Bnk Banking Corporation Limited · ASX:BBC
Bnk Banking — Investor Presentation (May 2021)
42 slides from Bnk Banking's investor presentation, May 19, 2021
Slide 1: BNK Group Investor Presentation
BNK Banking Corporation Limited Level 14, 191 St Georges Terrace Perth WA 6000 ASX Release, 19 May 2021 BNK GROUP INVESTOR PRESENTATION BNK Banking Corporation Limited (ASX:BBC) (“BNK” or the “Group”) today released an investor presentation update which is attached. ENDS Investor Enquiries Brett Mor
Slide 2: Who is BNK Banking Corporation Limited?
BNK Banking Corporation Limited Level 14, 191 St Georges Terrace Perth WA 6000 Who is BNK Banking Corporation Limited? Banking The company has operated as an APRA-regulated authorised deposit-taking institution (ADI) for over 38 years. As such our customers benefit from the Australian government dep
Slide 3: BNK Banking Corporation Limited Investor Presentation May 2021
BNK Banking Corporation Limited ASX:BBC Investor Presentation May 2021
Slide 4: Disclaimer
Disclaimer This presentation contains certain forward-looking statements with respect to the financial condition, results of operations, business plans and objectives of management. All such forward‐looking statements involve known and unknown risks, significant uncertainties, assumptions, contingen
Slide 5: Presenters
Presenters Brett is a highly credentialed finance industry professional who has distinguished himself in the sector for more than two decades. He spent close to a decade on the executive teams at ING Australia and ING India, led the development and execution of ING’s retail bank strategy in Australi
Slide 6: Agenda
Agenda Topic Description Who We Are What sets us apart? Banking Divisional Update Accelerating lending volumes and increasing returns Aggregation Divisional Update How we are achieving record growth Group Results Profitable and growing Investor Value proposition A compelling investment case Q&A Let
Slide 7: Who we are
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Slide 8: Combining the best of the Australian mortgage industry
BNK Banking Corporation Limited Combining the best of the Australian mortgage industry We are an ASX-listed (ASX:BBC) financial services company that was formed in 2018 following the merger between Finsure Group and Goldfields Money. BNK Banking Corp provides a broad range of consumer and business f
Slide 9: The merger combines mortgage distribution and manufacturing strengths
The merger combines mortgage distribution and manufacturing strengths • Finsure provides BNK with a national distribution footprint COMBINED BANKING • BNK provides high margin on balance Target sheet loan products • Together, a high margin business with a Margin national distribution footprint. We a
Slide 10: Our unique model generates revenue across the lending value chain
Our unique model generates revenue across the lending value chain Finsure 1,960 Brokers 65 Lenders on Panel A mortgage aggregation fintech $52b+ Loan Book $20b Settlements p.a. Better Choice Home Loans ~6,000 Accredited $2.4b Lending $150m+ Quarterly Brokers Portfolio Settlements A proven mortgage l
Slide 11: Our group is connected to a $50b+ per annum mortgage market
Our group is connected to a $50b+ per annum mortgage market Which has enabled us to write higher volumes of BNK-funded mortgages at 8x the margin Finsure Other Aggregators on Better Choice’s Panel $1.6b Monthly Settlements $3-4b Monthly Settlements 1,960 Loan Writers ~4,000 Loan Writers $50b+ per an
Slide 12: What sets us apart?
What sets us apart? A unique business model combining the best of the mortgage industry • Unique model monetising the entire lending value chain including mortgage aggregation, product manufacturing and funding diversity • Fast growing businesses and profitable group • Significant growth and margin
Slide 13: BNK and Better Choice Update
BNK and Better Choice Update Banking
Slide 14: We provide banking solutions to Consumer and SME segments
We provide banking solutions to Consumer and SME segments Our near term focus is to accelerate growth within existing core mortgage and deposit product categories Customer Segments Business Cash Management Commercial Overdraft SME Transactional & Term Deposits Loans Account Cash Investment Investor
Slide 15: We have a well diversified and low risk BNK-funded lending portfolio
We have a well diversified and low risk BNK-funded lending portfolio COVID-19 Relief Packages Historical Credit Charges (% of customers) (% of loan book) 5.0% 0.10% 4.0% 0.08% 3.0% 0.06% 2.0% 0.04% 1.0% 0.02% 0.0% 0.00% 2017 2018 2019 2020 1HFY21 March 2021 Geographical Lending Mix (%) March 2021 Po
Slide 16: With surplus deposits and a sound capital position
With surplus deposits and a sound capital position BNK Deposits ($b) Capital Adequacy Ratio (CAR) (LEVEL 2) % 21.2 0.48 20.0 18.7 0.39 17.9 0.09 0.35 0.31 0.08 0.06 0.04 0.39 0.29 0.31 0.27 1HFY20 2HFY20 1HFY21 Q3FY21 1HFY20 2HFY20 1HFY21 Q3FY21 BNK Funded Loans Surplus Deposits 14
Slide 17: Established and growing broker distribution network
BNK & Better Choice have an established and growing broker distribution network Over 6,000 accredited brokers across Finsure and other aggregation groups A strong panel of aggregators …with continued growth in accredited brokers 6,138 5,963 5,116 4,761 4,326 3,942 3,475 3,023 2,656 2,288 725 2HFY16
Slide 18: Our target is to be a Finsure top lender
Within the group, our target is to be a Finsure top 10 lender Using data driven insights to innovate across product, policy and broker experience is delivering strong settlement growth #10 Monthly Settlements through Finsure $55m #19 x2 growth #22 $28m $17m #32 $7m Sep-20 Dec-20 Mar-21 Next Hurdle 1
Slide 19: The BNK-funded loan book has grown by 42% this calendar year
The BNK-funded loan book has grown by 42% this calendar year BNK funded settlements accelerated in Delivering growth in the higher margin, Jan – Apr 21 ($m) BNK-funded loan portfolio ($m) 438.6 53.4 46.2 393.5 32.5 355.5 29.5 330.3 306.2 14.4 13.5 297.2 9.9 282.3 281.7 281.3 286.5 2.2 3.8 0.0 Total
Slide 20: Increasing the BNK-funded settlements mix is transforming our lending returns
Increasing the BNK-funded settlements mix is transforming our lending returns Settlements in Mar 21 generated 2.3x uplift in lending revenue Changing the funder mix Is delivering significant uplift in new lending returns (bps) 130 125 28% 20 - 115 31% 20 - 30bps 38% 20 - 30bps 30bps 2.3x 78% 20 - re
Slide 21: We have a simple and planned pathway to Bank profitability
We have a simple and planned pathway to Bank profitability Leveraging our strong lending team for higher margin BNK-funded loan growth *Banking division in 1HFY21 recorded an NPAT of ($1.9m) after the impact of the one-off atm write-off ^ Forecast half yearly interest income based on additional loan
Slide 22: Finsure Update
Finsure Update Aggregation © FINsure
Slide 23: Aggregation demonstrating strong profit and settlement growth
Aggregation demonstrating strong profit and settlement growth Broker Numbers (#) NPAT* ($m) 4.33 • NPAT of $4.33m 1,910 1,960 3.80 1H2021 up 50% YoY 1,667 1,583 2.89 • 1,960 brokers, 16.3% 1,328 increase YoY 1,082 • Annual settlements of $18.13b up 37% YoY • Large investments in technology CY16 CY17
Slide 24: Drivers of Finsure growth
Drivers of Finsure growth Finsure has an industry-leading business services model offering comprehensive solutions that attract a wide range of brokers Industry Leading Service Proposition – Driving a broad revenue base Flexible commissions Structure flexible based on the brokers’ needs $26.6m Loan
Slide 25: Finsure Group product & services strategy
Finsure Group product & services strategy Full broker support model providing additional revenue Marketing Lead Generation 3rd Party Services / App Broker Platform Packages Store Services Services Loan • SEO • Websites Software / Compliance / Processing • SEM • CoreLogic • Social media Training / Sa
Slide 26: Proprietary technology platform enhances our scale
Proprietary technology platform enhances our scale Infynity is a complete origination platform with proprietary architecture and sophisticated integrations Infynity allows for massive scale in broker numbers. The system is built on a 21st century tech platform which is cloud based and allows for ope
Slide 27: Group Results
Group Results About our group
Slide 28: Group financial performance
Group financial performance Underlying NPAT ($m) 24% increase ↑ 26
Slide 29: Merger delivering NPAT momentum
Merger delivering NPAT momentum BNK's (previously Goldfields Money) post-merger integration with Finsure is yielding strong results NPAT ($m) 5.3 Merger 3.6 3.0* -0.4 -1.0 FY17 FY18 FY19 FY20 1HFY21 *Profit excludes ATM losses 27
Slide 30: Segment performance
Segment performance Aggregation and Bank NPAT* ($m) Broker Numbers (#) 1,960 4.33 1,910 3.80 2.89 1,740 1,667 1HFY20 2HFY20 1HFY21 3QFY21 1HFY20 2HFY20 1HFY21 NPAT ($m) Net Interest Income ($m) 3.3 1HFY20 2HFY20 1HFY21 2.5 2.6 -0.35 -1.29 -1.42 -0.70^ 1HFY20 2HFY20 1HFY21 -1.99 ^loss from ATM and ta
Slide 31: Net Interest Margin
Net Interest Margin Solid improvement in 1H21 29
Slide 32: Capital
Capital Capital Adequacy Ratio (CAR) 30
Slide 33: Investor Value Proposition
Investor Value Proposition Investing in BNK
Slide 34: A compelling investment case
A compelling investment case Investor value proposition • Group underlying NPAT (excl. ATM write-off) grew 24% to $3m* for 1H21 • Infrastructure and team in place to substantially scale the profitable Finsure business • Ability to distribute BNK-funded loans through more than 6,000 accredited Profit
Slide 35: Questions
Questions Bank PW eetterchoice (G)FINSURE
Slide 36: Appendix
Appendix (Bank PR setercnoice (G)FINSURE
Slide 37: Group Financial Snapshot
Group Financial Snapshot Solid result in a challenging environment 1H21 Change1 Group Underlying NPAT excl. ATM ($000's) 2,969 ↑ 23.7% Group Underlying NPAT ($000's) 2,338 ↓ 2.5% Cost to Income Ratio (Exc. ECL) 79% ↓ 0.3% Statutory NPAT ($000's) 2,176 ↓ 6.4% Bank Loan Spot Book Size ($m) 306 ↑ 7.4%
Slide 38: Balance Sheet
Group ($m) 1H21 2H20 $ Var. % Var. Assets Cash & Equivalents 132.4 93.1 39.4 42.3% NPV Asset 443.3 387.2 56.1 14.5% Loans & Advances 305.6 283.6 22.0 7.8% Other Assets 74.5 75.4 (0.9) (1.2%) Total Assets 955.9 839.3 116.6 13.9% Balance Sheet Liabilities Deposits 391.3 345.8 45.5 13.2% • Portfolio gr
Slide 39: Profit & Loss Statement
1 1 Underlying Group ($m) Aggregation Wholesale Bank Eli 1H FY2021 2H 2020 $ Var. % Var. Gross Revenue Commission Income/(Exp.) 150.3 7.7 - (0.6) 157.5 149.6 7.9 5% Interest Income/(Exp.) 0.0 0.0 4.9 0.1 5.0 5.1 (0.1) -2% Fees & Other Income 5.8 0.4 0.5 - 6.6 6.7 (0.0) -1% TotalGross Revenue 156.2 8
Slide 40: Board Of Directors
Board Of Directors Jon Sutton CHAIRMAN OF THE BOARD Mr Jon Sutton is a successful senior executive with over 24 years’ experience in financial services including over eight years banking CEO experience. Jon was the CEO and Managing Director of the Bank of Queensland (BOQ) and retired in 2018. Prior
Slide 41: Board Of Directors
Board Of Directors John Kolenda EXECUTIVE DIRECTOR & FINSURE CEO Mr Kolenda was appointed a Director on 13 March 2018. Mr Kolenda is the Managing Director of Finsure Group and has extensive experience in the mortgage broking and aggregation sector. Finsure was ranked sixth in BRW Magazine’s Fast 100
Slide 42: Experienced and Refreshed Management Team
Experienced and Refreshed Management Team Brett Morgan John Kolenda Andrew Kitchen BNK/BCHL CEO Finsure CEO Chief Financial Officer Amber Smith Allan Savins Simon Bednar David Maher Chief Operating GM – Banking GM Aggregation Head of Officer & Wholesale Marketing Dara Wettner Malcolm Cowell Talia Sw