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Shawbrook Group plc
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Interim Results for the period ended 30 June 2022
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| London, 9 August 2022 - Shawbrook Group plc ('Shawbrook' or the 'Group') today announces its Interim Results for the six months ended 30 June 2022.
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| Financial highlights
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Annualised loan book growth of 22.9%1 to £9.3 billion as at 30 June 2022 (31 December 2021: £8.6 billion), driven by strong new lending volumes across all franchises.
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Strong profitability continued in H1 2022, with profit before tax of £111.4 million on an underlying basis (£106.4 million on a statutory basis) compared to £92.8 million on both an underlying and statutory basis in H1 2021. Return on tangible equity for H1 2022 was 19.6% on an underlying basis (18.6% on a statutory basis) compared to 19.7% on both an underlying and statutory basis in H1 2021.
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Against an uncertain macroeconomic backdrop, we continued to experience low levels of impairment losses and arrears, with the cost of risk comfortably within risk appetite at 38bps (H1 2021: 0 bps), reflecting the strong credit quality of our loan book. The overall arrears rate as at H1 2022 was 1.9%2 (31 December 2021: 1.7%).
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Material funding advantage generated, with customer deposits increasing by 9.8% to £9.2 billion (31 December 2021: £8.4 billion) and our total savings customer base growing to c.190,000 as at 30 June 2022 (31 December 2021: c.170,000).
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Successful completion of a £352 million fully retained securitisation of Bluestone Mortgages Limited (Bluestone) originated owner occupied and buy-to-let loans. This transaction further supports the Group's funding diversification strategy and demonstrates the flexibility of our business model.
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Capital levels remain in excess of regulatory requirements, with a Common Equity Tier 1 ratio of 12.7% (31 December 2021: 12.7%), a total capital ratio of 15.9% (31 December 2021: 16.2%) and a liquidity coverage ratio of 300.4% (31 December 2021: 247.8%) reflecting our liquid balance sheet. |
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Strategic highlights
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Continued to invest in and strengthen our capabilities and deploy innovative technology solutions across the business to improve our customer propositions:
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Following the successful rollout of My Shawbrook Portal across buy-to-let, we extended the portal to our bridging product range, streamlining the application process through the provision of fast valuation-backed credit decisions.
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Continued to deploy our portfolio management tool across our Business Finance proposition, providing powerful insights into loan book risk and performance.
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Continued to respond to macro trends with new products and services, including the launch of the Shawbrook energy efficiency discount in our property portfolio and our Open Banking-backed consumer lending proposition in collaboration with ClearScore, which demonstrates the scale and depth of our total addressable market.
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Continued to encourage social mobility and inclusivity:
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Successfully completed the first year of the 'Empower Her' project, working in partnership with the Saracens Foundation to support the next generation of female leaders through sport.
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Launched 'Thrive', an apprenticeship programme designed to support young people from disadvantaged backgrounds into a career in financial services.
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Achieved an excellent employee engagement score of 82% (2021: 80%), demonstrating how our people are proud of our culture and brand.
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| Marcelino Castrillo, Chief Executive Officer, commented:
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| "Our relentless focus on delivering excellent customer experiences and maintaining rigorous cost discipline resulted in a 20% increase in underlying profit before tax, delivering an underlying return on tangible equity of 19.6% for the first half of the year.
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| Our continued strong financial performance demonstrates the effectiveness of our unique 'best of both' approach, which has never been more relevant than in today's fast changing environment. As consumers and businesses increasingly seek personalised finance solutions, we continue to demonstrate our ability to meet these needs through innovation driven by both technology and the ingenuity of our people.
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| While change creates opportunities, it also brings with it uncertainty and, as such, we remain alive to the implications that the cost of living crisis may have on our stakeholders and will continue to prioritise our duties as a responsible lender, employer and active member of the wider community."
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| About Shawbrook - Banking for the real world
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| 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.
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| 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.
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| 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.
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| 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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| 1 |
Loan book growth of 7.9% from £8.6 billion at 31 December 2021 to £9.3 billion annualises to 15.9%. When adjusted to add back the sale of a portfolio of loans from Property Finance that completed in January 2022, which had a carrying amount at the point of derecognition of £298.3 million, annualised loan book growth is 22.9%.
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Loans that are equal to or greater than two payments in arrears (includes all term expired).
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Visit https://www.shawbrook.co.uk/investors/ to download the full Interim Financial Report.
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| For further information, please contact: Vicky Hart Head of Secretariat
For investor enquiries, please contact: Murray Long Head of Investor Relations
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| LEI: 21380071539WSMTM4410
-Ends-
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