OSB Group‘s dividend yield sits at around 6.5%, after the specialist mortgage lender raised its full-year dividend by 5% to 35.3p per share and launched a £100m share repurchase programme alongside its 2025 full-year results. An investor holding 10,000 shares at the current price of roughly 547p could collect approximately £3,530 in passive income this year, though that stake would cost around £54,700 to build.
The income case is straightforward enough. The payout ratio sits between 46% and 49%, and cash coverage stands at 2.83 times, both levels that suggest the dividend is well supported by earnings. OSB has paid ordinary dividends for 12 consecutive years.
What the 2025 Numbers Show
The headline figures from OSB’s 2025 results are broadly positive on the income side but point to pressure elsewhere. Sharecast reported that the group’s net loan book grew 3.2% to £25.9bn, supported by a 19% increase in originations to £4.7bn as OSB expanded into higher-yielding segments.
Net interest income fell to £679.4m from an underlying £690.6m in 2024. Net interest margin eased to 228 basis points from 230 basis points, reflecting higher retail funding costs tied to wider spreads to SONIA.
Profit before tax dropped to £382.5m from £418.1m in 2024, according to OSB’s preliminary results filed with Yahoo Finance. The decline was driven by an impairment charge (versus an impairment credit the prior year), higher fair value losses, and increased administrative expenses. Basic earnings per share fell to 75.6p from 77.6p, and return on tangible equity slipped to 13.7% from 14.9%.
On the balance sheet, tangible net asset value per share improved to 579p at 31 December 2025, up from 544p a year earlier, largely because the share count fell. The Common Equity Tier 1 capital ratio came in at 15.8%, down from 16.3% at the end of 2024. Retail deposits grew 2% to £24.3bn, and OSB repaid its Term Funding Scheme with additional incentives for SMEs borrowings in full on 10 September 2025.
OSB Group Dividend Yield in Context
A yield of 6%–7% with a sub-50% payout ratio is relatively rare in UK financials. The board has guided for a further 5% increase in the 2026 dividend, which, if delivered, would extend a pattern of steady income growth.
The final 2025 dividend of 24.1p per share carries an ex-dividend date of 2 April 2026, with payment scheduled for 13 May 2026, subject to shareholder approval at the AGM on 7 May 2026, according to data from Simply Wall St.
The risks are real. As a specialist buy-to-let and residential mortgage lender, OSB is directly exposed to UK property markets. A housing slowdown, rising arrears, or sustained pressure on net interest margins could erode profitability faster than the payout ratio suggests. The share price is up roughly 20% over five years but remains well below tangible book value at 547p against a TNAV of 579p per share.
The Buyback Adds a Second Return of Capital
OSB commenced its £100m share repurchase programme on 6 March 2026, with Jefferies International Limited executing market purchases of up to 37,035,134 ordinary shares for cancellation, according to the Investegate announcement. The programme is expected to complete no later than 6 March 2027.
By the close of trading on 28 April 2026, OSB had repurchased £30.2m of shares under the programme, per the company’s Q1 2026 trading update via Investor Meet Company. The CET1 ratio stood at 15.1% in Q1 2026, down from 15.8% at the 2025 year-end as the buyback reduced capital.
Buybacks at a discount to tangible book value are mechanically accretive to remaining shareholders: cancelling shares below TNAV lifts the per-share figure for those who stay in. With OSB buying at around 547p against a TNAV of 579p, the arithmetic favours existing holders, provided capital generation holds.
The OSB Group dividend yield story, then, is not simply about the 35.3p per share payout. It is also about whether the lender can sustain capital generation sufficient to fund both progressive dividends and a £100m buyback while navigating margin pressure and a competitive UK mortgage market. The next signal will come at the AGM on 7 May 2026, when shareholders vote on the final dividend.
