Osb Group Plc · LSE:OSB
Osb — OneSavings Bank — FY2014 Earnings Presentation
17 slides from Osb's earnings presentation, Mar 17, 2015
Slide 1: 2014 Preliminary Results
2014 Preliminary Results 17 March 2015 Specialist Personal Flexible
Slide 2: Performance highlights
Performance highlights Underlying PBT Loans & Advances £3.9bn £69.7m £3.0bn +133% £30.0m + 29% 2013 2014 2013 2014 Cost : Income ratio 38% Underlying RoE 31% 28% 22% Improved by + 9% points 10% points 2013 2014 2013 2014 Proposed Dividend Fully-loaded CET1 Ratio 11.4% 8.4%1 Strengthened (est) 3.9 pe
Slide 3: Delivering on our financial objectives 2014 - 2016
1 Delivering on our financial objectives 2014 - 2016 2014 result Funding / Liquidity strength Maintain loan to deposit ratio of <100%2 90% Cost discipline Cost:Income ratio of <35% 28% Capital strength CRD IV CET1 ratio >10% 11.4% Shareholder returns RoE of >25% 31%3 Dividend policy Pay-out ratio of
Slide 4: Key Financial Indicators
Key Financial Indicators 1 Improved underlying profitability1… 2 …Driven by high-margin new lending3… 2.9% 80 £m 3.0% 70 115 Profit Before Tax (£m) 2.5% 60 2.1% 95 2.0% 50 40 75 1.5% 70 30 125 20 55 1.0% 2 30 0.6% 10 35 71 0.5% 0 (15)2 (11) 15 (0.1%) (10) 0.0% 16 (20) -1 (5) -0.5% FY 2011 FY 2012 FY
Slide 5: Income Statement
Income Statement 2014 vs 2013 £m 2014 2013 Variance % change 2014 vs. 2013 Net interest income 125.2 70.8 54.4 77% • Strong growth in net interest Other income / (expense) (6.3) (5.3) (1.0) 18% margin driven by high-margin new lending, further offsetting the low- Total income 118.9 65.4 53.5 82% yie
Slide 6: Balance Sheet
Balance Sheet 2014 vs 2013 £m 2014 2013 Variance % change 2014 vs. 2013 Liquid assets 926 630 296 47% • 29% growth in loans & advances Net customer loans 3,919 3,041 878 29% through strong organic origination of o/w gross customer loans 3,945 3,069 876 29% £1.5bn in 2014 o/w provisions (26) (28) 2 7
Slide 7: Segmental Results – BTL / SME
Segmental Results – BTL / SME LTVs remain low at 68% (2013: 71%) with only 2% of loans by value with LTVs exceeding 90% (2013: 5%) 1 Gross loan book 2 Net interest income 50 2,000 Gross Loan Book (£m) Net Interest Income (£m) 40 1,500 30 1,000 2,065 50.3 20 1,099 500 10 17.2 0 2013 2014 0 2013 2014
Slide 8: Segmental Results – Residential
Segmental Results – Residential LTVs remain low at 54% (2013: 51%) with only 1% of loans by value with LTVs exceeding 90% (2013: 3%) 1 Gross loan book 2 Net interest income 60 2,000 50 1,750 Net Interest Income (£m) Gross Loan Book (£m) 1,500 40 1,250 1,000 30 57.1 1,765 1,763 750 20 42.3 500 250 10
Slide 9: Segmental Results – Personal Loans
Segmental Results – Personal Loans Run off portfolio – Arrears running significantly below forecast Run-off portfolio of performing unsecured consumer loans acquired July 2013 Gross loan book: £117m (Dec 2013: £205m) Net interest income: £17.7m (2013: £11.2m) Contribution to profit: £10.4m (2013: £8
Slide 10: Capital
Capital Basel III CRD IV capital ratios as at 31 December 2014 • Fully-loaded CRD IV common equity tier 1 (‘CET1’) 14.8% ratio of 11.4% (2013 year end estimated CRD IV of 15% 8.4%) strengthened with addition of net IPO proceeds 3.4% of £35.8m 12% • Leverage ratio of 4.2% as at 31 December 2014 9% 6%
Slide 11: Our strategy
Our strategy 1 Be a leading specialist lender in chosen sub-sectors 2 Retain focus on bespoke and responsive underwriting 3 Further deepen relationships, and reputation for delivery, with intermediaries 4 Leverage unique and cost efficient operating model 5 Maintain and build upon 150 year heritage
Slide 12: Delivering our strategy (i)
Delivering our strategy (i) 1 Be a leading specialist lender in our chosen sub-sectors Largest lending business in the Group, offering Buy-to-Let and first charge residential loans. Specialist semi-commercial/commercial mortgage lender providing Buy-to-Let loans, alongside owner-occupied and investo
Slide 13: Delivering our strategy (ii)
Delivering our strategy (ii) 2 Retain focus on bespoke and responsive underwriting • Experienced teams manually underwrite all risks • Executive management oversight for all new loans and exposures >£1m • Only 24 loans in 3m+ arrears (£4.5m), out of >14,000 loans (£2.7bn) of new organic origination1
Slide 14: Delivering our strategy (iii)
Delivering our strategy (iii) 4 Leverage unique and cost efficient operating model • Efficient operating platform supporting growth • Continued investment in low cost scalable Indian operations • Cost:Income ratio 28% (2013: 38%) including ongoing investments in IT/technology infrastructure • Custom
Slide 15: Current market trends
Current market trends Growth in Buy-to-Let lending to continue, private rented sector market value expected to hit £1 trillion1 in 2015 Significant opportunities in professional landlord market due to shortage in supply, despite some new entrants Regulation presents opportunities in residential mark
Slide 16: Summary and Outlook
Summary and Outlook 2014 was a landmark year: Delivered on all financial objectives and profit more than doubled Macro economic backdrop remains supportive for the overall housing market Broader mortgage market has seen increased levels of competition; we remain focused on specialist sub-segments Co
Slide 17: Disclaimer
Disclaimer Important Message No undertaking, representation, warranty or other assurance, express or implied, is given or made by or on behalf of any member of OneSavings Bank plc ("OSB") and its subsidiaries (together, the "OSB Group") or any shareholders, directors, officers, partners, employees,