OSB GROUP PLC
Annual Report and Accounts 2022
Strategic framework
Our Vision is to be recognised as the UK’s number one choice of specialist
bank through our commitment to exceptional service, strong relationships
and competitive propositions.
Priorities Our goals 2022 Looking forward Key risks KPIs
Specialist mortgage lending
Be a leading specialist
lender in our chosen
market sub-segments
Originate loans at attractive margins in our chosen
market sub-segments
– Target market sub-segments which oer
attractive returns on a risk-adjusted basis
– Identify incremental, non-organic business
– Invest in a highly responsive, customer-
focused culture
– Innovate to secure sustainable long-term
market leadership
– Provide solutions and leadership for
environmental, legislative and social changes
impacting our borrowers and their properties
– Organic originations were £5.8bn, up 29% from
£4.5bn in 2021 due to strong demand in our
core sub-segments
– Completions were very strong in the second
half with the Group’s stable and consistent
proposition proving popular as the underlying
macroeconomy became more dicult
– Originations improved in the Commercial sub-
segment as the Group relaunched products
under the InterBay brand
– Second charge products under the Precise
brand were withdrawn for new borrowers
– Maintain our strong credit and return requirements
and assess the attractiveness of growth
opportunities in our current market sub-segments
– Deploy scale and resources on organic
lending opportunities
– Identify new market sub-segments with high returns
on a risk-adjusted basis
– Leverage our proven track record for portfolio
acquisitions to deliver incremental
non-organic growth
– Political and economic uncertainty
aecting long-term demand for specialist
mortgages and appetite from professional
landlords to grow their portfolios
– Potential regulatory changes including
legislative focus on Buy-to-Let
and investment to meet
environmental regulation
– New specialist lenders entering the market
Organic originations
£5.8bn
2021: £4.5bn
Focus on automated
and bespoke manual
underwriting
High-quality decisions protecting the business
– Use deep credit expertise to deliver high-quality
lending decisions
– Provide a dierentiated underwriting approach
based on the needs and characteristics of
our customers; oering both an automated
approach and a skilled manual underwriting
capability and in-house real estate expertise
– Deliver a quality, dierentiated service informed
by comprehensive market feedback and research
– Deliver clear, accurate and ecient decisions
recognised by intermediaries for their quality
and fairness
– The OSB Transactional Credit Committee met
three times a week to assist with more complex
and larger new mortgage applications and
larger portfolio relationships
– Maintained high underwriting standards
notably in response to the increase in
completions in the second half of 2022
– Use OSB’s and CCFS’ credit experience in a
best-of-both approach
– Leverage dierentiated but complementary
underwriting capabilities to enhance customer
propositions
– Increase underwriting eciency to better serve
borrower needs across complementary brands
– Invest in technology solutions to support deep
underwriting expertise enabling faster decision
making and processing
– Use enhanced data insight and analysis of
the combined OSB and CCFS data sets and
analytic capabilities
– Changing regulations for underwriting
– More complex underwriting requirements
– Diculty in recruiting experienced
colleagues
– Increasing intermediary demands
– Demands of the ever-changing technology
Statutory loan loss ratio
13bps
2021: -2bps
Further deepen
relationships and
reputation for delivery
with intermediaries
Increase partner engagement in response
to demand
– Access to specialist products developed by
listening to intermediary partners
– Be accessible and available to intermediaries
– Oer complementary propositions for lending
brands across the Group
– Gain intermediary recognition for delivering
sustainable propositions
– Deliver bespoke solutions to meet intermediary
and customer needs
– Widened access to the Group’s specialist
products as we leveraged our complementary
brand propositions
– Enhanced the structure of the Sales team to
increase support to key market sub-segments
– Enhanced telephone intermediary resource to
complement our face-to-face service
– Launched Landlord Leaders programme,
supporting landlords in developing a
sustainable Private Rented Sector
– Continue to build direct relationships with
intermediaries
– Leverage best practices across the combined
Group to maintain and further enhance our service
performance to brokers
– Increase the breadth of sales support to
intermediaries during the application process
– Continue Landlord Leaders programme providing
market leading guidance and support to landlords
– Loss of key broker relationships
– More complex underwriting requirements
slowing the process
– Speed of investment in technology solutions
to ensure that the Group can keep pace
with market demands
– Competitive pressures altering with
changing macroeconomic conditions
leading to peaks and troughs aecting
service levels
OSB broker NPS
+37
2021: +55
CCFS broker NPS
+39
2021: +42
Sophisticated
funding platforms
Maintain stable,
high-quality,
diversified funding
platforms
Expertise in funding options
– Maintain resilient and diversified funding
platforms to support future growth and ensure
that liquidity requirements are met through the
economic cycle and cost of funds is optimised
– Be primarily funded through attracting and
retaining a loyal retail savings customer base
– Deliver propositions oering transparent,
straightforward savings products, providing long-
term value combined with excellent service levels
– Maintain a sophisticated securitisation
funding programme and balance sheet
management capability
– Opened over 191,000 new savings accounts
across both Banks in 2022, more than double
that in 2021
– Achieved 94% customer retention for Kent
Reliance and 88% for Charter Savings Bank
– Received multiple awards for savings products,
including ISA Provider of the Year for CSB and
Best Cash ISA Provider from Yourmoney.com
Personal Finance Awards for Kent Reliance
– Completed a fully retained £1.3bn
securitisation of Buy-to-Let mortgages under
the Canterbury Finance programme
– Continue to invest in both Kent Reliance and Charter
Savings Bank retail deposit franchises
– Benefit from the ability to execute structured
balance sheet management transactions across the
combined Group’s balance sheet
– Utilise in-house expertise to enable ecient access
to capital markets
– Increase the Group’s encumbrance eciency:
access to more wholesale funding for each pound of
assets encumbered
– Increase investment in technology to further
enhance customer service and servicing capabilities
– Increased competition for retail funds as
interest rates rise
– Increased customer expectation for
technology-based accounts
– Volatility of capital markets on demand
and price
– Increased burden of regulatory compliance,
for example, Open Banking (which currently
does not apply to the Group)
– Competition in wholesale and retail
markets as banks repay their Term Funding
Scheme with additional incentives for
SMEs drawings
22 securitisations since
2013 across the Group
worth
£11.1bn
Unique
operating model
Leverage our unique
and cost-ecient
operating model
Best-in-class customer service
– Have customer service at the heart of everything
we do
– Maintain centres of excellence across OSB’s
and CCFS’ existing locations in Chatham,
Wolverhampton and in India
– Extend activity in OSB India (OSBI) to develop
high-quality areas of excellence
– Deliver cost eciencies through excellent process
design and management
– Deliver technology-enabled flexible and resilient
operating processes
– Maintain strong savings customer NPS of +64
for Kent Reliance and +61 for Charter Savings
Bank whilst managing eight base rate changes
and more than doubling account opening
– Continued to develop deep credit know-how
through strong data analytical capabilities
– Increased support in OSBI reaching 663
employees at the end of 2022
– Demonstrated outstanding operational
resilience and flexibility
– Use greater scale to deliver ecient, scalable and
resilient infrastructure including IT security
– Deliver cost eciencies and operational
enhancements by leveraging OSBI’s lending, savings
and support operations and capabilities
– Deliver eciencies and enhanced capabilities in
centres of excellence
– Deliver significant improvements in customer
servicing and eciency including the use of robotics
technology to improve workflows to further enhance
primary servicing
– Harder to achieve continuous service
improvement as the Group grows
– Increasing costs in India and inflationary
headwinds in the UK
– Increasing complexity from compliance
with changing regulation
– Maintaining operational resilience as the
Group grows
– Increasing costs of investing in technology
as advances increase
Statutory cost to income ratio
27%
2021: 26%