Osb Group Plc · LSE:OSB
Osb — OneSavings Bank — H1 2020 Earnings Presentation
27 slides from Osb's earnings presentation, Aug 27, 2020
Slide 1: 2020 interim results
2020 interim results 27 August 2020 PRIVATE AND CONFIDENTIAL
Slide 2: Supporting our stakeholders
OneSavings Bank plc Supporting our stakeholders Interim results 2020 • Focused on keeping our colleagues safe: Responded quickly to support • Majority of employees in the UK and India are working from home customers and colleagues • Offices adapted for appropriate distancing protocols • Branches rem
Slide 3: Financial highlights - statutory
OneSavings Bank plc Financial highlights - statutory Interim results 2020 Gross new lending Net loan book Return on equity Fully loaded CET1 ratio 29% 2% (11)pts 1.4pts £18.8bn 17.4% £18.4bn 20% 16.0% £2.1bn £1.6bn 9% H1 2019 H1 2020 FY 2019 H1 2020 H1 2019 H1 2020 FY 2019 H1 2020 Net interest margi
Slide 4: Financial highlights - underlying
OneSavings Bank plc Financial highlights - underlying Interim results 2020 Gross new lending Net loan book Return on equity Basic EPS (pence per share) (32)% 7%1 (6)pts (14)% £18.5bn 24% £3.1bn 30.3p £18.2bn 18% £2.1bn 26.1p H1 2019 H1 2020 FY 2019 H1 2020 H1 2019 H1 2020 H1 2019 H1 2020 Net interes
Slide 5: Attractive underlying return on equity
OneSavings Bank plc Attractive underlying return on equity Interim results 2020 1. Resilient underlying profit before tax 2. Loan book growth at attractive margins despite COVID-19 200 400 2.70% 3 2.50% Underlying net interest income Net interest margin (%) Underlying and pro forma 2.5 underlying PB
Slide 6: Underlying NIM progression
OneSavings Bank plc Underlying NIM progression Interim results 2020 270 bps 250 bps H1 2019 Impact of asset EIR adjustment H2 2019 Non-recurring EIR Base rate lag Higher liquidity H1 2020 mix adjustment NIM reduced in the twelve months to 30 June 2020 due to a number of factors: Changing asset mix o
Slide 7: Resilient results despite COVID-19 driven impairment losses
OneSavings Bank plc Resilient results despite COVID-19 driven impairment losses Interim results 2020 Underlying and pro forma underlying P&L NII increased due to higher loan book H1 20 H1 19 Change £m £m £m % Gain on sale of structured assets as the Group disposed of its Net interest income 266.8 25
Slide 8: Strong, secure balance sheet
OneSavings Bank plc Strong, secure balance sheet Interim results 2020 H1 20 FY 19 Change £m £m £m % Underlying net loan book growth of 2%, or 7% excluding impact of structured asset sales Lending Underlying net customer loans 18,514 18,151 363 2 o/w provisions (96) (43) (53) 123 Organic originations
Slide 9: Expected credit losses
OneSavings Bank plc Impairment provisions reflect more adverse macroeconomic scenarios Interim results 2020 Impairment losses impacted by Expected credit losses 96.4 more adverse COVID-19 related 5.0 1.1 5.4 macroeconomic scenarios: £m • Underlying loan loss ratio of 42.9 42.0 60bps • Higher risk pa
Slide 10: Conservative forward-looking macroeconomic scenarios
OneSavings Bank plc Conservative forward-looking macroeconomic scenarios Interim results 2020 Scenario % Probability Year end Year end Scenario Economic measure Year end 2020 weighting % 2021 2022 GDP (5.9) 3.8 3.6 Base case 40 Unemployment 7.7 7.1 6.6 House price growth (14.3) (0.3) 7.0 GDP (2.6) 3
Slide 11: Payment holidays reducing
OneSavings Bank plc Payment holidays reducing Interim results 2020 Payment holidays (number of accounts) 1,000 The Group granted payment holidays to c. 26k accounts as at Number of accounts 4,000 the end of June, which was 28% of the loan book by value 26,000 21,000 From the payment holidays in plac
Slide 12: Strong capital base
OneSavings Bank plc Strong capital base Interim results 2020 CET1 % remains exceptionally strong at 17.4% as at 30 June 0.8% 2020 Pillar 2a requirement of 1.67% of 0.5% (0.3)% RWAs, excluding a static (0.2)% 0.6% integration add-on Full bail-in MREL requirement from 17.4% July 2025; expect interim 1
Slide 13: OSB segment results – BTL/SME
OneSavings Bank plc OSB segment results – BTL/SME Interim results 2020 Average book LTV remains low at 68% (FY 2019: restated 68%1) with only 2.0% of loans by value with LTVs exceeding 90% (FY 2019: 1.8%) and average new origination LTV of 71% (HY 2019: 70%). 1. Gross loan book 2. Net interest incom
Slide 14: OSB segment results – Residential
OneSavings Bank plc OSB segment results – Residential Interim results 2020 Average book LTV remains low at 58% (FY 2019: restated 57%1) with only 5.2% of loans by value with LTVs exceeding 90% (FY 2019: 3.3%) and average origination LTV of 69% (HY 2019: 70%). 1. Gross loan book 2. Net interest incom
Slide 15: CCFS segment results – BTL sub-segment
OneSavings Bank plc CCFS segment results – BTL sub-segment Interim results 2020 Average book LTV remains low at 74% (FY 2019: 71%), average origination LTV was 73% (HY 2019: 71%). 1. Gross loan book 2. Net interest income 6,000 60 Gross loan book income (£m) Net interest 4,000 40 (£m) 4,749 4,986 57
Slide 16: CCFS segment results – Residential sub-segment
OneSavings Bank plc CCFS segment results – Residential sub-segment Interim results 2020 Average book LTV remains low at 70% (FY 2019: 67%), average origination LTV was 71% (HY 2019: 72%). 1. Gross loan book 2. Net interest income 40 income (£m) Net interest Gross loan book 2,000 30 (£m) 20 1,0002 2,
Slide 17: Stronger together – the industrial logic remains sound
OneSavings Bank plc Stronger together – the industrial logic remains sound Interim results 2020 On 4 October 2019, OneSavings Bank plc (OSB) combined with Charter Court Financial Services Group plc (CCFS), creating a leading specialist lender. Integrating OSB and CCFS continues to achieve cost effic
Slide 18: Our award-winning lending franchises
OneSavings Bank plc Our award-winning lending franchises Interim results 2020 Organic lending during the first half impacted by significant slowdown in the Current position second quarter OSB CCFS Encouraged by volumes and quality of new applications, approaching 60% of 1600 pre COVID-19 levels Orig
Slide 19: Sophisticated funding model
OneSavings Bank plc Sophisticated funding model Interim results 2020 Combined Group remains predominantly retail funded. Retail savings complemented by increasingly diversified The Group had £16.7bn of retail deposits, up 3% from year end. funding sources: Attract Retain Satisfy 100 We continue to a
Slide 20: Summary and outlook
OneSavings Bank plc Summary and outlook Interim results 2020 Returning to our key messages from today: • We have not yet seen any decline in HPI COVID-19 • The housing market has been stimulated and is functioning well • Application volumes are approaching 60% of pre-COVID levels at tighter criteria
Slide 21: 2020 interim results - Appendices
2020 interim results - Appendices 27 August 2020 PRIVATE AND CONFIDENTIAL
Slide 22: Results impacted by COVID-19 driven impairment losses
OneSavings Bank plc Results impacted by COVID-19 driven impairment losses Interim results 2020 Statutory P&L H1 20 H1 19 Change NII increased due to inclusion of CCFS’ NII £m £m £m % Gain on sale of structured assets sales as the Group Net interest income 233.8 150.5 83.3 55 disposed of its remainin
Slide 23: OSB segment results – BTL/SME sub-segments
OneSavings Bank plc OSB segment results – BTL/SME sub-segments Interim results 2020 1. Buy-to-Let 2. Semi-commercial/Commercial 10000 1000 Gross loan book (£m) Gross loan book (£m) 5000 500 888 2 7,727 7,763 852 0 0 FY 2019 H1 2020 FY 2019 H1 2020 • Average interest rate coverage (ICR) was 203% duri
Slide 24: OSB segment results – Residential sub-segments
OneSavings Bank plc OSB segment results – Residential sub-segments Interim results 2020 1. First charge mortgages 2. Second charge mortgages 2,000 500 Gross loan book (£m) Gross loan book (£m) 1,000 250 2 1,467 1,602 359 336 0 0 FY 2019 H1 2020 FY 2019 H1 2020 3. Funding lines 50 Gross loan book (£m
Slide 25: CCFS segment results – Bridging
OneSavings Bank plc CCFS segment results – Bridging Interim results 2020 Withdrew products during lockdown and returned to the market later than with residential and BTL 1. Gross loan book 2. Net interest income 10 income (£m) Net interest Gross loan book 200 (£m) 5 1002 214 199 8 7 2 0 0 FY 2019 H1
Slide 26: CCFS segment results – Second charge
OneSavings Bank plc CCFS segment results – Second charge Interim results 2020 Withdrew products and reintroduced with a revised, more limited product set 1. Gross loan book 2. Net interest income income (£m) Net interest Gross loan book 200 4 (£m) 1002 219 220 2 3 4 2 0 0 FY 2019 H1 2020 H1 2019 H1
Slide 27: Disclaimer
OneSavings Bank plc Disclaimer Interim results 2020 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