Metro Bank Holdings Plc · LSE:MTRO
Metro Bank — Non-Deal Roadshow (October 2018)
29 slides from Metro Bank's roadshow presentation, October 2018
Slide 1: Join the Revolution: US Roadshow Presentation October 2018
JOIN THE REVOLUTION US Roadshow Presentation October 2018 1
Slide 2: The Metro Bank revolution
the Metro Bank revolution Metro Bank is the revolution in British Banking • A full service retail & commercial bank • Britain’s first new High Street bank in over 100 years • Founded by Vernon W. Hill, II, founder of Commerce Bancorp (CBH) in the US Key highlights • Unique customer-service led model
Slide 3: In a huge market ripe for disruption
in a huge market ripe for disruption • Total UK Deposit market is £2.3trillion(1) • Highly concentrated market, dominated by ‘Big 6’ in retail and ‘Big 5’ in business A model focused on creating FANS… … highest growth rates with lowest deposits(2) Overall Quality of Service Retail Business 85% 84% 1
Slide 4: It's all about building the brand
it’s all about building the brand Legendary Brands (Experiences) Emotional Brands (Feelings) Basic Brands (Brand Promise) 4
Slide 5: And creating fans
and creating fans Model Value Differentiating + Culture Unique + Execution Fanatical = 5
Slide 6: The Metro Bank model
the Metro Bank model • Growth retailers NOT bankers • Unique deposit driven/retail focus • Customers will trade lower rates for a better RETAIL EXPERIENCE • Great business creates FANS NOT CUSTOMERS • Growth is essential to success & value • Become a power retailer 6
Slide 7: The Metro Bank culture
the Metro Bank culture • Create a culture to match your model • Culture must be very clear & pervasive “Buy in or opt out” • Hire for attitude, train for skills • Over-train • Over-reinforce • Make everyone an owner 7
Slide 8: With fanatical execution
with fanatical execution • Believe in your model • Over-invest in facilities & people Best Current Account Provider for Branch Service • Demand 100% execution Highly Commended Most Trusted Overall Financial Services Provider • One person to say YES, Most Trusted Current Account Provider two to say N
Slide 9: No stupid rules
no stupid rules 7 Day store banking Instant account opening Free pens in store or online Instant debit/credit card Free coin counting Block and unblock printing in store card on mobile app 9
Slide 10: Delivers a unique culture and model to create fans
delivers a unique culture and model to create fans Our NPS score, brand awareness and service recognition… …wins a growing number of customer accounts 1,520 (‘000) • Net Promoter Score (NPS) at c.80%(1) 1,217 • Brand recognition at 88%(2) 915 • Competition and Markets Authority’s (CMA) 655 inaugural
Slide 11: Which drives our loan, deposit and asset growth
which drives our loan, deposit and asset growth 25000 59 56 20000 Annual growth rate (1) 48 15000 Loans 77% 41 36 10000 Deposits 54% Assets 62% 5000 Number of stores 0 30/06/2015 30/06/2016 30/06/2017 30/06/2018 30/09/2018 Loans £2.2bn £4.6bn £7.8bn £12.0bn £13.1bn Deposits £3.8bn £6.6bn £9.8bn £13.
Slide 12: It's about the experience integrated across every channel
it’s about the EXPERIENCE integrated across every channel and continuously evolving Legacy-free IT and state-of-the art stores offer best-in-class service however, wherever and whenever the customer chooses. Developer portal enables us to form partnerships & innovative services to harness the opport
Slide 13: Combining the best of digital
combining the best of digital • Insights: Best in-class AI-powered personal financial management • Live for retail customers • Market-leading customer service • Uses AI to drive spending insight • Offers spend analysis and alerts to help customers make smarter financial decisions • Personalised serv
Slide 14: With our uniquely branded state-of-the-art stores
with our uniquely branded state-of-the-art stores Bristol Watford Southampton Luton Bexleyheath Brighton 14
Slide 15: In our growing network
in our growing network A Sonn: ee ee OPEN 7 DAYS 4) COMING SOON
Slide 16: Where safe deposit boxes provide regular reliable income
where safe deposit boxes provide regular reliable income Stores open more than 1 year safe deposit box income covers 80% of base store rent 16
Slide 17: With Ealing an example of how store contribution grows
with Ealing an example of how store contribution grows Y1 Y2 Y3 Y4 Y5 £’000 May-14 May-15 May-16 May-17 May-18 Number of customer accounts 10,399 17,603 24,949 31,870 38,784 Deposits 44,581 153,232 226,255 290,347 402,444 Average deposit growth per month £3.7m £9.1m £6.1m £5.3m £9.3m Total income(1)
Slide 18: With strong average deposit growth per store
with strong average deposit growth per store 2017 2018(1) £76m £76m 2016 $99m $99m 2015 £68m 2014 £64m $88m average $83m £59m £7.4 $77m £6.6 £6.6 £6.3 £6.3 £6.2 £6.2 £6.1 £5.9 £5.7 £5.6 £5.5 £5.5 £5.3 £5.0 £4.8 £4.3 £4.1 £4.0 deposits per store per month (m) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 19: Increasing store contribution and performance
increasing store contribution and performance Annual cohorts start and grow faster(1) Avg Store Deposits £’m Months open 1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 2010 2011 2012 2013 2014 2015 2016 2017 Store contribution increases for new and existing stores (quarterly) Positive contri
Slide 20: As we continue to win low cost sticky deposits
as we continue to win low cost sticky deposits £14.8bn 27% • Current account growth of £11.7bn 38% YoY, now 30% of 47% deposits • Annual deposit growth of 38% - Retail 32% growth £8.0bn - Commercial 42% growth 56% • Deposit mix: commercial 54% and retail 46% £5.1bn 78% • Cost of deposits at 59bps 9M
Slide 21: A simple, liquid, predominantly deposit-funded balance sheet
leading to a simple, liquid, predominantly deposit- funded balance sheet Q3 2018 Q2 2018 QoQ Annual (£’m) (£’m) Growth Growth Loans and advances to • With an 89% loan to deposit ratio 13,121 12,013 9% 52% at 30 September 2018, the balance customers sheet is intrinsically liquid Treasury assets(1) 6,
Slide 22: Enabling us to grow our lending at low risk
enabling us to grow our lending at low risk High loan growth at low risk increasing our LTD ratio • Strong organic momentum in Net customer loans (bn) 36% lending across all asset classes £13.1 Loan to deposit ratio 64% £9.6 • 89% loan to deposit ratio in Q3 2018, increasing from 66% £5.9 82% in FY
Slide 23: Driving strong results with 9 quarters of increasing profitability
driving strong results with 9 quarters of increasing profitability Our Progress Underlying (loss)/profit before tax (2) 9M 2018 9M 2017 Change Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2016 2016 2016 2016 2017 2017 2017 2017 2018 2018 3018 Customer accounts 1,520k 1,124k +35% £15.1m £14.1m Customer deposits
Slide 24: Generating increasing returns
generating increasing returns 9M 2018 (£’m) 9M 2017 (£’m) Growth Net interest income 241.1 171.7 40% • 9M 2018 pre-tax profits up 197% Fees and other income 45.0 35.2 28% over 9M 2017 to £39.2m Net gains on sale of assets 8.7 2.3 278% • Positive operating jaws with Total revenue 294.8 209.2 41% 41%
Slide 25: With proactive management of regulatory requirements
with proactive management of regulatory requirements Well above minimum capital requirements… …and on track to meet MREL requirements with debt Leverage Ratio 5.7% 3.0% Target >4% 21.5% 19.1% • We will optimise and further 3.5%(3) Regulatory Buffers diversify our capital base as we grow T2 3.4% Curr
Slide 26: Significant further growth in both deposits and lending
which enables significant further growth in both deposits and lending £50-55bn Loans Current market share is c.0.6% (1) £42.5-49.5bn Deposits • £50bn implies c.2%, • £100bn implies c.4%, • £200bn implies c.9% £27.5bn £23.4-24.8bn £14.8bn £13.1bn £11.7bn £9.6bn £8.0bn £5.1bn £5.9bn £2.9bn £3.5bn £1.6
Slide 27: As we progress towards our mid-term targets
as we progress towards our mid-term targets Our Targets 2020 2023 Targets Targets Deposits c.£27.5bn £50-55bn Stores c.100 140-160 Monthly deposit growth /store £5.5–6.5m £5.5-6.5m Loan to Deposit Ratio 85-90% 85-90% Customer NIM + Fees(1) c.3% c.3% Cost:Income Ratio c.60% 55-58% Cost of Risk c.0.20
Slide 28: Glossary
Glossary Basel III Framework: Basel III is an internationally agreed set of measures developed by the Basel Liquidity Coverage Ratio (LCR): The LCR promotes the short-term resilience of a bank's liquidity risk Committee on Banking Supervision. The measures aim to strengthen the regulation, supervisi
Slide 29: Important: you must read the following
IMPORTANT: YOU MUST READ THE FOLLOWING. The following applies to this document (the “Information”). To the extent available, the industry, market and competitive position data contained in this presentation come from official or third party sources. Third party industry publications, studies and sur