Permanent TSB Group Holdings plc (PTSB) Earnings Call Transcript & Summary

Good morning, and welcome to the Annual General Meeting of Permanent TSB Group Holdings plc. The time is 11:00, and there is a quorum present, I declare the meeting open. My name is Ronan O'Neill, and I am the Senior Independent Director of the company. I've been asked by both the Board and our Chairman, Robert Elliott, to chair today's proceedings. Due to travel restrictions arising from the ongoing COVID-19 pandemic, Robert was unable to travel from the U.K. for today's meeting. However, I'm happy to say we will shortly hear from Robert via a preprepared video statement that we will play to the meeting in a few moments. But first, I would like to make a few comments. I'm joined in the room today by our Chief Executive Officer, Eamonn Crowley; by our company secretary, Conor Ryan, and by a number of employee shareholders of the company. All COVID-19 health and safety protocols are being observed today. I can confirm that for the minimum quorum requirements under the company's Articles of Association for the AGM to be convened have been met. I will also take the notice of Annual General Meeting, which was issued to shareholders on 16th of April, together with the Auditor's Opinion set out on Page 38 of the 2020 annual report as read. Today's meeting is being held against the ongoing backdrop of the COVID-19 pandemic. And I would like to express my appreciation to shareholders who opted to participate in today's meeting by submitting either questions or proxy voting forms in advance of the meeting. Our Company Secretary has confirmed to me that all questions submitted in advance of today's meeting by shareholders have been responded to. And a number of topics raised will also be addressed in a few moments, and I open the meeting to questions. In addition to the conference call facilities provided, the company has also provided a web-based platform for listening and viewing today's proceedings. And this platform facilitates the submission of questions by registered shareholders during the meeting. I would ask that any questions submitted relate only to the business of the meeting, the wider prospects of the bank or matters of interest to shareholders. We will not be in a position to address matters of a personal nature, but I will arrange for all such questions to be responder to privately. So I would ask any shareholders who have access to the online platform to submit any questions now or as the meeting progresses. The health and well-being of our shareholders and staff have always been to the forefront of our minds when determining the manner in which today's AGM would be held. Hopefully, in the not-too-distant future, we can revert to meeting in person. Now I would like to hand over to our Chairman, Robert Elliott, to say a few words.

Thank you, Ronan and good morning, everybody. While these are strange times indeed, I regret, very much that we have to hold this meeting in this [ way ]. But there can't be better than Ronan to chair the meeting. This will last as well as I've said it, our absolute priority must be to respect the public health guidelines and to safeguard the help of our colleagues and, indeed, our shareholders. In my perspective, I want to simply thank you all for participating in this meeting in these circumstances. And I also want to express and say thank you to our fellow PTSB colleagues right across the country. This past year has been difficult and stressful for all of us, but I am really struck by how colleagues across the bank have risen to the challenge. We will find more and more, it appears, they've really stepped up to the plate. They are a credit to the bank, and we are extremely grateful to them. Now I'd like to say a few words about our performance through 2020 and a bit more recently. And of course, 2020 was an extraordinary year, but I think it's one which, from a bank's perspective, we can now look back on with some pride. In the most difficult of circumstances, the bank and in particularly, our people performed exceptionally well. In a time when tens of thousands of businesses were forced to close their doors, and many of our competitors had to provide reduced services, we were able to keep each of our branches open and operating. We were able to switch quickly and smoothly to remote working for over 1,200 staff, and we are able to provide urgently needed support to our customers as our noticeable achievements. We also worked hard to minimize the financial impact of COVID on the bank, and I think we succeeded well in that regard. In the circumstances, we performed strongly on new lending with a good performance, in particular, in respect of mortgage lending, where we kept our market share largely intact. And we've seen that strong performance continue in the first quarter of this year. Importantly too, we launched some very competitive new mortgage rates and products which were designed to help address the historic discrepancy in our loan book between new and existing mortgage customers. And these rates have been very positively received in the market. And we made progress on SME lending, including forming a key partnership with a strategic banking corporation of Ireland on their SME lending products. And more generally, I'm delighted to say that our leadership team in the bank has certainly hit the ground running. And I know that a very positive energy, drive and vision which they've all brought with them as well under Eamonn's leadership is being felt right through the organization. So lots of change, and as we look across the banking sector, it's clear that further changes are on the way. With Ulster Bank on recently BBC announcing their plans to enter the market, we are clearly entering a new phase in the industry here. For our part, we confirmed that we're engaged in discussions with Ulster which may lead to an agreement for us to take on certain parts of our business here. While I'm restricted with what I can say on these continuing discussions, I can say that we are approaching them with enthusiasm and good growth. The changing nature of the market here opens great opportunities for us, and our job is to make sure that we are correctly positioned to exploit those opportunities. We've taken strong steps in that regard. We have recently authorized a very significant investment in our IT systems, building on substantial recent investment in that area. We've made very strong commitments to our branch network. Indeed, at the time when our competitors are reducing their various networks, we have been clear that we see branches as a key element of our business model. We continue to invest in digital and other innovation to ensure that we're able to engage with and interact with our customers in a way that most suits them. And all the time, involved, we are working hard to a key agenda items on a guided culture, inclusion and diversity, sustainability corporate responsibility. Now I'd like to hand back to Ronan in Dublin, who will continue with the business of the meeting.

Thank you, Robert. I would now like to take some time to address questions from shareholders. Perhaps, to get things started, I will first ask our company secretary to address a number of questions submitted in advance of the meeting. And after that, we can move to any questions submitted via the web-based platform. Conor?

Thank you, Chairman. We received a number of questions from shareholders relating to the personal status of these shareholdings. And all of those questions have been responded to. A number of shareholders contacted the company concerning difficulty they had experienced in trying to dispose of their shares with the organization. And this is because the transaction costs associated with selling shares can be quite prohibitive when selling shares through a broker. And this is a difficulty for a large proportion of our shareholders and something the company has listened very carefully too. I can confirm that the company is exploring a number of options to facilitate the disposal of low-value shareholdings and will communicate with shareholders once a solution has been reached. A further shareholder and customer raised the issue of a fee that the bank charges for the return of deeds, mortgage deeds. Once the mortgage has been repaid at the end of their term. This customer and shareholder made the case that such a fee does not reflect the loyal custom given over the term of the mortgage loan and the company agrees. And this was, in fact, something that the bank itself had placed under review. And the bank's intention is to waive this fee for all mortgage customers who reach the end of their mortgage term with the bank. They were the questions that we received in advance of the meeting. I might just have a look and see if we have any questions that have come in live now, Chairman. We do have a couple. We have a question from a shareholder regarding the uploading of the minutes of the AGM. Actually, just under company law, the minutes of this AGM are not a public document, but they can be inspected and a copy made available on request. So I will arrange for a copy of the minutes to be issued to that shareholder. And likewise, any other shareholders listening can request a copy of the minutes for the previous AGM and indeed, this one once they are drafted. We have also received a question around -- just to summarize this, around branch closures and also around our digital investment, which we announced recently and whether one connects with the other. So maybe I'm might ask Eamonn to maybe comment on branch closures and our digital investment piece.

Thank you, Conor. So -- as Robert Elliott, our Chairman had mentioned during his statement, we have recently announced a EUR 50 million investment in our digital capability. But we also announced a commitment to maintaining our branch network because we see branches as being a key part of how we operate and how we provide our services. But we also recognize that 72% of our customers today transact with us online, and that's increased by -- and the activity among those customers increased by between 20% and 30% in the last year. So we continue to provide services not only in branches, but also digitally and online. And the recent EUR 50 million investment is to enhance that experience, to enhance the type and the quality of service that we can provide to customers who want to transact online and then to combine that with our physical presence in the communities in which we operate, which is a really, really important part of our brand, an important part of our purpose and an important part of how we provide what we believe is a full-service and indeed, something that's socially impactful to the wider community across Ireland in the communities where we operate. So thank you for that.

Thank you, Eamonn. That is all the questions that we've received from our shareholders. I would like to comment that asking questions of the Board and management doesn't stop at an AGM. The web -- e-mail address and are postal address is there. So if there are any further questions that shareholders have of the Board or of management, again, please do send those questions in, and we will arrange for those to be replied to. So Chairman, that concludes the questions.

Thank you, Conor and Eamonn, indeed, for responding to those questions. Now I'd like to turn to the business of the meeting. We have a total of 22 individual resolutions to be voted on today. Of these resolutions, 1 to 5 are proposed as ordinary resolutions, and resolutions 6 to 11 are proposed as special resolutions. In accordance with the Articles of Association of the company, I am declaring a poll on each resolution as set out in the notice of the AGM issued to shareholders. Today's poll will be decided by applying and voting the results of the proxy voting forms that were submitted by shareholders to the company in advance of the cutoff for voting being 11:00 a.m. on Monday, the 17th of May 2021. Resolutions 1 to 5 are proposed as ordinary resolutions and are as follows: resolution 1, to receive and consider the financial statements and reports of the directors and auditors thereon, and review the affairs of the company; resolution two, to receive and consider the directors' report on remuneration; resolutions 3(a) to 3(l), to reappoint the following directors: Anne Bradley; Marian Corcoran; Donal Courtney; Eamonn Crowley; Paul Doddrell; Robert Elliott; Celine Fitzgerald; Mike Frawley; Ronan O'Neill; Andrew Power; Ken Slattery and Ruth Wandhöfer; resolution 4, to authorize the directors to determine the remuneration of the auditors; resolution 5, to grant the policy to the directors to allot shares. Now Resolutions 6 to 11 are proposed the special resolutions and are as follows: resolution 6, the disapplication of preemption rights for the allotment of up to 5% of the company's issued share capital and beyond that for other special allotments -- specified allotments, excuse me; resolution 7, the disapplication of preemption rights for an allotment of up to an additional 5% of the company's issued share capital for acquisitions or specified capital investments; resolution 8, to grant authority for the company to purchase its own ordinary shares; resolution 9, to grant authority to set the price range for a reallotment of treasury shares; resolution 10, to grant the directors authority to call a general meeting on 14 clear days' notice; and Resolution 11, to amend the company's constitution. I'm now calling a poll on each of the aforementioned ordinary and special resolutions, and will ask our company secretary to confirm when the poll is closed and on the results of the poll.

Thank you, Chairman. I can confirm that the poll is now closed, and that each of the resolutions have been carried.

Thank you, Conor. And I can confirm the details of the poll results will shortly be displayed on the company's website at www.permanenttsbgroup.ie. That concludes the business of the meeting. Thank you for listening to today's proceedings. I hope you keep safe and well. I now bring this meeting to a close.

Ladies and gentlemen, this concludes today's call. Thank you very much for joining. You may now disconnect your lines.