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OSB offers best of both worlds for jittery investors

A shortening of global supply chains affects banks, as well as industry, so buy local with OneSavings Bank
May 26, 2022

Investors in the UK’s largest banks have endured a long and cold winter ever since the sector self-immolated in 2008. Despite the prospect of central bank interest rate rises putting the meat back into margins, signs of spring are yet to appear this year.

Tip style
Growth
Risk rating
High
Timescale
Medium Term
Bull points
  • High-quality loan book
  • Excellent returns on equity
  • Solid capital buffers
  • Good geographic concentration
Bear points
  • Possible housing market slowdown
  • Negligible dividend yield

In fact, recent news that some large fund managers have dumped significant stakes in European banks has cast a cloud over a sector where share prices are struggling to break five times forward earnings, on average. If large multi-country, multi-lateral financial institutions find themselves even less popular with investors than tobacco companies, then perhaps home-grown lenders with less reliance on fickle international trends are the answer to this investing conundrum, which is why OneSavings Bank (OSB) could potentially fit the bill.

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