Shawbrook Group (SHAW) H1 2024 earnings summary

Executive summary

• Achieved 15% annualised loan book growth to £14.3bn, serving c.550,000 customers, and 21% deposit growth to £15.0bn year-over-year.

• Underlying profit before tax was £124.5m (H1 2023: £149.3m); statutory profit before tax £127.1m (H1 2023: £135.1m).

• Net interest margin declined to 4.2% (H1 2023: 5.2%) due to higher funding and deposit costs.

• Continued investment in digitalisation, operational efficiency, and risk management, with high employee engagement and Trustpilot score of 4.6/5.

• Signed agreement to acquire JBR Auto Holdings Ltd, expanding into high-end motor finance.

Financial highlights

• Net operating income increased to £290.5m (H1 2023: £288.0m), reflecting loan book growth.

• Underlying cost to income ratio rose to 42.1% (H1 2023: 36.6%), and cost of risk increased to 64bps (H1 2023: 61bps).

• Underlying return on tangible equity was 14.5% (H1 2023: 20.5%).

• CET1 ratio at 12.6% and total capital ratio at 15.9%, maintaining a strong capital position.

• Liquidity coverage ratio at 271.2% (FY 2023: 262.8%).

Outlook and guidance

• Margins expected to improve as interest rates decrease and wholesale markets recover.

• Completion of JBR Auto Holdings acquisition anticipated in H2 2024, with continued focus on digital innovation and operational efficiency.

• Confident in strategy for sustainable growth, leveraging digital capabilities and prudent risk management.

• Anticipate improved consumer and business confidence as UK enters period of relative stability.