OSB Group PLC · LSE:OSB
OSB — H1 2014 Earnings Presentation
16 slides from OSB's earnings presentation, Aug 27, 2014
Slide 1: Compelling combination of sustainable growth and returns
Compelling combination of sustainable growth and returns H1 2014 Results 27 August 2014 Specialist Personal Flexible
Slide 2: Performance highlights H1 2014 v H1 2013
Performance highlights H1 2014 v H1 2013 Loans & Advances £3.4bn (up 13% from 31 Dec 13) Net Interest Margin 282 bps (up 161bps) Underlying PBT1 £29.7m (up 306%) Underlying EPS2 11.0 pence (up 83%) Underlying ROE2 30% (up 10 percentage points) CRD IV CT 1 ratio 11.0% (up from est 8.4% at 31 December
Slide 3: Delivering our strategy (i)
Delivering our strategy (i) To be a leading specialist lender in our chosen sub-sectors Quarterly Organic Asset Origination (£m) 400 Gross new organic lending H1 2014 £649m 350 (H2 2013 £495m) 60 300 70 250 56 200 70 150 294 63 40 225 100 72 207 162 49 50 28 27 95 105 31 32 62 30 37 39 48 6 14 24 0
Slide 4: Delivering our strategy (ii)
Delivering our strategy (ii) Further deepen relationships, and reputation for delivery, with intermediaries • ~100% intermediary focus • Strong relationships with intermediaries • Consistent market presence • Product innovation and speed to market (within 7 days) • Kent Reliance Intermediary NPS1 of
Slide 5: Delivering our strategy (iii)
Delivering our strategy (iii) Maintain and build upon 150 year heritage in savings • Business remains predominantly retail funded with loan to deposit ratio of 94% • 91% retention on maturing fixed term deposits (H1 2013: 92%) • 12,000 new savings customers attracted to the Bank in first half 2014 L
Slide 6: Delivering on our Financial objectives 2014 - 2016
Delivering on our Financial objectives 2014 - 20161 H1 2014 Result Funding / Liquidity Strength Maintain loan to deposit ratio of <100%2 94% Cost Discipline Cost / income ratio of <35% 29% Capital Strength CRD IV CET1 ratio >10% 11% Shareholder Returns RoE of >25% 30%3,4 Year end Board Dividend Poli
Slide 7: Key Financial Indicators
Key Financial Indicators 1 Improved Underlying Profitability1… 2 …Driven by High-Margin New Lending2… 40 2.8% 3.0% 2.7% £m 35 Profit Before Tax (£m) 75 2.5% 30 1.6% 2.0% 25 55 1.5% 20 35 1.0% 15 2 30 0.5% 56 10 23 46 0.5% 15 5 (0.1%) 25 7 16 0.0% 0 -1 H1 2013 H2 2013 H1 2014 (5) -0.5% FY 2011 FY 201
Slide 8: Income Statement
Income Statement H1 2014 vs H1 2013 £m H1 2013 H1 2014 H1 2014 vs. H1 2013 Variance % change Net interest income 24.5 55.7 31.2 127% • Strong growth in net interest Other income / (expense) (1.0) (2.5) (1.5) 150% margin driven by high-margin new lending, further offsetting the low- Total income 23.5
Slide 9: Balance Sheet
Balance Sheet Growth £m FY 2013 H1 2014 Variance % change 13% growth in customer loans through strong organic origination Liquid assets 630 703 73 12% in H1 2014 (net of attrition on back Net customer loans 3,041 3,423 382 13% book and acquired books in run-off) o/w gross customer loans 3,069 3,455
Slide 10: Segmental Results – BTL / SME
Segmental Results – BTL / SME LTVs remain low at 73% (31 December 2013: 71%) with only 4.3% of loans by value with LTVs exceeding 90% (31 December 2013: 5.4%). 1 Gross Loan Book 2 Net Interest Income 49% 1,600 20 1,400 Net Interest Income (£m) 48% Net Loan Book (£m) 1,200 1,000 800 1,541 10 19.0 600
Slide 11: Segmental Results – Residential
Segmental Results – Residential LTVs remain low at 54% (31 December 2013: 51%) with only 2.7% of loans by value with LTVs exceeding 90% (31 December 2013: 3.3%). 1 Gross Loan Book 2 Net Interest Income 30 2,000 41% 43% 1,750 Net Interest Income (£m) Net Loan Book (£m) 1,500 20 1,250 1,000 1,765 1,76
Slide 12: Segmental Results – Personal Loans
Segmental Results – Personal Loans Run off portfolio – arrears levels below forecast Run-off portfolio of performing unsecured consumer loans acquired July 2013 Gross loan book: £154m (Dec 2013 £205m) Net interest income: £10.2m (H2 2013: £11.2m) Contribution to profit: £7.8m (H2 2013: £8.3m) Loan l
Slide 13: Capital
Capital Basel III CRD IV Capital Ratios as at 30 June 2014 • Permission received from PRA to include 2014 interim 14.7% profits in own funds less a ‘foreseeable dividend’ of 15% £4.1m under new rules introduced 1 Jan 2014 3.7% 12% • CRD IV common equity tier 1 (‘CT1’) ratio of 11.0% 9% (2013 year en
Slide 14: Summary and Outlook
Summary and Outlook Delivering high ROE growth Meeting our financial objectives Continuing to deliver on our strategy across the business Well placed to take advantage of expected mortgage market growth and improving economic outlook 13
Slide 15: Appendix: Capital: Impact of CRD IV
Appendix Capital: Impact of CRD IV Impact of CRD IV • Deferred tax asset of £6.2m as at 30 June 2014 (31 December 2013: £10.9m) deducted in full from CT1 capital (100% risk weighted under Basel II) • Two tranches of PSBs in issuance (converted from former PIBS on creation of OSB): £15m accounted for
Slide 16: Disclaimer
Disclaimer Important Message No undertaking, representation, warranty or other assurance, express or implied, is given or made by or on behalf of any member of OneSavings Bank plc ("OSB") and its subsidiaries (together, the "OSB Group") or any shareholders, directors, officers, partners, employees,