Permanent Tsb Group Holdings Plc · EURONEXT:PTSB
Permanent Tsb — H1 2020 Earnings Presentation
33 slides from Permanent Tsb's earnings presentation, Jul 29, 2020
Slide 1: Interim Results 2020
I N T E R I M F I N A N C I A L R E S U L T S HY 2020 Interim Results 2020 For The 6 Months Ended 30 June 2020
Slide 2: 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 3: Interim Financial Results
I N T E R I M F I N A N C I A L R E S U L T S HY 2020 Eamonn Crowley, CEO
Slide 4: Challenging Business Environment - Impacted By Covid-19
Challenging Business Environment - Impacted By Covid-19 H1 2020 Highlights • 10.5k Mortgage Payment Breaks approved (Peak May ‘20) | c.€1.6bn | c.10% of Gross Loans >10k Covid - 19 Payment Breaks • Average Loan Size €152k, Average Yield 2.80% Approved • c.50% Reduction in the number of Payment Break
Slide 5: Irish Economy Impacted By Worldwide Pandemic
Irish Economy Impacted By Worldwide Pandemic An Unprecedented Contraction In Economic Activity Job Losses Came In Waves Labour Market (%) Employment Rate Labour Force Growth Unemployment 14.5 9.2 7.6 7.3 5.0 2.9 2.7 2.0 1.3 0.6 -2.0 2019 2020E 2021E 2022E -11.9 Pandemic Unemployment Payment (PUP) •
Slide 6: Indicators Support Significant Lows In April And May
Indicators Support Significant Lows In April And May Signs Of Recovery With A Strategy Of Phased Reopening House Hold Deposits Increase To Record Highs New Household Debt, 65% Decline In April 20 - Transactions Added To The Property Price Suggesting Ability To Support Recovery But Showing Signs of R
Slide 7: Covid-19 Response
Covid–19 Response Supporting Our Customers, Colleagues And Communities Customer Support Payment Breaks1 Approved €1m Cashback to Customers €50 Contactless Payment Limit • c.10.5k Mortgage Payment • An increase of €20 per transaction Breaks, €1.6bn in Value • €5 Back On GoRewards Programme1 • 40 mill
Slide 8: Driving Sustainable Performance
Driving Sustainable Performance Strong Ambition, Purpose And Priorities Our Ambition Our Purpose To Be Ireland’s Best Personal To Work Hard Every Day to Build And Small Business Bank Trust with Our Customers – We are a Community Serving the Community Our Priorities Customers Transform Profitability
Slide 9: Customers
Customers Build Trust And Loyalty With Our Customers Enhance Leverage Re-Position Customer Journeys Digital Capabilities Our Brand Delivering On Our Priorities Medium Term Outcomes • Mortgage Pricing • Significant Improvement In Customer Satisfaction, • Realigned Fixed Rates for New and Existing Mor
Slide 10: Transform
Transform Build A Sustainable Future For The Bank Digital Business Model Embed Development Simplification Our Values Delivering On Our Priorities Medium Term Outcomes • Digital Development And Simplification - Better Customer Experience • Increased Flexibility and Process Improvements • Strengthened
Slide 11: Profitability
Profitability Growth, Efficiency And Sustainable Returns Grow Diversified Efficient Capital And Income Streams Organisation Resource Allocation Delivering On Our Priorities Medium Term Outcomes • Mortgage Market Share 15.2% • Revenue Growth Through Diversified Income Growth Streams • Operating Incom
Slide 12: Financial Performance
I N T E R I M F I N A N C I A L R E S U L T S Financial Performance
Slide 13: Income Statement
Income Statement Covid-19 Pandemic Has Material Impact On Profitability H1 20 H1 19 YoY YoY H1 20 Vs H1 19 €m €m €m % • 6% reduction in NII primarily due to lower income from Treasury Assets NII 171 181 (10) -6% (€11m) and NPLs (€5m) offset by lower funding costs. Fees & Commissions 16 17 (1) -6% •
Slide 14: Lower Net Interest Income
Lower Net Interest Income NIM Declining, 7 Bps Lower Year-On-Year Net Interest Income (€m) Net Interest Margin (%) 181 -6% 171 1.77 1.82 1.75 17 6 2.36% 2.42% 2.42% 12 7 NIM Treasury Income Lending Assets Yield NPL Income 2.14% 2.05% 1.95% Perf. Loan Income Asset Yield Deposit Cost 189 +5%1 191 0.87
Slide 15: Total New Lending Reduced By 16% YoY
Total New Lending Reduced By 16% YoY Mortgage Market Share Remained Strong Mortgage New Lending Volumes And Market Share Personal Term Lending2 61 93 46 1.2 44 15.5% 15.2% 15.1% 14.7% 13.8% 33 34 1.0 12.6% 28 27 0.810.8% Mortgage Volumes €bn 12 0.6 Drawdowns Mkt Share % 0.9 0.8 0.4 0.6 0.6 H1 18 H1
Slide 16: Performing Home Loan Book Broadly In Line
Performing Home Loan Book Broadly In Line Home Loan Yield 11 Basis Points Lower Performing Home Loan Book Movement (€bn) Performing Home Loan Yield (%) 11.7 11.6 2.98% 2.97% 2.86% 11.7 -0.6 11.6 2.60% 2.58% 2.59% Stock Flow +0.5 FY 19 Inflow Outlow H1 20 H1 19 FY 19 H1 20 Performing Home Loan Book b
Slide 17: Buy to Let Book Continues To Contract
Buy to Let Book Continues To Contract Reducing By 4% From Dec 19 Performing Buy to Let Book Movement (€bn) Performing Buy to Let Yield (%) 3.2 3.1 1% 1% -4% 9% 9% 1.43% 1.43% 1.42% 90% 90% Stock FY 19 H1 20 H1 19 FY 19 H1 20 Tracker Variable Fixed • During H1 20 the Buy to Let Mortgage Book reduced
Slide 18: Operating Expenses 2% Lower Year On Year
Operating Expenses1 2% Lower Year On Year Strong Cost Discipline Movement In Operating Expenses (€m) €m H1 20 H1 19 YoY €m YoY % 150 Staff Costs 77 77 - - 148 1 1 146 Non Staff Costs 46 51 -5 -10% 144 -7 2 Addressable Costs2 123 128 -5 -4% 142 Depreciation & 140 19 17 +2 12% 142 Amortisation3 138 14
Slide 19: Covid-19 Mortgage Payment Breaks
Covid-19 Mortgage Payment Breaks Reduced By c.50%1 By End July 2020 10% of Gross Loans 5% of Gross Loans €bn 1.6 -50% 10.5k 8.1k 0.8 4.8k 1.3k 3.7k Yield % 2.8% 1.1k 2.7% PB1 Expired & Option PB1 Expired & Payment Break Still On Opted Active Payment Selected Considering Options Approved Payment Paym
Slide 20: NPL Ratio 6.8%
NPL Ratio 6.8% Stable Since End Of 2019 10% 6.8% NPL Strategy (€1.1bn) €bn 1.7 -35% 44% • Operational Cures (0.5) (0.1) 1.1 • Other Alternative 56% Options Jun 19 Glas II Net Flows Jun 20 Jun-20 Asset Quality / Coverage Category Balance (€bn) ECL (€bn) Coverage (%) • Non Performing Loans of €1.1bn,
Slide 21: Strong Funding And Liquidity Position
Strong Funding And Liquidity Position Liquidity Coverage Ratio >200% Total Funding (€18.8bn) Liquidity And Funding Ratio 18.4 18.2 18.8 0.2 0.4 0.0 0.1 0.7 0.1 0.3 0.6 0.1 0.5 Ratio Dec 19 Jun 20 Movement LCR 170% 208% +38% Secured Market Repos MREL Debt NSFR 138% 142% +4% 17.4 17.2 17.8 AT1 Debt Se
Slide 22: Capital Remains Above Regulatory Requirements
Capital Remains Above Regulatory Requirements Reduction in Capital Ratios Driven By Prudent Impairment And Higher RWAs Regulatory Capital Ratios CET 1 Fully Loaded Ratio Movement Dec-18 Dec-19 (Proforma) Jun-20 RWAs RWAs €9.7bn €10.0bn (Proforma) 19.6% 15.5% -0.7% 18.1% 17.9% -0.7% 16.5% 15.0% 16.0%
Slide 23: 2020 Outlook
2020 Outlook Growth Efficiency Returns • New Lending - c.60% of • Operating Expenses will • 2020 will be loss making as 2019 volumes (€1.7bn) remain stable as we pay for we prudently provide for the investment and inflationary impact as a result of the • Net Interest Income will be pressure through
Slide 24: Summary
Summary • Safe and Secure Balance Sheet with Strong Funding and Capital Positions • Maintaining Competitive Position in Mortgage Market • Targeted Growth in SME and Consumer Lending • Cost Management a Key Focus – Progressing with Business Initiatives to Improve Efficiency and Drive Digital Transfor
Slide 25: Appendix
A N N U A L F I N A N C I A L R E S U L T S FY 2019 Appendix
Slide 26: Domestically Focused Retail And SME Bank
Domestically Focused Retail And SME Bank Business Overview Our Physical Landscape Business €15bn €5.4bn €10.5bn WEST 12 Branches Performing Current Account Retail Deposit Loan Book Balances Balances NORTH EAST 12 Branches Market Share DUBLIN 22 Branches 15.2% 12.2% 11.0% Residential Current Account
Slide 27: Historical Financial Information – Income Statement
Historical Financial Information – Income Statement €m FY 2019 FY 2018 FY 2017 FY 2016 FY 2015 Net Interest Income 356 379 407 394 358 Other Income 58 63 38 71 34 ELG Fees - - (2) (4) (14) Total Operating Income 414 442 443 461 378 Total Operating Expenses (Before (330) (331) (329) (341) (317) Excep
Slide 28: Historical Financial Information – Balance Sheet
Historical Financial Information – Balance Sheet €bn Dec 2019 Dec 2018 Dec 2017 Dec 2016 Dec 2015 Total Loan Book (net) 15.6 15.9 18.4 18.9 23.0 Treasury Assets 3.6 3.8 3.5 3.9 5.5 Other Assets 1.1 2.1 0.9 0.8 0.8 Total Assets 20.3 21.8 22.8 23.6 29.3 ROI Retail Deposits (Incl. Current Accounts) 15.
Slide 29: Interest Income Analysis
Interest Income Analysis Average Balances (€bn) Yields (%) Interest Income (€m) H1 2020 H1 2019 H1 2020 H1 2019 H1 2020 H1 2019 Tracker 9.4 9.7 1.3% 1.3% 56 61 Fixed and Variable 6.8 6.7 3.6% 3.8% 128 126 Consumer Finance 0.3 0.3 9.5% 10.3% 15 17 SME / CRE 0.1 0.1 3.3% 3.3% 0 2 Treasury Assets 3.6 4
Slide 30: Interest Expense Analysis
Interest Expense Analysis Average Balances (€bn) Cost of Funds (%) Interest Expense (€m) H1 2020 H1 2019 H1 2020 H1 2019 H1 2020 H1 2019 Current Accounts 5.0 4.2 0.0% 0.0% 0 0 Retail Deposits 10.4 10.4 0.2% 0.3% 9 13 Corporate Deposits 2.1 2.5 0.5% 0.5% 5 6 IOM Deposits - - - - - - Wholesale Funding
Slide 31: Asset Quality
Asset Quality 30-Jun 31-Dec Loans and Advances to Customers 2020 2019 Measured at Amortised Cost €m €m Home Loans 12,231 12,260 Buy To Let 3,494 3,598 Total Residential Mortgages 15,725 15,858 SME / CRE 174 165 Consumer Finance 326 366 Total Measured at Amortised Cost 16,225 16,389 Analysed By ECL S
Slide 32: NPLs and NPAs
NPLs and NPAs Stage 3 Analysis 30-Jun-20 Home Loan Buy-To-Let Commercial Consumer Finance Total €m €m €m €m €m NPL is < 90 Days 443 315 25 1 784 NPL is > 90 Days and < 1 year past due 55 22 1 9 87 NPL is 1-2 years past due 28 6 - 1 35 NPL is 2-5 years past due 19 5 2 1 27 NPL is > 5 years past due 1
Slide 33: Regulatory Capital
Regulatory Capital 30 June 20 31 Dec 19 Transitional Fully Loaded Transitional Fully Loaded €m €m €m €m Risk Weighted Assets 9,983 9,970 10,012 9,996 Capital Resources: Common equity tier 1 1,646 1,385 1,765 1,464 Additional Tier 11 79 96 85 103 Tier 1 Capital 1,725 1,481 1,850 1,567 Tier 2 Capital
Permanent TSB Group Holdings — H1 2020 Earnings Presentation on 6ix