Shawbrook Group (LON:SHAW) Issues Earnings Results

Key Points

• Strong first-half results: Underlying profit before tax rose 16% to £195.5 million, while net operating income increased 15% and return on tangible equity remained high at 18.1%.
• The loan book grew 10% on an annualized basis to £20.1 billion, driven by SME lending, retail mortgages and motor finance. Shawbrook maintained its full-year loan-book target of approximately £21 billion and reported an improved cost-to-income ratio of 36.4%.
• Credit risks remain: Impairment losses rose to £50.7 million, including a further £15.6 million provision for a legacy development-finance portfolio. Capital strengthened after a £250 million AT1 issuance, with management still targeting CET1 above 13.2%.

Shawbrook Group (LON:SHAW - Get Free Report) posted its quarterly earnings data on Wednesday. The company reported GBX 25.30 EPS for the quarter, Digital Look Earnings reports.

Here are the key takeaways from Shawbrook Group's conference call:

• Strong first-half performance: Underlying profit before tax rose 16% to £195.5 million, net operating income increased 15%, and underlying return on tangible equity remained robust at 18.1%.
• The loan book grew 10% on an annualized basis to £20.1 billion, led by strong SME growth and continued momentum in retail mortgages and motor finance; management reiterated its full-year target of approximately £21 billion.
• Operating leverage continued to improve, with the cost-to-income ratio falling to 36.4% as income growth outpaced a 5% increase in administrative expenses. Management highlighted further efficiency potential from platform consolidation, automation, and AI.
• CET1 capital increased to 13.0% and total capital to 16.4% following a £250 million AT1 issuance; the company maintained its guidance for CET1 above 13.2% and reaffirmed plans for its first ordinary dividend in 2027.
• Impairment losses increased to £50.7 million, including a further £15.6 million provision against a pre-2022 development-finance portfolio. Management expects the portfolio to reduce over time, but additional provisions remain a risk, while Basel 3.1’s eventual capital impact is still being finalized.

Shawbrook Group Stock Performance

LON:SHAW traded down GBX 6.50 during trading hours on Wednesday, reaching GBX 328.50. The stock had a trading volume of 48,273,332 shares, compared to its average volume of 2,198,236. The stock has a 50 day simple moving average of GBX 331.45 and a 200 day simple moving average of GBX 366. Shawbrook Group has a 12-month low of GBX 277.50 and a 12-month high of GBX 519. The stock has a market cap of £1.71 billion and a P/E ratio of 9.39.

Analyst Ratings Changes

SHAW has been the subject of several recent analyst reports. Shore Capital Group reaffirmed a "buy" rating and issued a GBX 475 target price on shares of Shawbrook Group in a report on Thursday, April 30th. Royal Bank Of Canada reiterated an "outperform" rating and set a GBX 475 price target on shares of Shawbrook Group in a report on Wednesday, July 8th. Finally, Deutsche Bank Aktiengesellschaft restated a "buy" rating and issued a GBX 610 price objective on shares of Shawbrook Group in a research note on Friday, May 15th. Three research analysts have rated the stock with a Buy rating, According to MarketBeat, Shawbrook Group presently has a consensus rating of "Buy" and an average target price of GBX 520.

Shawbrook Group Company Profile

Shawbrook Group plc is a lending and savings bank. The Company operates through four segments: Property Finance, Business Finance, Consumer Lending and Central. The Property Finance segment provides mortgages for investors, businesses and personal customers. It serves professional landlords and property traders in residential and commercial asset classes across long-term and shorter-term finance. The Business Finance segment includes propositions, such as the Regional Business Centers that provide finance solutions; Structured Finance proposition, which consists of lending to small and medium enterprise (SME) finance companies, and Specialist Sectors proposition, which consists of leasing and hire purchase finance solutions.

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