Permanent Tsb Group Holdings Plc · EURONEXT:PTSB
Permanent Tsb — FY2020 Earnings Presentation
39 slides from Permanent Tsb's earnings presentation, Mar 3, 2021
Slide 1: Annual Results
nw permanent tsb Group Holdings plc. Annual Results
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 2020
A N N U A L R E S U L T S 2020 Eamonn Crowley, Paul McCann, CEO Interim CFO
Slide 4: Business Update
A N N U A L R E S U L T S 2020 Business Update Eamonn Crowley, CEO
Slide 5: Good Performance – In Challenging Business Environment
Good Performance – In Challenging Business Environment FY 2020 Highlights 1 • Total New Lending of €1.4bn, reduced by 15% YoY 15.3% Customers Mortgage • €1.3bn New Mortgage Lending - action taken on Mortgage Pricing and Service Market Share • Developing partnerships for our customers • New Digital P
Slide 6: Pandemic-Related Disruption To Domestic Economic Activity
Pandemic-Related Disruption To Domestic Economic Activity Labour Market Expected To Return To Pre Covid Levels By 2022 Consumer Spending Since Onset of Covid-19 Labour Market (%) • Consumer spending being dictated by the Government Unemployment Rate Employment Growth levels of living with Covid-19 1
Slide 7: Housing Market Remained Resilient
Housing Market Remained Resilient Pace Of Growth Dictated By Housing Supply Mortgage Market (€bn) Mortgage Market Approvals (€bn) Mortgage Market Drawdowns (€bn) 3.5 10.2 2.5 9.5 9.0 2.9 8.0 2.4 2.0 2.0 1.5 1.5 2019 2020e 2021e 2022e Q1'20 Q2'20 Q3'20 Q4'20 Q1'20 Q2'20 Q3'20 Q4'20 • Mortgage Market
Slide 8: Good Business Performance – H2'20 Recovery
Good Business Performance – H2’20 Recovery Mortgage Market Share 15.3%1; In Line YoY Mortgage Drawdowns And Market Share Mortgage Applications And Market Share c.40%2 increase in Drawdowns H2 v H1 c.70%2 Increase in Applications H2 v H1 1.6 15.5% 16.0% 15.2% 15.3% 15.3% 3.5 14.5% 20.0% 1.4 15.5% 14.
Slide 9: A Purpose Led Strategy
A Purpose Led Strategy Strong Ambition, Purpose And Priorities Our Ambition Our Purpose To Be Ireland’s Best Personal To Work Hard Every Day to Build And Small Business Bank Trust with Our Customers – We are a Community Serving the Community Our Priorities Customers Transform Profitability Customers
Slide 10: Covid–19 Response
Covid–19 Response Strength Of Business Model Enabling Continued Delivery Covid-19 Supports In Operation Operational Strength And Resilience 100% 1.6m 4 1,200 • All 76 Branches remain open with specific hours for elderly & vulnerable customers Colleagues Calls • All Contact Centres fully operational
Slide 11: Customers
Customers Build Trust And Loyalty With Our Customers Enhance Leverage Re-Position Customer Journeys Digital Capabilities Our Brand Delivering On Our Priorities Meeting Changing Customer Needs Customer Feedback Is Important To Us Relationship NPS1 - delivering strong Customer Service and NPS1 + 12
Slide 12: Transform
Transform Build A Sustainable Future For The Bank Digital Business Model Embed Development Simplification Our Values Delivering On Our Priorities - A Digitally Connected Customer Centric Bank A Bank-Wide Enterprise Transformation Programme Launched Apple Pay – Delivering the digital wallet • Effec
Slide 13: Responsible And Sustainable Business
Responsible And Sustainable Business We Continue Doing Business In A More Responsible Way Strengthen Communities Achieving ‘ The Mark’ Through Our Partnerships And Staff Volunteering Accreditation of Best In Class Responsible Business Programmes Partnering with O Cualann Achievement of the Business
Slide 14: Financial Performance
A N N U A L R E S U L T S 2020 Financial Performance Paul McCann, Interim CFO
Slide 15: Covid-19 Pandemic Has Material Impact On Profitability
Covid-19 Pandemic Has Material Impact On Profitability Income Statement Grow Diversified Efficient Capital And Income Streams Organisation Resource Allocation FY 20 FY 19 YoY YoY FY 2020 Vs FY 2019 €m €m €m % Net Interest Income 341 356 (15) -4% • 4% reduction in N et Interest Income primarily due t
Slide 16: Net Lending Income Increases By 4%
Net Lending Income Increases By 4% Actively Managing Deposit Costs Net Lending Income (€m) Other Interest Income (€m) Net Interest Margin (%) 340 40 (18) 2.15% 2.10% 2 1.95% 330 14 30 (3) (6) 1.78% 1.80% 1.73% 320 20 37 332 (4) 310 319 10 0.38% 0.30% 0.23% 9 300 0 2019 Treasury NPL Other 2020 2018 2
Slide 17: Performing Home Loan Book Remains Stable
Performing Home Loan Book Remains Stable Book Yield At c. 2.5% Mix of Home Loan Book by Product (%) Home Loan Yield (%) Home Loan Yield By Product (%) €bn 11.3 11.7 11.7 1.30% 2.97% 2.97% 26% 20% 33% 2.81% 2.49% 3.80% 17% 29% 38% 2.61% 2.58% 3.10% 50% 45% 41% 2.49% FY 18 FY 19 FY 20 FY 18 FY 19 FY 2
Slide 18: Performing Buy To Let (BTL) Book Reduces By 53%
Performing Buy To Let (BTL) Book Reduces By 53% Yield Increased By 21 Bps Performing BTL Book Movement (€bn) Performing BTL Yield (%) 3.2 3.5 Performing BTL 3.0 0.3 Loan Sale -1.4bn 2.5 1.5 2.0 1.64% 1.5 2.9 0.2 1.43% 1.42% 1.0 0.5 1.3 Stock 0.0 FY 19 FY 20 FY 19 H1 20 FY 20 Tracker Other Key Elemen
Slide 19: Total Costs Lower Year On Year
Total Costs Lower Year On Year Cost Management Remains A Key Focus Of The Bank F Y 20 F Y 19 YoY YoY Movement In Operating Expenses (€m) Cost Base Analysis €m €m €m % 300 -3% Total Costs1 323 330 -7 -2% Regulatory Charges 49 47 +2 +4% 290 4 -1 3 Total Operating Expenses 274 283 -9 -3% -15 280 283 De
Slide 20: Proven Track Record Of Managing Costs
Proven Track Record Of Managing Costs Committed To Further Efficiency Improvements Proven Record of Managing Cost Framework to Achieve Savings Addressable Costs1 (€m) Rigorous approach to the management of BAU costs 271 259 BAU Costs 250 (ongoing) Productivity and Efficiency through 3rd 237 Part
Slide 21: Continuing To Invest In Key Priorities
Continuing To Invest In Key Priorities Depreciation Increasing As We Pay For Investment Average Annual Investment Spend (€m) Investment 2021 - 2023 Commercial & Technology Mandatory Commercial & Technology Investment • The Digital Current Account 48 • Launch of Android Pay • Developing the Digital M
Slide 22: A Material Expected Credit Loss of €155m
A Material Expected Credit Loss of €155m Reflecting Macro-Economic Factors And Management Overlays Expected Credit Loss Macroeconomic Projections Expected Credit Loss (€m) Cost of Risk1 Average Value Over First Year of Forecast 103bps Bas e2 Ups ide 3 Downside4 Cost of Risk1 HPI -5% 18% -20% 6bps Un
Slide 23: Increasing Provision Coverage
Increasing Provision Coverage NPL Ratio of 7.6% Gross Loans By Stage (€bn) NPL Ratio Provisions By Stage (€bn) 7.6% FY19 Gross Loan Book FY19 Reduced by FY20 FY20 9.3% 11.0 10.6 Performing Loan 0.4 Portfolio 0.4 0.3 (€1.4bn, Sep 20) 0.3 4.3 1.0 1.1 0.0 0.1 3.2 Stage 2 Assets Stage 1 Stage 2 Stage 3
Slide 24: Strong Funding And Liquidity Position
Strong Funding And Liquidity Position Liquidity Coverage Ratio Greater Than 200% Total Funding (€19.1bn) Liquidity And Funding Ratio 94% Funded by Customer 19.8 18.2 19.1 Deposits; 85% from Retail PTSB v Deposits (incl. C/A’s) European Bank European 0.0 Ratio Dec 20 Average Peers 1.1 0.4 0.1 0.3 0.2
Slide 25: Capital Ratios Remain Above Regulatory Requirements
Capital Ratios Remain Above Regulatory Requirements CET1 Fully Loaded Increased By 10 Basis Points Regulatory Capital Ratios (%) CET1 Fully Loaded Ratio Movement (%) Dec-18 Dec-19 (Proforma) Dec-20 Dec-20 (Proforma) RWAs RWAs €9.7bn Proforma €8.5bn 21.0% 17.5% 1.5% -1.6% 19.6% 20.0% 16.5% 18.1% 18.1
Slide 26: Summary – 2020 Outturn
Summary – 2020 Outturn Growth Efficiency Returns • Resilient New Lending • Addressable Costs (excluding Bank • Operating Profit of €52m Performance (€1.4 billion) despite Levy & Regulatory Charges) the challenges that 2020 brought. reduced by 3% YoY • Stable Funding & Capital Position • Proven Recor
Slide 27: Medium Term Outlook 2021-25
A N N U A L R E S U L T S 2020 Medium Term Outlook 2021-25 Eamonn Crowley, CEO
Slide 28: Strong Ambition, Purpose And Priorities
Strong Ambition, Purpose And Priorities Strategic Priorities Will Drive Sustainable Returns Our Ambition Nationwide Physical Right Products, Right Price To Be Ireland’s Best Personal Footprint The right products, at the right price, A continued physical presence in with strong market share in our An
Slide 29: Building Sustainable Profitability
Building Sustainable Profitability Medium Term Outlook 2021 to 2025 Medium Term Outlook Mortgage Market Share 16%-18% SME New Lending c. 8% market share Growth Consumer New Lending > €200m per annum NIM > 1.90% Net Fee Income >10% of Total Income Sustainable Efficiency Savings, c. 11% of Addressable
Slide 30: Appendix
A N N U A L R E S U L T S 2020 Appendix
Slide 31: Domestically Focused Retail And SME Bank
Domestically Focused Retail And SME Bank Business Overview Our Physical Landscape Business €13.7bn €5.8bn €10.5bn Performing Current Account Retail Deposit Loan Book Balances Balances Dublin Region 25 Branches Market Share South & East Region 25 Branches 15.3% 12% 11% Residential Current Account Ret
Slide 32: Historical Financial Information – Income Statement
Historical Financial Information – Income Statement €m F Y2020 F Y 2019 F Y 2018 F Y 2017 F Y 2016 Net Interest Income 341 356 379 407 394 Other Income 34 58 63 38 71 ELG Fees - - - (2) (4) Total Operating Income 3 75 4 14 4 42 4 43 4 61 Total Operating Expenses (Before (329) (330) (331) (329) (341)
Slide 33: Historical Financial Information – Balance Sheet
Historical Financial Information – Balance Sheet € bn Dec 2020 Dec 2019 Dec 2018 Dec 2017 Dec 2016 Total Loan Book (net) 14.2 15.6 15.9 18.4 18.9 Treasury Assets 5.9 3.6 3.8 3.5 3.9 Other Assets 0.8 1.1 2.1 0.9 0.8 Total Assets 2 0 .9 2 0 .3 2 1 .8 2 2 .8 2 3 .6 ROI Retail Deposits (Incl. Current Ac
Slide 34: Interest Income Analysis
Interest Income Analysis Average Balances (€bn) Yields (%) Interest Income (€m) FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 Tracker 8.1 9.4 1.2% 1.3% 104 115 Fixed and Variable 7.2 6.8 3.4% 3.6% 247 246 Consumer Finance 0.3 0.3 9.7% 10.5% 31 34 SME / CRE 0.2 0.1 3.0% 3.4% 7 3 Treasury Assets 4.5
Slide 35: Interest Expense Analysis
Interest Expense Analysis Average Balances (€bn) Cost of Funds (%) Interest Expense (€m) FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 Current Accounts 5.3 4.3 0.0% 0.0% 0 0 Retail Deposits 10.4 10.3 0.1% 0.2% 15 25 Corporate Deposits 1.9 2.4 0.5% 0.5% 10 13 Wholesale Funding 0.9 1.4 1.1% 0.5% 10
Slide 36: Asset Quality
Asset Quality 31- Dec 31- Dec Lo a ns and Advances to Customers 2020 2019 Me a sured at Amortised Cost €m €m Home Loans 12,338 12,260 Buy To Let 2,009 3,598 Total Residential Mortgages 14,347 15,858 SME / CRE 181 165 Consumer Finance 327 366 To tal Measured at Amortised Cost 14, 855 16, 389 Analysed
Slide 37: NPLs and NPAs
NPLs and NPAs St age 3 Analysis 31- Dec20 Home Loan Buy-To-Let Commercial Consumer Finance Total €m €m €m €m €m NPL is < 90 Days 464 319 28 1 812 NPL is > 90 Days and < 1 year past due 42 32 1 9 84 NPL is 1-2 years past due 42 14 - 1 57 NPL is 2-5 years past due 21 4 2 1 28 NPL is > 5 years past due
Slide 38: Regulatory Capital
Regulatory Capital 31 Dec 20 31 Dec 19 Transitional Fully Loaded Transitional Fully Loaded €m €m €m €m R i sk Weighted Assets 8, 480 8, 471 10,012 9,996 Ca pital Resources: Common equity tier 1 1, 535 1, 282 1,765 1,464 Additional Tier 11 190 198 85 103 Ti e r 1 Capital 1, 725 1, 480 1,850 1,567 Tie
Slide 39: Thank You
A N N U A L R E S U L T S 2020 Thank You End of Presentation
Permanent TSB Group Holdings — FY2020 Earnings Presentation on 6ix