Permanent Tsb Group Holdings Plc · EURONEXT:PTSB
Permanent Tsb — FY2019 Earnings Presentation
35 slides from Permanent Tsb's earnings presentation, 2020
Slide 1: Annual Results 2019
A N N U A L F I N A N C I A L R E S U L T S FY 2019 Annual Results 2019 For The Year Ended 31 December 2019
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: Agenda
A N N U A L F I N A N C I A L R E S U L T S FY 2019 Agenda Business Update Jeremy Masding, CEO Financial Performance Eamonn Crowley, CFO
Slide 4: Business Update
A N N U A L F I N A N C I A L R E S U L T S FY 2019 Business Update Jeremy Masding, CEO
Slide 5: Continuing Commercial And Financial Progress
Continuing Commercial And Financial Progress FY 2019 Highlights Profit NPLs • Profit Before Tax of €42m • NPLs of €1.05bn, 38% lower YoY • Net Interest Margin of 1.80% • €0.5bn NPL disposal in H2’19 • Cost discipline allowing reinvestment in • NPL Ratio 6.4%, Mid-Single Digit Ratio in the business s
Slide 6: Building Positive Momentum
Building Positive Momentum Financial Highlights FY 2019 Financial Performance Profit Before Tax Net Interest Margin Operating Expenses1 Impairment Charge €42m 1.80% €283m €10m FY 18 €3m FY 18 1.78% FY 18 €284m FY 18 €17m Retail Deposits Performing Loan Book2 NPLs Pro-Forma CET1 Ratio (Incl Current A
Slide 7: Growing New Business
Growing New Business 14% Growth In Total New Lending Total Customer Lending (€m) 1,484 140 47 +13% +15% +126% Mortgage Lending Personal Term Lending SME Lending Mortgage Market Share (%) Personal Term Lending Channels1 (€m) SME Lending (€m) +31% 47 +126% 21 FY 18 FY 19 6 1. Direct Channels include O
Slide 8: Managing To A Clear Business Model
Managing To A Clear Business Model Focusing As A Source Of Competitive Advantage Governing Objective Vision Brand Purpose Participation Strategy Maximising Sustainable To Be The Bank Of Choice For Deliver What Our Customers, Providing Financial Services Shareholder Value All Our Stakeholders Colleag
Slide 9: Delivering Our Brand Purpose
Delivering Our Brand Purpose Meeting Customers Needs Customer Omni-Channel Service And Distribution NPS1 - Joint 1st Digital Activity Customer Care and Value • Continuing Investment in Channels >80 million • Branches, Voice and Digital being the positive drivers Successful Log-Ins on Mobile App & •
Slide 10: Repositioning For Profitable Growth
Repositioning For Profitable Growth Delivering On Strategic Priorities Strategic Priorities Grow Income Profitability Drive Digital Transformation Advance Simplification And Commit To Fair Customer Embed An Inclusive High Efficiencies Outcomes Performance Culture • Profit Before Tax of €42 • Deliver
Slide 11: Evolving For A Better Future
Evolving For A Better Future Balance Of Opportunities And Challenges In Strategic Priorities Opportunities Challenges Strategic Priorities • Positioned Well for Commercial • Regulatory Requirements • Grow Income Profitably and Profitable Growth, Supported • Prolonged Lower For Longer Interest • Dive
Slide 12: Financial Performance
A N N U A L F I N A N C I A L R E S U L T S FY 2019 Financial Performance Eamonn Crowley, CFO
Slide 13: Irish Economy Continues To Grow
Irish Economy Continues To Grow Strong KPIs Across The Board (Versus European Peer Economies) GDP (Growth) Labour Market Real Consumer Spending Growth Unemployment Rate 6.0% 5.3% Total Employment Growth 5.0% 7.4% 5.0% 4.4% 6.2% 3.4% 5.5% 4.0% 3.1% 3.0% 2.6% 2.5% 3.2% 2.0% 3.1% 1.0% 0.0% 2018 2019 20
Slide 14: Income Statement
Income Statement Improving The Quality Of Earnings Year On Year FY 19 FY 18 YoY YoY FY 19 Vs FY 18 €m €m €m % • 6% reduction in NII primarily due to lower income from NPLs (€36m) and NII (After ELG Fees) 356 379 (23) -6% Treasury Assets (€18m) offset by lower funding costs Fees & Commissions 37 39 (
Slide 15: NIM Stable, 2 Bps Higher Year-On-Year
NIM Stable, 2 Bps Higher Year-On-Year Lower Net Interest Income Net Interest Income (€m) Net Interest Margin (%) 379 356 1.80 1.78 1.80 42 29 Treasury Income 57 21 2.24% NIM 2.14% 2.10% NPL Income Perf. Loan Income Asset Yield Deposit Cost +4%1 Cost of Funds 377 378 Other Funding Costs 0.46% 0.37% I
Slide 16: Growth In Performing Loan Book
Growth In Performing Loan Book Home Loan Mortgage Book Growth Of 3% Performing Mortgage Book Growth (€bn) Performing Mortgage Yield (%) 14.7 14.9 Home Loan Buy to Let 3.39% 3.14% 2.97% 3.4 3.2 +3% Growth in Home Loans 2.32% 2.34% 2.35% 11.3 11.7 HL HL 1.4 -1.0 Stock Flow FY18 Inflow Outflow FY19 FY
Slide 17: Total Operating Expenses Reduced By 1%
Total Operating Expenses Reduced By 1% Cost Discipline Allowing Reinvestment In The Business Operating Expenses (€m) Movement In Operating Expenses (€m) FY19 €m FY17 FY18 FY19 v FY18 Depreciation Bank Levy Regulatory Charges Addressable Costs Staff Costs 146 148 147 -1% Non Staff Costs1 118 112 110
Slide 18: Funding The Future
Funding The Future Investing In Key Strategic Performance Priorities Average Annual Investment Spend (€m) Commercial & Technology 29 27 • Improved Customer Engagement Platforms • Renovating and Integrating Existing Legacy Systems • Introducing New Workplace Technology 2 • Identifying Partnership Opp
Slide 19: Improving NPL Ratio of 6.4%
Improving NPL Ratio of 6.4% Mid Single Digit Ratio In Sight 10% 6% NPL Strategy (€1.05bn) €bn 1.7 -38% 25% • Operational Cures (0.5) (0.1) 1.05 75% • Other Alternative Options Dec 18 Glas II Cures/Other Dec 19 Dec 19 • Asset Quality Coverage remains appropriate • Non Performing Loans of €1.05bn, 38%
Slide 20: Properties In Possession
Properties In Possession Good Progress In Selling Properties 1,793 705 Stock of Properties at Properties Into 31 December 17 Possession 2018/2019 2,092 Properties Sold & Sale Agreed 2018/2019 406 Stock of Properties 58 Property Sales at 31 Dec 19 Jan 20 19
Slide 21: Strong Funding And Liquidity Position
Strong Funding And Liquidity Position Investment Grade Achieved Total Funding (€18.2bn) Liquidity And Funding Ratio Peer Comparison 20.3 19.8 18.2 0.3 0.1 PTSB v 0.1 1.3 1.1 1.6 1.6 0.3 0.6 PTSB European European 0.1 Ratio (Dec 19) Bank Average Peers MREL Debt AT1 LCR1 170% 145% 25% Debt Securities
Slide 22: Capital Remains Above Regulatory Requirements
Capital Remains Above Regulatory Requirements Pro-forma CET1 Fully Loaded Increases by 100 Basis Points Regulatory Capital Ratios (%) CET 1 Fully Loaded Ratio Movement RWAs RWAs RWAs Dec-18 Dec-19 Dec-19 (Proforma) €12.0bn €10.0bn €9.7bn 19.6% 16.0% 0.3% 0.4% 18.1% 19.1% 1.8% 0.3% 17.6% 14.0% 16.0%
Slide 23: 2020 Outlook
2020 Outlook Growth Efficiency Returns • Net Lending Growth while • Operating Expenses will • Continue to maintain maintaining commercial remain stable as we pay for profitability and generate discipline on risk and pricing investment and inflationary organic Capital pressure through sustainable • N
Slide 24: Continuing Commercial And Financial Progress
Continuing Commercial And Financial Progress 2019 Outturn and Medium Term Outlook 2019 Outturn Medium Term Outlook (2020 – 2023) • Mortgage Market Share 15.5% • Mortgage Market Share 16%-18% • €1.7 billion New Lending • SME New Lending > €250m | Consumer New Lending >€200m Growth • NIM 1.80%, +2 Bps
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 €15.3bn €4.7bn €10.3bn WEST 12 Branches Performing Current Account Retail Deposit Loan Book Balances2 Balances2 NORTH EAST 12 Branches Market Share DUBLIN 22 Branches 15.5% 12.1% 11.1% Residential Current Acco
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) FY 2019 FY 2018 FY 2019 FY 2018 FY 2019 FY 2018 Tracker 9.4 11.8 1.3% 1.1% 115 135 Fixed and Variable 6.8 7.4 3.6% 3.6% 246 263 Consumer Finance 0.3 0.2 10.5% 10.7% 34 32 CRE 0.1 0.2 3.4% 2.7% 3 5 Treasury Assets 3.0 3.7 0.6
Slide 30: Interest Expenses Analysis
Interest Expenses Analysis Average Balances (€bn) Cost of Funds Interest Expense (€m) FY 2019 FY 2018 FY 2019 FY 2018 FY 2019 FY 2018 Current Accounts 4.3 4.0 0.0% 0.0% 0 1 Retail Deposits 10.3 10.4 0.2% 0.3% 25 34 Corporate Deposits 2.4 2.5 0.5% 0.6% 13 16 IOM Deposits - - - - - - Wholesale Funding
Slide 31: Asset Quality
Asset Quality 31-Dec 31-Dec Loans and Advances to Customers 2019 2018 Measured at Amortised Cost €m €m Home Loans 12,260 12,413 Buy To Let 3,598 4,003 Total Residential Mortgages 15,858 16,416 Commercial 165 165 Consumer Finance 366 335 Total Measured at Amortised Cost 16,389 16,916 Analysed By ECL
Slide 32: NPLs and NPAs
NPLs and NPAs Stage 3 Analysis 31-Dec-19 Home Loan Buy-To-Let Commercial Consumer Finance Total €m €m €m €m €m NPL is < 90 Days 420 294 29 1 744 NPL is > 90 Days and < 1 year past due 46 12 - 7 65 NPL is 1-2 years past due 20 4 - 1 25 NPL is 2-5 years past due 19 8 4 2 33 NPL is > 5 years past due 1
Slide 33: Regulatory Capital
Regulatory Capital 31 Dec 19 31 Dec 18 Transitional Fully Loaded Transitional Fully Loaded €m €m €m €m Risk Weighted Assets 10,012 9,996 11,990 11,966 Capital Resources: Common equity tier 1 1,765 1,464 1,768 1,456 Additional Tier 11 85 103 87 95 Tier 1 Capital 1,850 1,567 1,855 1,551 Tier 2 Capital
Slide 34: 2011 – 2019: Our Transformation Journey
2011 – 2019: Our Transformation Journey Return To Profitable Growth €bn / % Year 2019 • LDR 227% 2011 91%1 • System Funding €19.5bn / 39% 2011 Zero • Total New Lending €0.1bn 2012 c.€1.7bn • Mortgage Market Share c. 2% 2012 15.5%2 • Financial Loss / Profit Loss €1bn 2012 Profit €42m3 • NIM 0.72% 201
Slide 35: Notes
Notes 34 Ww permanent tsb
Permanent TSB Group Holdings — FY2019 Earnings Presentation on 6ix