Shawbrook 2015 final results

DividendMax Ltd.

Shawbrook 2015 final results

Commenting on the results, CEO Steve Pateman said:

"2015 was a significant year for Shawbrook. We achieved a successful IPO and continued to grow our core businesses, underpinned by a strong well-capitalised balance sheet which will support our ambitions for the near and medium term. Our focus remains on serving customers who value a bank that takes the time to understand their requirements and provide the right answer. This approach also enables us to optimise our risk adjusted return profile. We have invested for the future and, notwithstanding a softer economic outlook, remain confident that we will continue to generate strong through the cycle returns consistent with our stated strategy."

Highlights

Another strong performance with underlying PBT beating consensus, up 63% to £80.1m (2014: £49.1m) and EPS up 77% to 26.9p (2014: 15.2p).

Ø Statutory PBT increased by 55% to £70.1m (2014: £45.3m) and statutory EPS was 24.1p (2014: 17.7p).

Increased profitability driven by a 44% increase in the loan book to £3,361m (31 December 2014: £2,331m) underpinned by a 23% increase in gross organic originations to £1,685m (2014: £1,366m), as 2014 momentum continued into 2015.

NIM increased to 6.2% (2014: 6.1%), benefitting from continued reduction in cost of funds. ISA product launch in H1 2015 and full market Easy Access product launch in H2 2015 expected to further reduce cost of funds.

Cost to income ratio reduced to 48.3% (2014: 50.5%) as the Group continues to proactively manage its cost base whilst investing in people, technology and infrastructure to build solid foundations to support future growth. We remain confident the investment made will deliver further scale efficiencies and has well positioned us for the next phase of growth.

Strong risk-adjusted margin supported by low cost of risk at 24bps (2014: 36bps), reflecting asset quality as well as the benign economic environment. Group focus remains on originating quality business and maintaining high-quality underwriting standards.

Track record of strong returns maintained with RoTE of 27.9% (2014: 26.9%) and pre-tax ROLA of 3.0% (2014: 2.6%), underpinned by increased customer activity. RoTE benefitted by c.1.3% from revaluation of deferred tax assets following the introduction of the Bank corporation tax surcharge.

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