Osb Group Plc · LSE:OSB
Osb — OneSavings Bank — H1 2018 Earnings Presentation
17 slides from Osb's earnings presentation, Aug 23, 2018
Slide 1: 2018 interim results
PRIVATE AND CONFIDENTIAL 2018 interim results 23 August 2018
Slide 2: Another strong set of results for the first half of 2018
Another strong set of results for the first half of 2018 £7.3bn £8.1bn Gross organic lending £1,229m £1,444m Loans and advances Improved + 17% by 2% H1 17 H1 18 + 11% FY 17 H1 18 points Cost to income ratio 28% 27% Underlying PBT £78.4m £91.8m Improved by 1pt + 17% H1 17 H1 18 H1 17 H1 18 24.1p 27.5
Slide 3: Strong growth in profits
Strong growth in profits 1. Continued growth in underlying profits… 2. with attractive NIM1 & robust loan book growth… 100 3.11 3.10 3.24 3.17 3.01 Net interest income (£m) Underlying profit before tax (£m) 140 3.5 80 120 3 Net interest margin (%) 100 2.5 60 80 2 90 92 135 40 73 78 60 117 128 1.5 2
Slide 4: Strong profitability drives growth in shareholder value
Strong profitability drives growth in shareholder value H1 2018 H1 2017 Change £m £m £m % • Other expenses include £2.5m Net interest income 135.2 117.1 18.1 15 (H1 2017: £6.2m) further accelerated Other expenses (2.1) (6.3) 4.2 (67) amortisation of fair value adjustments on Total income 133.1 110.8
Slide 5: Strong growth whilst maintaining credit quality
Strong growth whilst maintaining credit quality H1 2018 FY 2017 Change £m £m £m % • Net loan book growth of 11% in the Lending first half supported by 17% growth in Net customer loans 8,097 7,306 791 11 organic origination to £1,444m Provisions (23) (22) (1) 5 • Total drawings under Term Funding Fun
Slide 6: Segmental results – BTL/SME
Segmental results – BTL/SME • Average book LTV remains low at 69% (FY 2017: 69%) with only 0.3% of loans by value with LTVs exceeding 90% (FY 2017: 0.7%) 1. Gross loan book 2. Net interest income 7,000 Gross loan book (£m) Net interest income (£m) 100 6,000 80 5,000 4,000 60 3,000 6,516 94 102 2 4,8
Slide 7: Segmental results – BTL/SME sub-segments
Segmental results – BTL/SME sub-segments 1. Buy-to-Let 2. Semi-commercial/Commercial 6,000 Gross loan book (£m) 400 Gross loan book (£m) 5,000 4,000 300 3,000 5,034 5,801 200 429 2,000 2 371 1,000 100 0 0 FY 17 H1 18 FY 17 H1 18 • Average interest rate coverage (ICR) was 192% during H1 • Weighted av
Slide 8: Segmental results – Residential
Segmental results – Residential • Average book LTV remains low at 56% (2017: 56%) with only 3% of loans by value with LTVs exceeding 90% (2017: 3%) 1. Gross loan book 2. Net interest income 2,000 40 Net interest income (£m) Gross loan book (£m) 1,500 30 1,000 20 1,768 1,674 34 34 33 1,603 500 2 10 0
Slide 9: Segmental results – Residential sub-segments
Segmental results – Residential sub-segments 1. First charge mortgages 2. Second charge mortgages 500 1,250 Gross loan book (£m) 400 Gross loan book (£m) 1,000 300 750 2 1,241 1,190 415 500 200 390 250 100 0 0 FY 17 H1 18 FY 17 H1 18 3. Funding lines 4. Summary 60 • First charge new organic lending
Slide 10: Strong capital base
Strong capital base 18% 16.0% 15% 1.2% • Strong capital generation through 1.5% profitability to support growth 12% 9% 13.3% • Pillar 2a requirement of 1.1% of risk 6% weighted assets 3% 0% Total capital ratio • Progressing towards IRB with the required three year use test to complete in 2019 CET1 A
Slide 11: Capital Management Framework
Capital Management Framework Focused on shareholder value creation • Primary objective is to hold sufficient, but not excessive levels of regulatory capital to Regulatory capital support our stated strategy • CET1 ratio at a minimum of 12% • OSB’s primary growth strategy is organic lending growth ac
Slide 12: Forward guidance
Forward guidance Full year net loan book growth of high-teens through organic lending NIM for full year of c.3% reflecting current asset pricing and five year swap spreads Cost income ratio for full year of c.30% reflecting the planned investment spend weighted to the second half of 2018 CET1 ratio
Slide 13: Our award-winning lending franchise performed strongly
Our award-winning lending franchise performed strongly Organic lending up 17% Retention Net loan book growth 1,500 111 Gross loan book (£m) Significant increase in Improved by 2% 1,300 1,100 132 borrowers choosing new Growth points 900 700 173 800 1,097 1,333 products with our ‘Choices’ retention sc
Slide 14: Opportunities in adjacent markets
Opportunities in adjacent markets Residential InterBay Commercial InterBay Asset Finance Our strong Core products Experience in Excellent intermediary Knowledge of Strong expertise in and recently recruiting teams relationships relationships SMEs and small Build on bespoke residential introduced and
Slide 15: Stable funding and award-winning savings franchise
Stable funding and award-winning savings franchise Improved by 2% Retail deposits We continue to attract Diversification Growth points up 12% period in the £7.4bn new savings 23k through TFS balance £1.5bn customers Retention rates Quality of Liquidity coverage Performance on maturing Bonds and ISAs
Slide 16: Summary and outlook
Summary and outlook The first half of 2018 was yet another period of strong growth: 17% increase in organic origination to £1.4bn Strong credit profile: low arrears and sensible LTVs, with high interest cover on Buy-to-Let Excellent customer satisfaction and loyalty: customer NPS at +60, retail savi
Slide 17: 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