LSE:OSB

Stock Analysis Report

Executive Summary

OneSavings Bank plc operates as a specialist lending and retail savings company in the United Kingdom and the Channel Islands.

Rewards

Trading at 74% below its fair value

Earnings are forecast to grow 21.91% per year

Earnings grew by 13.1% over the past year

Risk Analysis

High level of non-cash earnings

Unstable dividend track record

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Very undervalued with reasonable growth potential.


Similar Companies

Share Price & News

How has OneSavings Bank's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: OSB's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

19.6%

OSB

9.3%

GB Mortgage

6.0%

GB Market


1 Year Return

-34.5%

OSB

-17.0%

GB Mortgage

-22.7%

GB Market

Return vs Industry: OSB underperformed the UK Mortgage industry which returned -14.2% over the past year.

Return vs Market: OSB underperformed the UK Market which returned -18.8% over the past year.


Shareholder returns

OSBIndustryMarket
7 Day19.6%9.3%6.0%
30 Day-37.8%-18.9%-20.3%
90 Day-41.7%-24.1%-28.1%
1 Year-30.5%-34.5%-14.0%-17.0%-18.6%-22.7%
3 Year-29.1%-37.9%-4.5%-12.3%-13.4%-24.6%
5 Year12.6%-8.0%-4.5%-19.2%1.3%-22.0%

Price Volatility Vs. Market

How volatile is OneSavings Bank's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is OneSavings Bank undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: OSB (£2.51) is trading below our estimate of fair value (£9.65)

Significantly Below Fair Value: OSB is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: OSB is good value based on its PE Ratio (4.8x) compared to the Mortgage industry average (6.7x).

PE vs Market: OSB is good value based on its PE Ratio (4.8x) compared to the UK market (12.7x).


Price to Earnings Growth Ratio

PEG Ratio: OSB is good value based on its PEG Ratio (0.2x)


Price to Book Ratio

PB vs Industry: OSB is good value based on its PB Ratio (0.8x) compared to the GB Mortgage industry average (0.8x).


Next Steps

Future Growth

How is OneSavings Bank forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

21.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: OSB's forecast earnings growth (21.9% per year) is above the savings rate (0.5%).

Earnings vs Market: OSB's earnings (21.9% per year) are forecast to grow faster than the UK market (15.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: OSB's revenue (17.2% per year) is forecast to grow faster than the UK market (2.7% per year).

High Growth Revenue: OSB's revenue (17.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: OSB's Return on Equity is forecast to be low in 3 years time (15.3%).


Next Steps

Past Performance

How has OneSavings Bank performed over the past 5 years?

15.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: OSB has a high level of non-cash earnings.

Growing Profit Margin: OSB's current net profit margins (46.8%) are lower than last year (49.5%).


Past Earnings Growth Analysis

Earnings Trend: OSB's earnings have grown by 15.2% per year over the past 5 years.

Accelerating Growth: OSB's earnings growth over the past year (13.1%) is below its 5-year average (15.2% per year).

Earnings vs Industry: OSB earnings growth over the past year (13.1%) exceeded the Mortgage industry -4.8%.


Return on Equity

High ROE: OSB's Return on Equity (10.8%) is considered low.


Next Steps

Financial Health

How is OneSavings Bank's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: OSB has a low level of unsold assets or inventory.

Debt Coverage by Assets: OSB's debt is not covered by short term assets (assets are 0.8x debt).


Financial Institutions Analysis

Asset Level: OSB's level of assets compared to its equity is moderate.

Allowance for Bad Loans: OSB has a low allowance for bad loans.

Low Risk Liabilities: OSB's liabilities are made up of primarily low risk sources of funding.

Loan Level: OSB has an acceptable proportion of non-loan assets held.

Low Risk Deposits: OSB's loans are broadly funded by customer deposits.

Level of Bad Loans: OSB has a high level of bad loans (2.33%)


Next Steps

Dividend

What is OneSavings Bank's current dividend yield, its reliability and sustainability?

6.41%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: OSB's dividend (6.41%) is higher than the bottom 25% of dividend payers in the UK market (2.65%).

High Dividend: OSB's dividend (6.41%) is low compared to the top 25% of dividend payers in the UK market (7.27%).


Stability and Growth of Payments

Stable Dividend: OSB has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: OSB's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.6%), OSB's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: OSB's dividends in 3 years are forecast to be well covered by earnings (28.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.2yrs

Average management tenure


CEO

Andy Golding (50yo)

8.17s

Tenure

UK£1,574,000

Compensation

Mr. Andrew John Golding, also known as Andy, serves as Director at Charter Court Financial Services Ltd. since October 4, 2019 and serves as its Chief Executive Officer. Mr. Golding has been Director at Ch ...


CEO Compensation Analysis

Compensation vs Market: Andy's total compensation ($USD1.95M) is about average for companies of similar size in the UK market ($USD1.85M).

Compensation vs Earnings: Andy's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Andrew Golding
Group CEO & Director8.17yrsUK£1.57m0.19% £2.2m
April Talintyre
CFO & Director7.75yrsUK£1.07m0.11% £1.2m
Clive Kornitzer
Group Chief Operating Officerno datano data0.14% £1.5m
Richard Davis
Chief Information Officer3.17yrsno data0.065% £730.0k
Alastair Pate
Group Head of Investor Relations and Head of Marketing & Communicationsno datano datano data
Jason Elphick
Group General Counsel & Company Secretaryno datano datano data
Richard Wilson
Group Chief Credit Officerno datano data0.079% £880.7k
Hasan Kazmi
Chief Risk Officer4.5yrsno data0.031% £342.7k
Nicholas Hurst
Head of Portfolio Credit Riskno datano datano data
Craig Richardson
Head of Underwritingno datano datano data

6.2yrs

Average Tenure

Experienced Management: OSB's management team is seasoned and experienced (6.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Andrew Golding
Group CEO & Director8.17yrsUK£1.57m0.19% £2.2m
April Talintyre
CFO & Director7.75yrsUK£1.07m0.11% £1.2m
David Weymouth
Non-Executive Deputy Chairman0.42yrno data0.0042% £46.9k
Elizabeth Harwerth
Senior Independent Director0.42yrno datano data
Margaret Hassall
Independent Non-Executive Director3.67yrsno datano data
Sarah Hedger
Independent Non-Executive Director1.08yrsno datano data
Timothy Brooke
Independent Non-Executive Director0.42yrno datano data
Mary McNamara
Independent Non-Executive Director5.83yrsno data0.015% £168.0k
John Allatt
Independent Non-Executive Director5.83yrsno datano data
Rajan Kapoor
Independent Non-Executive Director0.42yrno data0.0020% £22.5k

2.4yrs

Average Tenure

59yo

Average Age

Experienced Board: OSB's board of directors are not considered experienced ( 2.4 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 19.4%.


Top Shareholders

Company Information

OneSavings Bank Plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: OneSavings Bank Plc
  • Ticker: OSB
  • Exchange: LSE
  • Founded: 1847
  • Industry: Thrifts and Mortgage Finance
  • Sector: Banks
  • Market Cap: UK£1.119b
  • Shares outstanding: 445.44m
  • Website: https://www.osb.co.uk

Number of Employees


Location

  • OneSavings Bank Plc
  • Reliance House
  • Sun Pier
  • Chatham
  • Kent
  • ME4 4ET
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1SBALSE (London Stock Exchange)6.591%-VAR SUB BDS PERP GBP1000 'REGS'GBGBPMar 2011
1SBBLSE (London Stock Exchange)7.875%-STP SUB NTS PERP GBP1000GBGBPMar 2011
OSBLSE (London Stock Exchange)YesOrdinary SharesGBGBPJun 2014
OSBLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJun 2014
OSVB.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 2014
2OSDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2014

Biography

OneSavings Bank plc operates as a specialist lending and retail savings company in the United Kingdom and the Channel Islands. The company operates through two segments, Buy-to-Let/SME and Residential Mortgages. It offers fixed, notice, easy access, and regular savings products, including ISAs. The company also provides buy to let and commercial mortgages, as well as development loans to small and medium sized developers of residential property; funding lines to non-bank finance companies secured against portfolios of financial assets, principally mortgages and leases; asset finance; first charge, second charge, and shared ownership residential mortgage loans; and funding lines to non-bank lenders operating in specialist sub-segments, such as residential bridge finance. It sells its products primarily under the Kent Reliance, InterBay Commercial, Heritable Development Finance, Prestige Finance, osbIndia, and InterBay Asset Finance brands. OneSavings Bank plc was founded in 1847 and is headquartered in Chatham, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/28 23:30
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.