Slide 1: Full Year Results - 31 December 2017
Wkin ON, as LL February 2018 together it’s possible a a Kina Securities Ltd Full Year Results - 31 December 2017
Slide 2: 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 3: Highlights
Highlights For personal use only Statutory profit of PGK23.0m. Underlying profit of PGK30.0m. Final dividend of PGK10.0 toea/AUD4.0 cents per share. Full year dividend to PGK15.00 toea/AUD6.0 cents per share. Restored USD correspondent banking arrangement. Nasfund Fund Administration progressing. T1
Slide 4: Solid underlying profit performance
Solid underlying profit performance For personal use only Statutory NPAT (PGK$m) Underlying Profit (PGK$m) 21 20 20 21 20 20 PGK'm PGK'm 10 3 Jun 16 (HY) Dec 16 (HY) Jun 17 (HY) Dec 17 (HY) Jun 16 (HY) Dec 16 (HY) Jun 17 (HY) Dec 17 (HY) Dividend per share 10 10 10 5 4 4 4 2 Jun 16 (HY) Dec 16 (HY)
Slide 5: Well managed margins
Well managed margins For personal use only 45 8.4% 8.3% 39 40 8.2% 8.0% 34 34 35 31 8.0% 30 7.8% 25 PGK'm 7.6% 7.6% 20 7.4% 15 7.3% 7.2% 10 5 7.0% - 6.8% Jun 16 (HY) Dec 16 (FY) Jun 17 (HY) Dec 17 (FY) Net Interest Income {LHS} Net interest margin {RHS} Focus on margin improvement • Net interest mar
Slide 6: Key financial ratios at a glance
Key financial ratios at a glance For personal use only Cost to Income Ratio (excludes loan Loans to deposit ratio provisions and lease termination) 72.3% 72.0% 67.8% 48.3% 68.9% 60.6% 47.5% 64.4% Jun 16 (HY) Dec 16 (FY) June 17 (HY) Dec 17 (FY) Jun 16 (HY) Dec 16 (FY) June 17 (HY) Dec 17 (FY) Return
Slide 7: Foreign exchange revenue recovery
Foreign exchange revenue recovery For personal use only 13 8 PGK'm 5 2 Jun 16 (HY) Dec 16 (HY) Jun 17 (HY) Dec 17 (HY) The process involved in securing a US Dollar corresponding Bank has had significant impact on FX Income in H1 2017 7
Slide 8: Driving loan book growth with new products and services
Driving loan book growth with new products and services For personal use only Lending 2016 Lending 2017 Esi loan 4% Esi loan Housing Loan Overdraft 4% 10% Housing Loan 16% 17% Overdraft, 10% Asset Financing Asset Financing 2% 2% Investment Investment Property Loan Property Loan, 3% 0% Term Loans, Te
Slide 9: Grew deposits to more than PGK1b while managing cost of funds
Grew deposits to more than PGK1b while managing cost of funds For personal use only Deposits 2016 Deposits 2017 12 months 24 months 0.2% 24 months 0.4% 3% 12 months 9% 6 months 30% On Call On Call 41% 6 months 41% 22% 1-3 months 28% 1-3 months 25% Total deposits PGK958m Total deposits PGK1.014b 9
Slide 10: Strong balance sheet
Strong balance sheet For personal use only Total Risk Based Capital (%) Leverage ratio (%) 30% 30% 16% 16% 28% 28% 14% 13% 12% 12% 6% 6% Jun 16 (HY) Dec 16 (FY) Jun 17 (HY) Dec 17 (FY) Jun 16 (HY) Dec 16 (FY) Jun 17 (HY) Dec 17 (FY) Capital adequacy: T1 + T2 Leverage Ratio BPNG minimum leverage rati
Slide 11: Focus on costs
Focus on costs 19.3 For personal use only 16.1 14.6 13.8 PGK,m 8.8 8.6 8.2 6.6 4.7 4.8 5.0 3.5 1.3 1.7 1.1 1.5 0.7 1.0 0.6 0.3 0.3 0.4 0.1 (0.1) Administration Staff Occupancy Other Operating Board of Directors cost Investor Relationship expenses Jun 16 (HY) Dec 16 (HY) Jun 17 (HY) Dec 17 (HY) Cost
Slide 12: Balancing growth and returns
Balancing growth and returns For personal use only 1,200 7.0% 1,014 959 965 6.0% 1,000 5.8% 5.5% 4.7% 5.0% 800 4.8% 4.5% 733 4.4% 685 634 4.0% PGK' m 605 600 3.5% 3.0% 3.0% 437 400 2.0% 200 1.0% - 0.0% Jun 16 (HY) Dec 16 (FY) Jun 17 (HY) Dec 17 (FY) Kina Loan Book Kina Deposit Book Kina Lending Mark
Slide 13: Sound credit quality – low impairments
Sound credit quality – low impairments For personal use only 5.7% 5.4% 4.9% 4.2% 3.3% 3.0% 2.7% 2.3% 1.9% 1.8% 1.8% 1.8%1.8% 1.4% 1.3% 1.1% 0.6% 0.5% 0.5% 0.4% 0.3%0.4% 0.2% 0.2% Loan impairment expenseNon-performing loans and - 60 day arrears - 90 day arrears - Gross non-performing Total provision
Slide 14: Divisional performance highlights – Kina Bank
Divisional performance highlights Kina Bank For personal use only Disciplined balance sheet growth. Gross loan book grew by 21% to PGK746m. Deposit growth of 6% to PGK1,014m (moderated growth due to focused effort to reduce cost of funds). Net interest income of PGK72.4m, up 11%. Interest income on
Slide 15: Divisional performance highlights – Kina Wealth Management
Divisional performance highlights Kina Wealth Management For personal use only Growth in FUM and FUA – up 10% to PGK6.9b and 60% to PGK11b respectively. Key highlight was Kina’s Funds Administration’s success in signing the agreement to provide services to PNG’s largest superannuation fund Nasfund.
Slide 16: Economy
Economy For personal use only PNG’s economy grew by an estimated 2.2% in 2017 (2018 budget tabled in Parliament on November 28). Overall GDP is estimated to increase by 2.4% in 2018. Non-mineral GDP growth is expected to pick up from 1.9% to 3.5% over 2018 driven by policies to support the agricultu
Slide 17: Vision, purpose, values
Vison, purpose, values For personal use only Vision Purpose Values To be the best Our people, • Integrity dynamic, progressive customers and communities are • Trust and accessible empowered to • Fairness financial services have financial company in Papua independence and • Respect New Guinea securit
Slide 18: Delivering on 2017 strategic priorities
Delivering on 2017 strategic priorities For personal use only Ongoing delivery of profitable, quality lending growth at 21%. Achieving continued growth in the low cost deposit base thereby reducing cost of funds. Maintaining a strong prudential position and conservative capital adequacy. Maintain a
Slide 19: Strategic priorities 2018
Strategic priorities 2018 For personal use only PRIORITIES RESULTS partnerships Life Long customer relationships. Strong valued strategic partnerships. ”together it possible” digital Clarity in offering that surpasses anything in the market today, Connect anytime, anywhere, anyhow. with the best use
Slide 20: Digital
Digital For personal use only Overcoming PNG’s unique geographic and demographic challenges; enabling customers to connect anytime, anywhere and anyhow. Significant upgrade to the core banking system implemented in October 2017. Investing in new digital products and services. Released personal and c
Slide 21: Knowledge
Knowledge For personal use only KEY INITIATIVES: • Implemented new Online Learning Management System (LMS) with 12 Compliance & Regulatory courses produced in 2017. • Achieved 100% completion rate for all courses (e.g AML & KYC, Cyber Security, Whistle-blower, Social Media, Workplace Harassment & Bu
Slide 22: Responsible
Responsible For personal use only KEY INITIATIVES: • Supported and promoted Crocodile Prize Competition for aspiring writers and PNG illustrators. • Supported the Daffodil Corporate Cup Golf Challenge - an initiative of Cancer Foundation PNG in partnership with Oil Search Foundation. • Staff raised
Slide 23: Brand
Brand For personal use only KEY INITIATIVES: • Our brand sets us apart in the market. • In 2015, launched new distinctive Kina brand reflecting our proud local roots and positioning us to support the future prosperity of PNG and its people. • Launched new concept branch showcasing our brand at Visio
Slide 24: Partnerships
Partnerships For personal use only KEY INITIATIVES: • Our brand slogan - “together it’s possible” - reinforces that strong relationships are the cornerstone of the Kina brand. • Signed successful agreement to become PNG's first bank to sign a trade finance agreement with the Asian Development Bank (
Slide 25: Kina's comparative advantage
Kina’s comparative advantage For personal use only STRONG STRATEGIC POSITION Capital SUSTAINABILITY • Well capitalised (exceeds BPNG • Seeking to provide • Largest diversified financial capital adequacy requirements) a differentiated alternative services provider in Papua • Capital adequacy (T1 + T2
Slide 26: Actively supporting PNG
Actively supporting PNG For personal use only Backing PNG Papua PNG prosperity PNG Our New economy builder tax payer workforce Guinea Providing loans for Supporting working PNG people to own and retired PNG their homes, grow people through their business direct Kina share or enhance their ownership