Permanent Tsb Group Holdings Plc · EURONEXT:PTSB
Permanent Tsb — FY2022 Earnings Presentation
40 slides from Permanent Tsb's earnings presentation, Mar 1, 2023
Slide 1: Annual Results 2022
Annual Results 2022 Members of the Irish Olympic Team and the Irish Paralympic Team pictured at the launch of Permanent TSB’s title sponsorship of Team Ireland for the 2024 Games in Paris. We are a community serving the community
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: Annual Results 2022
A N N U A L R E S U L T S 2022 Eamonn Crowley, Nicola O’Brien, CEO CFO
Slide 4: Business Update
1 2 3 4 Business Update Financial FY23 & Medium Appendix Performance Term Outlook Eamonn Crowley, CEO
Slide 5: Business Performance
Business Performance Full Year 2022 Highlights; Strategy Execution Delivers Record Results • Mortgage Book increased by c.40%, c. €5.2bn Mortgage assets migrated from NatWest >200k New • Branch Network increased by c. 30%, 25 New Bank Branches Transferred in Jan’23 Customers Customers • New Mortgage
Slide 6: Macroeconomic Outlook
Macroeconomic Outlook Interest Rate Rises Expected to Impact Housing Market Sentiment House Price Growth (%) ECB MRO & HICP Forecast (%) Labour Market (%) ECB Refinance Rate HICP Unemployment Rate Employment Growth 8.2% 7.8% 6.5% 4.7% 5.0% 4.3% 4.6% 4.6% 4.0% 2.50% 3.75% 1.5% 0.9% 2022 2023e 2024e 2
Slide 7: A Purpose Led Strategy
A Purpose Led Strategy Delivering our Strategy is our Focus To Work Hard Every Day to Build Trust with Our To Be Ireland’s Best Customers - We are a Personal And Small Community Serving the Business Bank Community A Business Model With Great People and Great Tech Building A Sustainable Bank for the
Slide 8: Principle Completion of Transaction with Ulster Bank DAC
Principle Completion of Transaction with Ulster Bank DAC Transformative Acquisition Aligns With the Bank’s Strategic Priorities 7
Slide 9: Delivering Strong Performance For Our Customers
Delivering Strong Performance For Our Customers Total New Lending of €2.8 Billion + c.40% YoY Total Customer New Lending (€bn)1 • Total New Mortgage Drawdowns (€bn) & Market Share2 (%) • New Mortgage Lending of Lending of €2.8bn + c.40% €2.6bn YTD YoY +40% YoY 2.8 3 17.8% 18.5% 20.0% • Growth across
Slide 10: Customers
Customers Building Trust and Loyalty With Our Customers Enhance Customer Journeys Leverage Digital Capabilities Grow Customer Relationships Delivering on Our Priorities 2022 YoY A Growing Customer Base 2021 2022 YoY 2024 NPS1 – Remains Stable +10 - Total Customers 1.1m >1.2m +9% 1.4m New Current & D
Slide 11: Transform
Transform Building A Sustainable Future For The Bank We Continue To Invest To Transform Our Customer & Colleague Experience Continuing to Deliver Digital Capability Continuous Focus On Operational Excellence >50% New Current Accounts Opened Digitally 1.4m Credit Card Paper Statements Eliminated 94%
Slide 12: Sustainability – Building on Strong Foundations
Sustainability – Building on Strong Foundations Core to Operating Our Business in a Responsible Way Support Ireland’s Grow Sustainable Transition To A Low Carbon Enhance Our Culture Profitability Economy Environment Social Governance & Disclosures €500m Green Mortgage Lending 80% Culture Index, +10%
Slide 13: Financial Performance
1 2 3 4 Business Update Financial FY23 & Medium Appendix Performance Term Outlook Nicola O’Brien, CFO
Slide 14: Income Statement
Income Statement A Robust Financial Performance Grow Diversified Efficient Capital And Income Streams Organisation Resource Allocation FY 2022 Vs FY 2021 FY 22 FY 21 YoY YoY €m €m €m % • Supported by rising interest rate Net Interest Income environment and migration of €5.2bn Ulster Bank assets Net
Slide 15: Total Operating Income Grows +13%
Total Operating Income Grows +13% Net Interest Income +16%; Fees & Commissions +20% NIM% 1.51% Net Interest Income (€m) 1.54% Net Interest Income Drivers 1.71% Volume Growth 370Asset Yield • Net growth in existing loan book of (+€0.8bn, +7% YoY) 360 6 350 • Migration of Ulster Bank assets (+€5.2bn)
Slide 16: Total Performing Loan Book on Positive Growth Trajectory
Total Performing Loan Book on Positive Growth Trajectory Home Loan Book +48%; SME Book +59% Home Loan Book by Product (Mix %) Home Loan Yield (%) SME Performing Book Movement2 (€m) €bn +48% c.700 18.0 1050 1040 1030 1020 1010 1000 990 980 970 960 950 940 930 920 910 12.2 13.0 5.0 2.81% 2.69% 900 2.9
Slide 17: Operating Expenses
Operating Expenses Total Underlying Operating Costs Increased By 14% FY’22 FY’21 YoY YoY Cost Base Analysis €m €m €m % Movement In Operating Expenses (€m) Staff Costs1 164 140 +24 +17% +16% Other Costs 128 108 +20 +19% 350 5 340 Total Addressable Costs 292 248 +43 +17% 344 330 25 Depreciation 52 47
Slide 18: Continuing To Invest In Key Priorities
Continuing To Invest In Key Priorities Maintaining Investment Spend whilst Reducing the CIR% Average Annual Investment Spend (€m) Investment 2023 – 2026 [OpEx:CapEx = 40:60] 82 • Commercial & Technology Investment 80 • Expansion of Digital Customer Journeys & Payment Options 78 76 • Investment in Br
Slide 19: Net Impairment Release of €20m
Net Impairment Release of €20m Well Provided For Economic Cycle Cost of Impairment Release/(Charge) (€m) Risk1 0 bps Provision Stock (€m) -13 bps 700 604 €m 521 Expected Credit Loss (€’m) FY 2022 FY 2021 FY 2020 600 (63) 118 7 1 Model Results 14 (59) (42) 500 118 (64) 37 1 8 137 400 137 Post Model A
Slide 20: Further Strengthened Asset Quality
Further Strengthened Asset Quality NPL Ratio Reduced to 3.3% Total Loan Book By Stage (€bn) Provision Cover By Stage (€bn) 25.0 FY'21 FY'22 FY'21 FY'22 +38% 20.0 NPL Stable as 15.0 Ratio Book Grows -27% 19.2 -20% Reduced 0.45 YoY 10.0 to 3.3% 13.9 0.30 5.0 0.30 0.30 0.15 0.30 0.8 0.7 0.22 - - Perfor
Slide 21: Funding And Liquidity
Funding And Liquidity Retail Deposit Growth Driving Strong Funding Position Total Funding (€bn) Liquidity and Funding Ratios European Bank PTSB v Ratio Dec’21 Dec’22 Average1 European Peers 19.1 20.0 23.4 LCR1 274% 178% 163% +15% NSFR1 170% 154% 127% +27% 25.0 0.3 LDR1 75% 90% 109% -19% 0.7 0.6 Encu
Slide 22: FY22 Capital Ratios
FY22 Capital Ratios Fully Loaded CET1 Ratio Increased By 10bps CET1 Fully Loaded Ratio Movement (%) • Risk Weighted Assets of €10.6bn, +26% YoY RWAs1 RWAs €8.4bn Pro €10.6bn forma • Fully Loaded CET1 ratio has increased by c. 16.5% +0.7% -1.0% +10bps to 15.2%. +0.8% -0.4% 15.5% -0.2% +0.2% 14.5% • U
Slide 23: Summary
Summary A Robust Financial Performance with a Positive Outlook 2022 - A Transformative year €267m • Profit Before Tax (PBT) reflects a purpose driven business; Underlying PBT1 €45m & growing 18.5% • Growing New Mortgage Business & National Market Share 1.92% • Q4’22 NIM 1.92%, momentum in Net Intere
Slide 24: FY23 & Medium Term Outlook
1 2 3 4 Business Update Financial FY23 & Medium Appendix Performance Term Outlook Eamonn Crowley, CEO
Slide 25: 2023 Marks a Step-Change In Our History
2023 Marks a Step-Change In Our 200 Year History Migrating c. €6.7bn of Increasing our assets from Ulster Branch Network Bank to 98 Growing Employees, Launching New & from c. 2,400 Compelling Customer colleagues to c. 3,000 Journeys Welcoming 330 New Further Colleagues from Ulster Integrating our Ba
Slide 26: Outlook – FY 2023
Outlook – FY 2023 A Purpose Driven Strategy Well Positioned to Drive Sustainable Profitable Growth in 2023 and Beyond Cost Income Underlying Underlying Total Income Cost of Risk Ratio1 Profit RoE2 >> >> >> >> >> c. €650m <70% c. 10 bps >€160m c. 7% 1. Cost Income Ratio is calculated as Operating Exp
Slide 27: Medium Term Goals
Medium Term Goals Remain On Course to Deliver Sustainable Returns 2022 2025 Medium Term RoE%3 Net Interest Margin 1.54% > c.2.50% c.13% 2025 Other Income €47m > c.€90m 2022 c.11% Medium Term Total Income €409m > c.€825m 1% c.60c 2025 Cost / Income Ratio1 84% > c.55% c.40c Operating Profit2 €14m > c.
Slide 28: Investment Case
Investment Case Over the Medium Term Strong Market Position In Ireland Larger and More Active Customer Base Ongoing Transformation of Customer & Colleague Experience Investment with Target C:I Ratio c.55% by 2025 Balance Sheet Assured – Strong Capital & Funding with Low Risk Profile Sustainability S
Slide 29: Appendix
1 2 3 4 Business Update Financial FY23 & Medium Appendix Performance Term Outlook 28
Slide 30: Domestically Focused Retail And SME Bank
Domestically Focused Retail And SME Bank Business Overview Branch Footprint Existing PTSB Branch UB branches transferred in Jan-2023 Business €19.2bn €9.0bn €11.6bn Performing Current Account Retail Deposit Loan Book Balances Balances Market Share c. 17% 13.3% 10.9% Residential Current Account Retai
Slide 31: A Brief History
A Brief History 2011/2012 2016 2022 LDR% 227% > 111% > 90% System Funding €20bn > €1.4bn > €nil Total New Lending €0.1bn > €0.6bn > €2.8bn Mortgage Market Share 2% > 10% > 18.5% Net Interest Margin% 0.72% > 1.48% > 1.54% NPL% 28% > 28% > 3.3% CET1% (FL) 11.3% > 14.9% > 15.2% Rebuilding of the Bank i
Slide 32: Historical Financial Information
Historical Financial Information Income Statement €m FY 2022 FY 2021 FY 2020 FY 2019 FY 2018 Net Interest Income 362 313 341 356 379 Other Income 47 48 34 58 63 Total Operating Income 409 361 375 414 442 Total Operating Expenses (Before Exceptional Items) (395) (345) (323) (330) (331) Pre-Impairment
Slide 33: Historical Financial Information
Historical Financial Information Balance Sheet €bn Dec 2022 Dec 2021 Dec 2020 Dec 2019 Dec 2018 Total Loan Book (net) 19.6 14.2 14.2 15.6 15.9 Treasury Assets 5.4 6.7 5.9 3.6 3.8 Other Assets 1.1 1.3 0.8 1.1 2.1 Total Assets 25.9 22.2 20.9 20.3 21.8 Retail Deposits (Incl. Current Accounts) 20.6 17.7
Slide 34: Interest Income Analysis
Interest Income Analysis Average Balances (€bn) Yields (%) Interest Income (€m) FY 2022 FY 2021 FY 2022 FY 2021 FY 2022 FY 2021 Tracker 5.4 6.6 1.7% 1.3% 91 85 Fixed and Variable 9.2 7.8 3.1% 3.2% 290 249 Consumer Finance 0.3 0.3 9.4% 9.6% 28 28 SME / CRE 0.3 0.2 3.4% 3.8% 10 9 Treasury Assets 8.4 6
Slide 35: Interest Expense Analysis
Interest Expense Analysis Average Balances (€bn) Cost of Funds (%) Interest Expense (€m) FY 2022 FY 2021 FY 2022 FY 2021 FY 2022 FY 2021 Current Accounts 7.9 6.5 0.0% 0.0% 0 0 Retail Deposits 11.0 10.6 0.0% 0.0% 4 5 Corporate Deposits 1.2 1.5 0.5% 0.5% 6 8 Wholesale Funding1 1.7 1.0 1.4% 1.4% 24 14
Slide 36: Asset Quality
Asset Quality 31-Dec 31-Dec Loans and Advances to Customers 2022 2021 Measured at Amortised Cost €m €m Home Loans 18,340 12,568 Buy To Let 824 1,623 Total Residential Mortgages 19,164 14,191 SME / Commercial 239 196 Consumer Finance 401 358 Total Measured at Amortised Cost 19,804 14,745 Analysed By
Slide 37: NPLs and NPAs
NPLs and NPAs Stage 3 Analysis 31-Dec 22 Home Loan Buy-To-Let SME /Commercial Consumer Finance Total €m €m €m €m €m NPL is < 90 Days 175 118 17 2 312 NPL is > 90 Days and < 1 year past due 31 15 - 3 49 NPL is 1-2 years past due 31 80 - 2 113 NPL is 2-5 years past due 51 28 - 2 81 NPL is > 5 years pa
Slide 38: Regulatory Capital
Regulatory Capital 31 December 2022 31 December 2021 Transitional Fully Loaded Transitional Fully Loaded €m €m €m €m Risk Weighted Assets 10,627 10,627 8,600 8,603 Capital Resources: Common equity tier 1 1,718 1,616 1,457 1,265 Additional Tier 1 369 369 123 123 Tier 1 Capital 2,087 1,985 1,580 1,388
Slide 39: Notes
Notes 38 wn permanent tsb
Slide 40: Thank You
A N N U A L R E S U L T S 2022 Thank You End of Presentation
Permanent TSB Group Holdings — FY2022 Earnings Presentation on 6ix