RCS - Shawbrook Group PLC - Q3 2022 Trading Update
24/10/2022 09:00
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RNS Number : 7696D Shawbrook Group PLC 24 October 2022
Shawbrook Group plc - Q3 2022 Trading Update
Shawbrook Group plc ('the Group') today issues its trading update for the
three months ended 30 September 2022 ('Q3 2022').
Highlights
● Loan book grew to £9.8 billion as at 30 September 2022 (annualised growth of
23%(1)) as we continue to support our chosen markets.
● Strengthened our stable and diversified capital and liquidity base:
○ Bolstered our liquidity position with customer deposits surpassing the £10
billion milestone, growing 27% during the 9 months ended 30 September 2022 to
£10.6 billion (31 December 2021: £8.4 billion).
○ Successful completion of a £346 million fully retained securitisation of
buy-to-let loans originated through our 'The Mortgage Lender' franchise in
October 2022. This transaction provides the Group with an additional layer of
collateral to support our strategic ambitions, while helping to further
diversify the Group's funding base.
○ In October 2022 we completed the exchange of our existing AT1 instrument, for
new securities priced at a coupon of 12.103%, a margin of 8.099% above the 5
year Gilt. The exchange offer received an overwhelmingly positive response
from the Debt Capital Markets and we are pleased to be able to offer investors
in our AT1 instrument additional return against the backdrop of extreme market
volatility.
● The outlook for the macroeconomic backdrop continues to worsen and we remain
alert to the potential challenges ahead, however we are currently not seeing a
material deterioration in our Early Warning Indicators and we continue to
experience low levels of impairment losses and arrears (arrears rate at 30
September 2022 of 1.8%(2) compares to 30 June 2022 of 1.9%).
● Continued investment in technology and talent to support our digitalisation
journey:
○ Working with PEXA, the fintech behind the world's first digital property
exchange process, to digitalise our mortgaging processing capability,
streamlining the completion process for our professional property investor
customers, providing speed, simplicity, and certainty of execution.
○ Introduced auto-decisioning capabilities within our Asset Finance offering.
Initially aimed at smaller ticket and flow transactions, this marks another
important step in the digitalisation of our Business Finance proposition to
empower faster response times and broaden our reach.
○ Extended the roll-out of our portfolio risk management tool Vision across our
Property Finance business to generate dynamic and early insights into credit
performance.
● Made positive progress against our strategic ESG priorities, focusing on the
issues where we can have the most impact:
○ Published our second Energy Performance Certificate research paper, further
emphasising our commitment to issues that impact society and the environment
whilst supporting our professional landlord customers in their transition to a
low carbon future.
○ Announced a new partnership with education charity Future First, helping young
people from all backgrounds learn about careers in financial services and to
broaden their horizons by connecting them with relatable role models.
Marcelino Castrillo, Chief Executive Officer commented:
"Against an increasingly challenging macroeconomic backdrop, our focus remains
on ensuring Shawbrook provides a stable and consistent offering to our chosen
markets inside a well-established risk appetite. Our well-diversified lending
proposition offers us an additional layer of security. As some markets
retrench and others expand, creating a greater need for lending, this gives us
the optionality to deploy our capital across a range of asset classes.
In support of this, we continue to scale our digital capabilities through
targeted investments in technology to deliver excellent customer experiences,
with our loan book growing to £9.8 billion. This growth was funded by our
strong and consistent savings franchise, which surpassed the £10 billion
customer deposits milestone and more than 210,000(3) customers entrusting us
with their savings.
Our unique business model, combining deep human expertise with digital and
data, continued to produce strong returns and we are closely monitoring the
wider macro environment and the impact it may have on our chosen lending
markets.
While we do not yet see any material worsening of credit risk profiles across
the book, our investments in technology and data to enhance our risk
management capabilities, coupled with our investment in human expertise
ensures we remain prepared for a more challenged economic cycle."
1. Annual loan growth rate of 23% from £8.6 billion at 31 December 2021 to
£10.1 billion at 30 September 2022 (after adding back the disposal of
Property Finance loans of £299.7 million).
2. Loans that are equal to or greater than two payments in arrears (includes all
term expired).
3. As at 30 September 2022.
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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