Slide 1: Amended FY2018 Results Investor Presentation cover letter
11 March 2019 For personal use only ASX Market Announcements Office POMSoX Market Announcements Office ASX Limited Port Moresby Stock Exchange Limited 20 Bridge Street P.O Box 1531, Port Moresby SYDNEY NSW 2000 National Capital District, Papua New Guinea Dear Sir/Madam Amended FY2018 Results Investo
Slide 2: Full Year Results
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Slide 3: Important notice and disclaimer
Important notice and disclaimer You must read this notice before reading or making any use of this document or any information contained in this document. By accepting this For personal use only document, you agree to the following terms and conditions, including any modifications to them. Confident
Slide 4: Financial Results
Financial Results For personal use only • Revenue PGK 162m, up 45% from 2017 • Net Interest Income grew by 21% • NPAT PGK 48.1, up 109% on 2017 • Return on Equity up from 8.9% to 18.3% • Earnings per Share up 109% to PGK 29.3 toea • Final Dividend AUD 5.0 cents per share or PGK 12.1 toea 3
Slide 5: Cost Management
Cost Management For personal use only • Reduction in cost to income ratio from 58% to 54% achieved largely through higher revenue growth and strong cost containment in H218. • Tight management of discretionary expenses • Capex and Integration Capex budget tightly controlled and Board risk appetite f
Slide 6: Business Growth
Business Growth For personal use only • FX income restored and grew 373% to PGK 34.2m • Customer numbers up by 25% to 20,625 • Deposits grew by 29% to PGK 1.31b • Loans and Advances to customers grew by 20% to PGK 851.7m • Funds under Management grew by PGK 600m to PGK 7.5b • Funds under Administrat
Slide 7: Risk Management
Risk Management For personal use only • Capital adequacy maintained at 28.9% • Sound loan book – compliant with IFRS9 – total provision 2.1% of GLA • Arrears 2.2% & Loan Impairment expense 0.58% of GLA • Strategic partnership proposed for provision of Microfinance • NIM (annualized) 7.6% • New lendi
Slide 8: Strategic Milestones
Strategic Milestones For personal use only • Announced transformational acquisition of ANZ PNG’s retail, SME and Commercial businesses • Successfully onboarding of NASFUND funds administration – total members 750,000 • Resolution of escrow shareholding – FU Shan Investments (Hong Kong) Ltd ceased to
Slide 9: Strong Growth
Strong Growth For personal use only Revenue (PGK’m) NPAT (PGK’m) 47 42 43 27.5 38 33 27 20.5 20.5 20.0 20.6 22 20 18 18 18 13 14 14 14 13 9 8 9 10 10 9 5 2 Jun16 (HY) Dec16 (HY) Jun17 (HY) Dec17 (HY) Jun18 (HY) Dec18 (HY) 3.0 Interest on Loans Interest on Investments Jun16 (HY) Dec16 Jun17 (HY) Dec1
Slide 10: Improved Productivity
Improved Productivity For personal use only Cost to income Return on equity 18.3% 67.8% 16.2% 15.9% 16.1% 54.9% 58.2% 48.3% 46.7% 50.2% 8.0% 8.9% Jun16 Dec16 Jun17 Dec17 Jun18 Dec18 Jun16 (HY) Dec16 (HY) Jun17 (HY) Dec17 (HY) Jun18 (HY) Dec18 (HY) (HY ) (HY ) (HY ) (HY ) (HY ) (HY ) NIM K46m FX inco
Slide 11: Balance sheet in good shape
Balance sheet in good shape Loans 17 (K732m) Loans 18 (K852m) For personal use only Esi Esi loan Overdraft Overdraf 10% t Housing Loan 16% Housing Loan 15% Asset Financing Asset Financing 3% 2% Investment Property Loan Term Loans Investment 3% 69% Property Loan Term Loans 65% Deposits 17 (K1019m) De
Slide 12: Capital management
Capital management For personal use only Capital adequacy Leverage ratio 30% 30% 17% 28% 28% 29% 29% 16% 16% 14% 14% 13% 12% 12% 12% 12% 12% 12% 6% 6% 6% 6% 6% 6% Jun16 (HY) Dec16 (FY) Jun17 (HY) Dec17 (FY) Jun18 (HY) Dec18 (FY) Jun16 (HY) Dec16 (FY) Jun17 (HY) Dec17 (FY) Jun18 (HY) Dec18 (FY) Capit
Slide 13: Asset quality maintained with growth
Asset quality maintained with growth Structure of loan book For personal use only 5.7% 5.4% 4.9% 4.2% 3.3% 3.0% 2.7% 2.4% 2.3% 2.2% 2.1% 2.1% 1.9% 1.8% 1.8% 1.8% 1.8% 1.4% 1.4% 1.3% 1.1% 1.0% 0.8% 0.6% 0.6% 0.6% 0.5% 0.5% 0.5% 0.4% 0.4% 0.3% 0.2% 0.2% 0.2% 0.1% Loan impairment expense Non-performing
Slide 14: Concentration risk well managed
Concentration risk well managed For personal use only 249 247 208 200 182 154 155 147 133 81 84 73 50 36 40 31 27 21 22 16 15 12 15 4 3 6 6 2 4 4 5 1 - - - - - - 1 Dec-16 Dec-17 Dec-18 Agriculture, Forestry & Fishing Min ing Ma nufacturing Electrical, Gas & Water Building and Construction Wh olesale
Slide 15: New growth with digital strategy
New growth with digital strategy For personal use only Customer Number Growth 20,625 18442 17271 15101 13346 12340 Jun16 (HY) Dec16 (HY) Jun17 (HY) Dec17 (HY) Jun18 (HY) Dec18 (HY) 14
Slide 16: Market share gains
Market share gains For personal use only Market share percentage Market share percentage – Lending (PGK’m) – Deposits (PGK’m) 6.5% 6.4% 6.0% 5.8% 5.5% 5.3% 4.8% 4.7% 4.4% 4.5% 3.5% 3.0% 1,098 1,316 1,019 786 732 685 852 605 959 965 437 634 Jun 16 (HY) Dec 16 (FY) Jun 17 (HY) Dec 17 (FY) Jun 18 (HY)
Slide 17: Rebalancing deposits to low cost funds
Rebalancing deposits to low cost funds (PGK’m) For personal use only 661 650 602 585 562 396 372 323 316 302 298 286 251 93 103 60 25 24 18 21 18 19 0 0 Jun16 (HY) Dec16 (HY) Jun17 (HY) Dec17 (HY) Jun18 (HY) Dec18 (HY) Fixed Term Cash Management Accounts Curre nt Accounts Savings Accounts 16
Slide 18: Wealth management – stable performance
Wealth management – stable performance For personal use only Funds under Administration (PGK’b) Funds under Management (PGK’b) Member numbers in ‘000s 708 717 750 11.72 11.38 10.51 7.14 7.46 6.22 6.97 5.61 6.60 5.14 5.83 6.26 177 166 170 Jun16 (HY) Dec16 Jun17 (HY) Dec17 Jun18 (HY) Dec18 (HY ) (HY )
Slide 19: PNG Update - Economy
PNG Update - Economy For personal use only • Challenging year due to the tight supply of foreign exchange and lower economic activity – FX markets will normalise • Successful issue of PNG’s first sovereign bond raising US$500million • Exchange rate forecast will be flat and stable • Stable Growth in
Slide 20: PNG Update – APEC 2018
PNG Update – APEC 2018 For personal use only • Successful event had a positive impact • Several billion dollar partnerships announced including: - Trilateral partnership between Australia, USA and Japan for infrastructure development across the Indo-Pacific region - US$1.7bn partnership between Aust
Slide 21: 2019 Priorities: a transformational year ahead
2019 Priorities: a transformational year ahead For personal use only • Overall ANZ Integration Program is progressing well and on target for 30 Sep 2019 • Formal Regulatory approval from BPNG now to hand • Significant internal digital transformation automating systems and processes • Implementation
Slide 22: Continue to build momentum against organic growth plan
Continue to build momentum against organic growth plan For personal use only • New personal banking division – focus on new customer growth and conversion to lead bank • Targeting home lending for high growth in 2019 • Forecasting above 20% growth for business lending • Expanding Treasury, FX and Co