Shawbrook Group (SHAW) H2 2024 earnings summary

Executive summary

• Achieved strong profitability with underlying profit before tax of £294m, supported by 16% loan book growth to £15.2bn and a customer base of approximately 600,000, up from 560,000 in 2023.

• Underlying return on tangible equity improved from 15% in H1 2024 to 19% in H2 2024, averaging 17% for the year.

• Net interest margin decreased to 4.3% from 4.9% year-over-year, reflecting higher funding costs, while cost of risk improved to 47bps from 51bps.

• Employee engagement remained high at 81%, and the Trustpilot score was 4.7/5.

• Launched a unified Commercial and Retail franchise structure for sharper customer focus.

Financial highlights

• Net operating income rose to £609.8m from £586.5m year-over-year, with underlying administrative expenses increasing 12% to £248.8m.

• Deposit book grew by 16% to £15.8bn.

• Statutory profit before tax was £295.1m, up from £286.7m, and the loan book grew by £1.9bn.

• Gross asset yield increased to 9.8%, but liability yield also rose to 5.6%, impacting net interest margin.

• Liquidity coverage ratio decreased to 176% from 262.8% due to changes in retail deposit outflow assumptions.

Outlook and guidance

• Continued focus on technology investment, digital platform enhancements, and sustainability initiatives.

• Macroeconomic scenarios anticipate moderate GDP growth and stable unemployment, with a base case probability of 50%.

• Significant potential for organic growth across markets, with readiness to pursue attractive inorganic opportunities.

• Clear strategic focus and built capabilities position the group for long-term value creation in 2025 and beyond.