Osb Group Plc · LSE:OSB
Osb — OneSavings Bank — H1 2017 Earnings Presentation
15 slides from Osb's earnings presentation, Aug 24, 2017
Slide 1: Best in class specialist lending – H1 2017 Results
PRIVATE AND CONFIDENTIAL Best in class specialist lending H1 2017 Results 24 August 2017
Slide 2: Another strong set of results for the first half of 2017
Another strong set of results for the first half of 2017 £1,229m £5.9bn £6.5bn Gross organic lending £973m Loans and advances Unique business Improved by 2% model… + 26% H1 16 H1 17 + 10% FY 16 H1 17 points Cost to income ratio 26%1 28% Underlying PBT £65.3m1 £78.4m Remaining strong + 20% H1 16 H1 1
Slide 3: Strong growth in profitability
Strong growth in profitability 1. Continued growth in underlying profitability1… 2. with strengthened NIM & robust loan book growth1… Underlying profit before tax (£m) 80 140 3.08 3.13 3.09 3.11 3.22 3.5 Net interest income (£m) Net interest margin (%) 120 3 60 100 2.5 80 2 40 73 78 60 117 1.5 59 65
Slide 4: Strong profitability drives growth in shareholder returns
Strong profitability drives growth in shareholder returns H1 2017 H1 2016 Change £m £m £m % • Other expenses include £6.2m Net interest income 117.1 99.1 18.0 18 (H1 2016: £1.6m) further amortisation of Other expenses (6.3) (2.6) (3.7) 150 fair value adjustments on cancelled swaps Total income 110.8
Slide 5: Strong growth whilst improving credit quality
Strong growth whilst improving credit quality H1 2017 FY 2016 Change £m £m £m % • Net loan book growth of 10% Lending supported by 26% growth in organic Net customer loans 6,547 5,939 608 10 origination to £1,229m o/w gross customer loans 6,569 5,964 605 10 • FLS and TFS – continue to transition o/w
Slide 6: Segmental results – BTL/SME
Segmental results – BTL/SME1 • LTVs remain low at 69% (2016: 69%) with only 1% of loans by value with LTVs exceeding 90% (2016: 0.4%) 1. Gross loan book 2. Net interest income 5,000 Gross loan book (£m) Net interest income (£m) 80 4,000 60 3,000 4,802 40 72 83 2,000 2 3,569 4,104 63 1,000 20 0 0 H1
Slide 7: Segmental results – BTL/SME sub-segments
Segmental results – BTL/SME sub-segments 1. Buy-to-Let1 2. Semi-commercial/Commercial 4,000 Gross loan book (£m) 300 Gross loan book (£m) 3,000 250 200 2,000 3,613 4,267 150 303 268 2 100 1,000 50 0 0 FY 16 H1 17 FY 16 H1 17 • Average interest rate coverage (ICR) was 190% during H1 • Weighted averag
Slide 8: Segmental results – Residential
Segmental results – Residential • LTVs remain low at 58% (2016: 58%) with only 2% of loans by value with LTVs exceeding 90% (2016: 3%) • Average loan to incomes (LTIs) for residential mortgage lending increased with 3.7% of new loans having LTIs over 4.5 in the first half of 2017 compared to 2.6% in
Slide 9: Segmental results – Residential sub-segments
Segmental results – Residential sub-segments 1. First charge mortgages 2. Second charge mortgages 600 1,500 Gross loan book (£m) 500 Gross loan book (£m) 1,250 400 1,000 300 750 2 1,322 1,297 487 455 500 200 250 100 0 0 FY 16 H1 17 FY 16 H1 17 3. Funding lines 4. Summary 100 • First charge new organ
Slide 10: Stronger capital base, enhanced by AT1
Stronger capital base, enhanced by AT1 21% 17.3% • Strong capital generation through 18% 1.6% profitability 15% 2.0% 12% • Successful issuance of £60m AT1 securities 9% in May 2017 to optimise the capital stack 6% 13.7% and support general expenses and growth of the business 3% 0% • Pillar 2a requir
Slide 11: Our award winning lending franchise performed strongly
Our award winning lending franchise performed strongly Organic lending up 26% Retention Net loan book growth of 10% 1,250 132 Gross loan book (£m) Improved by 2% 1,000 750 135 173 Significant increase in Growth 10% 500 1,097 borrowers choosing new points 250 644 800 products with our ‘Choices’ reten
Slide 12: And are well-positioned to develop it further…
And are well-positioned to develop it further… V • OSB has announced its online • OSB expert portfolio submission platform underwriters receive ahead of the PRA’s portfolio application along landlord underwriting with the validated standards coming into effect portfolio details on 1st October • Dept
Slide 13: Stable funding and award winning savings franchise
Stable funding and award winning savings franchise Retail deposits up Recruiting new customers Diversification Improved by 2% Retail deposits We continue to We continue to transition our £6bn 9000 attract new TFS FLS Growth up 2% in the funding from £551m £390m points period savings customers the FL
Slide 14: Summary and outlook
Summary and outlook The first half of 2017 was yet another period of strong growth: 26% increase in organic origination to £1.2bn Strong credit profile: low arrears and LTVs Excellent customer results: customer NPS at 60%, retail savings bond retention at 87% Trading conditions in our core BTL marke
Slide 15: Disclaimer
Disclaimer This document should be read in conjunction with the documents distributed by OneSavings Bank plc (‘OSB’) through the Regulatory News Service (‘RNS’). This document contains certain forward- looking statements, beliefs or opinions, including statements with respect to the business, strate