Permanent TSB Group Holdings plc

Good morning and welcome to our 2023 annual results presentation. I'm going to give a short presentation on the significant progress that the bank has made, and then our Chief Financial Officer, Nicola O'Brien, will provide a more detailed review of our financial performance. After that, Nicola and I will be happy to take your questions. So if we just turn to slide four. And we can look at our customers. Our net loans increased by 10% in 2023. And there's a few key factors that have driven that. Firstly, we've successfully completed the Ulster Bank migration. And that has generated 170 million of additional gross income during the year. Our mortgage market share has grown by 70 basis points to 19.2%. Mortgages are a core part of our business and I'm happy to say that we continue to play a significant role in helping customers attain a new home. We grew our business lending book by 11% and we achieved our target of £1 billion of business lending in our book by the end of the year. And that is having expanded our service offering to include asset finance following its successful migration in July, but also building a stronger platform by way of our business banking offer. We've also recently launched the new PTSB brand, and this is the first of its kind for us in 20 years. in which we're repositioning ourselves as a full-service, customer-focused personal and business bank. If we just turn to financial performance, we achieved an underlying profit of £166 million, which is up from £45 million the year before, or a £121 million increase. And this is showing clear momentum in our business as we return to sustainable profitability. Our net interest income has increased by 71%, and that's benefited from the interest rate environment, but also the migration of the Ulster Bank assets and strong new lending. Our net interest margin was 232 basis points, and that's 78 basis points higher year in year. Net fees and commissions income performed well and were strong. and our total recurring operating expenses were up 25%. That might seem like a very large number, and indeed it is, but in the sense of that was what we expected, it reflects the full impact of the Ulster Bank acquisition, and indeed it also reflects an ongoing investment in our business, particularly when we look at our digital channel, we look at our branch channel, and indeed our business banking offering, which has expanded. Our cost-income ratio was 66%, and that's an 18% reduction or an 18-point reduction year-on-year, so a significant move. You can see that the income cost jaws widened significantly as we added more income and additionally more costs, but it widened to reduce our cost income to 66%. If we move to our balance sheet, our customer deposits have grown by 6% to £23 billion and 70% of these deposits are insured under the Deposit Guarantee Scheme. So it represents a good spread of deposits and indeed safety in our funding model in that sense. Our performing loan book grew by 9% to £20.9 billion. And as mentioned earlier, that was through strong new lending performance and indeed the addition of the Ulster Bank migrations through 2023. A non-performing loan ratio was consistent at 3.3%. So we haven't seen any material increase in our non-performing loans and they continue to be managed well in that sense. If I just turn to capital... All capital ratios remain above the management and regulatory minimum. And we've got a strong common equity tier one capital on a fully loaded basis of 14%. And you might recall when we started the journey on the Ulster Bank acquisition, we said that we would land the bank at a 14% CET1 level. And that's what we've done without any surprise. So it's landed as we expected. And that 14% level at the end of 2023 is after around a 900 million increase in risk rates during the year, driven by the lending growth that I mentioned earlier on. Our total capital on a fully loaded basis has decreased to 19.7%, which is 160 basis points lower than the end of 2022, but also that was expected and indeed is tied into our 14% CET1 ratio as well. A very welcome announcement at the end of the year was the removal of the dividend restriction that was imposed on the bank back in 2016 and that was a positive movement forward and really normalises our position with regard to how we think about distributions going forward. It also highlights and is a testament to the transformational improvement in the bank's balance sheet over the last number of years and I see it as a vote of confidence in the bank's ability to generate sustainable returns and indeed develop its business model going forward. Lastly, we were extremely pleased to receive news last week that Fitch, the rating agency, had upgraded our holding company rating to investment grade with a stable outlook. Again, these are very, very important moves by way of how we present our bank, how we present our balance sheet, and indeed how we operate in the market around raising debt and debt requirements under REMREL. I'll just turn to the macro outlook. There's a lot of information in this. I'll just touch on a few things. We can see GDP growth stabilising, we believe, in 24 and 25, around that 2.5%, 3% level. We also see a normalisation of inflation. We see a relatively strong labour market moving forward, so nothing of concern there. We see... ECB rates moving to 325. That's a deposit rate by the end of the year. So that's where we're predicting it. The mortgage market, we've seen a reduction in 2023 with the switcher market moving downwards, but saying that the first time buyer market has moved upwards. And that's a trend we expect will continue as first-time buyers are more active in the market. And indeed, there's a larger and bigger supply of housing stock as we move forward. And also, we can see the house price inflation normalising in 2024 and 2025 as well. If we just move to how we delivered on lending, what you'll see from this slide is that we now have a diversified balance sheet and a diversified lending base. We lent £2.8 billion of lending into the market, you'll see that while our mortgage volume had reduced from 2.6 billion to 2.3, we were able to offset that with new business lending, new lending and asset finance, and indeed an increasing customer term loan offer as well. So again, this is showing a lot of diversity in our balance sheet, and it shows we are starting to fire on all cylinders in that respect. If I just bring that down to... into the various constituent parts. The mortgage market itself reduced by 14%. Our volume reduced by 11%, which gave rise to an increase in our market share by 70 basis points to 19.2%. So around that 20% level by way of share, which means we're advancing one in every five mortgages in the country. If we look at personal term lending, it increased by 22% year-on-year. It's an area where we've been providing some marketing support. And indeed, 80% of term lending was fulfilled digitally during the year. On business banking, I think we're probably going against the trend here in that we achieved 11% increase in business lending to 167 million. We also now have the asset finance business, which for the full year lent 223 million. as well. And as I mentioned earlier on, our business book now is over a billion and that has increased significantly over recent years and Nicola will touch on that later on. If we just turn to our strategy, we have been and we are transforming the bank We believe we will differentiate by way of cluster experience. That's something that's within our DNA as an organization. And through that, we will drive sustainable profits. And now that the dividend restriction has been removed, over time, shareholder return We've executed a bank strategy that supports the delivery of our purpose. And our purpose is around building trust with customers and with communities. And we will do this by building a sustainable organisation that's transparent and fair with customers. Our strategic vision has been developed with our customers at heart and in consideration of all stakeholders. That is our colleagues, our shareholders, the regulators, our debt investors and indeed the broader Irish community where we believe we play an important part. And our ambition is to be Ireland's best personal and business bank differentiated through exceptional customer experience. And for us, best doesn't mean the biggest, it doesn't mean the most profitable, but what it does mean is being best at what we can do, and indeed for both personal and business customers. And having those customers tell other potential customers, go talk to PTSB, go give them a chance, do some business with PTSB. They've looked after me well, and I think they'll look after you. And how we measure our ambition and how we measure our purpose is across four pillars. Across the important part of being a secure and resilient bank that's operating 24-7, that protects customer data, that provides customers with what they need by way of service. And indeed, we do that in an efficient and a simple and indeed an increasingly automated way by way of our processes. It's having a connected customer experience where customers are at the heart of how we decide, how we offer our products, how we service them, and indeed to deepen that relationship. And as you've seen, you can see, I should say, the clear diversification of our income, and that will continue now over the coming years. We have all the ingredients around supporting both personal and business customers, and that will develop. If we think about sustainability in its broadest sense, it is obviously, it's around... the ESG and indeed supporting customers in the green transition. It's also about us creating a sustainable business that is profitable, that generates capital, that can support future lending and future support into the Irish economy and indeed provide a return for investors as well, who've placed their faith in us by way of providing us with equity and with debt and funding. And indeed, most importantly, culturally, from a cultural point of view, managing our culture, ensuring that we keep our reputational standards where they should be, and indeed using our culture and who we are as a key strategic enabler for how we operate our business. And underpinning these strategic priorities are what we would call foundational capabilities. It's how we manage risk, it's how we're risk aware, how we ensure we're in compliance with regulation, how we invest, and we have been investing heavily in technology, and indeed operational resilience. And then how we manage data for the purposes of what we have to do from both a regulatory point of view, but also how we support customers in their needs and anticipate and assist our customers in the needs that they have. And these are areas that we are focused on and we're making progress on. And you'll see that over the coming years as well. An important juncture for us this year was the launch of our brand, a modernisation of our brand, a communication of something different. It's about how we're repositioning PTSB to be a contemporary full-service bank, a bank that's customer-centred, that is connected to every Irish community across the country, where we have great people who are working locally and, indeed, centrally in our various units, but working directly in the UK. in unison to support personal and business customers. And indeed, we're complementing that with the investment we're making in technology and the investment we've made in our recently where we launched our new app. And indeed, we will see development of that over the coming months and years as well. So our brand reposition reflects our larger scale, a more diversified bank with customers at the centre and indeed significant growth ambitions to compete in this market and to make progress in that respect. And through this, we've introduced our new brand promise. And our new brand promise is to be altogether more human. And in that sense, that's our commitment to pushing customer needs at the centre of how we plan, how we design and how we deliver. And to combine, as I mentioned, good technology with good people who support customers. And this is also reinforced by our sponsorships. And we're very excited with regard to the journey now to Paris in July and August, where we're the title sponsor for the Irish Olympic and Paralympic teams. is really, again, connect to who we are. It's connected to communities. It's connected to people and athletes who are doing their best, who are competing. And indeed, that's what we want to do. It's not all about winning, that's important, but it's also about competing and ensuring that we have a product offer and a service offer that compete in this market. And we will see, hopefully, the benefits of all the work that the Olympians have put in in July and August of this year. It's looking good, by the way, so we're happy about it. If I look at the next slide, which is around how we think about our customers, we see a growth in our customer base. We're up to 1.3 million customers. That's a growth of 10% over two years. What's underlying that number is actually more activity. Customers are more active. They're more engaged. They're engaging with the bank. We're engaging with them. And that is an extremely positive aspect to our business. If we look at the customer loyalty, by way of our focus on loyalty, trust and our digital enablement, our brand power has increased by five points to 13%. Our NPS score is up 10 points. It's doubled in a year to 20 points. We would say we're number one in the market in this space, and we're growing. The level of activity by way of contactless payments has increased by 5% to 101%. 19 million. It's only a short couple of years ago that I was saying that that number was 60 million. So you can see the significant impact there and growth. Our digital active customers have increased as well. And digital activity in the sense of engaging with our app have increased as well. And as I mentioned earlier, we have a brand new piece of kit by way of our digital front end, which we introduced during the year. Given our size and scale, we are very focused on partnerships and making positive use of partnerships in that sense of sharing success. We introduced the credit logic mortgage application process, which is a fully digital process for our customers. In 2023, 290 million of mortgage drawdowns were completed through that digital application process. That's an 80% increase year and year. But we'll see that, and it's already, we can see it, that it's ramping up by way of CreditLogic. All our colleagues in the organisation are using CreditLogic. Our customers like it. And it has the added benefit of taking out a lot of paper and process out of the way in which we interact with customers. So that has been going well. We also have our partnership with the SPCI with regard to the Future Growth Loan Scheme and the Brexit Impact Scheme. We've lent 82 million across those three schemes in the last three years. But again, there'll be a significant increase there as we look at the green lending and transition agenda for retrofit that's coming this year as well. And the first home scheme has granted 50 million of drawdowns for eligible first-time buyers since its launch in 22. Again, we're a key party to that and we support it by way of funding. On the right-hand side, you'll see some of the awards we've won by way of innovative banking product, by way of where we are in... our community fund and what we're doing there, which is a really, really successful story for us. And indeed our best customer service awards as well, which we're proud of. If I just turn to the area of sustainability and the area of ESG, again, this is an area where we're showing continued commitment to supporting this area. On the environmental side, 700 million of lending was in green mortgage lending. That's a 40% increase year-on-year, and 30% of our total new mortgage lending was above a B3 rating. In fact, we're seeing momentum on that rate as well by way of increasing in 2024. We are committed to setting science-based targets in the second half of this year with regard to the reduction of Scope 1, 2 and 3 emissions. So that's something we will be coming with and announcing in the second half. We've also increased our... a focus on climate risk and indeed how we integrate climate risk and the transition to the green economy into how we do our business. And as part of that, we've implemented a sustainable supplier charter, which has been recognised in its own right by way of an award where we won the best procurement team award only recently. Again, that's recognised by way of our standards in this space. On the social side, as I mentioned, our title sponsorship of the Irish Olympic and Paralympic teams, very important to us. And really, as I mentioned, really connected to who we are and how we operate as part of our DNA to be in these communities and supporting Olympians. And as I say, we're really looking forward to July. Our cultural index score is 81%. That's 11% above the target. Again, very, very strong. We provided nearly 20 million funding to Social Finance Ireland over recent years. And that's a partnership that we've renewed. Indeed, I've met the CEO of the Social Finance Foundation and we have a very good connection in regard to how we can support them. 58% of our board are female by way of our gender diversity and their gender pay gap, while it's still at a level which is really unacceptable at 15.9%, It has reduced year and year. We've seen other parties where their gender pay gap has increased. Ours has reduced, and indeed, we have a focus on moving that forward over the coming years. And we have made progress, but we need to make more. If we look at a governance, we've a board approved sustainability strategy. It's across four pillars, which the green transition is one of those pillars, but it's also about supporting small business. We can see that in growth in our balance sheet. It's also about our cultural evolution, but it's also about how we support communities. And part of our brand strategy is clearly about supporting communities with regard to access to physical branches, but also ensuring that we've access to digital channels as well. We have a low ESG risk rating, which is externally measured by Sustainalytics. Again, that's a very positive piece of information. And we've issued the Task Force on Climate-related Financial Disclosures. And you'll see in our financial statements a significant level of disclosure in this space, which, again, has increased over recent years. And this year is an important year for landing a lot of that information. And, of course, as I mentioned, as we set our science-based targets in the second half of the year, it'll really measure against where we are today as we move forward. So, sustainability. is more and more part of what we do. We think of it in a broad sense. We think of it in the sense of also financial sustainability and how we are as an organisation. And with that, I'm going to hand over to Nicola O'Brien, our Chief Financial Officer, and she'll go through the financial performance. Thank you.

Thank you, Eamonn, and good morning, everyone. I'm delighted to present the bank's 2023 annual financial results. Slide 12 shows the strong financial performance the bank has had in 2023. Our underlying profit of 166 million has increased 121 million, largely driven by a higher total operating income and impairment release partially offset by higher operating expenses. Our reported profit before tax of 79 million is £188 million lower than 2022, primarily due to the negative goodwill of £267 million associated with the Ulster Bank transaction that was recognised in exceptional items in 2022. Overall total operating income has increased by 63% to £668 million. This increase is supported by a growing loan book through acquisitions and new business and the higher interest rate environment. We remain positive by the extent of the opportunity that we see in the Irish retail banking market and in our ability to continue to grow. Reported total operating expenses of 504 million have increased by 28% when compared to the prior year, reflecting the impacts of the acquisition the higher inflationary environment, together with the £9 million once-off non-recurring fee for the deposit guarantee scheme, while also continuing to invest in the business for the future. Excluding the once-off DGS fee, the bank's underlying operating expenses of £495 million have increased by 25% year-on-year, which is in line with previous guidance. We've recorded a P&L impairment release of £2 million as the macroeconomic environment remains strong and asset quality remains robust. Exceptional items show a cost of 87 million versus 222 million gain in the prior year, as the Ulster Bank transaction was recognised last year. Full year 2023 exceptional items are largely driven by the costs associated with the Ulster Bank transaction, which, as you know, we completed in full in July of this year, or of 2023, and the day one expected credit loss we had to take this year in relation to the associated acquired assets. Moving to slide 13, net interest income of 620 million increased by 71% year on year. The increase was driven by higher yield on tracker mortgage assets as the ECB continued to rise in 2023. Interest income on the migrated assets from Ulster Bank, it's worth noting that gross interest income from these assets is 170 million with the bank recognising a 25 million fair value unwind in the 2023 year. Income from the acquired mortgage assets, which came across in November of 22, were included in last year's accounts. Therefore, we're reporting a net increase of 125 million from those acquired assets. The bank also recognised net organic growth of the existing PTSB performing loan book, together with interest rate repricing on lending and treasury assets, and our overall income was partially offset by higher wholesale funding costs. The exit net interest margin of 232 increased 78 basis points from 154 last year to 232 this year. The total yield on assets is 291, reporting a 120 basis points increase year on year. This increase in total asset yield is due to a higher yield on both the loan book and treasury assets in a higher interest rate environment. Cost of funds were 63 basis points and increased 45 basis points year on year. The bank does remain leveraged to the interest rate environment at the 31st of December, 2023, assuming a starting ECB refinance rate of four and a half and a deposit rate of four, every 25 basis points increase or decrease results in a 10 million impact on net interest income. These sensitivities should not be considered as a forecast for future performance, but they do give an indication of how the bank's interest income remains leveraged to the interest rate environment. We're also pleased to report the positive performance in net fees and commissions, which remain strong at 42 million, benefiting from the significant growth in our customer base over the last two years, together with an increasing and more active customer base. The trajectory on fees and commissions income is positive. It's worth noting that in January, we announced an increase to our current account fee from €6 to €8 per month. This is a flat fee per month, to our customers, which will come into effect from April of this year. The bank offers rewards to our Current Count customers through our Explore Current Count, where customers can earn up to €5 per month by using their Current Count at point of sale, either online or in person. This, together with the investment the bank has made in the digital everyday banking services for customers, keeps the bank very competitive and gives our customers value in everyday banking. We've successfully grown our gross performing loans by 50% since 2021 and 10% year on year to 20.9 billion with the successful completion of the Ulster Bank migrations and organic growth. Mortgages now represent 94% of our gross performing loans, down from 97% despite having grown £6.2 billion over the same period. This comes from delivering on our ambition to grow the business banking book to £1 billion in 2023, which we have achieved, making further progress in diversifying the overall loan book. We will continue this momentum in new lending, reflecting capital optimisation and our business banking growth ambitions, which are outpacing repayments and redemptions. Looking at the total performing home loan mortgage book, this has grown by 50% since 2021. Fixed rate mortgages have increased by 11% year on year, from 12.6 billion to 14 billion. This is the bank's largest cohort of mortgages, accounting for 73% of the total performing home loan book. As we assess the schedule of fixed rate maturities, the bank will manage the price transformation, where maturing fixed rate mortgages written in a lower interest rate environment will transition to a either a variable rate or a fixed rate in a higher rate environment. We've had a good experience of this through 2023, with customers having options to choose variable or fixed rates on maturity, and with a very good performance on redemptions through the year, trending below prior year experiences. 36% or 4 billion of the fixed rate mortgage book will mature in the next two years. This repricing onto higher rates of the largest segment of the bank's loan book will be supportive to our net interest margin over the coming years, even as the ECB starts to reduce. While this does represent a rate increase for customers, our customers have been stressed at the underwriting stage to a rate of at least 2% higher than their chosen rate, which has proven to safeguard affordability. Fixed rate products accounted for 94% of new mortgage lending in full year 23. However, this reduced to 75% towards the end of the year and into the start of this year as the customers began to opt for variable rates. Tracker mortgages have reduced by 20% year on year from 3.5 billion to 2.7 billion and now make up 14% of the bank's home loan performing book, down from 19% at December 22. Variable rate mortgages are the smallest cohort of the performing home loan book have increased by 26% year on year, as some customers maturing from fixed rates opted for the variable rate for the first time in a number of years. The bank have announced an increase to its variable rates by a blended 51 basis points at the end of 2023, which was implemented in January this year. Variable rates are now more closely aligned to the lower terms of fixed rates. the average yield on new mortgages has increased by 117 basis points year-on-year to 3.73%. Aided by the automatic pass-through of ECB rate rises to tracker mortgage customers, together with the repricing and inclusion of the Ulster Bank assets, the yield on the performing home loan book has increased by 77 basis points to 3.69%. The weighted average loan-to-value on the home loan mortgage book is at 51%, with the new mortgage-weighted loan-to-value at 69%, and these have improved year on year. Also to note, 66% of the bank's performing home loan book has been written since 2015 under macroprudential rules. The bank has delivered on its 1 billion ambition for business banking in 2023 with continued momentum for future growth through providing a meaningful alternative for business customers. 2023 marked a huge step in our diversification journey as we launched PTSB Asset Finance and welcomed 18,000 customers nationwide. At December 2023, the asset finance book totalled 500 million. This business has shown strong growth in new lending over the last few years, increasing by 16% from 2021 to 220 million in 2023. The SME performing book has increased by 240 million to 550 million at December 23. This growth is inclusive of the acquisition of circa 160 million micro SME book from Ulster Bank plus net organic growth. SMEs secured mortgages account for 75% of the bank's new lending in 2023. Managing the cost base in a prudent manner is a key focus for the bank. We're now a larger bank, and we've seen a material change in the banking landscape in Ireland over the last two years. Two banks exited the market, customers sought new banking relationships, and we acquired new businesses while continuing to grow. Inflation continues to have an impact, having reached record levels following the reopening of the economy after the pandemic and the energy crisis as a result of the war in the Ukraine. However, most recent data points to an easing of inflation, which is on a more positive outlook. We can see from the underlying operating cost walk some of the key movements year on year. The bank increased its headcount from 2,488 at December 22 to 3,206 at December 23, a 29% increase year-on-year, of which 330 colleagues joined from Ulster Bank, 308 full-time equivalents. The additional headcount, primarily in customer-facing through customer servicing areas, ensured we maintained service levels for new and existing customers nationwide while we executed the safe delivery of the large-scale transaction. This additional headcount, together with increasing cost of wages and cost of living supports to our colleagues, has driven a 50 million increase in total payroll costs year on year. As part of the Ulster Bank transaction, the bank chose a service provider to service the mortgage assets acquired from Ulster Bank. This incurred an additional 12 million year on year. We continue to invest in important areas such as technology and cybersecurity. In 23, we've migrated to a dual location data center, which gives us a safe and secure infrastructure in running the technology of the bank. And we've also further invested in our cybersecurity. As Eamonn mentioned earlier, the bank refreshed its brand promise for the first time in over 20 years. which will further support the bank in driving long-term success. We have experienced a positive response to this modern and contemporary brand, which has already helped increase our brand power measurement. When we take brand and sponsorship investments for the bank, we see 10 million additional year-on-year expenditure. As previously guided, total depreciation has increased by 15 million, 10 million of which is coming through from prior year investments, and an additional 5 million from the investment required in the acquisition of new businesses. The investment over the last four years has been a critical enabler for the bank to operate safely and meet customers increasing expectations in areas such as digital and technology and availability through our nationwide branch network. These strategic investments include further rollouts in our digital banking programme, maintaining our operational cyber resilience and allowing us to enhance servicing of a larger customer base with their everyday banking needs in a more direct and efficient way. The underlying cost income ratio when you exclude regulatory costs, has reduced to 66%, 18 percentage points lower year on year, as increases in operating income offset higher cost base. The bank is focusing on further improving operational efficiencies through prudent cost management, with the ambition to operate with the cost of 500 million in the medium term while we continue to invest in the bank. The 2024 outlook does expect a mid single digit increase year on year, as we continue to manage the impacts of inflation, business growth and required investment while we work to optimise the cost base for the future. Our expectation is to work the cost income ratio down to circa 60% in the medium term. Underlying asset quality remains good and the loan book has withstood the challenges faced by an elevated inflation rate which now appears to be easing and a higher interest rate environment. The bank has recognised a P&L impairment release of 2 million for the year The bank also reports a 13 million impairment charged directly from capital in line with NPL calendar provisioning guidelines. Provision stock increased by 49 million since year end 22, with closing provision stock of 570 million. This includes a 135 million post-model adjustment, which will ensure that the bank is adequately provided in the event of any deterioration in asset quality. The total provision coverage of 2.6% and NPL ratio of 3.3% are both in line with December 22. Subject to the prevailing macroeconomic environment, the bank expects a cost of risk of circa 10 basis points in 2024. At December 2023, total funding reached 25.2 billion, 8% growth year on year. Customer deposits accounted for 91% of funding at December 23. Total customer deposits grew 6% year on year, while wholesale funding grew 38%, driven by the MRL issuances of £1.1 billion in the first half of 2023. As a deposit led lender, the bank is keenly focused on protecting and growing its customer deposit base. The deposit franchise is performing strongly, having grown 20% since 2021. Current account balances have increased by 400 million or 4% since December 22 and retail deposits, excluding current accounts, increased by 800 million or 7% across the same period. 70% of total customer deposits are guaranteed by the Irish state. The Bank observed a change in the behaviour in Q4 as more customers moved funding into interest-bearing deposit accounts, which have benefited from the seven interest rate increases applied by the Bank since the ECB started increasing interest rates in H222. These interest-bearing accounts now comprise 23% of total customer deposits, up from 18% at December 22. Wholesale funding at 2.2 billion is 38% higher than prior year, mainly driven by MREL issuances of 1.1 billion. The bank successfully completed two benchmark issuances in the first half of 23, 650 million in April 23, and a further 500 million in June 23. These issuances contributed to the bank's 3.8 billion of MREL eligible funding, including CET1 at December 23. The bank's MREL ratio of 32.9% is above both management and regulatory requirements. The MRL target for 1 January 24 has been set at 28.15%. Most recently, as Eamon mentioned earlier, the ratings agency Fitch has upgraded Permanent TSB PLC's long-term rating to BBB, up from BBB-, and Permanent TSB Group Holdings PLC long-term rating to BBB minus up from BBB positive. The upgrade means that Fitch's permanent TSB group holdings PLC rating has now returned to investment grade and will assist with greater market access for future debt issuances. The liquidity coverage ratio, net stable funding ratio and load to deposit ratio are all in a good position. Our regulatory capital ratios remain comfortable above the regulatory minimum requirements. CET1 ratio on a fully loaded basis is 14%, a reduction of 120 basis points from December 22, largely driven by the Ulster Bank mortgage and SME assets. The day one ECL of Ulster Bank assets. Net loan book growth. AT1 distributions partially offset by operating profits. The bank continues to operate in excess of regulatory requirements, which CET1 9.83% and total capital of 14.75%. Management CET1 target on a fully loaded basis remains at 14%. The bank has commenced a fuller review of the mortgage credit risk model. PTSB models were built back in 2017 when non-performing loans were at a peak level. The profile of the portfolio has substantially improved and the models will be updated to capture a more reflective view of the improved credit risk of the current and future PTSB portfolio in line with required regulatory expectations. It's the bank's view that the current risk model needs to be updated to better reflect the credit quality of the current and future mortgage portfolio. This is an important project for PTSB and one that we expect an outcome towards the end of 2025. To summarise, the bank has had a strong year with results showing a robust business and financial performance with a positive outlook. Reflecting on where performance landed when compared to expectation, new mortgage lending of 2.3 billion in line with expectation Mortgage market share of 19%, up 70 basis points year on year. Total business banking of 1 billion in line with expectation. Strong income performance, delivering 170 million gross income from the newly acquired mortgage assets and other SME assets from Ulster Bank. Cost income ratio reduced to 66% as the operating income grows and the bank maintains cost discipline while continuing to invest. Favorable macroeconomic environment, and robust asset quality, delivering a minus one basis point cost of risk. The capital position remains strong with the CET1 on a fully loaded basis of 14%. Underlying profit before tax, 166 million, shows the positive uplift from our acquired assets and our own growth organically in the marketplace, together with the changed interest rate environment. And our underlying ROE has increased to 6%. We actively manage our capital position And having assessed a range of scenarios, the CET1 ratio will remain well above the bank's minimum regulatory requirements. In summary, we have reshaped the balance sheet, acquired businesses with sustainable earning power and are building the business for the future. I'll hand you back to Eamon now to talk you through in more detail the outlook for 2024 and the medium term. Thank you.

Great. Thanks, Nicola. So I just want to cover a couple of slides here around our strategy and indeed our outlook as well. So if we take this from left to right, you'll see that, you know, we've delivered a lot in the last four years by way of bringing, as Nicola closed off, bringing the balance sheet to a safe position. I'd argue we've one of the safest balance sheets in Europe. If you look at our leverage ratio, it's over 7%. an equivalent UK mortgage lender would be something around 4%. So, you know, on any measure, we have an extremely safe balance sheet. The other thing to mention here is that we've no CRE exposure whatsoever, so it's not an area of concern for us at this moment in any sense, because we don't have exposure, where I know that's an area of concern elsewhere. But to come back to the balance sheet, NPL ratio of 3.3%. Real improvement in quality of earnings in that sense. Very high-performing assets with an increasing yield, as Nicholas mentioned, and in good quality. You know, the Ulster Bank acquisition has been absolutely transformational for the balance sheet. You can see it in the numbers. And it really provides us with an additional base to move on from. We've been investing in digital resilience and innovation. I mentioned our app. Nicola mentioned our investment in cyber. This is really important to us. And we will see the results from all of this investment as we move forward, which we would see will yield both an efficiency in our cost base, but also it will yield additional income in the top line. And as mentioned, the dividend restriction was lifted, again, an external endorsement of where we are. So we have a strategy in place to drive further growth. And if you stand back from it, our strategy, our strategic and business positioning has changed unbelievably by going from five banks to three banks. We are now a clear challenger to our two larger competitors. And we are making headway. You can see it in our business banking story. You can see it in asset finance. Indeed, we can see it in our personal business as well. And that will continue. But as part of that, we will continue to focus on being efficient and effective. Nicola has outlined that our our direction by way of our cost base, which is under our control, is to have a cost base in the region of half a billion. That has increased, but we see it as a reasonable level for the bank as we move forward and we drive top-line income. Our customer experience will continue to improve. We continue to invest in that space and we will see that as a differentiating factor as we move forward. And indeed, our ability to leverage our data and deepen customer relationships is a clear area of focus. If I think of the key catalyst that will drive this on, It's about protecting and growing our deposit franchise. It's the oxygen that we need in order to grow our balance sheet and to support lending growth. Again, you'll see more developments in that. We will maintain appropriate pricing and we will focus on margin over volume in the sense of protecting our margin and not just getting volume at any cost. And again, the differentiated factor here is how we deal and connect with customers. Coming back to the business side, we are faster to a yes by way of a yes decision, which means we're faster to cash and we're closer to customers in what we built by way of our business banking offering. So again, we believe that is something that will really pay dividends first going forward by way of increased income. And by way of our capital, Nicola has outlined where we are by way of our IRB models. It's clearly on us now to prepare the IRB models in line with the required regulatory requirements and indeed submit them. But we are on a defined road. to have those models ready and submitted. And indeed, given the fact that nearly 70% of our balance sheet has been created under market potential rules, LTV on our book is around 50%. Again, an enormous transformation in the last five years. that would have been up around 100% five years ago, six years ago. So an enormous transformation by way of safety. Our level of delinquency on the book is extremely low and indeed the book is performing extremely well and it's sound in that sense. We would believe that risk rates should adjust to reflect that performance. And indeed, that's something we are working on and are responsible by way of our control of that process over the coming months of 2024. If we just look at our outlook for 2024, it's about organic capital generation. There was a time when we couldn't say that with a lot of a lot of surety and that, you know, we now have a profitable business. We now have secure income. We now have a cost base that we can manage. We have invested in our business. A lot of that investment has done. We have some more to do, but it's at an incremental level, not at a fundamental level in that sense. So, you know, that's generating capital. We will have a positive ROE. We've made significant progress this year by way of our ROE. And indeed, our dividend policy will be announced in the second half, or distribution policy, I should say, will be announced in the second half of the year. By way of our income, we project our name to be at 225. probably unlike some of our competitors, we see our total income be broadly in line year and year. Our level of sensitivity to the interest rate reductions is, we have some sensitivity, but it's not material in that sense. So we see total income broadly in line where it is. So loan growth together with margin management will assist us in how we manage that income. Our operating expenses in 2025 will increase by a mid-single digit, and then we see over time, through a focus on the management of our cost base, that that will be coming down in around the 500 million level over the next couple of years. A cost-income ratio which will increase slightly on the back of that, but again, showing a very solid level of cost income that we can work with, again, over coming years as a target to reduce. Our asset quality, which I've touched on already, we're saying a cost of risk of 10 basis points. The reality is the cost of risk this year was zero. In fact, we had a release, as you rightly saw, and indeed, we don't see any stress in our book, nor are we exposed to areas of stress. So again, that is something that is in good shape. So that's the outlook for 2024. And if we just move on to the medium-term targets, you know, we would have announced targets in previous results to 2025. What we're seeing is those targets are probably pushed out a year out to 2026. We see an editor's margin coming in 230 rather than we had projected 250. We see our cost income ratio around 60%. We see our cost of risk below 30 basis points. We see an OROE in the region of 10%. We see an EPS of 30 cents per share. And that's in a situation where our C21 target is over 14% on a fully loaded basis. This medium-term guidance doesn't assume any change to risk rates because naturally, as we've said, we have to go through a process where we prepare a submission of models and then we see what the outcome is. But we are saying that within this period of guidance, that we would expect to have an outcome with regard to that project and that review and indeed an outcome with regard to what our risk weights for our book should be going forward, given the experience, given the exposure we have in the book and indeed the experience of that book over the last number of years, which has been very positive. So I'd like to thank you for listening to me, myself and Nicola, and we're more than happy now to take some questions. So thank you very much.