Bnk Banking Corporation Limited · ASX:BBC
Bnk Banking — H1 FY24 Earnings Presentation
20 slides from Bnk Banking's earnings presentation, Feb 23, 2024
Slide 1: Investor Presentation H1 FY24 Financial Results
ASX:BBC INVESTOR PRESENTATION H1 FY24 Financial Results 28 February 2024 1
Slide 2: Disclaimer
Disclaimer ASX:BBC 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, c
Slide 3: Agenda
Agenda ASX:BBC H1 FY24 Results Overview p5 Allan Savins Chief Executive Officer H1 FY24 Financial Results p 10 Stephen Kinsella Group CFO Strategy update and outlook p 14 Allan Savins Chief Executive Officer 3
Slide 4: H1 FY24 Results Overview
H1 FY24 Results Overview ASX:BBC Allan Savins Chief Executive Officer 4
Slide 5: H1 FY24 Results Overview: Financial highlights
H1 FY24 Results Overview ASX:BBC Financial highlights Cash NPAT position improved by $0.2m on 1H23 $1.5bn • $(1.8)m • NII of $8.6m, marginal decrease of 1.1% pcp Group Statutory NPAT Total Deposit Book Up $0.87m on 1H’23 Up 30.9% on 1H’23 • Focus on cost discipline resulted in a $1.5m (13%) decrease
Slide 6: BNK Loan Book, Deposits & Net Interest Income
BNK Loan Book, Deposits & Net Interest Income Record highs achieved across lending and deposits ASX:BBC Loan book ($m) Deposit book ($m) Net Interest Income ($m) 1478 1549 10.0 1349 8.7 8.6 1166 1252 1183 984 7.0 965 5.9 829 740 6 1H22 2H22 1H23 2H23 1H24 1H22 2H22 1H23 2H23 1H24 1H22 2H22 1H23 2H23
Slide 7: Managed growth and diversification in BNK-funded lending portfolio
Managed growth and diversification in BNK- funded lending portfolio ASX:BBC Stable risk profile despite steady increase in higher margin loans Portfolio by Payment Type Portfolio By Loan Type HY23 HY24 HY23 HY24 Stable position Modest increase with borrower in investor equity continuing lending supp
Slide 8: Strong Cornerstone Portfolio
Strong Cornerstone Portfolio Delivered growth while maintaining strength in underlying loan portfolio ASX:BBC Loan quality control maintained High quality customers • Retained interest rate servicing buffer of • Increase in offset account balances from 3.0% for Prime and Commercial loans in $99m in
Slide 9: H1 FY24 Financial Results
H1 FY24 Financial Results ASX:BBC Stephen Kinsella Chief Financial Officer 9
Slide 10: NPAT Performance
NPAT Performance Improvements in operating performance, Statutory NPAT and ASX:BBC Cash NPAT 1H24 1H24 vs 1H23 Operating income 8.07 (5.8)% Operating expenses 10.31 (12.5)% Operating performance (2.24) 30.4% Provision for credit loss 0.35 (29.2)% Statutory NPAT (1.82) 32.4% Cash NPAT (1.18) 12.5% 10
Slide 11: Performance
Performance Statutory NPAT ($m) Steady improvement in 1H23 1H24 ASX:BBC Statutory and Cash NPAT (1.82) (2.68) Cash NPAT bridge* ($m) 11 * Cash NPAT presented is tax normalised assuming effective tax rate c. 30%
Slide 12: Direct Net Interest Margin
Direct Net Interest Margin Ongoing margin pressure, reflective of wider industry challenges ASX:BBC • Decline in NIM due to industry headwinds and challenging interest rate environment with strong competition across both loans and deposits. • Opportunities to improve NIM: o Fixed rate maturities and
Slide 13: Competition for Deposits
Competition for Deposits Customers switching to high yielding Term Deposits ASX:BBC Deposit Composition 120% • Funding stability and attractive rates for 100% Term Deposits has led to unfavourable deposit mix outcomes and resulted in NIM 80% 41% 52% 57% compression. 60% • Current market Term Deposit
Slide 14: Fixed Rate Home Loans
Fixed Rate Home Loans Fixed Rate maturities will provide potential for margin uplift ASX:BBC 4.71% 104.5 • Approximately 80% of the remaining Fixed Rate HL book due to rollover during the 82.8 next 12 months. 3.01% 2.87% • Current pricing and active retention should 2.53% provide upside to NIM given
Slide 15: Credit Quality & Loss Protection
Credit Quality & Loss Protection Portfolio remains resilient despite increase in arrears ASX:BBC Prime Portfolio Delinquency Rate vs Prime SPIN Portfolio Hardship Rate (% ofcustomers) 1.40% 1.20% >90 days arrears = 0.41% (16 customers) 1.00% 0.80% 0.60% 0.40% 0.20% 0.00% Jan-21 Jan-23 Sep-21 Dec-21
Slide 16: Strategy Update and Outlook
Strategy Update and Outlook ASX:BBC Allan Savins Chief Executive Officer 16
Slide 17: Strategic focus for H2 FY24
Strategic focus for H2 FY24 Increased focus on managing costs to improve profitability ASX:BBC GROWTH MARGIN PROFITABILITY TARGET: Selectively increase TARGET: Increase BNK’s Net TARGET: Focus on achieving steady, BNK’s balance sheet loan book to Interest Margin to 2% over the sustainable growth wit
Slide 18: Summary & Outlook
Summary & Outlook ASX:BBC Becoming a market leading SME bank Remain confident of achieving 20% of total annual settlements in higher margin assets target in FY24. Continued focus on cost management for positive JAWS outcome. Cost reduction program expected to generate approx. $1.6m in annual sav
Slide 19: Appendix
Appendix 19
Slide 20: Group Financial Key Outcomes
Group Financial Key Outcomes ASX:BBC 1H24 1H23 Statutory NPAT ($m) (1.82) (2.68) Cash NPAT ($m) (1.18) (1.34) Group EPS (cents) (1.53) (2.26) Group Net Income ($m) 7.62 8.17 Operating Expenses ($m) 9.87 11.39 Direct Net Interest Margin 101bps 132bps Group Net Interest Margin 92bps 114bps Capital Ade