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OneSavings Bank eyes higher dividend after 'strong profit growth' in FY'17

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OneSavings Bank eyes higher dividend after 'strong profit growth' in FY'17

OneSavings Bank Plc said it plans to increase its dividend payouts for 2017 after seeing a "strong profit growth" in the year.

The bank said its board will propose a final dividend of 9.3 pence per share, taking the total dividend for 2017 to 12.8 pence per share, up from 10.5 pence per share paid for 2016.

The U.K.-based mortgage specialist lender reported full-year 2017 group statutory profit after tax of £126.9 million, up from £120.9 million in 2016.

Net loans and advances grew 23% to £7.31 billion in 2017 from £5.94 billion, while net interest margin remained stable at 3.16%. The bank said it expects to deliver net loan book growth in the mid-teens in 2018 and net interest margin of approximately 3%.

The lender also expects a cost-to-income ratio of about 30% for 2018, reflecting the "significant increase in the cost of regulation and planned additional investment in the business." In 2017, the ratio stood at 27%, unchanged from a year ago.

The return on equity was 28% in 2017, compared to 29% in 2016.

OneSavings Bank also said that it expects to maintain a common equity Tier 1 ratio of at least 12% going forward. At the end of 2017, the bank's CET1 ratio stood at 13.7%, compared to 13.3% at the end of 2016.