Permanent Tsb Group Holdings Plc · EURONEXT:PTSB
Permanent Tsb — H1 2021 Earnings Presentation
36 slides from Permanent Tsb's earnings presentation, Jul 28, 2021
Slide 1: Interim Results
ww permanent tsb Group Holdings ple Interim Results
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 Results 2021
I N T E R I M R E S U L T S 2021 Eamonn Crowley, Paul McCann, CEO Interim CFO
Slide 4: Business Update
I N T E R I M R E S U L T S 2021 Business Update Eamonn Crowley, CEO
Slide 5: Good Performance – In Challenging Business Environment
Good Performance – In Challenging Business Environment HY 2021 Highlights • Total New Lending of €0.9bn, increased by 43% YoY, +20% versus H1’19 17.5%1 Customers Mortgage • €0.8bn New Mortgage Lending, 45% increase YoY, +25% versus H1’19 Market Share • Continuing to enhance Customer Journeys and bui
Slide 6: Mortgage Market Is Growing
Mortgage Market Is Growing Demand Continues to Exceed Supply Mortgage Market (€bn) Mortgage Market Approvals (€bn) Mortgage Market Drawdowns (€bn) 12.5 11.0 3.5 3.5 10.0 2.9 2.8 2.9 8.4 2.1 2.2 2.0 2020 2021e 2022e 2023e Q3'20 Q4'20 Q1'21 Q2'21 Q3'20 Q4'20 Q1'21 Q2'21 Mortgage Market Applications (€
Slide 7: Macroeconomics Better Than Previously Forecast
Macroeconomics Better Than Previously Forecast Domestic Performance Linked to Successful Easing of Restrictions House Price Growth (%) Labour Market (%) • HPI is expected to rise as restrictions on construction activity during the 5.3% Unemployment Rate Employment Growth pandemic together with low l
Slide 8: Strong Business Performance – H1'21 Growth
Strong Business Performance – H1’21 Growth Mortgage Market Share 17.5%1 - up 2.3% YoY Mortgage Drawdowns & Market Share2 Mortgage Applications & Market Share 1.0 18.0% 17.5% 2.5 15.8% 20.0% 0.8 45% Growth 83% Growth 14.7% 15.2% 16.0% 14.8% in Mortgage 2.0 in Mortgage 12.4% 15.0% 0.6 Drawdowns Applic
Slide 9: A Purpose Led Strategy
A Purpose Led Strategy 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 Customers
Slide 10: Customers
Customers Build Trust And Loyalty With Our Customers Enhance Leverage Re-Position Customer Journeys Digital Capabilities Our Brand Delivering On Our Priorities Meeting Changing Customer Needs NPS1 + 19 72 Hour 42% Customer Feedback Is Important To Us Top 2 Mortgage New To Bank Market Approval Mortga
Slide 11: Transform
Transform Build A Sustainable Future For The Bank Digital Business Model Embed Development Simplification Our Values Delivering On Our Priorities A Bank-Wide Enterprise Transformation Programme Underway Successfully launched facilitating secure • Effective Organisation Design Digital Current Accou
Slide 12: Building a Responsible and Sustainable Business
Building a Responsible and Sustainable Business Engaging Communities to Build a Better Future Supporting Local Communities Committing To Do More Through Building Partnerships, Providing Financial Support and Engaging in Employee Volunteering • Signatory to the Business in the Community Ireland Eleva
Slide 13: Financial Performance
I N T E R I M R E S U L T S 2021 Financial Performance Paul McCann, Interim CFO
Slide 14: Lower Income Impacting Profitability
Lower Income Impacting Profitability Income Statement Grow Diversified Efficient Capital And Income Streams Organisation Resource Allocation H1 21 H1 20 YoY YoY HY 2021 Vs HY 2020 €m €m €m % • 11% reduction in Net Interest Income primarily as a result of the Performing loan sale in Q4’20 (€8m), redu
Slide 15: Net Interest Income
Net Interest Income Net Lending Income 8% Lower - Actively Managing Deposit Costs 170 Net Lending Income (€m) Other Interest Income (€m) Net Interest Margin (%)2 10 1.95% 1.95% (8) 160 1.79% 1.63% 1.77% (8) 7 (5) 1.72% 166 7 1.75% 1.73% 1 150 1.50% (6) 152 5 0.22% 0.14% 0.23% - 140 0 - H1 '20 Perf.
Slide 16: Performing Residential Loan Book
Performing Residential Loan Book Home Loan Book 2% Growth YoY Home Loan Book by Product (Mix %) Home Loan Yield (%) BTL Book by Product (Mix %) €bn 11.6 11.7 11.8 3.1 1.5 1.5 2.86% 23% 20% 18% 2.81% 9% 2.71% 12% 14% 34% 38% 43% 1% 2% 1% 2.59% 90% 44% 41% 39% 87% 2.49% 2.49% 84% H1 '20 FY '20 H1 '21
Slide 17: Total SME Loan Book
Total SME Loan Book New Lending Driving 16% Growth YTD Total SME Book Movement (€m)1 SME Yield (%) SME New Lending (€m) 25 42 42 (16) 4.04% 4.16% 3.91% +16% 185 159 3.52% 3.34% 3.40% 27 20 15 5 FY20 Inflows Outflows H1'21 H1'20 FY'20 H1'21 H1'20 H1'21 Mortgages Term Loans Stock Flow • SME Loan Book
Slide 18: Operating Expenses
Operating Expenses Total Costs Increase By 4% - Cost Management Remains A Key Focus H1’21 H1’20 YoY YoY Movement In Operating Expenses (€m) Cost Base Analysis €m €m €m % Total Costs 168 162 +6 +4% +4% 160 o/w Regulatory Charges 21 20 +1 +5% 4 -2 Total Operating Expenses 147 142 +5 +4% -1 150 4 o/w D
Slide 19: Asset Quality Improving
Asset Quality Improving NPL Ratio of 7.0% - Provision Coverage In Line With FY20 Total Loan Book By Stage (€bn) Provisions By Stage (€bn) FY '20 H1 '21 FY '20 H1 '21 NPL Ratio Reduced 13.8 13.7 By 60 Bps to 7.0% 0.39 0.36 1.1 0.34 0.34 1.0 Stage 1 & 2 Stage 3 Stage 1 & 2 Stage 3 Asset Quality / Cove
Slide 20: Strong Funding And Liquidity Position
Strong Funding And Liquidity Position Ratios Significantly Better Than European Peers Total Funding (€bn) • 94% Funded by Customer Retail & Corporate Deposits (€bn) Deposits; 18.8 19.1 19.6 • 87% from Retail Deposits (incl. Action taken on 0.4 0.4 C/A’s) Non-Personal Deposits 0.4 0.4 0.5 0.2 0.5 0.1
Slide 21: Capital Ratios Remain Above Regulatory Requirements
Capital Ratios Remain Above Regulatory Requirements CET1 Fully Loaded Increased By 20bps YTD Regulatory Capital Ratios1 (%) CET1 Fully Loaded Ratio Movement (%) Dec-20 Dec-20 (Proforma) Jun-21 RWAs RWAs €8.5bn Proforma €8.5bn 22.3% 21.0% 16.5% 20.0% 0.1% -0.1% -0.1% 0.3% 18.1% 18.1% 15.5% 17.4% 15.1
Slide 22: Building Sustainable Profitability
Building Sustainable Profitability 2021 Outlook Growth Efficiency Returns • New Mortgage Lending c. 30% increase • Accelerating investment in Digital • Lower Net Interest Income impacting on 2020 volumes Infrastructure to support growth, profitability in 2021 increasing Operating Expenses c.3% YoY •
Slide 23: Medium Term Outlook
I N T E R I M R E S U L T S 2021 Medium Term Outlook Eamonn Crowley, CEO
Slide 24: Signed Memorandum of Understanding
Signed Memorandum of Understanding Potential Acquisition of €7.6 Billion of Assets From NatWest and Ulster Bank DAC • On the 23rd July 2021, the Bank entered into a Memorandum of Understanding (MOU) with NatWest and Ulster Bank DAC • Potential acquisition where PTSB will acquire certain elements of
Slide 25: Strategically Compelling Transaction
Strategically Compelling Transaction Complements The Bank’s Purpose And Ambition • Accelerates growth of PTSB customer base allowing the Bank to deliver an improved Increased Customer proposition for all customers. Customer Trust, Advocacy, Loyalty • Increased market share in complimentary products
Slide 26: Strong Ambition, Purpose And Priorities
Strong Ambition, Purpose And Priorities Strategic Priorities Will Drive Sustainable Returns Our Ambition Nationwide Physical Right Products, Right Price To Be Ireland’s Best Personal Footprint A continued physical presence in And Small Business Bank our communities in Ireland, The right products, at
Slide 27: Appendix
I N T E R I M R E S U L T S 2021 Appendix
Slide 28: Domestically Focused Retail And SME Bank
Domestically Focused Retail And SME Bank Business Overview Our Physical Landscape Business €13.8bn €6.5bn €10.5bn Performing Current Account Retail Deposit Loan Book Balances Balances Dublin Region 25 Branches Market Share South & East Region 25 Branches c.15% 12% 10% Residential Current Account Ret
Slide 29: Historical Financial Information – Income Statement
Historical Financial Information – Income Statement €m HY2021 FY 2020 FY 2019 FY 2018 FY 2017 Net Interest Income 152 341 356 379 407 Other Income 15 34 58 63 38 ELG Fees - - - - (2) Total Operating Income 167 375 414 442 443 Total Operating Expenses (Before (168) (329) (330) (331) (329) Exceptional
Slide 30: Historical Financial Information – Balance Sheet
Historical Financial Information – Balance Sheet €bn Jun 2021 Dec 2020 Dec 2019 Dec 2018 Dec 2017 Total Loan Book (net) 14.2 14.2 15.6 15.9 18.4 Treasury Assets 6.5 5.9 3.6 3.8 3.5 Other Assets 0.8 0.8 1.1 2.1 0.9 Total Assets 21.5 20.9 20.3 21.8 22.8 ROI Retail Deposits (Incl. Current Accounts) 17.
Slide 31: Interest Income Analysis
Interest Income Analysis Average Balances (€bn) Yields (%) Interest Income (€m) H1 2021 H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 Tracker 6.7 8.7 1.3% 1.3% 43 54 Fixed and Variable 7.2 7.1 3.3% 3.6% 116 125 Consumer Finance 0.3 0.3 10.4% 10.1% 14 16 SME / CRE 0.2 0.2 3.8% 3.0% 4 3 Treasury Assets 6.2
Slide 32: Interest Expense Analysis
Interest Expense Analysis Average Balances (€bn) Cost of Funds (%) Interest Expense (€m) H1 2021 H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 Current Accounts 6.2 5.0 0.0% 0.0% 0 0 Retail Deposits 10.6 10.4 0.1% 0.2% 3 9 Corporate Deposits 1.6 2.1 0.5% 0.5% 4 5 Wholesale Funding 0.9 1.0 1.3% 1.1% 6 6 Und
Slide 33: Asset Quality
Asset Quality 30-Jun 31-Dec Loans and Advances to Customers 2021 2020 Measured at Amortised Cost €m €m Home Loans 12,435 12,338 Buy To Let 1,893 2,009 Total Residential Mortgages 14,328 14,347 SME / CRE 186 181 Consumer Finance 334 327 Total Measured at Amortised Cost 14,848 14,855 Analysed By ECL S
Slide 34: NPLs and NPAs
NPLs and NPAs Stage 3 Analysis 30-Jun 21 Home Loan Buy-To-Let Commercial Consumer Finance Total €m €m €m €m €m NPL is < 90 Days 425 256 45 1 727 NPL is > 90 Days and < 1 year past due 46 48 1 6 101 NPL is 1-2 years past due 38 18 - 1 57 NPL is 2-5 years past due 26 6 1 2 35 NPL is > 5 years past due
Slide 35: Regulatory Capital
Regulatory Capital 30 June 21 31 Dec 20 Transitional Fully Loaded Transitional Fully Loaded €m €m €m €m Risk Weighted Assets 8,486 8,481 8,480 8,471 Capital Resources: Common equity tier 1 1,481 1,296 1,535 1,282 Additional Tier 11 123 123 190 198 Tier 1 Capital 1,604 1,420 1,725 1,480 Tier 2 Capita
Slide 36: Thank You
I N T E R I M R E S U L T S 2021 Thank You End of Presentation
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