Permanent Tsb Group Holdings Plc · EURONEXT:PTSB
Permanent Tsb — H1 2023 Earnings Presentation
39 slides from Permanent Tsb's earnings presentation, Aug 2, 2023
Slide 1: Interim Results 2023
Interim Results 2023 Members of the Irish Olympic Team and the Irish Paralympic Team pictured at the launch of Permanent TSB’s title sponsorship of Team Ireland for the 2024 Games in Paris. We are a community serving the community
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: Interim Results 2023
I N T E R I M R E S U L T S 2023 Eamonn Crowley, Nicola O’Brien, CEO CFO
Slide 4: Business Update Financial Performance
1 2 3 4 Business Update Financial FY23 & Medium Appendix Performance Term Outlook Eamonn Crowley, CEO
Slide 5: Business Performance
Business Performance Half Year 2023 Highlights • Ulster Bank transaction now complete; €6.75bn assets acquired New Lending • New Mortgage Market Share1 of 23.1%, 6.8% higher YoY Customers €1.4bn +36% YoY • 1.2m customers, +6% YoY, larger and more active customer base • Asset Finance business success
Slide 6: Macroeconomic Outlook
Macroeconomic Outlook Housing Market Remains Strong Despite Macroeconomic Uncertainty House Price Growth (%) ECB MRO & CPI Forecast (%) Labour Market (%) ECB Refi Rate HICP Unemployment Rate Employment Growth 8.2% 5.3% 7.7% 4.8% 5.0% 4.4% 4.25% 3.0% 2.8% 3.8% 2.0% 3.0% 1.3% -1.0% 2.5% 2022 2023e 202
Slide 7: Market Transactions
Market Transactions Share Sale & MREL Issuances Are Positive Catalysts for Equity & Debt Investors 1.2 Ownership Structure 1 Material Increase in Free Float 25% 21% 25% 0.8 31% • c. 50% increase in Free Float shares over the last 12 months -27m 0.6 +91m shares • c. 95% increase in the stock’s averag
Slide 8: A Purpose Led Strategy
A Purpose Led Strategy Delivering Our Strategy is Our Focus To Work Hard Every To Be Ireland’s Best Day to Build Trust with Personal And Small Our Customers – We Business Bank are a Community Serving the Community A Business Model Bringing People and Technology Together To Build a Sustainable Bank f
Slide 9: Transformational Transaction Now Complete
Transformational Transaction Now Complete New Businesses, Customers and Colleagues What We Have Achieved… And What It Means… 2 Year Programme of Work from MOU Phase Greater scale and diversification to compete and grow the business Increased branch footprint with a greater geographical spread
Slide 10: Commercial Performance Driving Revenue Growth
Commercial Performance Driving Revenue Growth Total New Lending of €1.4 Billion +36% YoY Total Customer New Lending (€bn)1 Mortgage Drawdowns (€bn) & Market Share2 (%) • Total New • New Mortgage 1.8 Lending of Lending of €1.3bn €1.4bn; +36% 1.8 25.0% +41% YoY 1.6 23.1% 1.4 YoY 18.5% 1.4 20.0% • Mark
Slide 11: A Growing And Active Customer Base
A Growing And Active Customer Base Building Trust and Loyalty With Our Customers More Active Customer Base New to Bank Mortgages Digital Active Digital Contactless Delivering on Our Priorities NPS1 Customers Activity2 Customers3 Payments HY’23 33 44% 76m 633k 59m YoY Movement +3% In Line YoY +18% +1
Slide 12: Transforming Our Business
Transforming Our Business In Line With Our Purpose Driven Strategy Delivering Across Strategic Priorities in H1’23 Connected Cultural Secure & Resilient Sustainable Customer Evolution Foundations Business Growth Experience 25 New Branches with 69% of roles are now Resilience through Multi- U
Slide 13: Delivering on ESG Agenda
Delivering on ESG Agenda Continuing To Build On Strong Foundations In A Responsible Way Support Ireland’s Grow Sustainable Elevate Our Social Impact Transition To A Low Carbon Profitability & Enhance Our Culture Economy Environment Social Governance & Disclosures • Title Sponsor of the Irish • Board
Slide 14: Business Update Financial Performance
1 2 3 4 Business Update Financial FY23 & Medium Appendix Performance Term Outlook Nicola O’Brien, CFO
Slide 15: Robust Financial Performance
Robust Financial Performance With Continued Business Momentum Grow Diversified Efficient Capital And Income Streams Organisation Resource Allocation HY 2023 Vs HY 2022 HY’23 HY’22 YoY YoY • Growth due to rising interest rate €m €m €m % Net Interest Income environment and migration of Ulster Bank ass
Slide 16: Strong Operating Income Performance
Strong Operating Income Performance Benefitting from Higher Interest Earning Assets and Larger Customer Base NIM% Net Interest Income (€m) 1.41% 2.29% 2.68% 360 350 340 Total Asset Yield Net Interest Income Drivers 330 320 1.51% (40) 310 300 58 290 • Upward Interest Rate Environment, Asset Yield 2.6
Slide 17: Loan Book Growth in a Competitive Environment
Loan Book Growth in a Competitive Environment 7% Growth in Gross Loans Total Gross Loans (€bn) Performing Home Loan Book by Product (Mix %) +7% +55% €bn 21.1 12.4 18.0 19.2 Organic Growth 0.3 +0.3 14% 11% 11% 0.5 +67% Migration of c. €1.1bn 19% 16% Acquisitions of Ulster Bank Assets 33% 19.7 +1.1 in
Slide 18: Acquisition Supporting SME Loan Book Growth
Acquisition Supporting SME Loan Book Growth On Target To Grow SME Loan Book In Excess Of €1bn by FY’23 SME Performing Book Movement1 (€m) 1050 1040 1030 1020 > 1,000 1010 1000 990 980 970 960 950 940 930 920 910 900 890 880 870 860 850 840 830 820 • Total SME Book of €482m at Jun’23, +60% from Dec’2
Slide 19: Maintaining Cost Discipline as Planned Investment Continues
Maintaining Cost Discipline as Planned Investment Continues Cost Income Ratio of 63%; 29% Lower Year on Year Cost Base Analysis HY’23 HY’22 YoY YoY Movement In Underlying Operating Expenses (€m) €m €m €m % Staff Costs1 94 73 21 +29% +13% +11% Other Costs 78 67 11 +16% 16 3 Total Addressable Costs 17
Slide 20: Strong Observed Asset Quality
Strong Observed Asset Quality Customers Demonstrating Resilience Despite High Inflationary Environment Impairment Release/(Charge) (€m) Cost of Provision Stock (€m) Risk1 -13 bps 9 bps 590 558 Expected Credit Loss HY‘23 FY‘22 HY’22 570 -6 Model (Charge) / Release (49) 14 (10) 550 49 -36 30 118 521 P
Slide 21: Continued Deposit Franchise Growth
Continued Deposit Franchise Growth Funding Driven by Higher Deposits & Wholesale Funding Total Funding HY‘23 (€bn) Customer Deposits (€bn) Sub Debt Repurchase Agreements 0.3 +13% 1.1 1% Senior MTNs 4% 1.8 20.1 21.8 22.6 7% 1.1 • 88% Funded by 1.2 Corporate 1.1 Customer Deposits Deposits Retail 5.4 5
Slide 22: Effective Management of Capital as Business Grows
Effective Management of Capital as Business Grows Capital Ratios Remain Above Regulatory Requirements CET1 Fully Loaded Ratio Movement (%) RWAs RWAs RWAs1 16.5% €10.6bn €11.2bn €11.6bn 15.5% -0.8% -0.4% +0.9% -0.3% -0.7% 14.5% -0.2% 13.5% 12.5% 15.2% 14.4% 13.8% 11.5% 10.5% 9.5% 8.5% 7.5% FY'22 Ulst
Slide 23: Strong Performance with Continued Business Momentum
Strong Performance with Continued Business Momentum Economic and Market Backdrop Supporting Growth Ambitions HY’23 €86m • Underlying Profit Before Tax1 reflects a Purpose Driven Business 23.1% • New Mortgage Business Market Share of 23.1%, an increase of 6.8% YoY 2.29% • Strong NIM% with Continued B
Slide 24: Business Update Financial Performance
1 2 3 4 Business Update Financial FY23 & Medium Appendix Performance Term Outlook Eamonn Crowley, CEO
Slide 25: Outlook – FY 2023
Outlook – FY 2023 A Purpose Driven Strategy Upgrading FY’23 Guidance to Reflect More Positive Operating Environment (change vs previous guidance) Cost Income Underlying Underlying Total Income Cost of Risk Ratio1 Profit RoE2 >> >> >> >> >> c. €680m <65% c. 10 bps c. €180m c. 8% (+c. 5%) (-5%) (No ch
Slide 26: Medium Term Targets
Medium Term Targets Guidance Remains Unchanged 2025 2023 2025 RoE%3 c. 11% 2023 Net Interest Margin c. 2.35% > c. 2.50% c.2.50% c. 8% 2022 Total Income c. €680m > c.€825m c. €825m 2025 1% c. 40c Cost / Income Ratio1 <65% > c.55% c. 55% 2023 c. 10c Operating Profit2 c. €200m > c.€325m c. €325m EPS Co
Slide 27: Investment Case
Investment Case Over the Medium Term 1 2 3 4 5 Strong Market Larger and More Strong Capital & Organic CET1 Attractive Medium Position in Active Customer Funding, with Low Generation From Term Targets: Ireland Base Risk Profile FY24 Onwards • RoE1 >11% • EPS >40c 26 1. RoE% calculated as Profits Attr
Slide 28: Appendix
1 2 3 4 Business Update Financial FY23 & Medium Appendix Performance Term Outlook
Slide 29: Domestically Focused Retail And SME Bank
Domestically Focused Retail And SME Bank Business Overview Branch Footprint Existing PTSB Branch UB branches transferred in Jan-2023 Business €20.4bn €9.5bn €12.0bn Performing Current Account Retail Deposit Loan Book Balances Balances Market Share c. 24% 13.5% 11.2% Residential Current Account Retai
Slide 30: A Brief History
A Brief History 2016 2019 H1 2023 LDR% 111% > 91% > 92% System Funding €1.4bn > €nil > €nil Total New Lending €0.6bn > €1.7bn > €1.4bn Mortgage Market Share 10% > 15.5% > 23.1% Net Interest Margin% 1.48% > 1.80% > 2.29% NPL% 28% > 6.4% > 3.3% CET1% (FL) 14.9% > 15.0% > 14.4% Rebuilding of the Bank i
Slide 31: Historical Financial Information
Historical Financial Information Income Statement €m HY 2023 FY 2022 FY 2021 FY 2020 FY 2019 Net Interest Income 298 362 313 341 356 Other Income 25 47 48 34 58 Total Operating Income 323 409 361 375 414 Total Operating Expenses (Before Exceptional Items) (228) (395) (345) (323) (330) Pre-Impairment
Slide 32: Historical Financial Information
Historical Financial Information Balance Sheet €bn Jun 2023 Dec 2022 Dec 2021 Dec 2020 Dec 2019 Total Loan Book (net) 20.9 19.6 14.2 14.2 15.6 Treasury Assets 6.7 5.4 6.7 5.9 3.6 Other Assets 0.9 1.1 1.3 0.8 1.1 Total Assets 28.4 25.9 22.2 20.9 20.3 Retail Deposits (Incl. Current Accounts) 21.5 20.6
Slide 33: Interest Income Analysis
Interest Income Analysis Average Balances (€bn)1 Yields (%) Interest Income (€m) HY 2023 HY 2022 HY 2023 HY 2022 HY 2023 HY 2022 Tracker 4.0 5.8 4.2% 1.3% 84 38 Fixed and Variable 15.5 5.7 2.9% 4.5% 219 126 Consumer Finance 0.3 0.3 10.0% 13.5% 14 18 SME / CRE 0.5 0.3 5.1% 3.1% 12 4 Treasury Assets 6
Slide 34: Interest Expense Analysis
Interest Expense Analysis Average Balances (€bn)1 Cost of Funds (%) Interest Expense (€m) HY 2023 HY 2022 HY 2023 HY 2022 HY 2023 HY 2022 Current Accounts 9.2 7.5 0.0% 0.0% - - Retail Deposits 11.8 10.7 0.1% 0.0% 5 2 Corporate Deposits 1.1 1.2 1.2% 0.4% 7 3 Wholesale Funding2 2.3 1.6 3.3% 0.7% 38 6
Slide 35: Asset Quality
Asset Quality 30-Jun 31-Dec Loans and Advances to Customers 2023 2022 Measured at Amortised Cost €m €m Residential mortgages: 19,488 18,340 Home Loans Buy To Let 806 824 Total Residential Mortgages 20,294 19,164 Commercial 376 239 Consumer Finance 449 401 Total Measured at Amortised Cost 21,119 19,8
Slide 36: NPLs and NPAs
NPLs and NPAs Stage 3 Analysis 30-Jun 23 Home Loan Buy-To-Let SME /Commercial Consumer Finance Total €m €m €m €m €m NPL is < 90 Days 181 100 11 3 295 NPL is > 90 Days and < 1 year past due 64 26 1 4 95 NPL is 1-2 years past due 39 43 1 2 85 NPL is 2-5 years past due 54 66 - 1 121 NPL is > 5 years pa
Slide 37: Regulatory Capital
Regulatory Capital 30 June 2023 31 December 2022 Transitional Fully Loaded Transitional Fully Loaded €m €m €m €m Risk Weighted Assets 11,245 11,245 10,627 10,627 Capital Resources: Common equity tier 1 1,654 1,624 1,718 1,616 Additional Tier 1 369 369 369 369 Tier 1 Capital 2,023 1,993 2,087 1,985 T
Slide 38: Notes
Notes 37 wn permanent tsb
Slide 39: Thank You
I N T E R I M R E S U L T S 2023 Thank You End of Presentation
Permanent TSB Group Holdings — H1 2023 Earnings Presentation on 6ix