Slide 1: ASX/PNGX Announcement: 1H 2022 Results Investor Presentation
29 August 2022 ASX/PNGX | Announcement ASX Markets Announcement Office PNGX Markets Exchange Centre Harbourside West Building 20 Bridge Street Unit 1B.02, Level 1, Stanley Esplanade Sydney NSW 2000 Down Town, Port Moresby 121 Australia Papua New Guinea BY ELECTRONIC LODGEMENT 1H 2022 Results – Inves
Slide 2: Financial results for the half year ended 30 June 2022
Kina Securities Limited Financial results for the half year ended 30 June 2022 29 August 2022 1
Slide 3: Overview
Overview. Organic growth momentum NPAT up 15% Deposit up 12%, Lending up 5% Diversified Revenue growth FX revenue up 10% Digital revenue 92% Customer Acquisition Net Customer growth 15% Market share growth, second largest by total footings (Deposits and Loans) Shareholder returns Return on Equity 15
Slide 4: 1H22 Highlights strong revenue growth
1H22 Highlights strong revenue growth Revenue Return on Equity Net Loans (PGK'm) 17.8% 15.9% 2,053 197 170 13.9% 1,759 163 1,421 PGK'm Jun20 HY Jun21 HY Jun22 HY Jun20 HY Jun21 HY Jun22 HY Jun20 HY Jun21 HY Jun22 HY 3
Slide 5: Our Strategy
Our Strategy. Fairness Reflection Honesty Imagination Togetherness Purpose To constantly improve the prosperity of the people, communities and markets that we serve. Vision The most dynamic, progressive and accessible financial services organisation in the Pan Pacific region. • Growth & prosperity •
Slide 6: From a Bank to a Market Maker
From a Bank to a Market Maker. 5
Slide 7: Delivering our strategy
Delivering our strategy • 15% Customer Growth Growth & • New customer segment propositions Kina PRIME PLUS (home loans), Kina Private (mass affluent), Kina Prosperity Venture (SME) • Established a Corporate Advisory Services Unit • Expansion of Business Banking footprint to key provincial centres •
Slide 8: Financial Results
Financial Results. 7
Slide 9: Financial Highlights
Financial Highlights. 2022 Half Year Results Jun-22 Jun-21 % Underlying NPAT (PGK m) 45.6 39.8 15 Revenue (PGK m) 179.1 155.7 15 Cost to Income 62.3 60.9 2 Return on Equity 15.9 13.9 14 Ordinary Dividend (AUD cents) 4.1 3.0 37 Total Capital Ratio (T1 + T2) 22.0% 23.3% 6 8
Slide 10: Strong NPAT growth
Strong NPAT growth Underlying NPAT trend • Core business continues to perform against expectations 96.2 • Less Capital intensive lines of business contributing 38% to income. Full Year 1st Half 76.0 • Staff costs reduced to 39% of total costs compared to 42% against PGK'mn pcp. • Admin costs up 18%
Slide 11: Shareholder Returns
Shareholder Returns Dividend per Share Statutory Earnings per Share Capital Adequacy 16.8 23.3% 10.3 15.9 21.9% 22.0% 10.0 13.9 8.3 12.0% 6.8 6.3 4.0 4.1 5.1 3.0 Jun20 HY Jun21 HY Jun22 HY Jun20 HY Jun21 HY Jun22 HY Jun20 HY Jun21 HY Jun22 HY DPS (PGK toea) DPS (AUD cents) EPS (PGK toea) EPS (AUD ce
Slide 12: Total operating income
Total operating income +15% 179,136 Wealth Management +8% 155,739 16,712 15,449 69,916 Other Banking Income +28% 54,847 PGK’000 Net Interest Income +8% 85,443 92,508 HY21 HY22 11
Slide 13: Operating expenses
Operating expenses +17.7% 111,565 8,838 Other Operating Costs +147% 94,768 3,581 24,888 Occupancy Cost +11% 22,519 Administrative Costs +18% 33,887 PGK’000 28,849 Staff Costs +10% 39,819 43,952 HY21 HY22 12
Slide 14: Net Interest Margin
Net Interest Margin Net Interest Margin 7.5% 7.0% 7.0% 6.7% 6.2% • NIM movements impacted by: • Lower yields on central bank treasury bills which are expected to normalize and improve over 2h 2022 • Strong growth in corporate wholesale deposits and link to FX growth • Deliberate participation in cor
Slide 15: Loan Portfolio
Loan Portfolio 1,357 1,184 922 PGK'm 493 409 341 80 94 96 99 95 64 53 16 23 Overdraft Term Loans Investment Property Loan Asset Financing Housing Loan Jun20 HY Jun21 HY Jun22 HY 14
Slide 16: Loan Portfolio
Loan Portfolio 133 Other* 121 61 92 Hotel & Restaurants 101 90 122 Building and Construction 109 92 208 Jun22 HY Other Business 155 Jun21 HY 140 Jun20 HY 350 Real Estate/Renting/Business Services 357 233 587 Personal Banking 519 514 604 Wholesale & Retail 435 316 PGK’m *Other: includes Manufacturing
Slide 17: Asset Quality
Asset Quality Gross Loans and Advances 10.7% 9.3% 9.0% 7.1% 6.4% 6.1% 4.5% 2.6% 2.1% 2.0% 2.2% 1.7% 0.6% 0.2% 0.1% Total provision % of GLA Impairment expense % of GLA + 90 day arrears + 180 days arrears NPL % of GLA Jun20 HY Jun21 HY Jun22HY 16
Slide 18: Deposits Tenure
Deposits Tenure Funding duration has lengthened. 12 months term deposits increased from 3% to 14% over 6 months Jun22 HY Dec21 FY 24 months 12 months 0% 6 months 3% 12 months 5% 3 months 24 months 14% 7% 0% 2 months 6 months 4% 8% 1 month 3 months 6% 2% 2 months 5% 1 month On Call 4% 67% On Call 75%
Slide 19: Deposits Portfolio
Deposits Portfolio 1,488 1,154 1,139 1,055 PGK'm 763 591 587 544 403 348 326 292 Fixed Term Cash Management Accounts Current Account Savings Account Jun20 HY Jun21 HY Jun22 HY 18
Slide 20: Kina Wealth
Kina Wealth Funds under Administration Funds under Management 17.24 8.96 860 14.19 13.64 8.49 832 PGK'bn 7.90 805 Jun20 HY Jun21 HY Jun22 HY Jun20 HY Jun21 HY Jun22 HY FuA (PGK'bn) Member ('000) 19
Slide 21: Outlook
Outlook. 20
Slide 22: PNG Economy
PNG Economy. • PNG economy on the road to recovery with forecasted 5.4% real growth in 2022 • Solid rebound in 2021 post COVID-19 contraction in 2020 • Economy has performed solidly relative to peers in East Asia and the Pacific. 21
Slide 23: Recovery expected to continue in 2022
Recovery expected to continue in 2022 • Recommencement of Porgera Mine with Barrick Interest from Australian Companies Gold • Fortescue Future Industries • Est. US$1.5b FDI to re-mobilise • Hydropower and Geothermal projects • Final Investment Decision for Wafi-Golpu with Newcrest • Santos acquisiti
Slide 24: Thank you
Thank you kinabank Together it’s possible