Osb Group Plc · LSE:OSB
Osb — OneSavings Bank — FY2017 Earnings Presentation
15 slides from Osb's earnings presentation, Mar 15, 2018
Slide 1: Best in class specialist lending: 2017 Results
Best in class specialist lending 2017 Results 15 March 2018
Slide 2: Another strong set of results for 2017
Another strong set of results for 2017 £2.6bn £7.3bn £5.9bn Gross organic lending Net loan book £2.3bn Improved Unique by 2% + 14% 2016 2017 + 23% 2016 2017 business points model… Cost to income ratio 27%1 27% Underlying PBT £138.2m1 £167.7m Remaining strong + 21% 2016 2017 2016 2017 51.1p 29% 28% U
Slide 3: Strong growth in profitability
Strong growth in profitability 1 Continued growth in underlying earnings1… 2 …with stable NIM & robust loan book growth1… 280 2.94 3.09 3.16 3.16 3.5 Underlying profit before tax (£m) 160 Net interest income (£m) Net interest margin (%) 140 240 3 120 200 2.16 2.5 100 160 2 80 168 138 120 245 1.5 60
Slide 4: Strong profitability drives growth in shareholder returns
Strong profitability drives growth in shareholder returns 2017 2016 Change £m £m £m % • Other expenses include £7.3m Net interest income 245.4 206.6 38.8 19 (2016: £4.9m) amortisation of fair value Other expenses (7.3) (5.2) (2.1) (40) adjustments on cancelled swaps Total income 238.1 201.4 36.7 18
Slide 5: Strong growth whilst improving credit quality
Strong growth whilst improving credit quality 2017 2016 Change £m £m £m % • Net loan book growth of 23% Lending supported by 14% growth in organic Net customer loans 7,306 5,939 1,367 23 origination to £2.6bn o/w provisions (22) (25) 3 12 • BoE funding schemes – transitioned Funding and liquidity ou
Slide 6: Segmental results – BTL/SME
Segmental results – BTL/SME1 • LTVs remain low at 69% (2016: 69%) with only 0.7% of loans by value with LTVs exceeding 90% (2016: 0.4%) 1. Gross loan book1 2. Net interest income1 200 Net interest income (£m) 5,000 Gross loan book (£m) 4,000 160 3,000 120 5,654 2,000 4,104 80 177 2 3,155 135 1,000 4
Slide 7: Segmental results – BTL/SME sub-segments
Segmental results – BTL/SME sub-segments 1. Buy-to-Let 2. Semi-commercial/Commercial 5,000 400 Gross loan book (£m) Gross loan book (£m) 4,000 300 3,000 5,034 200 371 2,000 2 3,613 268 1,000 100 0 0 2016 2017 2016 2017 • Average interest rate coverage (ICR) was 185% during 2017 • Weighted average LT
Slide 8: Segmental results – Residential
Segmental results – Residential • Average LTV remains low at 56% (2016: 58%) with only 3% of loans by value with LTVs exceeding 90% (2016: 3%) 1. Gross loan book 2. Net interest income 80 Net interest income (£m) 2,000 Gross loan book (£m) 60 1,500 40 1,000 2,007 1,860 69 71 68 1,674 500 2 20 0 0 20
Slide 9: Segmental results – Residential sub-segments
Segmental results – Residential sub-segments 1. First charge mortgages 2. Second charge mortgages 600 1200 Gross loan book (£m) Gross loan book (£m) 1000 400 800 2 600 1,322 1,241 487 200 415 400 200 0 0 2016 2017 2016 2017 3. Funding lines 4. Summary 100 • First charge new organic lending in 2017 w
Slide 10: Stronger capital base, enhanced by AT1
Stronger capital base, enhanced by AT1 21% 16.9% • Strong capital generation through 18% 1.4% profitability 15% 1.8% 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: Forward guidance
Forward guidance Full year net loan book growth of mid-teens through organic lending NIM for full year of c.3% reflecting current asset pricing and an expectation of rising cost of retail funds after the end of TFS Full year cost to income of c.30% reflecting the increasing cost of regulation and pl
Slide 12: Our award winning lending franchise performed strongly
Our award winning lending franchise performed strongly Organic lending up 14% Retention Net loan book growth of 23% Organic origination (£m) 3,000 2,500 244 Improved by 2% 2,000 382 Significant increase in Growth 334 23% 1,500 borrowers choosing new points 1,000 500 1,494 1,959 2,414 products with o
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 continued Growth up 12% in the points period £6.7bn attract new savings customers 27,000 to draw funding from the TFS £1.25bn Strong custome
Slide 14: Summary and outlook
Summary and outlook 2017 was yet another year of strong growth: 14% increase in organic origination to £2.6bn Strong credit profile: low arrears and strong LTV coverage, and high interest cover on Buy-to-Let Excellent customer results: customer NPS at +62, retail savings bond retention at 90% Tradin
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