Bsp Financial Group Ltd. · ASX:BFL
Bsp Financial — 1H-2023 Earnings Presentation
24 slides from Bsp Financial's earnings presentation, August 2023
Slide 1: Investor Presentation 1H-2023
Investor Presentation 1H-2023 Mark T. Robinson BSP Financial Group Limited [ARBN: 649 704 656, Incorporated in Papua New Guinea] BSP Classification: External Confidential
Slide 2: Disclaimer
Disclaimer NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR to take any action, whether in or out of the ordinary course of business, which executed, and subject to such limitations as may be provided in such INTO THE UNITED STATES the Company in its sole discretion deems necessary
Slide 3: South Pacific market leader
South Pacific market leader 25.5m per month transactions ~ 3.5m Customer accounts 125 branches Largest network K14.9b [A$6.1b] In net lending K35.1b [A$14.4b] In total assets K6.1b on PNGX [A$2.6b on ASX] Market capitalisation 1 1 Market capitalisation values based on last price as at 17/08/23 on AS
Slide 4: 1H-23 results
1H-23 results Net Profit After Tax 1H-23 vs 1H-23 1H-22 K427.2m 1H-22 … 7.6% ↑ from 1H-2022 Net profit after tax [Km] 427.2 397.2 +7.6% Cost-to-income ratio [%] 38.1 36.5 +160bps Earnings per share Earnings per share [toea] 91.4 85.0 +7.6% K0.91 PNGX market capitalisation1 [Kb] 6.1 5.8 +5.2% … 7.6%
Slide 5: 1H-2023 Group Financial Performance
1H-2023 Group Financial Performance BSP Classification: External Confidential
Slide 6: Operating profit trend
Operating profit trend INCOME OPERATING EXPENSE OPERATING PROFIT BEFORE IMPAIRMENTS AND TAXES [Km] +4.2% [Km] 1H-23 VS 1H-22 [Km] +8.7% +1.6% 1,341.1 510.9 1,287.4 470.2 441.9 1,143.8 A$209m A$548m 1H-21 1H-22 1H-23 1H-21 1H-22 1H-23 OPERATING PERFORMANCE [Km] +1.6% 817.2 830.2 701.9 A$339m 1H-21 1H
Slide 7: Tax impacts
Tax impacts Two material PNG taxation changes occurred in 2022 TAX IMPACTS ON NPAT and 2023. [Km] ● 2022 – payment of the -8.9% K190m additional company tax (ACT) ● 2023 – increase in tax rates for commercial banks from 30% to 45%. Adjusting for the impacts of the above taxes, the Group NPAT reduced
Slide 8: Credit quality
Credit quality Impairment expenses increased by K98.8m off a 10 YEAR TREND – IMPAIRMENT EXPENSE TO GROSS LOANS [%] low 1H-22 base, due to post 0.80% COVID-19 provision releases 0.50% in 2022. 0.46% 0.49% 0.37% 0.28% 0.28% 0.37% 0.44% 1H-23 impairment expense -0.14% as a percentage of gross 1H-14 1H-
Slide 9: Balance sheet
Balance sheet NET LOANS TOTAL ASSETS +8.3% +11.6% [Kb] [Kb] CAGR CAGR 14.9 4.1% 35.1 12.1% 13.8 31.5 13.4 28.9 A$14.4b A$6.1b 1H-21 1H-22 1H-23 1H-21 1H-22 1H-23 DEPOSITS DEPOSIT MIX [Kb] +13.1% [Kb] Demand deposits Term deposits CAGR 3.0 CAGR 28.4 2.7 3.2 25.1 13.3% 25.4 -7.5% 23.0 22.4 19.8 17.2%
Slide 10: Key ratios
Key ratios COST TO INCOME RETURN ON AVERAGE EQUITY RETURN ON AVERAGE ASSETS [%] [Annualised, %] [Annualised, %] +160bps -10bps -10bps 38.6% 38.1% 3.2% 26.4% 36.5% 21.9% 21.8% 2.6% 2.5% 1H-21 1H-22 1H-23 1H-21 1H-22 1H-23 1H-21 1H-22 1H-23 CAPITAL ADEQUACY1 PROVISIONS TO LOANS NET NPL TO LOANS [%] [%
Slide 11: Income trends
Income trends Income increased by 4.2% to NET INTEREST INCOME FX INCOME K1.3b in 1H-23. [Km] [Km] ● Despite loan growth of +1.6% +14.7% 8.3%, net interest income 875.5 889.4 201.7 775.2 growth was lower by 154.1 175.8 1.6% due to lower yields from government securities. 1H-21 1H-22 1H-23 1H-21 1H-22
Slide 12: Expenditure trends
Expenditure trends Expenditure increased by 8.6% to K510.9m in 1H-23, STAFF COSTS TECHNOLOGY COSTS driven by: [Km] [Km] +36.3% ● Technology – higher +11.7% software, maintenance 251.1 102.6 224.8 and volume related 206.0 75.3 69.2 channel costs. ● Staff – additional staff in compliance and risk, 1H-
Slide 13: Market position and loan portfolio composition
Market position and loan portfolio composition LOANS MARKET SHARE DEPOSIT MARKET SHARE [1H-2023] Rank [1H-2023] Rank PNG 66% #1 PNG 66% #1 Solomon Islands 45% #1 Cook Islands 53% #1 Tonga 36% #1 Solomon Islands 49% #1 Cook Islands 36% #2 Tonga 45% #1 Samoa 30% #1 Samoa 40% #1 Fiji 26% #1 Fiji 23% #2
Slide 14: 1H-2023 Group Operational Performance
1H-2023 Group Operational Performance BSP Classification: External Confidential
Slide 15: Moving customers to digital channels
Moving customers to digital channels BSP Average monthly transactions 1H-23 EFTPOS 8% Transactions via Branches 500+ 18% Transactions 15% 4.6m Terminals via EFTPOS ATM Mobile & 14.9m 15,000+ EFTPOS 19% Online All Payment Channels Operational 18% Transactions via 56% 7% 2.2m Branch & Agency ATMs Digi
Slide 16: Supporting our communities
Supporting our communities ... Our contribution in 1H-23 SPONSORSHIPS K1.8m DONATIONS K616k COMMUNITY PROJECTS K600k 16 INVESTOR PRESENTATION BSP Classification: 1H-23 External Confidential
Slide 17: Shareholder returns and growth outlook
Shareholder returns and growth outlook BSP Classification: External Confidential
Slide 18: Market capitalisation
Market capitalisation JANUARY 2022 JANUARY 2023 AUGUST 2023 +5.2% PNGX K5.7 billion K5.8 billion K6.1 billion … K12.25 on 3/1/22 … K12.41 on 3/1/23 … K13.05 on 17/8/23 +14.7% ASX $2.0 billion $2.3 billion $2.6 billion … $4.27 on 3/1/22 … $4.90 on 3/1/23 … $5.62 on 17/8/23 INVESTOR PRESENTATION BSP C
Slide 19: Dividends
Dividends SHAREHOLDER RETURNS SUMMARY 1H-2021 1H-2022 1H-2023 Change Interim dividend [K] 0.39 0.34 0.37 + 8.8% EPS [K] 0.96 0.85 0.91 + 7.5% Dividend yield1 (PNGX) 11.7% 13.5% 14.1% + 60bps Dividend yield1 (ASX) 9.9% 13.4% 15.2% + 180bps 1 Dividend yield was calculated on 2022 Final (K1.40) and 202
Slide 20: Growth outlook
Growth outlook K REAL GROSS DOMESTIC PRODUCT 2021 2022e 2023f 2024f Australia 5.2% 3.7% 1.6% 1.7% New Zealand 6.1% 2.4% 1.1% 0.9% Fiji -5.1% 14.5% 7.0% 5.0% Papua New Guinea 0.1% 4.5% 3.7% 4.4% Samoa -7.1% -6.0% 5.0% 3.6% Vanuatu 0.6% 1.9% 3.5% 3.6% Solomon Islands -0.6% -4.1% 2.5% 2.4% Tonga -2.7%
Slide 21: PNG resource project investment
PNG resource project investment Project / Value Project Partners K Construction K Early 2024 K45.0b Production 2027 – 2028 Late 2024 K18.2b Production 2027 2028 K39.2b Production 2031 Pasca A K5.6b TBA 21 INVESTOR PRESENTATION BSP Classification: 1H-23 External Confidential
Slide 22: 1H-2023 Closing
1H-2023 Closing BSP Classification: External Confidential
Slide 23: Closing remarks
Closing remarks Leading South Pacific brand … with origins dating back to 1957 Payments leader … moving customers to digital channels Continued strong profits and shareholder returns … interim dividend increasing by 8.8% BSP’s capital base remains solid, with total capital adequacy of 22.5% Attracti
Slide 24: Thank you
THANK YOU We welcome your questions 24 INVESTOR PRESENTATION BSP Classification: 1H-23 External Confidential