Permanent TSB Group Holdings PLC · EURONEXT:PTSB
Permanent TSB — Irish Life & Permanent — FY2006 Earnings Presentation
50 slides from Permanent TSB's earnings presentation, 2007
Slide 1: 2006 Final Results
2006 Final Results www.irishlifepermanent.ie Images of Modern Ireland 1 2006 Final Results St Stephen’s Green Shopping Centre, Dublin
Slide 2: Index
Index Section Page Highlights 3 Total profit after tax 7 Life operating profit 9 Bank operating profit 12 Associate operating profit 15 Capital and Dividend 16 Review of the Life business 19 Review of the Banking business 27 Outlook 34 Additional information Embedded Value 37 Bank Capital 38 Analysi
Slide 3: Winning in Competitive Markets
Winning in Competitive Markets Record market beating year for sales Excellent financial results Focus on service quality and customer satisfaction Strongly placed to face opportunities and challenges ahead 3 2006 Final Results
Slide 4: Sales Highlights
Sales Highlights Life Assurance Retail life sales 33% Corporate life sales 27% ILIM sales 44% Banking Irish residential mortgage lending 37% Commercial mortgage lending 97% 84,500 new current accounts opened 26% 4 2006 Final Results
Slide 5: Financial Highlights
Financial Highlights Operating profit Banking 36% Life 23% Value of New Life business 36% Operating EPS 32% Dividend 12.4% 5 2006 Final Results
Slide 6: Financial Review
Financial Review Peter Fitzpatrick Group Finance Director 6 2006 Final Results
Slide 7: Group Profit After Tax
Group Profit After Tax 2006 2005 Change €m €m % Total EPS Operating profit 529 420 26 cent 2006 205 Investment variances 101 94 Economic assumptions (38) 13 2005 176 Disposals / Other - 4 Profit before tax 592 531 11 Taxation (28) (28) Profit after tax 564 503 12 Discontinued / Minority (3) (28) Tot
Slide 8: Group Operating Profit
Group Operating Profit 2006 2005 Change €m €m % Operating EPS cent Life Assurance 274 222 23 2006 178 Banking 202 148 36 476 370 29 2005 135 General Insurance 56 54 4 Other (3) (4) Operating profit 529 420 26 Taxation / Levy (42) (54) Operating profit after tax 487 366 33 8 2006 Final Results
Slide 9: Life Operating Profit
Life Operating Profit 2006 2005 Change €m €m % New Business 128 94 36 In-force business: • Total expected return 115 94 • Experience variances 14 15 • Assumption changes 17 19 Operating profit 274 222 23 9 2006 Final Results
Slide 10: Life New Business
Life New Business 2006 2005 €m €m New Business Contribution APE Sales 2006 2005 Life 106 79 €m €m ILIM 22 15 Life 516 388 ILIM 190 132 Margin - APE % % Life 20.6 20.4 ILIM 11.4 11.4 PVNBP Sales 2006 2005 Margin - PVNBP €m €m Life 3.1 3.1 Life 3,482 2,571 ILIM 1.1 1.1 ILIM 1,901 1,319 10 2006 Final R
Slide 11: Life Costs
Life Costs 2006 2005 Change €m €m % Retail 146 127 15 Corporate Business 33 30 10 ILIM 16 15 Other 14 14 209 186 12 11 2006 Final Results
Slide 12: Banking Operating Profit
Banking Operating Profit 2006 2005 Change €m €m % Cost / Income Ratio 2006 2005 Net interest income 429 377 14 % % Other income 45 40 Reported 56 62 Trading income 12 (4) Incl. Commission 53 60 486 413 18 Incl. Bank EV Earnings 50 56 Expenses (273) (255) Impairment provisions (14) (12) Investment ga
Slide 13: Net Interest Margin
Net Interest Margin 2006 Movement bps Assets 2006 2005 Dec 2005 129 €bn €bn Basis risk (5) Lending 33.8 26.3 Retail (2) Liquidity 9.7 8.0 CHL (2) Treasury 3 Funding (4) Dec 2006 119 13 2006 Final Results
Slide 14: Bank Funding
Bank Funding 2006 €bn Long-term Debt 9.2 Securitisation 3.8 Extendible Notes 1.7 Commercial Paper 9.4 Customer Accounts 13.6 Interbank 5.1 Total 42.8 14 2006 Final Results
Slide 15: General Insurance Operating Profit
General Insurance Operating Profit 2006 2005 Change €m €m % Combined Ratio % Underwriting results 52 48 2006 71 Investment return 12 18 2005 74 Disposal 3 - 67 66 Taxation (11) (12) Operating profit 56 54 4 15 2006 Final Results
Slide 16: Bank Capital
Bank Capital Movement RAR €m % Dec 2005 2,138 12.6 Post tax earnings 157 Dividends received 141 Dividends paid (173) 125 Capital issued 93 Capital amortised (104) (11) IFRS adjustments (100) Dec 2006 2,152 10.4 16 2006 Final Results
Slide 17: Life Capital
Life Capital Solvency Movement Cover €m % Net Worth Dec 2005 750 163 In-force earnings 203 New business IRR 13.2% Investment fluctuations 53 [2005: 12.5%] 256 €200m Perpetual debt raised in Q1 ‘07 New business (163) Other (6) Dividend (90) Net Worth Dec 2006 747 180 17 2006 Final Results
Slide 18: Operating EPS & Dividend
Operating EPS & Dividend cent 200 CAGR 1998 - 2006: EPS 12% & DPS 11% 178 180 160 135 140 124 EPS 120 115 112 99 DPS 100 87 86 80 73 68.0 55.0 60.5 60 51.0 43.0 47.5 35.1 39.0 40 28.5 20 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 18 2006 Final Results
Slide 19: Business Review
Business Review David Went Group Chief Executive 19 2006 Final Results
Slide 20: Life Business
Life Business Investment markets strongly supportive Record sales increase market share Robust margins Focus on customer and intermediary service 20 2006 Final Results
Slide 21: Life & Investment Sales
Life & Investment Sales €m 800 Sales* CAGR 1998 - 2006: 20% 706 700 600 520 500 470 Retail 414 400 Corporate Business 320 331 316 300 232 ILIM 200 167 100 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 * APE basis 21 2006 Final Results
Slide 22: Retail Life Products
Retail Life Products Mix Growth % S% Investments 32 +68 Pension 39 +18 Protection / Risk 18 +26 Savings 11 +26 Sales* €317m [2005: €238m] * APE basis 22 2006 Final Results
Slide 23: Retail Life Distribution
Retail Life Distribution Mix Growth % S% Bancassurance • permanent tsb 28 +33 40% • Institutions 12 +86 Direct Salesforce 28 +30 Brokers / IFAs 32 +22 Sales* €317m [2005: €238m] * APE basis 23 2006 Final Results
Slide 24: Corporate Life Products
Corporate Life Products Mix Growth % S% Defined Contribution 72 +40 Annuities / Other 18 +53 Protection / Risk 10 -36 Sales* €165m [2005: €130m] * APE basis 24 2006 Final Results
Slide 25: Life Market Share
Life Market Share % New Business 1998 - 2006 30 28% 26% 25% 25 23% 22% 21% 21% 20 19% 19% 15 10 1998 1999 2000 2001 2002 2003 2004 2005 2006E Source: Irish Insurance Federation 25 2006 Final Results
Slide 26: Irish Life Investment Managers
Irish Life Investment Managers €bn Funds Under Management 1998 - 2006 35 31 30 25 25 Institutional 21 20 Life company 16 17 15 15 15 14 12 10 5 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 26 2006 Final Results
Slide 27: Banking Business
Banking Business Record year for Irish housing market Increasing market share in highly competitive market Continued success in customer acquisition Building the no.1 retail bank 27 2006 Final Results
Slide 28: Bank New Lending
Bank New Lending €m 14000 New Lending CAGR 1998 - 2006: 27% 12,861 12000 10000 9,750 ROI Mortgages 7,980 UK Mortgages 8000 Commercial 5,978 6000 Consumer Finance 4,494 4000 3,594 2,853 3,147 1,895 2000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 * APE basis 28 2006 Final Results
Slide 29: Loan Book
Loan Book 2006 €33.8bn 2005 €26.3bn €bn 25 +30% 20 15 10 +28% 5 +19% +31% 0 Ireland UK Mortgages Consumer Commercial Mortgages Finance 29 2006 Final Results
Slide 30: New Lending LTVs
New Lending LTVs Residential Mortgages (Ireland) 2006 2005 2004 New Lending % % % Home Loans First Time Buyers 87 84 81 Second Time Buyers 58 61 60 Average 71 69 68 RIPs Average 68 65 65 Equity Release Average 51 51 49 Total New Lending* 66 64 63 * Weighted average 30 2006 Final Results
Slide 31: Mortgage Arrears
Mortgage Arrears 000’s 000’s 12 190 Residential Mortgages (Ireland) 180 9 No. of Mortgages (RHS) 170 160 6 No. in Arrears * 150 3 140 2002 2003 2004 2005 2006 * > 1 month 31 2006 Final Results
Slide 32: Mortgage Market Share
Mortgage Market Share €bn 25 New Residential Mortgage Lending 1998 - 2006 23% 23% 22% 21% 20% 20% 20 19% 19% 19% 15 1998 1999 2000 2001 2002 2003 2004 2005 2006 Source: IMC / Irish Banking Federation 32 2006 Final Results
Slide 33: Customer Acquisition
Customer Acquisition 84,500 new current accounts opened in 2006 68,000 new customers 16,500 upgrades Opening 1,250 accounts per week Account balances up 18% yoy Credit card sales doubled to 20,000 in 2006 33 2006 Final Results
Slide 34: Outlook - Economy
Outlook - Economy SSIAs boost consumer and investor demand Housing market slowed by stamp duty uncertainty Another year of 5%+ economic growth forecast* * ESRI Quarterly Economic Commentary, Winter 2006 34 2006 Final Results
Slide 35: Outlook - Trading
Outlook - Trading Life sales - another buoyant year Bank lending - slower first half Earnings target: low to mid-teens growth in banking & life 35 2006 Final Results
Slide 36: Additional Information
Additional Information Page 37 Change in Embedded Value 38 Bank Capital 39 Operating profit after tax 40 Operating EPS 41 Total profit after tax 42 IFRS (Statutory) profit after tax 43 IFRS / EV reconciliation 44 Other activities operating profit 45 Bank non-interest income 46 Group costs 47 Life va
Slide 37: Embedded Value Change
Embedded Value Change Net Worth VIF Total Required Capital €m €m €m €m Opening 1 Jan 2006 750 1,103 1,853 535 Operating profit 40 221 261 Investment fluctuations 53 63 116 Economic assumptions (6) (33) (39) Capital movements (90) - (90) Closing 31 Dec 2006 747 1,354 2,101 560 * All movements net of
Slide 38: Bank Capital
Bank Capital 2006 2005 €bn €bn Risk weighted assets 20.6 17.1 Capital: Tier 1 4.4 4.1 Less Goodwill (Irish Life & TSB) (1.5) (1.5) 2.9 2.6 Tier 2 1.4 1.4 Total Capital 4.3 4.0 Less Embedded Value deduction (2.1) (1.9) Available Capital 2.2 2.1 RAR 10.4% 12.6% 38 2006 Final Results
Slide 39: Operating Profit After Tax
Operating Profit After Tax 2006 2005 Pre-tax Tax Post-tax Post-tax €m €m €m €m Life assurance 274 (13) 261 206 Banking 202 (30) 172 122 Other activities (3) 1 (2) (4) 473 (42) 431 324 Associate 56 - 56 54 Levy - - - (12) 529 (42) 487 366 39 2006 Final Results
Slide 40: Operating EPS
Operating EPS 2006 2005 Change €m €m % Operating profit 529 420 Taxation (42) (42) Government levy - (12) Operating PAT 487 366 33 Average no. of shares 274m 270m EPS 178c 135c 32 Note: “own shares” included for EPS calculation 40 2006 Final Results
Slide 41: Total Profit After Tax
Total Profit After Tax 2006 2005 Pre-tax Tax Post-tax Post-tax €m €m €m €m Operating profit 529 (42) 487 366 Investment fluctuations 101 15 116 125 Economic assumptions (38) (1) (39) 8 Other changes / Credits - - - 4 592 (28) 564 503 Discontinued / Minority (3) - (3) (28) Total profit 589 (28) 561 4
Slide 42: IFRS (Statutory) Profit After Tax
IFRS (Statutory) Profit After Tax 2006 2005 Change €m €m % Life assurance 186 223 (17) IFRS Life Earnings Movement €m Banking 202 148 Economic Variance (29) General Insurance 56 54 Investment fluctuations (26) Surplus on Investment contracts 24 Other (3) (4) New Business strain (8) (37) Interest on
Slide 43: IFRS / EV Reconciliation
IFRS / EV Reconciliation 2006 S’Holders Total Profit* Equity after Tax €m €m Embedded Value basis 3,199 564 Investment business • Value of in-force (808) (131) • Deferred costs & fees 61 39 • Restatement of liabilities 39 (34) Own shares adjustment (81) (28) Owner occupied property - (34) Other (25)
Slide 44: Other Activities Operating Profit
Other Activities Operating Profit 2006 2005 €m €m Cornmarket / IPSI 16 11 Springboard (1) - 15 11 Corporate costs (18) (15) (3) (4) 44 2006 Final Results
Slide 45: Banking Non Interest Income
Banking Non Interest Income 2006 2005 Change €m €m % Fees & Comms (rec’d) 51 46 Fees & Comms (payable) (6) (6) 45 40 13 Trading income 12 (4) 57 36 58 Note: Bancassurance Embedded Value operating profit €56m [2005: €46m] included in life assurance 45 2006 Final Results
Slide 46: Group Costs
Group Costs 2006 2005 Change €m €m % Banking: • Operational 273 255 7 • Restructuring - 11 Life: • Administrative 209 186 12 • Development costs - 8 Other operations 58 50 540 510 6 46 2006 Final Results
Slide 47: Life Variances & Assumptions
Life Variances & Assumptions Experience Variances Assumption Changes 2006 2005 2006 2005 €m €m €m €m Persistency (1) - 3 (3) Risk 23 15 19 17 Other (8) - (5) 13 14 15 17 27 Development Expenses - - - (8) 14 15 17 19 47 2006 Final Results
Slide 48: Life & Investment Sales
Life & Investment Sales Recurring Premium Single Premium 2006 2005 2006 2005 €m €m €m €m Retail 182 149 1,347 892 Corporate 130 107 348 225 ILIM - - 1,901 1,319 ILI - - 339 200 Total 312 256 3,935 2,636 APE Basis 312 256 394 264 PVNBP Basis 1,448 1,254 3,935 2,636 48 2006 Final Results 2006 Interim
Slide 49: Retail Life Sales
Retail Life Sales 2006 2005 Change €m €m % Products Pension 123 104 18 Investments 101 60 68 Protection / Risk 59 47 26 Savings 34 27 26 317 238 33 Distribution Bancassurance 88 66 33 Direct Salesforce 90 69 30 Brokers / IFAs 100 82 22 Institutions 39 21 86 317 238 33 49 2006 Final Results
Slide 50: Contact Information
Contact Information Please contact our Investor Relations Department for any further information or visit our group website at www.irishlifepermanent.ie Contact details: Barry Walsh [email protected] +353 1 704 2678 Orla Brannigan [email protected] +353 1 704 1345 50 2006 Final Resu
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