Shawbrook Group PLC Interim Report for the period ended 30 June 2023 (8589I)

TIDMPH56

RNS Number : 8589I

Shawbrook Group PLC

10 August 2023

 
                                       Shawbrook Group plc 
                        Interim Results for the period ended 30 June 2023 
                   London, 10 August 2023 - Shawbrook Group plc ('Shawbrook' or 
                   the 'Group') today announces its Interim Results for the six 
                                    months ended 30 June 2023. 
 Financial highlights 
     --     Loan book grew to GBP11.9 billion(1) as at 30 June 2023 
             (31 December 2022: GBP10.5 billion), driven by strong net 
             lending volumes across Real Estate, SME and Residential 
             Mortgage Brands. 
     --     Strong profitability maintained in the first half of 2023, 
             achieving 34% growth in underlying profit before tax to 
             GBP149.3 million compared to GBP111.4 million in H1 2022 
             (27% growth on a statutory basis from GBP106.4 million to 
             GBP135.1 million). Underlying return on tangible equity 
             was 20.5% compared to 19.6% for H1 2022 (18.4% on a statutory 
             basis compared to 18.6% for H1 2022), supported by the diversification 
             of our proposition. 
     --     We continue to remain alert to the potential challenges 
             that lie ahead given the uncertain macroeconomic environment, 
             however we are yet to see any material changes to our early 
             warning indicators, with credit quality remaining strong 
             and the number of customers in arrears remaining stable. 
             The overall arrears rate as at 30 June 2023 was 1.9%(2) 
             (31 December 2022: 1.9%). 
     --     Further strengthened and diversified our funding base, with 
             our deposit book growing by 22% on an annualised basis to 
             GBP12.1 billion (31 December 2022: GBP10.9 billion) and 
             our total savings customer base increasing by 16% to c.262,000 
             (31 December 2022: c.225,000). 
     --     Maintained strong surplus liquidity and capital resources, 
             with a Common Equity Tier 1 (CET1) ratio of 12.2% (31 December 
             2022: 12.7%(3) ), a total capital ratio of 14.8% (31 December 
             2022: 15.6%(3) ) and a liquidity coverage ratio of 330.7% 
             (31 December 2022: 321.3%), reflecting our liquid balance 
             sheet. 
 
   Strategic highlights 
     --     Completed the acquisition of Bluestone Mortgages Limited 
             (BML) in May 2023, helping us to deliver an even stronger 
             proposition to homeowners across the UK. 
     --     Continued to invest in and strengthen our digital capabilities, 
             deploying innovative solutions across the business to improve 
             our customer propositions: 
                    Launched the Shawbrook 'Colleague Hub', a strategic 
                     platform currently used by our Real Estate business. 
                     Born out of our 'Next Generation Underwriting' project, 
                     the platform digitalises processes to help maximise 
                     our underwriters' productivity in making valuable 
                     lending decisions. 
                    Continued to build out our new digital savings experience. 
                     This introduces enhanced self-service functionality 
                     to our customers and automated processes for our 
                     colleagues, to create a more seamless and streamlined 
                     savings proposition. 
                    Further invested in our Digital SME Lending proposition, 
                     using our auto decisioning capabilities to offer 
                     an improved customer journey. 
     --     As an organisation that seeks to protect our customers 
             and promote good outcomes, we continued to embed the Financial 
             Conduct Authority's new Consumer Duty across the business. 
     --     Our employee engagement score improved to 84% (2022: 82%), 
             demonstrating how our people are proud of our culture and 
             brand. 
     --     Continued to extend our positive ESG impact: 
                    Progressed our climate roadmap with a focus on embedding 
                     our strategy across the Group. This includes integrating 
                     the use of a climate portal into credit underwriting 
                     teams. 
                    Extended our existing relationship with Saracens. 
                     This gives us the opportunity to further deepen our 
                     commitment to the Saracens Foundation and men's and 
                     women's rugby teams, as well as becoming the new 
                     principal partner of the Mavericks netball team from 
                     2024. 
 Marcelino Castrillo, Chief Executive Officer, commented: 
 "The first half of the year has again demonstrated the benefits 
  of our business model - differentiated by our 'best of both' 
  approach and fuelled by resilient and diversified funding. We 
  continued to expand our presence across a range of carefully 
  selected specialist markets, contributing to the sustained growth 
  of our loan book to GBP11.9 billion(1) and delivering stable 
  returns, with an underlying return on tangible equity of 20.5% 
  (18.4% on a statutory basis). 
 
  Expanding our brand presence in the deposit market, we successfully 
  attracted 37,000 new savings customers, increasing our retail 
  deposit base to GBP12.1 billion. We have grown our liquidity 
  levels to maintain a healthy liquidity coverage ratio as we continue 
  to fund our lending growth. 
 Continuing investment in our digital strategy enables us to scale-up 
  our proposition and deliver operational leverage: our underlying 
  cost to income ratio has reduced further to 36.6% (41.5% on a 
  statutory basis). 
 
  Data, technology and organisational design are also providing 
  us with access to a growing number of early warning indicators, 
  with insights enabling us to proactively address any potential 
  issues or stress in the loan book. Notwithstanding the volatile 
  macroeconomic environment, our portfolios remain resilient, with 
  the Group's overall arrears rate remaining stable at 1.9%(2) 
  , supported by low loan-to-value levels and prudent risk appetite. 
 The resilience and agility of the model we have created at Shawbrook 
  gives us the confidence to continue investing in our brand, people 
  and the propositions we offer across a diverse range of markets. 
  The sustainable returns we generate also enable us to further 
  scale-up our model through ongoing investment in data and technology. 
  Our 'best of both' approach creates opportunities in the current 
  volatile macroeconomic environment." 
 
  Footnotes 
 1      Excluding the Bluestone Mortgages Limited acquisition, 
         the loan book was GBP11.6 billion. 
 2      Loans that are equal to or greater than two payments in 
         arrears (includes all term expired). 
 3      Risk-weighted assets as at 31 December 2022 have been restated 
         to reflect adjustments in credit valuation adjustment and 
         counterparty credit risk in respect of the Group's structured 
         entities' interest rate swap derivatives. Risk-weighted 
         assets have increased by GBP80.6 million to GBP7,463.1 
         million and the capital and leverage ratios have also been 
         restated to reflect these adjustments. 
 
   Visit https://www.shawbrook.co.uk/investors/ to download the 
   full Interim Financial Report. 
 
 

For further information, please contact:

Joe Hughes

Teneo

[e-mail]

For investor enquiries, please contact:

Murray Long

Head of Investor Relations

[e-mail]

About Shawbrook - Banking for the real world

Shawbrook is designed to accommodate individuality, diversity and the dynamics of the modern world. We are driven by our purpose, to power up ingenuity to create opportunity, every single day.

Leveraging strong digital capabilities to complement deep human expertise, our 'best of both' proposition is ideally placed to provide personalised finance solutions to those with immediate and often complex needs. We offer a diversified range of practical lending and savings products across three customer franchises to serve consumers, businesses and real estate professionals.

Our advanced digital platform enables us to provide a differentiated proposition to an expanding customer base. Our multi-channel distribution and end-to-end digital capabilities are empowered by our expert talent and partnerships with a range of leading FinTech and data providers to deliver best-in-class customer experiences.

The Group's lending activities are primarily funded by a stable retail deposit book consisting of easy access and ISA accounts, variable rate notice accounts and fixed rate fixed term accounts (mostly one - five years). Shawbrook Bank Limited is an operating entity of Shawbrook Group plc. Shawbrook Bank Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority and is a member of the Financial Services Compensation Scheme.

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August 10, 2023 02:00 ET (06:00 GMT)