Nationwide Building Society · LSE:NBS

Nationwide Building Society — H1 2016/17 Earnings Presentation

17 slides from Nationwide Building Society's earnings presentation, November 2016

  1. Slide 1: Half Year Results Presentation

    Half Year Results Presentation For the half year ended 30 September 2016

  2. Slide 2: Building Society, Nationwide

    BUILDING SOCIETY, NATIONWIDE Helping more members move up the housing ladder Protecting rates for savers through our support package +17% +81% £17.5bn £4.7bn £14.9bn £2.6bn H1 15/16 H1 16/17 H1 15/16 H1 16/17 Gross Mortgage Lending Growth in Member Deposits Strengthening our Current Account offering

  3. Slide 3: Balancing Profits in Line with Members' Interests

    BALANCING PROFITS IN LINE WITH MEMBERS’ INTERESTS H1 15/16 H1 16/17 % Change £m £m UNDERLYING INCOME 1,683 1,642 (2%) COSTS 858 938 9% IMPAIRMENTS - 37 - OTHER PROVISIONS 24 52 116% UNDERLYING Other items (£m) H1 15/16 H1 16/17 801 615 (23%) PROFIT Transformation costs (8) - OTHER ITEMS 1 81 - FSCS

  4. Slide 4: A Low Risk Balance Sheet

    A LOW RISK BALANCE SHEET 4 Apr 16 30 Sept 16 £bn £bn % Change RESIDENTIAL MORTGAGES 162.1 168.3 4%  Asset growth of 8% driven by OTHER LENDING 16.7 16.8 1% growth in residential mortgage LIQUIDITY¹ 23.1 30.5 32% lending and prudent liquidity position OTHER ASSETS 7.0 9.9 41%  Other assets and othe

  5. Slide 5: Margin Expected to Be Only Modestly Lower in H2

    MARGIN EXPECTED TO BE ONLY MODESTLY LOWER IN H2 Net Interest Margin (NIM) Evolution Movement in NIM Net Interest Margin Net Interest Income 158bps 1.58% 1.46% 1.35% 1.33% 1.31% 1,557 1,529 1,449 (17bps) 710 739 H1 15/16 H2 15/16 H1 16/17 Q1 16/17 Q2 16/17 (3bps) 1.47% 1.52% (2bps) 1.27% 1.33% (3bps)

  6. Slide 6: Investing for Our Future in a Growing Society

    INVESTING FOR OUR FUTURE IN A GROWING SOCIETY Underlying Costs (£m)  Investment in enhancing our service proposition, such as our new Banking +9% App, Android Pay and extending Nationwide Now, supporting growth in 938 all core markets 5 8 8  Investment in our people, providing a 23 Living Pension

  7. Slide 7: Cost Growth Expected to Slow as Efficiencies Are Delivered

    COST GROWTH EXPECTED TO SLOW AS EFFICIENCIES ARE DELIVERED Underlying Costs (£m)  Investment in simplifying processes to improve service propositions and create sustainable efficiency savings, including: − Digitised sales processes 938 938 − New banking app 858 − Mobile payments − Keystroke automat

  8. Slide 8: Reduced Impairments

    REDUCED IMPAIRMENTS Impairments (£m) Unsecured Residential Retail Lending lending Treasury & Other Commercial Lending Consumer Banking Residential Lending 4 Apr 16 30 Sept 16 4 Apr 16 30 Sept 16 591 Non performing 3,179 3,032 345 316 balances (£m) NPL provisions 3.2% 3.2% 81% 83% 428 coverage 383 3

  9. Slide 9: Lower Customer Redress

    LOWER CUSTOMER REDRESS Customer Redress (£m) PPI Other 103 103 73 69 59 52 24 FY 11/12 FY 12/13 FY 13/14 FY 14/15 H1 15/16 H2 15/16 H1 16/17 Nationwide Interim Results 9 2016/17

  10. Slide 10: Maintaining a Strong Capital Position

    MAINTAINING A STRONG CAPITAL POSITION Movements in CET1 Ratio Peer Group CET1 Ratio¹ 23.3% 1.5% (1.2%) 15.0% 13.9% 13.4% 23.2% 23.3% 11.6% 11.1% (0.1%) (0.1%) Mar 16 Profit Pension RWAs Other Sept 16 Nationwide RBS HSBC Lloyds Barclays Santander Deficit UK Movements in end-point CRD IV Leverage Rati

  11. Slide 11: Well Placed to Meet Current and Emerging Capital Requirements

    WELL PLACED TO MEET CURRENT AND EMERGING CAPITAL REQUIREMENTS £15bn Buffers % of RWA Tier 2 £10bn 26.2% AT1 AT1 23.3% Buffers 22.1% 19.8% 6% of leverage AT1 exposure £5bn 14.8% CET1 11.6% CET1 Buffers CET1 8.1% Pillar 2A 4.5% Pillar 1 £0bn End point capital Leverage CET1 MREL¹ Transitional resources

  12. Slide 12: Prudent Approach to Funding and Liquidity

    PRUDENT APPROACH TO FUNDING AND LIQUIDITY Liquid assets (£bn)  Increase in liquid assets attributable to pre-funding of Other securities Other liquid assets Government bonds1 Cash2 wholesale maturities and increased collateral postings +24% against derivatives following the EU Referendum 34.7 27.9

  13. Slide 13: Summary

    SUMMARY Performance highlights Award highlights  Strong trading performance  Number one for service satisfaction amongst our high street peer group¹  Financially strong Nationwide 1 © GfK 2016, Financial Research Survey (FRS) measure, as defined in the glossary (slide 16) Interim Results 13 2016/

  14. Slide 14: Slide 14

  15. Slide 15: Contacts

    CONTACTS Alex Wall Head of Investor Relations, Rating Agencies & Capital alexander.wall@nationwide.co.uk 0845 602 9053 Sarah Gardiner Head of Investor Relations sarah.gardiner@nationwide.co.uk 0845 602 9053 Nationwide Treasury Mailbox nationwide.treasury@nationwide.co.uk Nationwide Interim Results 1

  16. Slide 16: Glossary

    GLOSSARY Definitions used are in line with the glossary in the Annual Report and Accounts 2016. In addition, further items included in the results presentation are defined below. Customer satisfaction measure Definition Net satisfaction in core products © GfK 2016, Financial Research Survey (FRS), 3

  17. Slide 17: Disclaimer

    DISCLAIMER This presentation has been prepared by and is the This communication must not be acted on or relied on It has no regard to the specific investment objectives, Nationwide; changes in business strategy, lending property of Nationwide Building Society (“Nationwide”). by persons who are not r

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