Half Year 2026 Shawbrook Group PLC Earnings Call Transcript
Key Points
- Underlying profit before tax increased 16% to GBP195.5 million, with net operating income up 15%.
- Cost-to-income ratio improved to 36.4%, and normalized costs reduced by 5% year-on-year despite organic loan book growth of approximately 14%.
- CET1 ratio increased to 13.0% (up 60 basis points in H1), with total capital rising to 16.4% following a successful GBP250 million AT1 issuance.
- Credit performance remained resilient with cost of risk at 57 basis points (37 bps excluding pre-2022 development finance vintage), and net write-offs at 13 bps, well below the historical median of 29 bps.
- AI and technology adoption are driving efficiency gains, including a 35% reduction in inbound messages/calls and a 9x productivity gain in software development, supporting scalable growth.
- Cost of risk increased to 57 basis points, driven by a further GBP15.6 million charge on the pre-2022 development finance vintage, which remains a drag on credit performance.
- Real estate segment risk-adjusted returns declined 0.5 percentage points to 4.7%, impacted by specific provisions.
- The loan-to-deposit ratio reduced to 93.9%, indicating a need to moderate deposit growth in H2, which could limit funding flexibility.
- Basel 3.1 implementation in 2027 remains a significant capital event, with the full impact still uncertain and potential offsets via Pillar 2A not yet confirmed.
- Management noted cautious demand in development finance due to geopolitical uncertainties (e.g., Middle East conflicts), which could temper growth in that segment.
Good morning, everyone. Welcome to the Showbrook Half Year 26 results presentation. I am Marcelino Castrillo, CEO, and with me today is our CFO, Dylan Minto.
We have a lot to cover this morning, but my own personal reflections on the first half of 26 can be summed up as follows. We have delivered a strong set of numbers on plan and on track.
We have a business that delivers efficient growth. Within a large and diverse market with plenty of runway ahead. And a combination of tech capability and the expertise and skills of our people give us a competitive advantage, which is now amplified by AI. We are ambitious and we ask a lot of our colleagues and partners. So, I want to thank them all for their hard work and contribution to delivering the performance that we will talk through now.
So shortly, Dylan will take you through the financial results in detail. I will then cover how we are continuing to leverage our tech and data capabilities to accelerate and benefit from the deployment of AI. Further
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