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Shawbrook Group
plc
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Full year results for the 12
months to December 2023
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London, 28 March 2024 - Shawbrook
Group plc ('Shawbrook' or the 'Group') today announces its full
year results for the year ended 31 December 2023.
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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.
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Financial highlights
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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.
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Strong profitability maintained,
achieving 27% growth in underlying profit before tax to £302
million (FY 2022: £238 million).
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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.
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Underlying cost to income ratio
reduced further to 38.2% (FY 2022: 40.0%), supported by careful
cost management and operational efficiency.
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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).
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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).
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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.
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Strategic highlights
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Continued to invest in and
strengthen our digital capabilities, deploying innovative solutions
across the business to streamline and accelerate customer
journeys:
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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.
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Expanded our auto-decisioning
capabilities within our Digital SME lending proposition, giving
more customers certainty with faster decisions.
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Launched new products, including a
digital SME term loan product to support businesses to finance
capital expenditure.
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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.
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Completed the acquisition of
Bluestone Mortgages Limited (BML) in May 2023, increasing and
diversifying our presence in the UK mortgage market.
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Continued to enhance our employee
value proposition, with our employee engagement score increasing
further to 84% (2022: 82%).
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Marcelino Castrillo, Chief Executive Officer,
commented:
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"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."
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Footnotes
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1
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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%.
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2
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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.
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Visit https://www.shawbrook.co.uk/investors/
to download the Group's 2023 Annual Report and
Accounts.
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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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