Mystate Limited · ASX:MYS
Mystate — H1 2025 Earnings Presentation
32 slides from Mystate's earnings presentation, Feb 18, 2025
Slide 1: 1H25 Results Investor presentation
For personal use only 1H25 Results Investor presentation For the half year ended 31 December 2024 19 February 2025 1
Slide 2: Contents
Contents For personal use only 1 Overview Brett Morgan { Managing Director & CEO 2 Financial results { Gary Dickson Chief Financial Officer 3 Merger update Brett Morgan{ Managing Director & CEO 4 Appendix { 1H25 Additional MyState financial information 2
Slide 3: Overview
Overview For personal use only Brett Morgan Managing Director & CEO 3
Slide 4: Key messages
Key messages For personal use only MyState completes merger with Auswide Bank ● MyState merger with Auswide effective 19 February 2025 ● Estimated cost synergies range of $20m-$25m per annum unchanged; full run rate expected to be achieved by end of FY27 ● Expected to be double-digit earnings accret
Slide 5: MyState 1H25 summary
MyState 1H25 summary Balancing growth and return in a challenging market. Capital strong For personal use only $8.0b $6.1b 7,820 Home loan book Customer deposits New to bank customers acquired +0.3% on pcp +2.2% on pcp +32% over the half 17.0% 15.8 cps 10.5 cps Total capital Underlying earnings per
Slide 6: Delivered on key strategic initiatives
Delivered on key strategic initiatives For personal use only Group Bank Wealth Delivered Business New digital merger with optimisation capability Auswide program ● Significant increase in scale, capital base, ● Retail customer base fully migrated onto ● Operating costs down in an inflationary home l
Slide 7: Financial results
Financial For personal use only results Gary Dickson Chief Financial Officer 7
Slide 8: 1H25 financial overview
1H25 financial overview Metric 1H25 1H24 1H25 v 1H24 Total operating income ($m) 77.0 75.8 1.6% ▲ For personal use only Total operating expenses ($m) 52.7 49.8 5.8% ▲ Core earnings ($m) 1 24.3 26.0 -6.6% ▼ Relative to 1H24: Underlying net profit after tax ($m) 2 17.5 17.5 Steady ● Revenue higher,
Slide 9: Half year NPAT
Half year NPAT Well-managed expenses partially offsetting revenue challenges Net profit after tax ($m) For personal use only 0.4 0.8 0.0 0.0 2.9 1.7 1.6 17.5 Decrease 17.5 15.9 Increase 1H24 Statutory Net interest Other banking Wealth Operating Net bad and Income tax 1H25 Underlying Merger related 1
Slide 10: Operating costs contained in an inflationary environment
Operating costs contained in an inflationary environment ● Operating costs (excluding merger transaction costs) increased by 5.8% ($2.9m) on 1H24, broadly in-line with 1H23 For personal use only ● FTE flat, personnel costs up 6.9% ($1.5m) reflecting higher salaries and variable based remuneration ●
Slide 11: Stable net interest margin
Stable net interest margin ● Net interest margin stable in a challenging environment ● Key themes For personal use only o home loan and deposit price competition o deposit switching to higher rate products o increase in securitisation funding o higher liquid asset holdings ● Exit NIM higher than ave
Slide 12: Quality home loan book
Quality home loan book ● Home loan portfolio steady at $8.0b ● Continued focus on low-risk, owner occupied lending with a LVR <80% Home loan book – 1H 2H Applications For personal use only applications and settlements ($b) ● Run-off remains a sector wide challenge driven by fixed rate maturities Set
Slide 13: Diversified funding mix
Diversified funding mix Funding mix (%) For personal use only ● Customer deposit ratio improved to 69.7% since 30 June 2024 14.4% 16.3% 22.0% 21.7% o growth in transaction account and offset account balances 12.5% 10.9% 8.9% 8.6% o growth in term deposits included some product switching from variabl
Slide 14: Strong capital position
Strong capital position ● MyState remains well capitalised with the total capital ratio up 60 bps to 17.02% ● During the half, capital relief term RMBS and warehouse drawdowns were completed For personal use only ● Interim dividend supported by the organic generation of capital ● Strong capital posi
Slide 15: Interim dividend in line with key merger principles
Interim dividend in line with key merger principles For personal use only Dividend payout ratio based on profit type ● MYS Dividend Policy targets a payout ratio in the range of 60 – 80% of MYS NPAT MergeCo MergeCo ● Key factors the Board considered in determining the 1H25 dividend Dividend MYS Stat
Slide 16: TPT Wealth providing income diversification
TPT Wealth providing income diversification Operating income ($m) 1H24 6.8 For personal use only 1H23 15.4 ● TPT provided $7.2m in fee revenue (up 5.4% on pcp) and income 14.3 7.3 2.7 diversification for the Group 2.6 4.1 5.0 7.4 ● Improved operating efficiency with the cost to income ratio improvin
Slide 17: Merger update
Merger For personal use only update Brett Morgan Managing Director & CEO
Slide 18: Corporate profile
Corporate profile1 MyState Limited is a provider of banking, trustee and wealth management services to c. 272,000 customers across Australia MyState Ratings MyState Bank Auswide Bank through its retail brands – MyState Bank, Auswide Bank, Selfco Limited For personal use only and TPT Wealth MyState l
Slide 19: 1H25 pro forma underlying financials
1H25 pro forma underlying financials The combined entity will have significantly increased scale, a larger capital base, and a more diversified home loan and deposit portfolio, with improved financial resilience As at 31 Dec 2024 MyState 3 Auswide 1,2,3 MergeCo 3 For personal use only Gross loans an
Slide 20: Improved home lending diversification
Improved home lending diversification The merger with Auswide further diversifies the home loan book across the eastern seaboard For personal use only 31 December 2024 home loan geographic distribution (%) MyState Auswide MergeCo 2% 6% 4% 19% 14% 18% 32% 34% 2% 60% 19% 15% 20% 24% 21% QLD NSW ACT VI
Slide 21: Significant shareholder value creation
Significant shareholder value creation The transaction is expected to yield annual pre-tax cost synergies of $20m - $25m achieved over a three-year period. For personal use only Pre-tax synergy run-rate benefits of $20m to $25m Indicative synergy breakdown • Committed to a cohesive integration, leve
Slide 22: Phased integration process
Phased integration process A phased integration process expected to span 3 years. Pre-tax integration costs of c. $29m, with the majority of these anticipated in the initial two years. For personal use only Simplify Transform Pre-merger completion Year 1 Years 2 & 3 • Execute immediate cost synergie
Slide 23: Experienced Board with the requisite skills and capabilities
Experienced Board with the requisite skills and capabilities to lead the merged Group Sandra Birkensleigh (Board Chair) Warren Lee (Chair of TPT Wealth) For personal use only Appointed February 2025 Appointed October 2017 Vaughn Richtor Jacqueline Korhonen Appointed September 2019 Appointed February
Slide 24: Management team
Management team For personal use only Brett Morgan Gary Dickson Mandy Khanna Janelle Whittle Paul Moss Managing Director Chief Financial Officer Chief Risk Officer Chief People Officer Chief Information Officer & CEO Damian Hearne Rob Burden Danielle Ryan Tim Newman Matt Pearson GM Auswide GM Selfco
Slide 25: Appendix
Appendix For personal use only Additional MyState 1H25 financial information 25
Slide 26: Home loan book
Home loan book Loan balance and lending flows ($b) ● Growth driven by lower risk owner occupied P&I lending with LVR <80% For personal use only ● Variable rate lending as a proportion of total flow remained steady at 0.9 0.7 0.4 0.6 97% in 1H25 (97% in pcp) ● Run-off remains a sector wide challenge
Slide 27: Forward looking economic overlay assumptions
Forward looking economic overlay assumptions For personal use only ● Forward looking overlay has remained steady at $1.9m Assumptions June 25 June 26 ● At 31 December 2024, the key assumptions used to determine the Unemployment (year ended) overlay incorporate the latest observed economic data inclu
Slide 28: Fixed rate home loan profile
Fixed rate home loan profile New HL flow – fixed rate issuance Fixed rate HL expiry schedule as at 31 Dec 2024 140.0 m 128.5 m 100% $533m 113.0 m 90% For personal use only 120.0 m 80% 100.0 m 70% 60% 80.0 m $294m 62.4 m 50% $249m 60.0 m 40% 41.1 m 36.2 m 40.0 m 30% 23.0 m 20% 20.0 m $43m $56m 1.5 m
Slide 29: Capital, stock and flow metrics
Capital, stock and flow metrics Movement Stock metrics Dec-24 Jun-24 Dec-23 31-Dec-24 30-Jun-24 30-Jun-23 % (Jun-Dec ‘24) Broker 83% 83% 82% $m $m $m $m Proprietary 17% 17% 18% Qualifying capital Owner occupied 80% 79% 79% For personal use only Common equity tier 1 capital (CET1) Investor 19% 20% 20
Slide 30: Prudent loan provisioning
Prudent loan provisioning ● Decrease in the total collective provision, despite an uptick in arrears, Credit provisions ($m) reflects the positive impact of a higher ‘cure rate’ over the previous For personal use only 36 months i.e. effectively a lower loss given default 7.9 7.7 6.9 7.3 ● Forward lo
Slide 31: Glossary
Glossary 1H: First half of financial year EPS: Earnings per share NIM: Net interest margin 2H: Second half of financial FHLDS: First home loan deposit scheme NPAT: Net profit after tax For personal use only year FUM: Funds under management NPBT: Net profit before tax ADI: Authorised deposit-taking i
Slide 32: Disclaimer
Disclaimer Summary information Past performance not indicative of future performance The material in this Presentation is general background information about MyState Limited (ABN Past performance information, including past share price information, should not be relied upon For personal use only 26