Liberty Financial Group Ltd · ASX:LFG
Liberty Financial — H1 2022 Earnings Presentation
36 slides from Liberty Financial's earnings presentation, Feb 28, 2022
Slide 1: Liberty Financial Group Half Year Results
Click to edit Master text styles Liberty Financial Group Half Year Results 28 FEBRUARY 2022
Slide 2: Presenting today
Presenting today… Click to edit Master text styles James Boyle Peter Riedel Chief Executive Officer Chief Financial Officer
Slide 3: Agenda
Agenda Click to edit Master text styles 01 Highlights 02 Results Analysis 03 Business Update 04 Outlook 05 Summary 06 Questions
Slide 4: Highlights
Click to edit Master text styles 01 Highlights
Slide 5: Highlights
Highlights Click to edit Master text styles Record loan originations with portfolio growth Increased NIM against industry trend % Stable cost to income ratio Stronger balance sheet with 22% ROE COVID portfolio risk exposure managed effectively Customer experience improvements through digitisation Aw
Slide 6: Financial Highlights
Financial Highlights Click to edit Master text styles % Underlying NPATA Net revenue NIM $122.4m ($117.7m) $324.9m ($303.0) 3.14% (3.07%) +4% +7% +7bps BDD Cost to income Underlying ROA -1bps (0bps) 21.9% (21.4%) 2.0% (2.0%) -1bps +50bps Stable *Balances represent: 1H22 (1H21) change between the per
Slide 7: Business Highlights
Business Highlights Click to edit Master text styles Average financial assets New assets originated COVID arrangements $12.4b ($11.9b) $2.8b ($2.0b) $84m ($262m) +4% +44% -68% FTE Staff Broker NPS Customer NPS 501 (454) 83 (75) 63 (54) +10% +11% +17% *Balances represent: 1H22 (1H21) % change between
Slide 8: Results Analysis
Click to edit Master text styles 02 Results Analysis
Slide 9: Profit Performance
Profit Performance Underlying NPATA ($m) Statutory NPATA ($m) Click to edit Master text styles $122.4 $122.4 $117.7 $108.4 $108.4 $28.8 $88.9 $88.9 1H21 2H21 1H22 1H21 2H21 1H22 Growth in underlying NPATA One-time IPO costs explains difference between 1H21 • +38% compared to 1H21 or +4% excluding im
Slide 10: Profit Drivers
Profit Drivers Total Revenue ($m) BDD (bps) Click to edit Master $440.6 text styles $433.1 Total revenue growth +5% (1H22 v 1 Consistent period results as realised $419.9 2H21) and +2% (1H22 v 1H21) losses covered by prior provisions Growth driven by increased average 0 -1 and no change in collectiv
Slide 11: Revenue
Revenue Average Assets ($b) Lending Income ($m) Click to edit Master $12.4 text styles $37 $38 Average asset growth +2% (1H22 v Lending income stable 1H22 v 1H21 $12.1 2H21) and +4% (1H22 v 1H21) Reduction in 2H21 as increasing loan $11.9 $32 New financial asset origination life spreads fee income o
Slide 12: Funding
Funding Cost of Funds Click to edit Master text styles 2.18% Total Financing ($b) 2.04% 12.2 (0.9) 1.3 12.6 1.85% 1H21 2H21 1H22 Jun-21 Term Issues W'sale Mov't Dec-21 Reduction in average 1M BBSW from 7bps in 1H21 to 1bps in Obtained $2.5b new funding in 1H22 2H21 and 1H22. Wholesale funding limit
Slide 13: BDD
BDD 1H21 (0 bps) 1H22 (-1 bps) Click to edit Master text styles 6 11 5 3 -9 -1 -14 -1 Realised Specific Specific Collective Realised Specific Specific Collective Loss Provision Provision Provision Loss Provision Provision Provision (Release) (Increase) (Release) (Increase) 2H21 (1 bps) 3 3 1H22 BDD
Slide 14: Loss Provisions
Loss Provisions Provisions by Nature Portfolio by Stage Collective Provision ($m) Click($m) to edit Master text styles Specific provisions at Dec-21 ($12m) by Stage ($m) $77 $75 lower than prior periods with $12,281 $12,487 $65 discharge of one significant loan $12,019 $54 $54 $53 Collective provisi
Slide 15: Cost to Income
Cost to Income $m 1H21 2H21 1H22 Click to edit Master text styles Growth in gross fees and commission expense Fees and commissions (gross) 106.3 99.9 116.1 largely from higher loan origination in aggregation networks Net fees and commissions increased to $12.9m in 1H22 (v $11.2m 1H21) Operating expe
Slide 16: Financial Position
Financial Position $m Jun-21 Dec-21 Click to edit Master text styles Stable balance sheet and leverage Cash 604 769 Investment grade rating BBB- (positive outlook) Financial assets 12,239 12,463 affirmed following analysis of FY21 results Annualised ROE 22% with modest leverage Loans to related part
Slide 17: Business Update
Click to edit Master text styles 03 Business Update
Slide 18: Business Update
Business Update Click to edit Master text styles % Record loan originations with portfolio growth Group NIM increase counter to trend Residential activity increase maintaining portfolio Renewal of New Zealand management Secured ongoing growth supported by SME Secured continuing work on refreshed Mot
Slide 19: Segment Loan Origination
Segment Loan Origination Residential ($m) Secured ($m) Click to edit Master $2,029 text styles $684 Continued growth in new residential Continued growth in new SME loan loan origination given strong origination as small business $1,583 demand for credit $454 recovers from COVID lockdown $1,481 $390
Slide 20: Segment Loan Portfolio
Segment Loan Portfolio Residential ($m) Secured ($m) Click to edit Master $8,538 $8,527 text styles $3,504 $8,400 Consistent portfolio given higher $3,232 $3,318 Continued growth in Secured loan than trend discharges and portfolio amortisation Steady discharges and amortisation 1H21 2H21 1H22 1H21 2
Slide 21: NIM Industry Analysis
NIM Industry Analysis NIM (%) 3.14% Click to edit Master text styles Premium NIM notwithstanding cost of funds 1.92% 1.91% disadvantage 1.64% 1.80% 1.57% NIM expansion despite market led price competition Asset mix diversification strategy supportive of Liberty Bank 1 Bank 2 Bank 3 Bank 4 Bank 5 NIM
Slide 22: COVID Payment Arrangements
COVID Payment Arrangements COVID impacted customers making +30 day delinquency (%) Click to edit Master text partial styles ($m) payments 3.92% 262 2.71% 232 2.10% 84 84 73 74 29 11 10 1H21 2H21 1H22 1H21 2H21 1H22 Material reduction in customers impacted by COVID between Delinquency measures mirror
Slide 23: Outlook
Click to edit Master text styles 04 Outlook
Slide 24: Outlook
Outlook Click to edit Master text styles Economic indicators support slower credit growth Refinance activity to continue at likely slower rate Reducing customer COVID support needed % Reducing borrowing cost should support NIM Launch of expanded auto finance solutions Continue investment in improvin
Slide 25: Summary
Click to edit Master text styles 05 Summary
Slide 26: Summary
Summary Click to edit Master text styles Measured growth in financial asset portfolio Diversity of customer solutions adds business value % NIM expansion contrary to industry trend Continued growth in earnings Strong liquidity and capital position to support growth Customer service focussed Retain d
Slide 27: Questions
Click to edit Master text styles 06 Questions
Slide 28: Appendix
Click to edit Master text styles Appendix
Slide 29: Who is LFG?
Who is LFG? Click to edit Master text styles Liberty Financial Durable Business Model Diversified Portfolio Started 1997 and only investment Advanced risk-management grade non-bank (BBB-/positive/A-3) capabilities Pioneered specialty finance industry Proprietary technology supports in Australia and
Slide 30: Products and Services
Products and Services Residential Finance Financial Services Australian mortgages Personal loans Click to edit Master text styles • Personal loans in Australia • Prime and custom lending for residential owner occupier and investment properties SME loans • SME loans in Australia New Zealand mortgages
Slide 31: Segment Performance
Segment Performance Portfolio Net Contribution 2% Click to edit2% 2% Master text styles 3% 3% 6% 9% 8% 8% 9% 26% 27% 27% 27% 28% 41% 45% 44% 44% 43% 72% 71% 71% 70% 69% 50% 49% 47% 48% 48% 1H20 2H20 1H21 2H21 1H22 1H20 2H20 1H21 2H21 1H22 Net Revenue Relative segment portfolio mix continues its traj
Slide 32: Profit or Loss
Profit or Loss $000 1H21 1H22 Click to edit Master text styles Interest income 313,956 311,660 Other income 119,179 128,957 Total revenue 433,135 440,617 Finance expense (236,440) (231,831) Bad and doubtful debts 260 1,685 Personnel expenses (56,701) (42,356) Other expenses (46,550) (34,851) Profit
Slide 33: Reconciliation Statutory to Pro-Forma
Reconciliation Statutory to Pro-Forma Click to edit Master text styles $m HY21 HY22 Statutory NPAT 83.0 116.5 IP Amortisation 5.9 5.9 Statutory NPATA 88.9 122.4 Non-recurring personnel costs 20.1 - IPO offer costs 12.4 - Tax effect of adjustments (3.7) - Adjustments - - Underlying NPATA 117.7 122.4
Slide 34: Balance Sheet
Balance Sheet $000 Jun-21 Dec-21 Cash and cash equivalents 603,869 769,011 Click to edit Master text styles Financial assets 12,239,391 12,463,319 Intangible assets 288,987 282,871 Loans to related parties 157,212 115,349 Other assets 277,708 313,219 Total assets 13,567,167 13,943,769 Financing (12,
Slide 35: Disclaimer
Disclaimer The information provided in this presentation and any information supplied in connection with this No offer of securities presentation (“Presentation”) has been prepared by Liberty Financial Group Limited (ACN 125 611 574) This Presentation is not, and does not constitute, an offer to sel
Slide 36: Thank you
Click to edit Master text styles Thank you
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