Osb Group Plc · LSE:OSB
Osb — OneSavings Bank — FY2019 Earnings Presentation
23 slides from Osb's earnings presentation, Mar 19, 2020
Slide 1: 2019 preliminary results
PRIVATE AND CONFIDENTIAL 2019 preliminary results 19 March 2020
Slide 2: Presentation of results
Presentation of results On 4 October 2019, OneSavings Bank plc (OSB) combined with Charter Court Financial Services Group plc (CCFS), creating a leading specialist lender. Presentation of results Statutory results Statutory results reflect 12 months of OSB’s results and CCFS’ results from 4 October
Slide 3: Highlights - overview
Highlights - overview We have four key messages to deliver today: 2019 was Both OSB and CCFS maintained momentum and delivered strong results as the transaction progressed during another strong 2019. The Group’s net loan book grew by 23% on a pro forma underlying basis, excluding the impact of struc
Slide 4: Our response so far to COVID-19
Our response so far to COVID-19: Board level comprehensive plan • We have developed a comprehensive 4 stage plan, through prevention, continuity, impact and stress. We have worked with external economists to develop severe pandemic related stress tests to ensure we are positioned as well as possible
Slide 5: Excellent results in a transformative year
Excellent results in a transformative year Gross new lending Profit before tax Basic EPS (pence per share) Cost to income ratio +36% +10% +14% +9% (5)% +9% +4pts +1pt Group statutory £6.5bn 2019 £381m 32% £5.9bn £351m 64.9p 55.5p 52.6p 59.4p Group statutory 5 £4.1bn £209m 2018 29% £3.0bn £183m* 28%
Slide 6: Attractive pro forma underlying return on equity
Attractive pro forma underlying return on equity… 1. Strong pro forma underlying profit before tax… 2. with attractive NIM & high loan book growth… 450 3.5 700 2.86% 2.66% Pro forma underlying PBT (£m) 400 3 Net interest income (£m) 600 Net interest margin (%) 350 2.5 300 500 250 2 400 200 381 1.5 1
Slide 7: Strong profitability drives growth in shareholder value
Strong profitability drives growth in shareholder value Statutory Pro forma underlying 2019 2018 Change 2019 2018 Change • NII up due to strong loan book growth £m £m £m % £m £m £m % after structured asset sales • Administrative expenses up due to Net interest income 344.7 286.3 58.4 20 518.4 466.8
Slide 8: Strong and secured balance sheet
Strong and secured balance sheet 2019 2018 Change £m £m £m % • Net loan book growth of 105% through the Lending Combination and underlying growth Net customer loans 18,447 8,983 9,464 105 o/w provisions (43) (22) (21) (96) • Term Funding Scheme – balance of £2.6bn as at 31 December 2019 Funding and
Slide 9: Strong capital base
Strong capital base 18% 17.3% 0.6% • Strong capital position reflecting : 16% 0.7% • organic capital generation 14% capability of the business to support significant growth 12% 16.0% through profitability and 10% structured asset sales 8% • Beneficial impact to CET1 from Total capital ratio the fair
Slide 10: OSB segment results – BTL/SME
OSB segment results – BTL/SME • Average book LTV remains low at 72% (2018: 70%) with only 1.8% of loans by value with LTVs exceeding 90% (2018: 0.6%) 1. Gross loan book 2. Net interest income 10000 300 Net interest income (£m) Gross loan book (£m) 8000 250 200 6000 150 4000 7,389 8,983 254 2 100 220
Slide 11: OSB segment results – Residential
OSB segment results – Residential • Average book LTV remains low at 58% (2018: 56%) with only 3.3% of loans by value with LTVs exceeding 90% (2018: 3%) 1. Gross loan book 2. Net interest income 2,000 80 Net interest income (£m) Gross loan book (£m) 70 1,500 60 50 1,000 1,616 1,837 40 30 67 63 500 20
Slide 12: CCFS segment results – BTL sub-segment
CCFS segment results – BTL sub-segment • Average book LTV remains low at 71% (2018: 73%) 1. Gross loan book 2. Net 120 interest income 5000 Net interest income (£m) 100 Gross loan book (£m) 4000 80 3000 4,749 60 105 114 2000 4,508 40 2 1000 20 0 0 RWA as % 2018 2019 2018 2019 Gross asset of net loan
Slide 13: CCFS segment results – Residential sub-segment
CCFS segment results – Residential sub-segment • Average book LTV remains low at 67% (2018: 70%) 1. Gross loan book 2. 80 Net interest income 2500 Net interest income (£m) Gross loan book (£m) 2000 60 1500 40 1000 1,707 2,171 55 64 2 20 500 0 0 RWA as % 2018 2019 2018 2019 Gross asset of net loans 4
Slide 14: Stronger together – the industrial logic remains sound
Stronger together – the industrial logic remains sound On 4 October 2019, OneSavings Bank plc (OSB) combined with Charter Court Financial Services Group plc (CCFS), creating a leading specialist lender. Integration on track Our integration project and cost synergies project as of today is on track,
Slide 15: Our award-winning lending franchises performed strongly
Our award-winning lending franchises performed strongly Organic lending for the combined Group up 10% (pro forma underlying ) Retention Net loan book growth 4000 OSB CCFS Borrowers continue to choose Gross loan book £m 82 16% 3000 541 57 280 334 new products with OSB Choices Growth 2000 322 825 797
Slide 16: Award-winning savings franchises
Award-winning savings franchises The combined Group remained predominantly retail funded during 2019 and offers competitive retail savings propositions, which allows the Group to raise significant funds as we require them. The Group had £16.2bn of retail deposits up 23% on a pro forma underlying bas
Slide 17: Summary and outlook
Summary and outlook Returning to our four key messages from today: 2019 was an Both OSB and CCFS maintained momentum and delivered strong results as the transaction progressed during 2019. The Group’s net loan book grew by 23% on a pro forma underlying basis, excluding the impact of structured excel
Slide 18: 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 is not audited and contains certain forward-looking statements, beliefs or opinions, including statements with respect to th
Slide 19: 2019 preliminary results - Appendices
2019 preliminary results - Appendices 19 March 2020
Slide 20: OSB segment results – BTL/SME sub-segments
OSB segment results – BTL/SME sub-segments 1. Buy-to-Let 2. Semi-commercial/Commercial 10000 1000 Gross loan book (£m) Gross loan book (£m) 8000 800 6000 600 888 4000 7,727 400 2 6,518 548 2000 200 0 0 2018 2019 2018 2019 • Average interest rate coverage (ICR) was 187% during 2019 • Weighted average
Slide 21: OSB segment results – Residential sub-segments
OSB segment results – Residential sub-segments 1. First charge mortgages 2. Second charge mortgages 1,500 500 Gross loan book (£m) Gross loan book (£m) 1,250 400 1,000 300 750 2 1,224 1,467 200 500 368 359 250 100 0 0 2018 2019 2018 2019 3. Funding lines 4. Summary 60 • First charge gross loan book
Slide 22: CCFS segment results – Bridging
CCFS segment results – Bridging • Average book LTV remains low at xx% 1. Gross loan book 2. Net interest income 300 30 Gross loan book (£m) Net interest income (£m) 250 200 20 150 244 100 214 10 16 2 50 15 0 0 RWA as % 2018 2019 2018 2019 Gross asset of net loans 58% 60% yield 7.9% 8.5% 3. Contribut
Slide 23: CCFS segment results – Second charge
CCFS segment results – Second charge • Average book LTV remains low at 67% 1. Gross loan book 2. Net interest income 250 8 Net interest income £m Gross loan book £m 200 6 150 7.1 219 4 100 184 2 6.4 2 50 0 0 RWA as % 2018 2019 2018 2019 Gross asset of net loans 40% 44% yield 5.1% 5.1% 3. Contributio