REG - Shawbrook Group PLC - 2022 Annual Report and Accounts

London Stock ExchangeAnnouncement

30/03/2023 08:15

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RNS Number : 6825U  Shawbrook Group PLC  30 March 2023

 Shawbrook Group plc - Full year results for the 12 months to 31 December 2022
 Record profitability against an uncertain macroeconomic backdrop

 London, 30 March 2023 - Shawbrook Group plc today announces its full year
 results for the year ended 31 December 2022.

 Our 2022 profitability and returns reflect the strength of our 'best of both'
 business model which combines modular technology with human expertise,
 underpinned by our strong and prudent capital and liquidity profile.

 Key highlights
 ●    Growth delivered through continued investment in our customer proposition
      ○                                         Loan book growth of 25%(1) to £10.5bn (2021: £8.6bn), driven by our diverse
                                                offering and further expansion across our markets.
      ○                                         Strong originations, particularly in our core SME and Real Estate markets.
      ○                                         Scaled our digital capabilities through investments in technology, serving
                                                c.425,000 customers in 2022.
      ○                                         Deposits rose c.31% to £10.9bn (2021: £8.4bn) as our strong savings
                                                proposition continued to attract customers.
 ●    Record profitability with consistent superior returns
      ○                                         Profitability driven by net interest margin improvement, with underlying
                                                profit before tax increasing to £238.0m (2021: £197.2m).
      ○                                         Underlying return on tangible equity of 20.1% (2021: 20.1%), driven by
                                                continued scalability, operating leverage and our disciplined approach to
                                                pricing and returns.
 ●    Supplemented growth through strategic M&A
      ○                                         Announced an agreement, subject to regulatory approval, to acquire Bluestone
                                                Mortgages Limited, a specialist mortgage lender focused primarily on owner
                                                occupied mortgages.
 ●    Conservative capital management provides the foundation for future growth
      ○                                         Continued to optimise our capital resources with Common Equity Tier 1 capital
                                                ratio of 12.8% (2021: 12.7%) and total capital ratio of 15.8% (2021: 16.2%).
      ○                                         The liquidity coverage ratio remains prudently positioned at 321.3% (2021:
                                                247.8%).

      ○                                         Careful and robust management of loan books remains a strategic priority and
                                                the Group's overall arrears rate(2) remains relatively stable at 1.9% (2021:
                                                1.7%).
 ●    Extending our positive impact
      ○                                         Partnered with education charity Future First, to support their work aimed at
                                                encouraging and enabling social mobility to give young people the opportunity
                                                to engage with relatable role models and broaden their career horizons.
      ○                                         Launched our 'Thrive' apprenticeship programme designed to help young talent
                                                from different backgrounds experience early career opportunities.
      ○                                         Published our inaugural Task Force on Climate-related Financial Disclosures
                                                (TCFD) report.

 Visit shawbrook.co.uk/2022results (https://www.shawbrook.co.uk/2022results/)
 to download the full Report

 Marcelino Castrillo, Chief Executive Officer commented:
 "2022 was an exceptionally good year for Shawbrook, not just in terms of what
 was delivered but the way in which it was achieved. As well as achieving a
 record £238.0 million underlying profit before tax, we delivered an
 underlying return on tangible equity of 20.1% and served over 425,000
 customers, doing so against an uncertain macroeconomic backdrop.

 Customers across all of our markets have a pressing funding need, often
 complex or time-sensitive and frequently both. They choose Shawbrook for our
 ability to understand their individual requirements and to deliver the right
 finance solution quickly and seamlessly. To do this consistently and at scale
 requires the combination of great technology and human ingenuity - the 'best
 of both'.

 We continued to co-develop 'Vision', a digital portfolio monitoring tool now
 running within our Real Estate and SME portfolios, enabling us to generate
 deeper data-driven insights into credit performance. We also extended our
 MyShawbrook portal and its partner ecosystem to include bridging and
 commercial investment applications with integrated valuations, driving a
 vastly improved broker experience.

 But, technology is only half of the equation at Shawbrook and, in 2022, we
 continued to focus on the

 attraction and retention of exceptional talent. We also strengthened our
 employee value proposition,

 introduced a number of support measures to help our people with the increased
 cost of living and

 continued to embed our purpose and culture.

 While the external landscape changed significantly over the course of 2022,
 the flexibility of our model continued to play to our advantage. We are well
 positioned for further sustainable growth across our diverse markets and
 remain alert to further inorganic opportunities.

 I am reassured by the financial strength of our platform and the resilience of
 our model given the likelihood of continued market volatility. The success of
 2022 allows us to look ahead with confidence in our ability to respond to the
 immediate needs of the customers we serve today and to commit to prudent
 investment in the long-term sustainable growth of Shawbrook."

 Business highlights

 Enterprise
 The Group's Enterprise franchise serves UK real estate investors, homeowners
 and SMEs with a range of specialist lending products.
      ●                                         Increased automation and digitalisation of our core customer journeys helped
                                                us to establish a differentiated proposition in a competitive UK property
                                                market, demonstrated by our latest 83%(3) (2021: 80%) broker satisfaction
                                                score.
      ●                                         Joined forces with PEXA, the fintech behind the world's first digital property
                                                exchange, to initiate the digitalisation of the completions process.
      ●                                         Further extended the roll out of our award-winning 'Vision' portfolio
                                                monitoring tool, developed in collaboration with FundingXchange, across our
                                                Real Estate and SME portfolios.
      ●                                         Continued to evolve our digital SME lending business, using automation and
                                                enhanced data analytics to simplify and speed up lending decisions, providing
                                                fast, flexible and risk-adjusted finance at scale.
      ●                                         Launched Open Banking technology across the franchise, leveraging application
                                                programme interface (API) enabled links into customers' live banking
                                                information, enabling faster, more targeted focus on the customers who really
                                                need it.

 Consumer
 The Group's Consumer franchise serves UK consumers and micro business
 owners with a range of lending and savings products.
      ●                                         Delivered enhanced customer support and faster response times, through
                                                transitioning our consumer lending servicing operation to a new servicing
                                                partner.
      ●                                         Launched our Open Banking backed product in partnership with ClearScore,
                                                offering a discounted rate to incentivise customers to share their data,
                                                enabling us to integrate Open Banking data into our consumer decisioning
                                                technology.
      ●                                         Made several improvements to our customer journeys to align with the Financial
                                                Conduct Authority's new Consumer Duty principles, ensuring our purpose-led
                                                culture and Risk Management Framework continued to encourage good consumer
                                                outcomes.

 Savings
 The Group provides a wide range of Personal and Business savings solutions,
 with competitive interest rates, including easy access, notice and fixed term
 accounts and fixed cash ISAs.
      ●                                         Focused efforts on the dynamic management of our retail deposit book,
                                                including the proactive handling of the back book, increasing our customer
                                                care and enhancing our digital capabilities to enable more customers to
                                                experience excellent customer journeys.
      ●                                         Deployed a major upgrade and cloud migration of our core savings system,
                                                allowing us to further automate key elements of customer fulfilment requests,
                                                improving the speed and effectiveness of the service we provide.
      ●                                         To optimise the Group's cost of funds, we continued to diversify our deposit
                                                mix by expanding our product range and digital marketplace presence.

 The Mortgage Lender Limited (TML)
 TML provides a range of buy-to-let and owner occupied mortgages, designed for
 customers with more complex income profiles, including self-employed,
 entrepreneurs and first-time buyers.
      ●                                         Continued to scale its 'real life lending' offering through a volatile rate
                                                environment impacting the UK mortgage market.
      ●                                         Enhanced its portfolio monitoring capabilities with the introduction of a
                                                wider suite of early warning indicators to proactively identify emerging
                                                risks.
      ●                                         Launched a dedicated intermediary members club 'Society'. Since launch, the
                                                club has increased engagement and collaboration with its intermediary
                                                partners, through a series of industry events and communications.

 1.   Loan book growth of 22% from £8.6 billion at 31 December 2021 to £10.5
      billion at 31 December 2022. When adjusted to add back the sale of a portfolio
      of loans from Real Estate that completed in January 2022, which had a carrying
      amount at the point of derecognition of £298.3 million, loan book growth is
      25%.
 2.   Loans that are equal to or greater than two payments in arrears (includes all
      term expired).
 3.   Combined 2022 score as at 31 December 2022.

 Visit shawbrook.co.uk/2022results (https://www.shawbrook.co.uk/2022results/)
 to download the full Report

 A copy of the Annual Report will be submitted to the National Storage
 Mechanism and will shortly be available for inspection at
 https://data.fca.org.uk/#/nsm/nationalstoragemechanism
 (https://data.fca.org.uk/#/nsm/nationalstoragemechanism)

For further information, please contact:

 Stephanie Mackrell

 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 - 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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