OneSavings Bank price target raised by Barclays after first-half profit growth


OneSavings Bank PLC (LSE:OSB) announced a sharp rise in earnings for the first half, which spurred Barclays to increase its price target on the UK challenger bank.

OSB’s underlying pretax profits soared 62% to a record GBP252.8mln in the six months to end-June 2021, with gross new organic lending rising by 16% to GBP2.5bn.

Underlying net interest income increased to GBP299mln from GBP266.8mln in the first half of 2020 and the net interest margin was 18 basis points higher at 268bps.

In a broker note following the results, Barclays lifted the price target on OSB to 610p from 560p and raised its EPS estimate for 2023 by 7% based on revenue. It has retained its ‘Overweight’ rating.

OSB is “our preferred UK Challenger Bank as we continue to see significant value in the shares”, the broker added, noting that the shares are trading at 6.3 times its estimated 2022 EPS.

OSB shares were 1.2% higher at 503 in late morning trade.


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