Slide 1: OSB Group 2020 preliminary results
OSB Group 2020 preliminary results 8 April 2021 OSB GROUP PLC – Private and Confidential
Slide 2: Supporting our stakeholders in a challenging year
Supporting our stakeholders in a challenging year Responded quickly to • All areas of the business were adapted to ensure we could safely and confidently deliver the service our customers have come to expect support our customers • Mortgage intermediaries continued to be supported as we grew our len
Slide 3: Financial highlights - underlying
Financial highlights - underlying Gross new lending Net loan book Net interest margin Loan loss ratio The Board has recommended (42)% 9%1 (19)bps 28bps payment of a 38bps dividend of 14.5 £19.0bn 266bps pence per share £6.5bn £18.2bn for 2020, 247bps representing 25% 10bps of full year £3.8bn underl
Slide 4: Attractive underlying return on equity
Attractive underlying return on equity 1. Resilient underlying profit before tax 2. Loan book growth at attractive margins 2.66% 600 2.47% 3 Net interest margin (%) Underlying net interest 400 Underlying and pro forma underlying PBT (£m) income (£m) 300 400 2 381 346 518 534 200 200 1 100 2020 0 und
Slide 5: Resilient results despite COVID-19 driven impairment losses
Resilient results despite COVID-19 driven impairment losses 1 Underlying P&L Underlying NII 3% growth year on year Gain on sale of financial instruments related to 2020 2019 Change disposal of remaining notes from Canterbury No.1 £m £m £m % and PMF 2020-1B securitisations in January 2020 Net interes
Slide 6: Strong, secure balance sheet
Strong, secure balance sheet 2020 2019 Change £m £m £m % Underlying net loan book growth of 5%, or 9% excluding impact of structured asset Lending sales Underlying loans and advances to customers 19,021 18,151 870 5 o/w provisions (111) (43) (68) 158 Organic originations in the year of £3.8bn, down
Slide 7: Underlying NIM progression
Underlying NIM progression Underlying NIM reduced in 2020 to 247bps from 266bps primarily as a result of the dilutive impact of a delay in passing on the base rate cuts in full to 247 retail savers 266 bps bps The full impact of the base rate cuts was passed on to retail savers by the end of the thi
Slide 8: Impairment provisions reflect impact of Covid-19
Impairment provisions reflect impact of Covid-19 Expected credit losses £m Statutory impairment losses of £71.0m and 3.9 (2.9) 111.0 underlying impairment losses of £71.2m in 2020 20.0 representing 38bps of average gross loans and 10.4 advances 4.8 10.7 21.2 • £21.2m relating to more adverse forward
Slide 9: Strong capital base
Strong capital base Exceptionally strong CET1 of 18.3% as at 31 December 2020 1.9% Total capital ratio of 18.3% as following the 0.9% insertion of OSBG as the ultimate holding 0.5% company, AT1 securities and PSBs issued by 0.6% 18.3% OSB no longer qualify as regulatory capital (0.8)% at the Group l
Slide 10: Stronger together - integration update
Stronger together - integration update On 4 October 2019, OneSavings Bank plc (OSB) combined with Charter Court Financial Services Group plc (CCFS), creating a leading specialist lender. • Progress towards achieving the synergies from the Combination has been strong. By the first anniversary of the
Slide 11: Our award-winning lending franchises
Our award-winning lending franchises Originations in 2020 impacted by Covid-19 pandemic Current position OSB CCFS 82 Encouraged by volumes and 3000 541 quality of new applications, which 334 Originations £m are near pre COVID-19 level in 797 Buy-to-Let and Residential sub- 32 2000 142 BTL/SME segmen
Slide 12: Sophisticated funding model
Sophisticated funding model The combined Group remains predominantly retail funded. Retail savings complemented by increasingly diversified funding sources: The Group had £16.6bn of retail deposits, up 2% in the year. Attract Retain Satisfy 1,000 We continue to attract We retain a very high High qua
Slide 13: Summary and outlook
Summary and outlook Returning to our key messages from today: • All areas of the business adapted for our customers and employees in response to the pandemic • Protected the business during pandemic with controlled growth, higher pricing and tighter underwriting criteria • Strong financial performan
Slide 14: 2020 preliminary results appendices
2020 preliminary results appendices 8 April 2021 OSB GROUP PLC – Private and Confidential 14
Slide 15: Funding lines
Funding lines As announced in a trading update on 17 March 202 Group’s funding lines gross loans, £m 2020, the Group became the Group became aware aware of potential of potential fraudulent fraudulent activity by activity by a third a third party in oneparty of itsinnon-property one of its non-prope
Slide 16: Financial highlights - statutory
Financial highlights - statutory Gross new lending Net loan book Net interest margin Cost to income ratio (9)% 4% (27)bps (1)pt £19.2bn £18.4bn 243bps £4.1bn 32% 31% £3.8bn 216bps 2019 2020 2019 2020 2019 2020 2019 2020 Return on equity Profit before tax Basic EPS (pence per share) Fully loaded CET1
Slide 17: Strong statutory results despite COVID-19 related impairment charge
Strong statutory results despite COVID-19 related impairment charge Statutory P&L Change NII increased due to inclusion of CCFS’ NII 2020 2019 £m £m £m % Gain on sale of loans as the Group Net interest income 472.2 344.7 127.5 37 disposed of its remaining notes under the Gain/(loss) on sale of loans
Slide 18: OSB segment results – BTL/SME
OSB segment results – BTL/SME Average book LTV remains low at 67% (2019: restated 68%1) with only 2.9% of loans by value with LTVs exceeding 90% (2019: 1.8%) and average new origination LTV of 71% (2019: restated 71%1). 1. Gross loan book 2. Net interest income 10000 300 Gross loan book income (£m)
Slide 19: OSB segment results – Residential
OSB segment results – Residential Average book LTV remains low at 54% (2019: restated 57%1) with only 1.6% of loans by value with LTVs exceeding 90% (2019: 3.3%) and average origination LTV reduced to 61% (2019: restated 70%1). 1. Gross loan book 2. Net interest income 2000 80 Gross loan book income
Slide 20: CCFS segment results – BTL sub-segment
CCFS segment results – BTL sub-segment Average book LTV remains low at 69% (2019: 71%), average origination LTV was 74% (2019: 73%). 1. Gross loan book 2. Net interest income 6000 150 Gross loan book income (£m) Net interest 100 (£m) 3000 4,749 5,292 50 114 115 0 0 2019 2020 2019 2020 RWA as % Gross
Slide 21: CCFS segment results – Residential sub-segment
CCFS segment results – Residential sub-segment Average book LTV remains low at 62% (FY 2019: restated 65%1), average origination LTV was 67% (FY 2019: restated 68%1). 1. Gross loan book 2. Net interest income 3000 80 Gross loan book income (£m) Net interest 2000 (£m) 40 68 10002 2,171 2,386 64 0 0 2
Slide 22: OSB segment results – BTL/SME sub-segments
OSB segment results – BTL/SME sub-segments 1. Buy-to-Let 2. Semi-commercial/Commercial 8000 • 1000 Gross loan book • income (£m) 6000 750 Net interest (£m) 4000 8,045 • 500 7,727 888 822 20002 • 250 0 • 0 2019 2020 2019 2020 • The weighted average interest coverage ratio (ICR) was 201% during • Weig
Slide 23: OSB segment results – Residential sub-segments
OSB segment results – Residential sub-segments 1. First charge mortgages 2. Second charge mortgages 2000 400 Gross loan book Gross loan book 1500 300 (£m) 1000 1,467 1,661 200 359 (£m) 295 5002 100 0 0 2019 2020 2019 2020 3. Funding lines • First charge gross loan book increased by 13% largely due 4
Slide 24: CCFS segment results – Bridging
CCFS segment results – Bridging Withdrew products during lockdown with cautious return to market in the second half of the year 1. Gross loan book 2. Net interest income 20 Gross loan book income (£m) Net interest 15 150 (£m) 214 10 16 2 106 5 12 0 0 2019 2020 2019 2020 RWA as % Gross asset of net l
Slide 25: CCFS segment results – Second charge
CCFS segment results – Second charge Withdrew products and reintroduced with a revised, more limited product set 1. Gross loan book 2. Net interest income 250 10 Gross loan book 200 8 income (£m) Net interest 150 6 219 (£m) 100 198 4 7 7 2 50 2 0 0 2019 2020 2019 2020 RWA as % Gross asset of net loa
Slide 26: Conservative forward-looking macroeconomic scenarios
Conservative forward-looking macroeconomic scenarios Post the onset of the COVID-19 pandemic, the Group implemented a suite of adverse economic scenarios which incorporated the potential impact of the lockdown periods on economic activity and the unwind of government support measures. Scenario % Cum
Slide 27: This document should be read in conjunction with the documents distributed by OSB GROUP PLC
This document should be read in conjunction with the documents distributed by OSB GROUP PLC (OSBG) through the Regulatory News Service (RNS). This document is not audited and contains certain forward-looking statements, beliefs or opinions, including statements with respect to the business, strategy