Permanent Tsb Group Holdings Plc · EURONEXT:PTSB
Permanent Tsb — H1 2024 Earnings Presentation
39 slides from Permanent Tsb's earnings presentation, Aug 1, 2024
Slide 1: Interim Results 2024
Interim ptsb Results 2024 Permanen' t TSB Group Holdings pic 1st August 2024 Zart Ila
Slide 2: Interim Results 2024 - Presenters
Interim Results 2024 ptsb gy Py, Eamonn Crowley, Nicola O’Brien, CEO CFO
Slide 3: Contents
Contents 1 2 3 4 Business Financial Medium Term Appendix Update Performance Outlook
Slide 4: Business Performance: HY 2024 Highlights
Business Performance HY 2024 Highlights • Strong Deposit growth; Launch of Innovative Interest First Deposit product Total Deposits • Competitive Fixed Rate Mortgage products announced in Q2’24 Customers €23.6bn; • New Mortgage Market Share1 of 13.5%; Strong pipeline of activity heading into H2’24 +
Slide 5: Strength in Irish Macroeconomic Outlook
Strength in Irish Macroeconomic Outlook Highly Attractive Operating Environment GDP and MDD Growth (%) CPI (Inflation %) Labour Market (%) Unemployment Rate Employment Growth MDD GDP 8.2% CPI 4.9% 5.0% 9.5% 4.6% 4.4% 4.5% 9.4% 3.4% 2.8% 3.4% 2.3% 2.0% 1.6% 1.8% 2.6% 2.6% 2.5% 2.1% 2022 2023 2024e 20
Slide 6: Delivering a Strong Diversified Commercial Performance
Delivering a Strong Diversified Commercial Performance Total New Lending of €1 Billion; Mortgage Market 7% Lower YoY Total Customer New Lending (€m)1 Mortgage Drawdowns (€bn) & Market Share2 (%) €1.0bn €1.4bn €1.0bn Total Lending €5.6bn €5.6bn €5.2bn Mortgage Market 23.1% 60 • Diversified new • Sign
Slide 7: A Customer and Purpose Led Strategy
A Customer and Purpose Led Strategy Delivering Our Next Phase of Growth Transforming the Bank, Differentiating on Customer Experience, Driving Sustainable Profits & Shareholder Returns Purpose Ambition Brand Promise Working together to To become Ireland’s best Personal Altogether More Human Build Tr
Slide 8: Connected Customer Experience
Connected Customer Experience Combining the Best of Technology and People Together Digital Transformation Products & Partnerships Customer Experience Launched Market Leading Interest First 640k Digitally Active Customers1 Jul’24 Fixed Term Deposit 1.2m Total Number of Customers Market Leading 6-Mont
Slide 9: Continuing to Build on Strong Foundations in a Responsible Way
Continuing to Build on Strong Foundations in a Responsible Way Delivering on ESG Agenda Support Ireland’s Transition to a Low Elevate our Social Impact Grow Sustainable Profitability Carbon Economy & Enhance our Culture Environment Social Governance & Disclosures • Title Sponsor of the Irish Olympic
Slide 10: Contents
Contents 1 2 3 4 Business Financial Medium Term Appendix Update Performance Outlook
Slide 11: Building Sustainable Profitability
Building Sustainable Profitability With Strong Momentum Moving Into H2’24 Grow Diversified Efficient Capital And Income Streams Organisation Resource Allocation H1’24 H1’23 YoY YoY • A resilient performance in Net Interest Income, Income Statement (€m) €m €m €m % increasing 4% YoY Operating Net Inte
Slide 12: Resilient Operating Income Performance
Resilient Operating Income Performance 4% Growth in Net Interest Income Net Interest Income (€m) Net Fees & Commissions (€m) NIM% 2.29% 2.27% +53% Over 3 Years 25 (48) 46 3 (40) 27 23 23 +4% 19 298 311 15 H1'23 ECB Linked Acquired Other L&A Treasury Deposits Funding H1'24 H1 '21 H1 '22 H1 '23 H1 '24
Slide 13: Diversifying Total Performing Loan Book
Diversifying Total Performing Loan Book Lending in Business Banking Grows by 120% Mortgages as % Total Gross Performing Loans (€bn) 96% 93% of Total Loans +1% 20.4 20.7 Business +0.5 Banking1 0.5 (0.2) 1.1 0.3 0.3 Consumer Finance Total Performing Loan Book % Mix H1’24 Mortgage2 • Mortgages2 93% (-2
Slide 14: Performing Residential Home Loan Book
Performing Residential Home Loan Book Yield on New Homeloan Flow Increases by 108bps YoY Performing Residential Home Loan Book by Product (Mix %) Residential Home Loan Yield (%) Total 19.2 19.2 19.0 Book €3.3bn €bn 4.50% 4.33% 11% 13% 17% €2.5bn 4.00% 16% 14% 13% 3.73% 4.25% 3.25% €13.2bn 3.59% 3.46
Slide 15: Business Banking
Business Banking 20% Growth in SME Book YoY SME Book Movement (€bn)1 Asset Finance Business +20% Asset Finance Supporting New Lending 0.6 Book of c. 18,000 €117m €0.5bn at customers 0.5 H1’24 Jun’24 nationwide H1'23 H1'24 SME Book by Sector (Jun’24) Asset Finance Book (Jun’24) Human Health & Social
Slide 16: Operating Expenses
Operating Expenses Cost Base in line with Management Expectations H1’24 H1’23 YoY YoY Movement in Underlying Operating Costs (€m) Cost Base Analysis €m €m €m % +17% +3% 1 Staff Costs 116 100 16 +16% Other Costs 90 72 18 +25% 6 7 Total Addressable Costs 206 172 34 +20% 14 3 11 Depreciation 39 32 7 +2
Slide 17: Strong Asset Quality
Strong Asset Quality NPL% 1.7%1; 20bps below European Average2 Cost of -1 bp -19bps Impairment Release/(Charge) €20m Risk3 Provision Stock (€m) Expected Credit Loss HY’24 FY‘23 HY’23 570 414 Model (Charge) / Release (37) (29) (49) 135 Post Model Adjustments 52 21 36 (133) Other P&L Items 5 10 4 435
Slide 18: Funding & Liquidity
Funding & Liquidity Strong Deposit Growth YTD Total Funding €26.5bn; Composition H1‘24 (€bn /% share) Total Customer Deposits (€bn) Sub Debt 51bps 86bps 178bps Yield %2 0.3 / 1% Retail Deposits • 4% Growth in total 12.9 / 49% • 89% Funded 22.6 23.0 23.6 Deposits YoY Repurchase by Total Agreements Cu
Slide 19: Capital Ratios & RWAs
Capital Ratios & RWAs Strong Capital Position Supports Growth Ambitions • Pro-forma CET1 Ratio 14.9%1 at Jun’24; +90bps higher than Dec’23 CET1 Ratio Movement2 • Main drivers are: o Glas III Loan Sale (c. +35bps) 0.2% (0.2%) (0.1%) 0.4% 0.1% 0.5% o Net Loan Book Movement (c. +10bps) o H1 2024 Operat
Slide 20: IRB Model Review Underway
IRB Model Review Underway Programme of Review With Outcome Expected End of 2025 Risk Weight Densities EAD RWA Avg. Risk • PTSB models were built (in 2017) when non-performing loans were at HY’24 (€bn) (€bn) Weight % a peak level. The profile of the PTSB portfolio has substantially Residential Mortga
Slide 21: Strong Performance with Business Momentum
Strong Performance with Business Momentum Positive Operating Environment Supporting Growth Ambitions Cost/ Income CET1 Target3 Profit Before Tax Cost of Risk2 RoE4 Ratio1 €75m 73% -19bps 14.9% +6% +c. €50m YoY +10ppts YoY -28bps YoY +110bps YoY Broadly in line YoY Strong Operating Costs €20m Impairm
Slide 22: Contents
Contents 1 2 3 4 Business Financial Medium Term Appendix Update Performance Outlook
Slide 23: A Customer and Purpose Driven Strategy
A Customer and Purpose Driven Strategy Pivoting the Bank for Future Growth Strategic Achievements To Date Strategy to Unlock further Growth Multiple Catalysts to Deliver 2019 – HY2024 Over the Medium Term Meaningful Returns Deliver Meaningful Shareholder Returns A Larger & More Active Customer Base
Slide 24: Medium Term Targets
Medium Term Targets Guidance Reaffirmed Net Interest Cost/ Income Cost of Risk RoE2 EPS3 CET1 Target Margin Ratio1 c. 2.30% c. 60% < 30 bps c. 10% c. 30c >14% Medium Term Guidance Does Not Assume Changes to Risk Weight Densities or Distributions 1. Cost Income Ratio is calculated as Operating Expens
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Slide 26: Contents
Contents 1 2 3 4 Business Financial FY’24 & Medium Appendix Update Performance Term Outlook
Slide 27: Customer Focused Retail and Business Bank
Customer Focused Retail and Business Bank 98 Branches in Communities Business Overview (Jun’24) Across the Republic of Ireland €20.7bn €9.3bn €12.9bn Performing Loan Current Account Retail Deposit Book Balances Balances c. 23% 13.4% 11.5% Residential Current Account Retail Deposit Mortgages1 Market
Slide 28: PTSB Has Been Rebuilt Over The Last 10 Years
PTSB Has Been Rebuilt Over The Last 10 Years Restructure Resilience Relevance Acquisition Growth 2012 2015 2018 2020 2021 2022 2023 2023+ • ECB Stress Test Fail • ECB Funding Reduced • New Annual Mortgage Lending >€2bn • State Capitalisation (2012) • >€4bn NPLs Deleveraged • NPL Ratio reduced to 1.7
Slide 29: A Safe, Resilient and Growing Bank
A Safe, Resilient and Growing Bank Margins have increased Sustainable returns now being Key mortgage provider to the Irish generated market 82 2.27% 14% 10% (244) 1.48% FY'16 HY'24 FY'16 HY'24 FY'16 HY'24 Net Interest Margin % Underlying Profit/ (Loss) Mortgage Market Share % Asset quality materiall
Slide 30: Historical Financial Information
Historical Financial Information Income Statement €m HY’24 FY’23 FY’22 FY’21 FY’20 Net Interest Income 311 620 362 313 341 Other Income 25 48 47 48 34 Total Income 336 668 409 361 375 Total Operating Expenses (Before Exceptional Items) (274) (504) (395) (345) (323) Operating Profit / (Loss) 62 164 1
Slide 31: Interest Income Analysis
Interest Income Analysis1 Average Balances (€bn)2 Yields (%) Interest Income (€m) HY’24 HY’23 HY’24 HY’23 HY’24 HY’23 Tracker 3.2 4.0 5.5% 4.2% 89 84 Fixed and Variable 16.8 15.5 3.2% 2.9% 271 219 Consumer Finance 0.3 0.3 9.9% 10.0% 15 14 SME / CRE 1.1 0.5 5.4% 5.1% 30 12 Treasury Assets 6.3 6.1 2.4
Slide 32: Interest Expense Analysis
Interest Expense Analysis Average Balances (€bn) 1 Cost of Funds (%) Interest Expense (€m) HY’24 HY’23 HY’24 HY’23 HY’24 HY’23 Current Accounts 9.3 9.2 0.0% 0.0% - - Retail Deposits 12.6 11.8 0.7% 0.1% 45 5 Corporate Deposits 1.3 1.1 2.4% 1.2% 16 7 Wholesale Funding 2.7 2.3 5.7% 3.3% 78 38 Total Int
Slide 33: Historical Financial Information
Historical Financial Information Balance Sheet €bn HY’24 FY’23 FY’22 FY’21 FY’20 Total Loan Book (net) 21.0 21.5 19.6 14.2 14.2 Treasury Assets 7.1 5.3 5.3 6.7 5.9 Other Assets 1.0 1.0 1.0 1.3 0.8 Total Assets 29.1 27.8 25.9 22.2 20.9 Retail Deposits (Incl. Current Accounts) 22.2 21.7 20.6 17.7 16.3
Slide 34: Balance Sheet Composition
Balance Sheet Composition Jun‘24 Asset Composition Funding Composition €29.1bn €21.0bn 3% €23.6bn 90% 4% Total Assets Net Loans YoY Asset Customer LDR YoY Deposit Growth Deposits Growth Business Consumer Corporates, 6% Banking, 5% Finance, 1% Other Assets, 4% Current Term, 20% Accounts, Cash, 11% 40
Slide 35: Asset Quality
Asset Quality1 Loans and Advances to Customers Jun’24 Dec’23 Measured at Amortised Cost €m €m Residential mortgages: 19,192 19,557 Home Loans Buy To Let 506 749 Total Residential Mortgages 19,698 20,306 Commercial 433 437 Consumer Finance 513 499 Finance leases and hire purchase receivables 467 446
Slide 36: NPLs & NPAs
NPLs & NPAs1 Stage 3 Analysis Finance leases and hire Jun’24 Home Loan Buy-To-Let SME/ Commercial Consumer Finance Total purchase receivables €m €m €m €m €m €m NPL is < 90 Days 120 27 9 4 5 165 NPL is > 90 Days and < 1 year past due 49 15 2 3 2 71 NPL is 1-2 years past due 29 8 1 2 1 41 NPL is 2-5 y
Slide 37: Regulatory Capital
Regulatory Capital Jun’24 Dec’23 Transitional Fully Loaded Transitional Fully Loaded €m €m €m €m Risk Weighted Assets 11,338 11,338 11,546 11,546 Capital Resources: Common Equity Tier 1 1,644 1,644 1,647 1,616 Additional Tier 1 368 368 368 368 Tier 1 Capital 2,012 2,012 2,015 1,984 Tier 2 Capital 29
Slide 38: Forward Looking Statements
Forward Looking Statements This document contains forward-looking statements with respect to certain of the Permanent TSB Group Holdings plc’s (the ‘Bank’) intentions, beliefs, current goals and expectations concerning, among other things, the Bank’s operational results, financial condition, perform
Slide 39: Thank You
Thank You End of Presentation
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