OSB Group PLC is a UK challenger bank. A specialist lender, OneSavings is focused on selected sub-sectors of the mortgage market including buy-to-let, commercial and semi-commercial, and shared ownership. The stock is listed on the London Stock Exchange and currently has a market capitalisation of £1.2 billion.

We last covered OneSavings Bank in December when the stock was trading at around 420p. At the time, we highlighted the fact that multiple insiders –  including the CEO, CFO, and the COO – had recently been offloading stock, which was slightly concerning, in our view. Fast forward to today, and OneSavings Bank shares now trade at 276p, meaning they have fallen around 34% since our last report. In a recent trading update, the bank said that it is too soon to say what the longer-term impact of Covid-19 will be on the business.

Source 2iQ Research

Looking at recent insider transaction activity, we think there’s further risk to the downside here. We say this because on 12 June, we observed a large sale (320,595 shares) from Managing Director Alan Cleary. Cleary was recently appointed MD of the group after OneSavings Bank merged with Charter Court, so he is likely to have a good understanding of the business and its near-term prospects. Interestingly, Cleary was buying shares in March when the stock was trading near 200p. However, after the recent stock market rally – in which OSB has rebounded 50% – he has turned into a seller. We see this insider sale as a bearish signal.