Permanent Tsb Group Holdings Plc · EURONEXT:PTSB

Permanent Tsb — FY2014 Earnings Presentation

29 slides from Permanent Tsb's earnings presentation, March 2015

  1. Slide 1: All numbers and charts contain dummy numbers

    All numbers and 0 charts contain dummy numbers 0 .

  2. Slide 2: Disclaimers

    Disclaimers A number of statements we make in our presentation, and in the accompanying slides, will not be based on historical fact but will be 1 “forward-looking” statements within the meaning of Section 27A of the US Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the

  3. Slide 3: Agenda

    Agenda 2 Jeremy Masding, Group CEO – 2014 Highlights Glen Lucken, Group CFO – Financial Performance Jeremy Masding, Group CEO – Recap 2 and Priorities Questions & Answers 2

  4. Slide 4: Today's Key Messages

    Today’s Key Messages 3 €525m to CAPITAL RAISE meet regulatory requirements and buy back State CoCo RESTRUCTURING Agreed in principle with the European Commission PLAN 3 FINANCIAL Continued strong progress PERFORMANCE Agreements announced today to DELEVERAGING achieve over 50% of planned Non-Core del

  5. Slide 5: Capital Raise

    Capital Raise 4 €125m To €400m To €525m Total Strengthen Repay State CoCo Capital Base  Initial investor engagement has been encouraging 4 November  Investor roadshow began in  Analysts and Investor Day tomorrow  Confident that the transaction can be completed by Capital Plan deadline – 26 July

  6. Slide 6: Restructuring Plan – Agreed In Principle

    Restructuring Plan – Agreed In Principle 5 Viable, competitive CERTAINTY retail bank FOR THE FUTURE Important role in bringing competition to Irish market VALIDATION Plan sets out future shape and size of Group OF OUR BUSINESS 5 Focus on being safe, stable, PLAN well-managed institution Growing the

  7. Slide 7: Group Financial Highlights

    Group Financial Highlights 6 BOTTOM LINE NET INTEREST IMPAIRMENT RESULTS MARGIN GROUP pre-tax loss reduced 93% GROUP increased from €668m to €48m to 90bps from 82bps €42m write-back in 2014 CORE BANK (2013: charge of €929m) CORE BANK increased to profit before exceptional items of 121bps from 97bps

  8. Slide 8: Core Bank / Non-Core: Financial Headlines

    Core Bank / Non-Core: Financial Headlines 7 Group Core Bank Non-Core Core Bank Now Profitable Non-Core Loss Levels Abating  Profit Before Exceptional Items of 7  Loss Before Exceptional Items of €5m, improved by €699m €44m, reduced by €239m  Profit Before Impairment, Non  Impairment Charges of €

  9. Slide 9: Core Bank: Strong New Business Acquisition

    Core Bank: Strong New Business Acquisition 8 Deposit Volumes* (€bn) and Market Share (%) 16.0 12.8% Attracting New Customers and Deposits 13.6 14.3 12.7% 14.0 13.2 2.2 2.6 12.6%  Retail Deposits increased to €14.3bn (incl. 12.0 2.1 10.0 11.1 11.4 11.7 12.4% Current Accounts) with a market share of

  10. Slide 10: Core Bank: Managing Down The Legacy Arrears

    Core Bank: Managing Down The Legacy Arrears  Arrears over 90 days cases reduced by 32% from peak; now represents around 11% of total number of cases 9  Close to 27,000 long term treatments offered  Both early arrears and late are falling, and are ahead of the industry % of Late Arrears Home Loan

  11. Slide 11: Non-Core: Major Progress On Deleveraging

    Non-Core: Major Progress On Deleveraging 10  Agreements announced today will achieve over 50% of total deleveraging  c.€5bn of non-core loan sales announced today  CHL £2.5bn of UK Mortgage assets  Commercial Real Estate €1.5bn of Irish assets 10 Springboard CRE CHL Mortgages Sold in 2014 €0.5bn

  12. Slide 12: Agenda

    Agenda 11 Jeremy Masding, Group CEO – 2014 Highlights Glen Lucken, Group CFO – Financial Performance Jeremy Masding, Group CEO – Recap 11 and Priorities Questions & Answers 11

  13. Slide 13: Group Income Statement

    Group Income Statement €m 2014 2013 Change %  NII increased by €19m due to reduced cost of funds12  Steady NIM improvement of 8bps from 82 to 90bps in a Net Interest Income 329 309 19 7% falling rate environment driven by lower cost of funds Other Income 38 48 (10) 21%  Other Income decrease of €

  14. Slide 14: Segmental Performance

    Segmental Performance 13 Income Statement (€m) Core Bank Non-Core Total Ireland UK 2014 2013 2014 2013 2014 2013 2014 2013 Profit/(Loss) Before Impairments and 45 (34) 19 24 (56) (21) 8 (31) Non-Recurring Items Non-Recurring Items (91) (16) 2 (1) - - (89) (17) Impairment Writeback/(Charges) 51 (644)

  15. Slide 15: Net Interest Margin

    Net Interest Margin Today’s NIM 14 Components of NIM  Group NIM shows an improvement of 1.20% 8bps; Core Bank NIM improved by 24bps 0.12% 1.00% 0.07% 0.02%  Driven mainly by deposit re-pricing and -0.13% 0.80% reduction in overall cost of funds 0.60% 0.82% 0.90%  Continuous ECB rate cuts over las

  16. Slide 16: Total Operating Expenses

    Total Operating Expenses Staff Costs 15 Total Operating Expenses (€m) 440  Staff Costs increased by €3m primarily due to 400 389 new staff hires (+161) in the AMU and as a 360 27 result of increased regulatory requirements 320 300 72 Other Costs 280 39  Other Costs increased due to continuous incr

  17. Slide 17: Impairment Charges

    Impairment Charges 16 Loan Impairment Charges / Write-Back  Impairment Charges decreased by €971m since 2013 1,100 (€m) influenced by: ROI Residential Mortgages (decreased by €762m) 900  Reduction of €317m due to significantly lower levels of new defaults and higher loan cures in 315 2014; 700  R

  18. Slide 18: Deleveraging

    Deleveraging 17 Gross Loans At Constant Exchange Rate (€bn) 2014 Highlights  Continued natural net reduction of loan Sale agreed for 50% of non-core assets 40 Loan Book Reduced portfolio by c.€5bn since 2011  Capital Positive Sale of Springboard 35 Mortgages Limited of €0.5bn 30  €0.2bn of CHL de

  19. Slide 19: Funding

    Funding 18  Continuing focus on optimising the funding: Group Funding Mix (€bn) 45.0 3.00%  System Funding reduced by a further 40.0 2.72% €2bn; reduced to 15% of Total Funding 2.50% Sources 35.0 11.7  Deposit represents 61% of Total Funding, 30.0 8.2 8.0 2.00% with €0.9bn in Deposit Growth in 20

  20. Slide 20: Capital

    Capital 19 CET1 Ratio %  Capital Ratio strengthened from 16.0% 14.2% 13.1% 12.4% 2013 due to a reduction in RWA 12.0% 11.3%  Common Equity Tier 1 ratio under 8.0% Basel III transitional basis 14.2% 4.0% fully loaded basis 12.4%; 0.0%  RWA – down €2.0bn due to Dec-13 Dec-14 Transitional Fully load

  21. Slide 21: Group: Asset Quality

    Group: Asset Quality 20 1% Gross Loans NPLs 6% 1% ROI HL 2% ROI HL ROI BTL 18% ROI BTL 20% UK HL 1% UK HL 1% 52% UK BTL 51% UK BTL 20% CRE 27% CRE Consumer Consumer 20 2014 ROI HL ROI BTL UK HL UK BTL Commercial Consumer Total Gross Loans €bn 16.6 6.3 0.4 6.4 2.0 0.3 32.0 Performing % 74% 64% 88% 98

  22. Slide 22: Group: Asset Quality – ROI Home Loans

    Group: Asset Quality – ROI Home Loans ROI HL: Gross Loans €16.6bn 2014 2013 Change Portfolio 21  72% of ROI residential mortgages are HLs Early Arrears (<90 Days) Cases 5,345 6,140 13%  57% are Trackers Late Arrears (90+ Days) Cases 14,370 21,812 34% Economic Environment Late Arrears % of Total Ca

  23. Slide 23: Group: Asset Quality – ROI Buy-To-Lets

    Group: Asset Quality – ROI Buy-To-Lets ROI BTL: Gross Loans €6.3bn 2014 2013 Change 22 Portfolio Early Arrears (<90 Days) Cases 809 963 16%  28% of ROI residential mortgages are BTLs Late Arrears (90+ Days) Cases 3,040 3,872 21%  86% are Trackers Late Arrears % of Total Cases 13.6% 16.8% 3.2ppts E

  24. Slide 24: Group: Asset Quality – NPL Analysis

    Group: Asset Quality – NPL Analysis 23 Home Loans NPLs (€bn) Buy-To-Let NPLs (€bn) 5.0 4.5 3.0 4.5 4.2 2.5 4.0 2.5 2.2 3.5 1.4 2.5 2.0 / 48% 2.0 3.0 3.1 / 69% 1.2 1.4 / 56% 0.9 1.1 / 50% 2.5 0.6 1.5 2.0 0.2 23 0.2 0.2 0.5 0.1 - 1.5 1.0 0.2 0.2 1.1 0.2 0.0 0.1 0.3 2.2 / 52% 1.0 1.1 / 44% 0.2 1.1 / 50

  25. Slide 25: Key Medium Term Targets

    Key Medium Term Targets 24 Core Bank 2013 2014 2018E Target Market Share In Key Product Offerings 8-13% 11-13% >13% NIM 0.97% 1.21% c.1.70% Underlying Cost: Income Ratio1 116% 85% c.50% Impairment Charge 3.0% (0.3)% <0.4% (as a % of Net Loan Book) Return On Equity2,3 24 n/a n/a c.10.0% Group Loan To

  26. Slide 26: Agenda

    Agenda 25 Jeremy Masding, Group CEO – 2014 Highlights Glen Lucken, Group CFO – Financial Performance Jeremy Masding, Group CEO – Recap 25 and Priorities Questions & Answers 25

  27. Slide 27: Recap and Priorities

    Recap and Priorities 26  Capital Raise  Restructuring Plan Recap  Financial and Operating Performance  Deleveraging  Serving Customers 26  More Products and More Innovation Priorities  Improving NIM  Managing Costs  Achieving Sustainable Profitability 26

  28. Slide 28: To Sum Up

    To Sum Up 27 Strong Financial Performance Delivering Ahead 27 Of Plan Clear Roadmap 27

  29. Slide 29: Questions & Answers

    28 Questions & Answers 28 28

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