Nationwide Building Society · LSE:NBS
Nationwide Building Society — H1 2018/19 Earnings Presentation
21 slides from Nationwide Building Society's earnings presentation, September 2018
Slide 1: Interim Results Presentation
Interim Results Presentation For the 6 months ended 30 September 2018
Slide 2: Highlights
@ Nationwide
Slide 3: Profits in line with expectations as we support record members today and invest for the future
Profits in line with expectations as we support record members today and invest for the future Retain Return Reinvest ▪ We are investing an additional £1.3bn, bringing total investment to £4.1bn over the next five years UK leverage ratio (%)1 Member financial benefit (£m)2 Underlying profit before t
Slide 4: We are delivering against our commitments to members
We are delivering against our commitments to members Measure Target H1 performance FRS: 1st + 4% 1st + 4.2%1 Outstanding service Customer satisfaction in our high street peer group UK CSI: UK top 5 Joint 5th2 Member financial benefit At least £400m pa £330m Value for members Engaged members 10m by 2
Slide 5: Strong trading performance in a competitive market
Strong trading performance in a competitive market Robust current account openings, Strong gross mortgage lending, Growth in member deposits, and 1 in 5 switchers and record FTBs maintaining market share Current accounts opened (‘000) Gross mortgage lending (£bn) Change in deposit balances (£bn) 427
Slide 6: Financials
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Slide 7: Profits in line with expectations as we invest in our long-term future
Profits in line with expectations as we invest in our long-term future H1 2017/18 H1 2018/19 ▪ £135m charge from asset write-offs and additional £m £m technology spend in line with our announcement in September Underlying income 1,639 1,590 ▪ Excluding this charge, our costs are flat year on year Co
Slide 8: Maintaining a low risk balance sheet
Maintaining a low risk balance sheet 04 Apr 18 05 Apr 184 30 Sep 18 % IAS39, £bn IFRS9, £bn £bn share ▪ Balance sheet growth driven by £3.6bn net mortgage lending and increase in liquidity due to strong retail Residential mortgages 177.2 177.1 180.7 76 deposit performance Other lending 14.5 14.4 14.
Slide 9: Margin has moderated in line with guidance
Margin has moderated in line with guidance Continued focus on long-term value for members Lower funding costs offset by mortgage competition Net interest income (£m) & net interest margin (%) Net interest margin (bps) 1.47 1.52 1.27 1.33 1.31 2,872 3,086 2,960 3,011 (11) 2,431 3 (7) 8 FY 13/14 FY 14
Slide 10: Delivering efficiency to hold operational costs flat, whilst commencing additional technology investment
Delivering efficiency to hold operational costs flat, whilst commencing additional technology investment Underlying costs (£m) ▪ Reported costs have increased due to additional technology spend and asset write-offs (0.1%) ▪ Our continued focus on efficiency has allowed us to absorb the impact of 104
Slide 11: Low impairment charges reflect high quality of lending
Low impairment charges reflect high quality of lending Impairment charge (£m) Treasury & other Consumer banking Residential lending Residential Unsecured Retail lending1 05 Apr 18 30 Sep 18 05 Apr 18 30 Sep 18 199 145 Total balances (£m) 177,303 180,967 4,107 4,316 107 106 74 64 Provision balances (
Slide 12: Staging and provision analysis of loans
Staging and provision analysis of loans Residential mortgages1 Unsecured 05 Apr 18 30 Sep 18 05 Apr 18 30 Sep 18 Provision Provision Provision Provision Balance Share of Balance Share of Balance Share of Balance Share of coverage coverage coverage coverage (£m) book (%) (£m) book (%) (£m) book (%) (
Slide 13: Further strengthened capital ratios
Further strengthened capital ratios Further profits enhanced capital ratios Continue to benchmark well against peers ▪ Revised IRB expectations and the finalised Basel III framework will increase RWAs significantly, but we expect our CET1 ratio to remain ahead of peers Movement in CET1 ratio (ppts)
Slide 14: Meeting all existing and future capital regulatory requirements
Meeting all existing and future capital regulatory requirements Capital in excess of regulatory requirements Managing MREL resources ahead of 2020 deadline Going concern capital (% of RWAs) 1 MREL (£bn) 34.7 18.3 AT1 27.7 5 16.5 SNP Buffers Buffers Tier 2 CET1 13.2 6.5% of Min. leverage leverage Buf
Slide 15: Strong liquidity position and presence in wholesale funding market
Strong liquidity position and presence in wholesale funding market High quality liquid asset buffer Liquid assets (£bn)1 ▪ Liquidity Coverage Ratio (LCR) increased to 131.9% at 30 September 2018 (4 April 2018: 130.3%) 31.3 ▪ Net Stable Funding Ratio (NSFR) increased to 134.4% 26.8 3.9 Other securiti
Slide 16: Outlook & Summary
Outlook & Summary @ Nationwide
Slide 17: Building society, nationwide
Building society, nationwide UK’s most trusted financial brand3 Creating up to 1000 roles as part of our technology investment Four community boards have supported 34 local housing projects One of the first businesses to sign the Race at Work Charter Attracted 1 in 5 current account switchers and 2
Slide 18: Nationwide
@ Nationwide
Slide 19: Contacts
Contacts Alex Wall Head of Investor Relations, Rating Agencies & Capital alexander.wall@nationwide.co.uk 0845 602 9053 Nationwide Treasury Mailbox nationwide.treasury@nationwide.co.uk 19
Slide 20: Glossary
Glossary Measure Definition © GfK 2018, Financial Research Survey (FRS), 12 months ending 30 September 2018, proportion of Net satisfaction in core products extremely/very satisfied customers minus proportion of extremely/very/fairly dissatisfied customers summed (slides 4, 17) across current accoun
Slide 21: Disclaimer
Disclaimer This presentation has been prepared by and is the property of This communication must not be acted on or relied on by It has no regard to the specific investment objectives, financial Nationwide; changes in business strategy, lending practices or Nationwide Building Society (“Nationwide”)
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