1 2013 Half Year Results 1 Forward Looking Statements 2 A number - PowerPoint PPT Presentation

1 1 2013 Half Year Results 1

Forward Looking Statements 2 A number of statements we make in our presentation and in the accompanying slides will not be based on historical fact, but will be “forward - looking” statements within the meaning of the US Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in the forward looking statements. Factors that could cause actual results to differ materially from those in the forward looking statements include, but are not limited to, global, national and regional economic conditions, levels of market interest 2 rates, credit or other risks of lending and investment activities, competitive and regulatory factors and technology change. permanent tsb Group Holdings plc undertakes no obligation to update the forward-looking statements contained in this presentation. Forward- looking statements made in this presentation relate only to events as of to date on which they are made. 2013 Half Year Results 2

Agenda 3 1 • Group Chief Executive’s Review 2 • Financial Review 3 • Asset Quality & Arrears 3 4 • Recap & Priorities 5 • Q & A 2013 Half Year Results 3

4 Group Chief Executive’s Review Jeremy Masding 4 2013 Half Year Results 4

H1 2013 – Encouraging Progress 5 Bank Plus Two strategy now firmly in place  The Bank - PTSB SBU – is proving its relevance and is on a pathway to viability  Return to mortgage market – beginning to gain traction  Launches very competitive assault on current account market 5  Continues gathering deposit accounts Over € 120m new Almost 30,000 new Growth in Deposits of mortgage approvals to current accounts over € 2.5bn in H1 2013 date in 2013 opened to date in 2013  Pre-impairment losses of € 12m, approaching break-even 2013 Half Year Results 5

H1 2013 – Encouraging Progress 6  The Plus Two are performing in line with expectations –  AMU has proposed long term solutions to 5,000+ customers  2,888 accepted by end June  Non-Core operations (CHL and CRE) being managed in line with expectations 6  Restructuring Plan  Update recently submitted by Department of Finance to EC  Aiming for approval before year end 2013 Half Year Results 6

H1 2013 – Encouraging Progress 7 Financial Performance – firmly in line with Restructuring Plan  Reduction of Group losses from € 565m to € 141m flattered by technical accounting issues (pension write back)  Modest improvement in Group Operating Loss before Exceptional Items – despite conservative approach to 7 impairment provisions  The “Good Bank” reports underlying losses of € 39m (just ~9% of total Group losses) – Pre-impairment – close to break-even  Progress on reducing costs + increasing Net Interest Margin  € 2.6bn Senior Debt repaid + System funding down by 27% 2013 Half Year Results 7

8 Financial Review Glen Lucken 8 2013 Half Year Results 8

Group Income Statement € m H1 2013 H1 2012 Change % 9 € m Total Operating Income 119 115 3% Operating Expenses (138) (135) 2% Pre-Impairment Loss (19) (20) 5% Impairment Charges (430) (437) 2% Underlying Loss (449) (457) 2% Before Exceptional Items Exceptional Items (Net) 318 (130) - Loss Before Taxation (131) (587) 78% Taxation (10) 22 145% Loss After Taxation (141) (565) 75% 9 Net Interest Margin 0.82% 0.76% 6 bps  Loss After Taxation: Decreased by 75%  Underlying Loss Before Exceptional Items: Marginally reduced in H1 2013 by 2%  Income: NIM (excluding ELG) has increased from H1 2012 by 6bps to 0.82%, primarily due to reduction in cost of funding  Operating Expenses: Broadly in line with H1 2012 with specific actions undertaken to manage costs down further  Impairments:  Marginally reduced from H1 2012  Overall Provisions Coverage Ratio 1 increased to 48% from 45% in December 2012  Early arrears reducing and provision charge falling in most books 1 Total impairment provision as % of Non-Performing Loans 2013 Half Year Results 9

Segmental Performance 10 € m H1 2013 H1 2012 ptsb AMU Non-Core Group Group Underlying Loss Before ( € 39m) ( € 329m) ( € 90m) ( € 449m) ( € 457m) Exceptional Items NIM 0.95% 0.19% 0.14% 0.82% 0.76% Loans to Customers € 14.5bn € 6.7bn € 9.0bn € 30.2bn € 32.9bn Total Assets € 22.0bn € 6.8bn € 9.3bn € 38.1bn € 43.8bn Good Bank 10  ptsb reported underlying loss before exceptional items of € 39m (pre-impairment loss of € 12m) approaching break-even  ptsb recorded a NIM of 0.95% (before ELG costs) with overall Group NIM diluted by lower margins in AMU and Non-Core  AMU continues to be impacted by high impairment charges; however, progress to date and future progress on arrears resolution will mitigate this impact  Non-Core losses mainly attributable to impairment charge on Commercial Real Estate (CRE) Portfolio 2013 Half Year Results 10

Total Operating Income 11 € m H1 2013 H1 2012 Net Interest Income (Before ELG) 156 166 ELG Fees (63) (81) Other Income 26 30 Total Operating Income 119 115 11  NIM increased to 0.82% in H1 2013 from a trough of 0.66% in H2 2012  ELG fees reduction due to withdrawal of the scheme in March 2013  Funding covered by ELG as a percentage of total liabilities has dropped from 38% in December 2012 to 24% in June 2013  ELG fees will reduce as the covered liabilities mature 2013 Half Year Results 11

Operating Expenses 12 € m € 151m € 138m € 135m 12  Movements in OpEx reflect significant underlying changes in the Group’s cost structure. Since H1 2012, the Group has invested in the AMU which employs circa 250 people.  Notwithstanding this, staff costs reduced by € 2m from H1 2012 and by € 10m from H2 2012 due to a voluntary severance programme and the sale of the non-core consumer finance portfolio in December 2012.  Non-payroll costs € 5m higher from H1 2012 due to AMU strategic investment  Managing down the cost base further 2013 Half Year Results 12

Impairment Charges 13 € m Impairment Charges PCR % H1 2013 H1 2012 Change % H1 2013 H2 2012 ROI Mortgages - HLs 236 130 82% 36% 34% - BTLs 102 124 18% 58% 50% UK Mortgages 11 12 8% 30% 28% CRE 72 138 48% 64% 66% Consumer 8 30 73% 103% 101% Total Group 429 434 1% 48% 45% 13  Impairments on ROI HLs increased by € 106m mainly arising from continued conservative approach to provisioning  Impairments on BTLs decreased by € 22m due to progress made by AMU  CRE impairments decreased by € 66m as 2012 included a one-off review which resulted in a large impairment charge  PCR on ROI HLs and BTLs increased:  ROI HL 34% 36%  ROI BTL 50% 58% 2013 Half Year Results 13

Capital 14 14  Core Tier 1 Ratio of 15.7% (Basel II basis) with 5.2% buffer to the CBI minimum of 10.5%  Risk Weighted Assets (RWA) reduced by € 0.3bn 2013 Half Year Results 14

Funding Balance Sheet Metrics H1 2013 H2 2012 Balance Sheet Metrics H1 2013 H2 2012 15 € bn % Wholesale Funding: Funding Mix: Monetary Authorities 7.8 10.7 Deposits 55% 45% Market 7.8 9.6 Long-Term Debt 30% 33% Short-Term Debt 15% 22% 100% 100% Deposits: Retail 13.7 13.5  157% LDR 191% Corporate 5.5 3.1  81% NSFR 67% 15  System funding reduced by 27% ( € 2.9bn); no recourse to ELA since April 2012  Senior debt of € 2.6bn already repaid in 2013  Continuing focus on optimising the funding mix:  € 2.6bn growth in deposits across both Retail and Corporate channels at an improved rate  Reliance on short-term debt reduced to 15%.  Deposits now 55% of total funding  LDR and NSFR improved due to a combination of deposit growth and loan book run down  Deposits increased despite ending of ELG scheme  Continued focus on optimising the cost of funds 2013 Half Year Results 15

Conclusion 16  NIM increased to 0.82% from a trough of 0.66% in H2 2012, 0.95% in ptsb SBU  Operating costs broadly in line with H1 2012, further Rebuilding actions taken to manage costs down Profitability  Impairments remain elevated but outlook stabilising  ptsb SBU approaching breakeven  Strong Core Tier 1 Capital Base at 15.7% 16 Capital Position  Continuous effort to optimise RWAs  System funding reduced by a further 27%  Deposit base increased by 16%, aligned to improvements in Funding Position funding mix  No impact from ELG withdrawal 2013 Half Year Results 16

17 Asset Quality 17 Jeremy Masding 2013 Half Year Results 17

AMU Progress 18 18 2013 Half Year Results 18

Asset Quality: Total Portfolio Composition 19 Total Portfolio Composition 100% OTHER € 0.5bn 90% CHL € 6.9bn 80% CRE € 2.2bn 70% ROI BTL 60% € 6.5bn 19 50% € 33.8bn* 40% 30% ROI HL € 17.7bn € 3.9bn 20% 10% 0% Composition of Loan Portfolio (% of € values) * Excludes provisions of € 3.6bn 2013 Half Year Results 19

Group: € 33.8bn 20 20  Early arrears reducing  Overall arrears growth slowing  Impairment charge reduced  PCR improved: PCR of NPLs increased by 3% to 48% in June 2013 2013 Half Year Results 20