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0 . Forward Looking Statements 1 A number of statements we make in - PowerPoint PPT Presentation

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0 0 . Forward Looking Statements 1 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

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  2. Forward Looking Statements 1 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 rates, credit or other risks of lending and investment activities, 1 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 at the date on which they are made. 1

  3. Road to Recovery Year Key Milestones Stage 2 2012 • Overhauled the Group Architecture • New Senior Management Team • Restructuring Plan Submission Building Capabilities Including Establishing the AMU • Laying the Foundations 2013 • Completion of Internal Reorganisation and Building • Return to Lending Momentum • Successful product Launches particularly Current Accounts • Return to Funding Markets Submission of an Updated Restructuring Plan • 2 • Engaged with over 80% of customers in financial difficulties 2014 • Improve Customer Experience Grow and • Continue To Innovate with Simple Products Trend to • Increase Market Share in Key Product Areas 2015 Profitability • Approach Breakeven 2016 • Return to Profitability Privatise and • Agree and execute an ‘Exit Strategy’ with the Minister for Finance Return Value 2017 to State 2

  4. Agenda 3 1 • Summary and Progress To Date 2 • Financial Performance 3 • Arrears Management 3 4 • Recap & Priorities 5 • Q & A 3

  5. 4 1 • Summary and Progress To Date 4 Jeremy Masding 4

  6. Turning the Corner 5  Successful re ‐ entry into the market; force for competition  Permanent tsb SBU profitable in 2014  System Funding reduced by 35%; returned to wholesale market  Arrears have peaked and are now in decline  Engaged with over 80% of customers in financial difficulties 5  CBI Balance Sheet Assessment addressed; no further capital required and capital remains in excess of regulatory minimum 5

  7. Summary Financial Performance (1) 6  Loss after tax of €261m including two significant one ‐ off accounting adjustments for pension schemes and deferred tax assets  Loss pre ‐ exceptional items flat versus 2012 at €977m; operating loss pre ‐ impairment charge reduced by 44%  Total operating income increased by 28%; modest improvement in NIM 6  Staff related costs decreased by 15%  Impairments increased by 4% including impact of BSA (c.€0.3bn) and new Central Bank Provisioning Guidelines 6

  8. Summary Financial Performance (2) 7  Funding and Liquidity positions improved €2.6bn Senior Debt repaid + System funding down by 35% o Market access signified by €500m of RMBS issuance in 2013 o Customer deposits increased by €2.9bn to 56% of total funding o requirement 7  Core Tier 1 ratio of 13.1% including impact of BSA  Basel III transitional Common Equity Tier 1 ratio of 13.4 % 7

  9. Core Bank 8 permanent tsb Group permanent tsb bank Asset Management Unit Non Core (UK) Non Core (ROI) 8  An end ‐ to ‐ end Irish Retail Bank; serving customers and an asset for the State  permanent tsb – providing competition in the Irish Market Place  AMU – Best ‐ in ‐ class collections unit 8

  10. Core Bank – permanent tsb 9 permanent tsb bank has returned successfully to the market, with major gains in Current Accounts and Lending. Deposits Current Accounts Lending Retail Deposits up by €0.5bn Over 40,000 new Current Close to €300m new Mortgages Accounts opened approved; over €200m paid out 9 • 650,000 Deposit Account • Over 500,000 Current Account • 225,000 Mortgage Customers Customers Customers • 12% market share • 13% market share of Retail • Increased market share driven by • Personal lending ‐ €36m payouts Deposits switchers +71% on 2012 9

  11. Core Bank – permanent tsb 10 Success has been driven by a range of simple, innovative, customer ‐ friendly products, supported by new technology. New Initiatives Early 2014 signs • New Products:  Fee ‐ free Switch Current Account encouraging…  €100m home improvement fund  Market Leading Car Finance Offering  Managed Variable Rate Mortgages • Strong pipeline  Tracker Mover Products  New BTL suite  Booster Bonus Deposit Account • Greater customer 10 • Approval in Principle: 15 minutes for Mortgages awareness leading and 5 minutes for Personal Loans to increased • Saturday opening hours (trial) demand New Technology • Continuing • Mobile Banking App available for iPhone and Android devices momentum • Tablet and Mobiles Payments App launching soon • Redesign of the Online Banking (Open24) under way • Active Twitter Support • Plan for increase in engaging customers through more social channels 10

  12. Core Bank – AMU 11 • Collections through to Recoveries is an integral part of an end to end banking platform • Invested heavily to build and develop this capability and skillset in the AMU The AMU has 3 Key Objectives: 1. Deliver a better 2. Support ptsb front- 3. Meet all Central Bank bottom line end efforts targets  Best ‐ in ‐ class early  Cured AMU loans can 11  Proposed long term collections capability return to ptsb solutions to more than 18,000 customers  Wide range of  Minimise new arrears  More than 12,500 restructure cases in ptsb arrangements accepted by end 2013  Optimised property management 11

  13. Non ‐ Core 12 permanent tsb Group permanent tsb bank Asset Management Unit Non Core (UK) Non Core (ROI) • Capital Home Loans • CRE • Isle of Man • Springboard 12  Non ‐ Core being managed in line with expectations;  Outsourced management of CRE book to enhance value  Increasing buyer appetite for Irish Non ‐ Core assets; CRE and Springboard being prepared for sale  CHL & IoM – good quality but low ‐ yielding  Driving efficiencies and managing for value 12

  14. 13 2 •Financial Performance Glen Lucken 13 13

  15. Group Income Statement Total Operating Income €m 2013 2012 Change 14  Increased by 28% largely due to reduction in ELG Net Interest Income 309 300 3.0%  NIM (excluding ELG) has increased to 0.82%, Other Income (net) 48 62 ‐ 22.6% primarily due to reduction in cost of funding and ELG Fees (105) (165) 36.4% one ‐ off gains from disposals Total Operating Income 252 197 27.9% Operating Expenses  Operating expenses increased by 6% due to one ‐ Operating Expenses (300) (283) ‐ 6.0% off provisions Pre ‐ Impairment Loss (48) (86) 44.2% Impairment Charge Impairment Charges (929) (891) ‐ 4.3%  Overall increase of 4%, mainly driven by the ROI Underlying Loss (977) (977) ‐ 14 Home Loan and BTL portfolios Before Exceptional Items  Includes the effect of BSA and new CBI Exceptional Items (Net) 309 58 ‐ provisioning guidelines of c.€0.3bn Loss Before Tax (668) (919) 27.3% Exceptional Items (Net)  Tax 407 (77) ‐ Includes write ‐ back of pension liabilities of €329m offset by restructuring costs of €20m. Loss After Tax (261) (996) 73.8% Tax  Relates to recognition of deferred tax asset on Net Interest Margin 0.82% 0.72% 10 Bps previously unrecognised carried forward tax losses 14

  16. Segmental Performance 15 2013 2012 ptsb AMU Non ‐ Core Group Group Underlying Loss Before (€153m) (€561m) (€283m) (€977m) (€977m) Exceptional Items NIM 1.03% 0.11% 0.21% 0.82% 0.72% Loans to Customers €14.2bn €6.4bn €8.7bn €29.3bn €31.8bn Total Assets €21.9bn €6.4bn €9.3bn €37.6bn €40.9bn 15  ptsb reported an underlying loss before exceptional items of €153m and a NIM of 1.03% (before ELG costs)  AMU’s results are impacted by high impairment charges of €496m  Non ‐ Core losses mainly attributable to impairment charge on Commercial Real Estate (CRE) Portfolio which represented 86% of the total Non ‐ Core impairments 15

  17. Operating Expenses 16 Staff Costs €300m  Staff costs reduced by €23m or 15% €283m due to changes on pension entitlements, other staff benefits and €127m savings achieved from VSS €150m  Average staff numbers increased mainly due to significant staffing up in 16 the AMU (c.300), offset by staff reductions in other parts of the €173m €133m Group Other Costs  Increase in other costs relates to one ‐ 2012 2013 off provisions Other Costs Staff Costs 2,041 2,018 Avg. Staff No. 16

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