REG - Shawbrook Group PLC - Shawbrook Full Year 2023 Results
28/03/2024 08:00
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RNS Number : 5938I Shawbrook Group PLC 28 March 2024
Shawbrook Group plc
Full year results for the 12 months to December 2023
London, 28 March 2024 - Shawbrook Group plc ('Shawbrook' or the 'Group') today
announces its full year results for the year ended 31 December 2023.
2023 was another exceptional year for Shawbrook as we continued to provide
finance to a diverse range of customer segments that value the premium
experience, flexibility and certainty that we deliver. Our full year results
demonstrate our consistent focus on growth and efficiency, delivering an
underlying profit before tax of £302 million and an underlying cost to income
ratio of 38.2%.
Our 'best of both' approach, combining the deep expertise of our people with
advanced digital, technology and data capabilities, enables us to deliver a
specialist proposition at scale while maintaining operational efficiency.
Financial highlights
• Loan book grew by 24%(1) to £13.3 billion (FY 2022: £10.5 billion),
following continued strong originations in our core SME and property markets.
• Strong profitability maintained, achieving 27% growth in underlying profit
before tax to £302 million (FY 2022: £238 million).
• Underlying return on tangible equity was 20.2% (FY 2022: 20.1%), supported by
the diversification of our proposition and disciplined approach to pricing and
returns.
• Underlying cost to income ratio reduced further to 38.2% (FY 2022: 40.0%),
supported by careful cost management and operational efficiency.
• The overall credit quality of our loan book remained strong, with our cost of
risk stable at 51bps (FY 2022: 51bps), of which 28bps was due to loan
write-offs (net of recoveries).
• Further strengthened our funding base, with our deposit book growing by 24% to
£13.6 billion (31 December 2022: £10.9 billion) and served c.350,000 savings
customers (31 December 2022: c.255,000).
• Maintained strong surplus capital resources, with a Common Equity Tier 1
(CET1) ratio of 12.9% (31 December 2022: 12.7%(2)) and a total capital ratio
of 16.4% (31 December 2022: 15.6%(2)), benefiting from the issuance of a £90
million subordinated Tier 2 note in October 2023.
Strategic highlights
• Continued to invest in and strengthen our digital capabilities, deploying
innovative solutions across the business to streamline and accelerate customer
journeys:
⁰ Launched our Next Generation Underwriting Hub in our Real Estate business,
digitalising the underwriting process to maximise the time available for
underwriters to make valuable lending decisions.
⁰ Expanded our auto-decisioning capabilities within our Digital SME lending
proposition, giving more customers certainty with faster decisions.
⁰ Launched new products, including a digital SME term loan product to support
businesses to finance capital expenditure.
⁰ Became the first UK bank to complete a limited company remortgage case on the
PEXA platform, demonstrating the potential for faster and simpler remortgaging
for professional property investors.
• Completed the acquisition of Bluestone Mortgages Limited (BML) in May 2023,
increasing and diversifying our presence in the UK mortgage market.
• Continued to enhance our employee value proposition, with our employee
engagement score increasing further to 84% (2022: 82%).
Marcelino Castrillo, Chief Executive Officer, commented:
"Our approach has again delivered a strong set of results, generating an
underlying profit before tax of £302 million and underlying return on
tangible equity of 20.2%.
From growth businesses to professional property investors, consumers and
homeowners, more customers than ever are choosing Shawbrook to meet their
specific and often event-driven funding needs, driving loan book growth of
24%(1) in 2023. By delivering a premium experience, choice and consistently
great value to c.350,000 savers, we also grew our savings franchise to £13.6
billion.
The business model we have created is unique and difficult to replicate,
centred around our 'best of both' approach that combines deep human expertise
with advanced digital, technology and data capabilities. This enables us to
serve customers at scale, while maintaining operational efficiency with our
underlying cost to income ratio reducing further to 38.2%.
Technology continues to accelerate the pace of change across the financial
services industry, driven by AI and machine learning. The Group is embracing
this opportunity to transform our customer and colleague experience. This has
so far included the implementation of new cloud contact-centre technology,
driving enhanced customer experience with in-depth sentiment analysis helping
us to identify customers that may require additional support. We have also
embedded generative AI into our software development workflow to support
agility and drive productivity gains for our engineers.
While the macroeconomic landscape continues to evolve, we are encouraged by
both the resilient performance we have delivered to date and the improving
sentiment seen across our markets. The attractive returns we generate year on
year give us the confidence to continue to pursue our ambition - to deliver
for more customers in more markets by combining the innovative mindset and
agility of a start-up with the scale and financial strength of a large
business.
The embedded optionality of the platform we have created at Shawbrook enables
us to both react quickly to attractive inorganic opportunities as they arise,
whilst continuing to pursue the significant organic growth we see in our
existing markets."
Footnotes
1 The annual growth rate of 24% represents the loan book growing to £13.0
billion and excludes the BML acquisition. Including the acquisition, the loan
book was £13.3 billion and represented a growth rate of 27%.
2 Risk-weighted assets as at 31 December 2022 were restated to reflect
adjustments in credit valuation adjustment and counterparty credit risk in
respect of the Group's structured entities' interest rate swaps. Risk-weighted
assets have increased by £80.6 million from £7,382.5 million to £7,463.1
million. Capital and leverage ratios have also been restated to reflect these
adjustments.
Visit https://www.shawbrook.co.uk/investors/
(https://www.shawbrook.co.uk/investors/) to download the Group's 2023 Annual
Report and Accounts.
For further information, please contact:
Joe Hughes
Teneo
shawbrook@teneo.com (mailto:shawbrook@teneo.com)
For investor enquiries, please contact:
Murray Long
Head of Investor Relations
murray.long@shawbrook.co.uk (mailto:murray.long@shawbrook.co.uk)
About Shawbrook
Shawbrook provides finance to a wide range of customers who value the premium
experience, flexibility and certainly we deliver. We are a purpose-led
organisation, with a focus on delivering long-term sustainable value for all
our stakeholders.
We have a diversified offering, with our innovative lending propositions
tailored to meet specific customer needs in carefully selected markets across
SME, Real Estate and Personal. Our innovative and specialist lending products
range from complex structured credit facilities for growth-focused businesses
to mortgages for professional landlords and property investors, as well as
simple loans for consumers delivered digitally. We fuel our lending through
customer deposits, which we attract by delivering a premium experience, choice
and consistently great value to smart savers.
The business model we have created is unique and difficult to replicate, with
our 'best of both' approach combining deep human expertise with advanced
digital, tech and data capabilities. This combination not only allows us to
deliver excellent customer experiences, but to do so efficiently and at scale.
We are proud of our innovative and agile culture, which drives consistently
high employee engagement scores and makes Shawbrook an attractive destination
for the best talent.
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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