Bnk Banking Corporation Limited · ASX:BBC
Bnk Banking — Investor Presentation (September 2020)
31 slides from Bnk Banking's investor presentation, Sep 23, 2020
Slide 1: BNK Banking Corporation Investor Presentation
BNK Banking Corporation Investor Presentation September 2020
Slide 2: 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 3: Our Purpose
Our Purpose BNK Banking Corporation • BNK Banking Corp provides a broad range of consumer and business financial solutions through three key divisions (1) Who are we aggregation (2) non-bank lending (3) banking • BNK was established in 1982 as the Goldfields Credit Union. The Company was listed on t
Slide 4: Finsure
Finsure B2B Platform for mortgage brokers • 1,740 mortgage brokers up 4% YoY • $15.6b loan settlements in FY20 up 23% YoY • Total loan book in excess of $45.5b up 19% YoY • Panel of 65+ lenders (Residential, Commercial, Asset & Private Lending) Expanding Revenue from a Diverse Base • Aggregation fee
Slide 5: Better Choice
Better Choice B2B2C Non-Bank Lender • Distribution via approx. 6,000 accredited brokers • $447m loans settled in FY20 • Total loan book $2.3b Flexible Funding Lines • Strategic shift from traditional ‘off balance’ sheet mortgage manager to non-bank lender • 6 different wholesale funding lines • Ware
Slide 6: BNK Bank
BNK Bank APRA-regulated ADI (bank) • $285m of on-balance sheet loans up 33% YoY • $48m of off-balance sheet loans • $346m total deposits up 20.4% YoY • Australian Government Guaranteed Deposits Migrating towards a national, digital bank • Finsure and Better Choice distribution now shifting customer
Slide 7: Bringing it all together
Bringing it all together Group synergies 1,700+ 6,000+ Brokers Brokers* Finsure is a conduit that connects over 1,700 brokers with over 60 lenders. Brokers originate loans through the Finsure platform and Finsure derives revenue from commissions and value-added services. Better Choice is a non-bank
Slide 8: What sets us apart
What sets us apart Competitor comparison Diversified Income BNK Group’s Competitive Advantage BNK Banking Corporation combines flexibility, enterprising flair and SCALE • We are not a neo bank with an unproven business model, we are profitable and fast growing Limited Established • Unrestricted ADI
Slide 9: FY20 Key Highlights
FY20 Key Highlights Proven strategy, now building for scaled growth FY20 Statutory NPAT $5.3m Earnings Per Share (EPS) of 6.14 Group Net Income Growth incl. (Statutory NPAT $5.6m before COVID-19 cents per share NPV related provisions) up 19.5% YoY Up 17% $35.5 Up 47% YoY $5.3 6.14 $30.2 $3.6 5
Slide 10: FY20 Key Highlights
FY20 Key Highlights Proven strategy, now building for scaled growth BNK Bank Loan Book Higher % of low-cost deposit accounts Prudent Loan-Loss Well Capitalised Up 32% improving margins Provision Rate CAR% as at Jun20 $283.6 0.26% 35% $214.3 20% 0.12% 0.12% 21.2% Excl. COVID- 19 overlay FY19 FY20 F
Slide 11: Segment Growth
Aggregation Net Revenue ($m) Segment Growth Wholesale Net Revenue ($m) Bank Net Revenue Segment revenue growth & profitability accelerating ($m) $22.3 $6.5 $6.7 • Highly synergistic operating segments with valuable fast growing $21.6 $4.8 operating segments growing in their own right $3.8 • Finsure
Slide 12: Merger delivering NPAT momentum
Merger delivering NPAT momentum BNK's (previously Goldfields Money) post-merger integration with Finsure is yielding strong results NPAT ($m) 5.3 3.6 Cash NPAT $1.6m Cash NPAT (0.4) (1.0) $(0.8)m FY17 FY18 FY19 FY20 Merger between Goldfields Money Ltd. & Finsure Ltd. 12
Slide 13: FY21 Outlook
FY21 Outlook • Strong starting asset base of $48.1b of total loans – up 18% YoY • Asset base delivers highly predictable recurring revenues and operating leverage • Finsure June 20 run rate volumes indicate >$18b in home loan settlements for FY21 • Strong volume indicates improved flows of loans for
Slide 14: A Compelling Investment Case
A Compelling Investment Case Fast growing with majority Net Income (incl. NPV) of $35.5m in FY20, up 17% YoY (+8% on a pro-forma basis). of business revenue Increase in fee & other income (majority recurring) mix, up from 31% to 33% of all net revenue. recurring Loan growth leveraging Ability to dis
Slide 15: Appendix
Appendix
Slide 16: Profit & Loss Statement
Group ($ m) Aggregat ion Whol esal e Bank FY20 20 1 FY20 19 1 FY20 19PF 2 $ Var. % Var. Gross Revenue Commission Income/ (Exp.) 290.5 187.0 103.5 55% Profit & Loss Statement Int erest Income/ (Exp.) Fees & Ot her Income 10.6 11.5 8.8 9.4 1.9 2.2 21% 23% Tot al Gross Revenue 312.7 20 5.2 231.6 10 7.5
Slide 17: Balance Sheet
Group ($m) FY2020 FY2019 $ Var. % Var. Assets Cash & Equivalents 89.7 97.9 (8.2) (8.4%) NPV Asset 387.2 269.4 117.8 43.7% Loans & Advances 283.6 214.3 69.3 32.3% Balance Sheet Other Assets Total Assets 78.8 839.3 64.5 646.1 14.3 193.2 22.2% 29.9% Liabilities • Strong portfolio growth in Finsure resu
Slide 18: Treasury
Deposit Balance Growth FY19 $400 – FY20 ($m) $224m $350 FY19 FY20 Treasury $300 • Cash and liquid holdings of $90m, with a robust capital adequacy ratio $250 $171m of 21.22% positioned for continued growth. $200 • Overall Deposit balance of $346m, growing by +20.5% YoY and supporting strong lending
Slide 19: Revenue Growth
Revenue Trend ($m ) $40.0 Revenue Growth $35.5m $32.8m • Gross Revenue of $312.7m up 51.9% YoY and 37.3% on a pro $35.0 $30.2m forma basis. Gross Revenue (ex NPV) of $196.9m up 42% YoY and 22.5% on a pro forma basis. $30.0 • Net revenue of $35.5m, up by $5.3m (+17%), or up by $2.7m (+8%) on a pro-fo
Slide 20: Finsure
Brokers (#) 1,740 1,435 1,664 Finsure • Finsure settled a record $15.6b in loans during FY20 up 23% YoY including record quarterly settlement volumes in Q4 of $4.5b. • Finsure’s market share continues to grow through the year recording an all- time monthly record of $1.7b in settlements during June
Slide 21: Broker Market Share Growth
0 100,000 140,000 160,000 20,000 40,000 60,000 80,000 120,000 76,139 1.11% 80,659 1.09% 72,613 1.16% 93,208 1.22% 95,221 1.38% 107,437 2.05% 96,171 2.07% 108,600 4.54% 118,522 4.43% Broker Market Share Growth 121,581 Finsure growth continues to out-perform the market 5.32% 110,093 4.45% 125,289 4.85
Slide 22: Better Choice & BNK
Better Choice & BNK WHAT SETS US APART Better Choice (Wholesale) • Circa 6,000 brokers accredited with Better Choice. Recently added to the PLAN Australia aggregation panel increasing distribution capability. • Strategic shift from traditional ‘off balance’ sheet mortgage manager to non-bank lender
Slide 23: Strong risk management & resilience through COVID-19
Strong risk management & resilience through COVID-19 • BNK has a strong track record of risk management with $0 in write-offs for FY20 and low historical losses with only $139k credit losses for the last 14 years. On Balance Sheet Portfolio Arrears June 2020 • Credit quality has been maintained whil
Slide 24: Improved diversification and scale
Improved diversification and scale FY19 On Balance Sheet ACT Loans • High quality book of residential loans (93%) and SME loans (7%) with low arrears 0% NSW • Loan book growth over FY20 has greatly improved diversification and scale of portfolio 17% NT 0% WA 67% QLD 8% SA # Actual Balance Average We
Slide 25: Strong Lending Growth
Strong Lending Growth Record Finsure settlements and BNK on balance sheet settlements despite challenging conditions Aggregation Settlements ($b) Wholesale Settlements ($m) Bank (On-B/S) Settlements ($m) Total Group Settlements ($b) $129.1 $16.1 $15.6 $578.4 $13.3 $12.7 $12.5 $12.0 $448.3 $385.9 $74
Slide 26: Strong Asset Growth
Strong Asset Growth Delivering double digit portfolio growth and associated recurring revenue growth Aggregation Loan Book ($b) Wholesale Loan Book ($b) Bank Loan Book ($b) Total Group Loan Book ($b) 45.5 48.1 2.34 2.3 0.28 38.10 2.24 40.60 31.80 0.21 34.20 0.17 FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY
Slide 27: Industry recognition
Industry recognition Confirming our place as market leaders Each business unit in our group has received recognition for excelling in their particular channels 2020 Australian Lending Awards 2019 Acquisition International Finance Awards Best Aggregator (Finsure) Best Retail Solutions Provider (BNK)
Slide 28: Board Of Directors
Board Of Directors Extensive credit and risk management expertise 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
Slide 29: Board Of Directors
Board Of Directors Extensive credit and risk management expertise Jon Denovan NON EXECUTIVE DIRECTOR Jon is well known as a leading authority on regulation and compliance for the mortgage industry. In recognition of his contribution to the industry, Jon was made the first honorary member of the Mort
Slide 30: Executive Team
Executive Team Extensive credit and risk management expertise Allan Savins GM - BANKING & WHOLESALE Allan has over 35 years’ experience within the financial services industry and is responsible for Sales & Distribution, Funder Relationships, Lending Activities, Portfolio Funding and Product & Data A
Slide 31: Executive Team
Executive Team Extensive credit and risk management expertise Amber Smith CHIEF OPERATING OFFICER Amber is passionate, dedicated and a customer focused leadership professional with 20 years’ experience in Transformation Management, Business Improvement, Strategy Execution and Project Delivery. She h