The firm says gross new lending was down 7% to £2.3bn in the six months to the end of June compared to the year before.
However, the lender benefited from the Bank of England hiking interest rates six times in a row since December to 1.75%, as the central bank bids to combat rising inflation.
OSB, founded in 2011, says its net interest margins lifted to 280 basis points and 236bp, “benefitting from base rate rises”.
The group says originations were down from a year ago as “the prior period benefitted from higher purchase activity due to the stamp duty holiday”.
But it says applications “grew strongly during the first half” as it concentrated on its core business sub-segments – buy to let, residential, commercial and semi-commercial loans, leading to “a record pipeline of new business”.
It adds that applications for buy-to-let mortgages increased throughout the period “as landlords reported improving levels of tenant demand in the private rented sector which supported rising rents”.
The lender also launched the first of a range of mortgage products aimed at landlords who want to improve the energy efficiency and energy performance certificate rating of their properties, which includes refurbishment funding to boost capital values and rental yields.
The firm’s net loan book lifted by 3% to £21.m over the period. Its common equity tier 1 capital ratio, which included the full impact of a £100m share repurchase programme, came in at 18.9%, compared to 19.6% at the end of December.
OSB Group chief executive Andy Golding says: “We have a record pipeline of new business and we are seeing robust demand for our mortgages. Tenant demand in the private rented sector remains positive, especially among our target multi-property portfolio landlords and we continue to see strong interest in our other core business sub-segments.”
“We remain confident in delivering underlying net loan book growth of circa 10% for 2022 based on current pipeline and applications. We continue to expect the underlying cost to income ratio for the full year 2022 to increase marginally from 2021.”
