Tsb Banking Grp reports 43.9% Net Income growth and 14.5% Revenue growth

26 Jan 2017 • About Tsb Banking Grp ($TSB) • By InTwits

Tsb Banking Grp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

Tsb Banking Grp has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.9%. At the same time it's in pair with industry average of 3.7%.
CAPEX is quite volatile: 35.9 in 2016, 39.7 in 2015, 85.8 in 2014, 37.5 in 2013, 23 in 2012
The company has business model with low profitability: ROIC is at 8.3%
It operates with high leverage: Net Debt/EBITDA is 2.6x while industry average is

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Tsb Banking Grp ($TSB) key annual financial indicators

mln. £	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	1,293	856	1,192	1,174	1,345	14.5%
Net Income	28	185	135	89	128	43.9%
Balance Sheet
Cash	361	316	4,532	2,919	3,912	34.0%
Short Term Debt		235	33	1	50	6,100.0%
Long Term Debt	0	0	406	402	413	2.8%
Cash flow
Capex	23	38	86	40	36	-9.6%
Ratios
Revenue growth	-3.2%	-33.8%	39.2%	-1.4%	14.5%
Net Income Margin	2.2%	21.6%	11.3%	7.6%	9.5%	1.9%
CAPEX, % of revenue	1.8%	4.4%	7.2%	3.4%	2.7%	-0.7%
ROIC	35.6%	10.7%	9.6%	3.3%	8.3%	5.0%
ROE			9.1%	5.3%	7.1%	1.8%

Revenue and profitability

Tsb Banking Grp's Revenue surged on 14.5% in 2016.

Net Income marign increased slightly on 1.9 pp from 7.6% to 9.5% in 2016.

Capital expenditures (CAPEX) and working capital investments

Tsb Banking Grp's CAPEX/Revenue was 2.7% in 2016. Tsb Banking Grp showed small CAPEX/Revenue decline of 1.7 pp from 4.4% in 2013 to 2.7% in 2016. It's average level of CAPEX/Revenue for the last three years was 4.4%.

Return on investment

The company operates at low ROIC (8.27%) and ROE (7.08%). ROIC increased on 5.0 pp from 3.3% to 8.3% in 2016. ROE increased slightly on 1.8 pp from 5.3% to 7.1% in 2016.

Leverage (Debt)

Debt jumped on 14.9% in 2016 while cash surged on 34.0% in 2016.

Appendix 1: Peers in Banks

Below you can find Tsb Banking Grp benchmarking vs. other companies in Banks industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Kazkommertsbank JSC ($KKB)		6.0%	16.3%	41.4%
Sberbank Of Russia ($SBER)	37.2%	25.1%	23.4%	27.4%
Commercial Intl Bank(Egypt)S.A.E ($CBKD)	37.6%	23.7%	18.9%	26.8%
Yapi Ve Kredi Bankasi As ($YKBD)	14.9%	4.8%	19.7%	25.3%
Mcb Bank Ltd ($MCBS)	3.0%	-1.7%	19.4%	22.4%
Median (43 companies)	10.2%	4.8%	11.5%	5.5%	1.0%
Tsb Banking Grp ($TSB)		-33.8%	39.2%	-1.4%	14.5%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Banque Marocaine Du Comm Exterieur ($69IR)	3.7%	9.7%	4.3%	26.8%
Lloyds Banking Group ($LLPC)	8.0%	8.9%	13.1%	13.6%	14.5%
Banco Santander Sa ($BNC)	2.7%	2.6%	8.9%	10.2%	9.1%
Guaranty Trust Bank ($GRTB)	6.7%	6.1%	6.8%	7.7%
Diamond Bank ($DBPA)	8.2%	7.9%	6.0%	6.7%
Median (41 companies)	2.4%	2.7%	2.1%	2.5%	1.9%
Tsb Banking Grp ($TSB)	1.8%	4.4%	7.2%	3.4%	2.7%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Commercial Intl Bank(Egypt)S.A.E ($CBKD)	21.7%	26.9%	30.1%	30.3%
Guaranty Trust Bank ($GRTB)	19.8%	18.9%	17.8%	16.0%
Mcb Bank Ltd ($MCBS)	15.0%	14.4%	15.8%	14.9%
United Bank Ltd ($UBLS)	11.7%	11.8%	13.8%	12.6%
Zenith Bank ($ZENB)	19.0%	17.6%	15.0%	11.2%
Median (43 companies)	6.0%	5.3%	4.4%	3.5%	3.5%
Tsb Banking Grp ($TSB)	35.6%	10.7%	9.6%	3.3%	8.3%

Tsb Banking Grp stock price chart

Tsb Banking Grp financials

mln.	FY2011	FY2012	FY2013

Revenue	1,336	1,293	856.2
EBITDA	0.000	0.000	0.000
Net income	57.000	28.000	185.0
CAPEX	18.000	23.000	37.500
Debt	0.000	0.000	234.7
Cash	390.0	361.0	316.4

About Tsb Banking Grp

TSB Banking Group plc, together with its subsidiaries, provides retail banking services to retail and small business banking customers in the United Kingdom. It operates through two segments, TSB Franchise and Mortgage Enhancement. The company accepts current accounts, savings accounts, business accounts, designated clients' accounts, clients' call accounts, treasurer's accounts, and credit union accounts; and offers various loans and finance products, such as small business and commercial loans, personal loans, graduate loans, business overdrafts, commercial mortgages, and enterprise finance guarantees, as well as residential buy to let mortgage, fixed rate and tracker mortgage, and remortgaging services. It also provides business debit and credit cards; online, bulk, and international payment services; and home, travel, and mobile phone insurance services, as well as Internet banking and travel services. In addition, the company owns a portfolio of mortgage assets. As of March 31, 2014, it operates 631 branches in England, Scotland, and Wales. The company was incorporated in 2014 and is headquartered in Edinburgh, the United Kingdom. TSB Banking Group plc is a subsidiary of Lloyds Banking Group plc.