Shawbrook Group PLC

Management Reports • Oct 24, 2022

National Storage Mechanism | Additional information

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 210,0003 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 [email protected] 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.

This information is provided by Reach, the non-regulatory press release distribution service of RNS, part of the London Stock Exchange. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.

Reach is a non-regulatory news service. By using this service an issuer is confirming that the information contained within this announcement is of a non-regulatory nature. Reach announcements are identified with an orange label and the word “Reach” in the source column of the News Explorer pages of London Stock Exchange’s website so that they are distinguished from the RNS UK regulatory service. Other vendors subscribing for Reach press releases may use a different method to distinguish Reach announcements from UK regulatory news.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

NRAUAUVRUAURUAA