Resimac Group Limited · ASX:RMC
Resimac — H1 2019 Earnings Presentation
25 slides from Resimac's earnings presentation, Feb 25, 2019
Slide 1: December 18 HY Financial Results
For personal use only Resimac Group Ltd DECEMBER 18 HY FINANCIAL RESULTS FEBRUARY 2019
Slide 2: Performance Highlights
For personal use only PERFORMANCE HIGHLIGHTS SCOTT MCWILLIAM C EO
Slide 3: Performance Highlights
PERFORMANCE HIGHLIGHTS For personal use only A strong HY19 result of $14.5m normalised NPAT ($18.9m statutory NPAT) underpinned by 5x system principally funded portfolio growth and cost management. Normalised* Cost to Income Total Assets Under Statutory NPAT Ratio NPAT (Normalised) Settlements Manag
Slide 4: Earnings Growth
PERFORMANCE HIGHLIGHTS EARNINGS GROWTH For personal use only Continued earnings momentum, lower Cost to Income Ratio, and higher Return on Equity. $m 1H19 1H18 2H18 FY18 NPAT (normalised)* 14.5 12.9 13.3 26.2 Net Interest Income (NII) 55.1 51.0 51.6 102.6 Other Income/(Expenses) (normalised)** (2.3)
Slide 5: Financial Results Summary
PERFORMANCE HIGHLIGHTS FINANCIAL RESULTS SUMMARY For personal use only 1H19 NPAT disclosed on a statutory and normalised basis. A reconciliation of 1H19 statutory and normalised profit is included on slide 18. FINANCIAL PERFORMANCE 1H19 1H18 PCP% CHANGE NPAT (statutory) $18.9m $11.9m 58% NPAT (norma
Slide 6: Group Margin
PERFORMANCE HIGHLIGHTS GROUP MARGIN For personal use only Group NIM (BPS) BBSW 2.08% 1H19 2.03% 2H18 Average 1.89% 1.98% Average 1.80% 1.93% 1.88% 1H18 1.83% Average 1.62% 1.78% 1.73% 1.68% 1.63% 1.58% Source: Bloomberg 6
Slide 7: Funding Program
PERFORMANCE HIGHLIGHTS FUNDING PROGRAM For personal use only New warehouse lines established with UOB (Singapore) and MUFG (Sydney branch) further augmenting Resimac’s short-term funding capability and establishing strategic relationships for further Asia-Pacific & Japan bond distribution Contin
Slide 8: Portfolio Performance
PERFORMANCE HIGHLIGHTS PORTFOLIO PERFORMANC E For personal use only Mortgage delinquencies and loss rates remain low consistent with the outstanding credit quality of the portfolio. >90 day delinquencies1 at 31 December 2018 were 0.08% (June 2018 0.10%) Our Prime portfolio continues to outperfor
Slide 9: Credit Provisions
PERFORMANCE HIGHLIGHTS CREDIT PROVISIONS For personal use only AASB 9 Financial Instruments is adopted for the 31st December 2018 reporting period replacing AASB 139 Financial Instruments: Recognition and Measurement. AASB 9 recognition of collective provision is transitioned to an expected loss m
Slide 10: Industry Leading Performance 1H19 vs 1H18
PERFORMANCE HIGHLIGHTS INDUSTRY LEADING PERFORMANC E 1H19 vs 1H18 For personal use only RBS Consumer Division NPAT 12.8% EXPENSES REVENUE 9.1% (NII) 8.0% EXPENSES EXPENSES 2.3% 1.0% REVENUE REVENUE (1.4%) (4.3%) NPAT (8.4%) NPAT (12.6%) 10
Slide 11: Outlook & Priorities
For personal use only OUTLOOK & PRIORITIES SCOTT MCWILLIAM C EO
Slide 12: Market Considerations: Building Resilience
MARKET CONSIDERATIONS BUILDING RESILIENC E For personal use only Royal Commission Non-Bank Market Share We noted the Royal Commission Market share continues to favour our growth objectives recommendations and remain and support our relevance to customers. vigilant to ensure our lending 10.0% pract
Slide 13: Strategic Priorities: Leveraging Our Brands
STRATEGIC PRIORITIES LEVERAGING OUR BRANDS For personal use only CORPORATE Clear communication of proposition and company vision and values Thought leadership on key industry issues Sponsorship, social media and PR activity to support vision DIRECT BROKER Leverage strength of Leverage awar
Slide 14: Strategic Priorities: Customer & Digital Focus
STRATEGIC PRIORITIES CUSTOMER & DIGITAL FOCUS For personal use only Customer proposition definition – required product and service (journey) ✔ CUSTOMER DEFINITION Marketing customer acquisition program development (by channel) ✔ Marketing customer retention program development (IN PROGRESS)
Slide 15: Strategic Priorities: Direct Channel Growth
STRATEGIC PRIORITIES DIRECT CHANNEL GROWTH For personal use only c.$360b p.a. Australian Mortgage Market DIRECT 45% BROKER 55% Customers buying behaviour – channel usage c. $160b p.a. c. $200b p.a. Direct at Resimac Prime product only Strong digital brand Highly effective lead generation strat
Slide 16: Strategic Priorities: Diversification
STRATEGIC PRIORITIES DIVERSIFICATION For personal use only MORTGAGE MARKET PRODUCTS FUNDING Ongoing Increased focus development on Specialist of NZ Alternative NEW ASSET CHANNEL through education Sources CLASSES & marketing Growth of Inorganic Digital Direct opportunities Channel (Asset Finance) DIV
Slide 17: Financial Results
For personal use only FINANCIAL RESULTS JASON AZZOPARDI Chief Financial Officer
Slide 18: Consolidated Statement of Profit or Loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE HALF -YEAR ENDED 31 DECEMBER 2018 For personal use only 1H19 $m 1H18 $m Interest income 217.0 169.6 Interest expense (161.9) (118.6) Net interest income 55.1 51.0 Fee and commission income 12.0 14.6 Fee and commission expense (16.1) (17.8) De-recognit
Slide 19: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMB ER 2018 For personal use only $m 31 DEC 18 30 JUN 18 $m 31 DEC 18 30 JUN 18 Assets Cash reconciliation Cash and bank balances 300.3 198.9 Cash and bank and on hand 20.8 15.2 Trade and other receivables 8.4 7.6 Cash collections account 278.
Slide 20: Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF -YEAR ENDED 31 DECEMBER For personal use only $m 1H19 1H18 Cash flows from operating activities Interest received 215.2 176.1 Interest paid (155.3) (112.1) Receipts from loan fees and other income 19.6 37.6 Payments to suppliers and employees (76.9)
Slide 21: Scott McWilliam and Jason Azzopardi
For personal use only Scott McWilliam Jason Azzopardi Chief Executive Officer Chief Financial Officer Scott has been with Resimac Group since 2004 and has Jason commenced with the Group in July 2018 as Chief held various senior executive roles including Chief Financial Officer. Jason is a Fellow of
Slide 22: Important Notice & Disclaimer
IMPORTANT NOTICE & DISCLAIMER For personal use only The information in this presentation provides an overview of the results for the half year ended 31 December 2018. It is general background information about the activities of Resimac Group Ltd and is current as at the date of the presentation, 25
Slide 23: About Us
For personal use only US ABOUT
Slide 24: About Us
ABOUT US For personal use only CUSTOMERS SETTLEMENTS PEOPLE 50,000+ over $4b p.a. 300+ Australia, New Zealand & Philippines PORTFOLIO SHAREHOLDERS DISTRIBUTION Resimac Group is one of Australia and New Zealand’s $12.8b (AUM) $200m* Direct to ($9.4b principally funded) (approx. market cap) premier an
Slide 25: Business Key Activities
BUSINESS KEY ACTIVITIES For personal use only ORIGINATION SERVICING FUNDING 3RD PARTY BROKER UNDERWRITING WAREHOUSE 85% of mortgage Loan applications Short-term funding (364 broker market Loan credit assessing days) Loan packaging Funding provided by banks RMBS DIRECT LOAN MANAGEMENT Long-term fundi