Bsp Financial Group Ltd. · ASX:BFL
Bsp Financial — Shareholder Meeting (May 2022)
61 slides from Bsp Financial's shareholder meeting presentation, May 20, 2022
Slide 1: ASX cover letter: updated 2022 AGM Presentation
Company Secretary 20th May 2022 For personal use only Ms. Nicola Lombardi ASX Limited Exchange Centre 20 Bridge Street Sydney NSW 2000 Australia By Electronic Lodgment Dear Ms. Lombardi, BSP Financial Group Limited – 2022 Annual General Meeting Presentation (updated) In accordance with the ASX Listi
Slide 2: 2022 Annual General Meeting Shareholder Presentation
For personal use only 2022 ANNUAL GENERAL MEETING Shareholder Presentation Robin Fleming – Group CEO BSP Financial Group Limited [ARBN: 649 704 656, Incorporated in Papua New Guinea]
Slide 3: Disclaimer
Disclaimer NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES This presentation has been prepared and issued by BSP Financial Group Limited (the "Company"), and may not be reproduced in whole or in part, nor may any of its contents be disclosed to any other per
Slide 4: Introducing BSP
2022 AGM PRESENTATION For personal use only Introducing BSP
Slide 5: South Pacific market leader
2022 AGM PRESENTATION South Pacific market leader BSP provides financial services to seven South Pacific countries and two in South East Asia. BSP remains the largest South Pacific bank, with the most extensive branch network. For personal use only K13.6b [A$5.3b] In net lending K30.4b [A$11.9b] In
Slide 6: Diversification
2022 AGM PRESENTATION Diversification BSP provides banking, asset finance, life insurance, funds management and corporate advisory services. BSP has also established a 50:50 Fintech JV in PNG to improve its digital For personal use only capabilities. We continue to explore both organic and inorganic
Slide 7: 2021 Financial Performance
2022 AGM PRESENTATION For personal use only 2021 Financial Performance
Slide 8: 2021 results overview
2022 AGM PRESENTATION 2021 results overview As customers in every country adapted to the COVID-19 impacts, a granular re- assessment of COVID-19 related provisions taken up in 2020 saw adjustments to the For personal use only provision levels held, which combined with strong domestic liquidity and g
Slide 9: Group profit
2022 AGM PRESENTATION Group profit Group NPAT increased by K269m [33.4%], as economies we operate in adjusted to a COVID- 19 operating environment … illustrated by double digit income growth and impairment releases. For personal use only INCOME OPERATING LOAN IMPAIRMENT NPAT [Km] EXPENSE [Km] EXPENS
Slide 10: Normalised Group profit
2022 AGM PRESENTATION Normalised Group profit The 2021 Group NPAT [K1.075b] was K269m [33.4%] above the prior year’s K806m profit. Normalised 2021 Group NPAT, after adjusting for impairment releases, increased by 18.7% to K957m. For personal use only NORMALISED NPAT 2021 VS NPAT 2020 [Km] +33.4% +18
Slide 11: Profit by division
2022 AGM PRESENTATION Profit by division All of BSP’s divisions recorded profits, notwithstanding flat economic conditions, particularly in tourism dependent economies. For personal use only PNG BANK +K218m OFFSHORE BRANCHES SUBSIDIARIES [NPAT, Km] [NPAT, Km] +K51m [NPAT, Km] +36.1% +33.3% 822 204 -
Slide 12: Profit contribution mix
2022 AGM PRESENTATION Profit contribution mix PNG and offshore branches [OSBs] account for 95% of 2021 Group NPAT. BSP Fiji bank was a key contributor … generating almost half [46.2%] of the combined OSB and Subsidiary For personal use only 2021 NPAT. NPAT CONTRIBUTION MIX OFFSHORE BRANCH AND SUBSID
Slide 13: Group financial performance drivers
2022 AGM PRESENTATION Group financial performance drivers BSP continued to grow its assets and deposits. Flat lending growth reflected generally soft economic conditions and negative credit growth in most countries. Collectively, these results confirm BSP’s underlying strength. For personal use only
Slide 14: Group key ratios
2022 AGM PRESENTATION Group key ratios BSP Group has maintained strong results across all of its profit, efficiency and capital ratios. For personal use only COST TO INCOME [%] ROE & ROA +60bps [%] +510bps 37.7 -10bps 3.7 3.7 29.7 29.7 3.1 37.6 24.6 37.5 2019 2020 2021 2019 2020 2021 2019 2020 2021
Slide 15: Group income stream trends
2022 AGM PRESENTATION Group income stream trends Total income increased by 10.3%. Fee income rebounded, with a focus on channel streams and increased transactional activity. Foreign exchange revenue improved, especially in For personal use only PNG, and surplus liquidity was invested in government p
Slide 16: Group expenditure trends
2022 AGM PRESENTATION Group expenditure trends Total operating costs increased by 10.0% year-on-year, with increases in Computing and Staff Costs, as BSP continued to invest in its AML capacity and IT delivery. For personal use only Premises & Total Operating Staff costs Computing costs Equipment Ad
Slide 17: Market position and portfolio composition
2022 AGM PRESENTATION Market position and portfolio composition BSP continues to dominate the South Pacific market, with five countries ranked #1 in lending and deposits. Our loan and deposit portfolios are predominantly PNG domiciled. For personal use only LOANS MARKET SHARE [31 Dec 21, %] DEPOSIT
Slide 18: PNG bank's relative performance
2022 AGM PRESENTATION PNG bank’s relative performance BSP continues to outperform its competitors and dominate in PNG … PNG’s most successful bank continues to deliver value to its shareholders. For personal use only NPAT TREND GROSS INCOME TREND [Km] [Km] 822 2019 2020 2021 2019 2020 2021 1,813 668
Slide 19: Operational Performance
2022 AGM PRESENTATION For personal use only Operational Performance
Slide 20: Continued network expansion
2022 AGM PRESENTATION Continued network expansion BSP has the largest branch and electronic/digital network in the South Pacific region … and continues to invest to improve customer service levels across the Group. Between 2017 and 2022, BSP has committed K690m on new projects in PNG. For personal u
Slide 21: Bank branch access in comparable markets
2022 AGM PRESENTATION Bank branch access in comparable markets BSP branch access ranks highly when compared to other leading banks in comparable markets [i.e. countries presented in the World Bank PNG Economic Update Feb-2022 For personal use only report]. BSP’s PNG footprint is the largest, with 84
Slide 22: Channel growth trends
2022 AGM PRESENTATION Channel growth trends Our digital platforms accounted for 69% of total customer transactions in 2021 … an annual increase of 11%. A total of 179m transactions per annum, or an average of 14.9m per month via digital channels, largely led by mobile banking. For personal use only
Slide 23: Key digital achievements
2022 AGM PRESENTATION Key digital achievements Underpinning the earlier reported growth in digital transactions has been our continued investment in digital services to improve customer service levels. For personal use only BSP PAY MOBILE MERCHANTS SCHOOL FEE MERCHANTS 100% PNG MADE ONLINE PAYMENT S
Slide 24: Growing middle class wealth
2022 AGM PRESENTATION Growing middle class wealth Our home loans products continue to grow providing opportunity to citizens to increase their personal wealth with an attractive 4% fixed interest rate over a 40 year term. For personal use only BSP's First Home Ownership Scheme Loan Equity Interest R
Slide 25: Facilitating economic growth
2022 AGM PRESENTATION Facilitating economic growth BSP is a strong supporter of the PNG government’s economic policy to grow the number and capacity of PNG’s SMEs. The government’s SME credit enhancement scheme loan program For personal use only commenced in May 2021. Despite subdued economic condit
Slide 26: Financial inclusion
2022 AGM PRESENTATION Financial inclusion BSP offers a number of “fee free” accounts to its PNG customers … to support and encourage savings and financial inclusion. For personal use only ● Youth account ● Card, mobile and internet SUMATIN ACCOUNT Banking made easier for SUMATIN ACCOUNT banking acce
Slide 27: Recent fee reductions to benefit customers
2022 AGM PRESENTATION Recent fee reductions to benefit customers BSP continues to review its fees and charges and has NOT increased a single fee in PNG since 2014. We estimate that the cumulative annual fee income forgone will be circa K91m For personal use only in 2022. 2021 FEES REDUCED 2022 FEES
Slide 28: Social and environmental management
2022 AGM PRESENTATION Social and environmental management BSP’s Environmental and Social Risk Management (ESRM) policy was established in 2008 to assess and monitor potential environmental and social risks associated with customers’ For personal use only business activities in all jurisdictions that
Slide 29: Social license to operate
2022 AGM PRESENTATION Social license to operate Banking and delivering financial services to our chosen markets has given BSP the most unique opportunity to reach more communities than any other bank or financial services For personal use only provider can. BSP continues to support our communities i
Slide 30: Core system replacement
2022 AGM PRESENTATION Core system replacement Vanuatu’s new core banking Oracle FLEXCUBE system went live in 1H-2021 … PNG to follow in Q1-2023 and remaining OSBs thereafter. For personal use only The new FLEXCUBE system will improve our operating efficiency and materially improve BSP’s competitiven
Slide 31: BSP Group strategy
2022 AGM PRESENTATION BSP Group strategy The Group Board has set the following strategic objectives For personal use only ● Defend market leadership position, with organic growth strategies targeting specific market segments and increase share of wallet ● Where not market leader, grow market share b
Slide 32: Q1 2022 Financial Performance
2022 AGM PRESENTATION For personal use only Q1 2022 Financial Performance
Slide 33: Q1-2022 results overview
2022 AGM PRESENTATION Q1-2022 results overview Strong Q1 results were driven by improving economic conditions and loan growth. However, the new K190m Additional Company Tax (ACT) is a significant drag on Q1 results. For personal use only Q1-22 vs Q1-21 Q1-22 Q1-21 ● Normalised Profit [NPAT, Km] befo
Slide 34: Q1-2022 profit result
2022 AGM PRESENTATION Q1-2022 profit result Income growth and lower loan impairment expense, resulted in an increase in Group NPAT to K259m, compared to K203m last year. In accordance with accounting standards BSP recognised the full K190m ACT in the Q1-22, reducing Group NPAT to K69m, despite For p
Slide 35: Q1-2022 profit contribution by business
2022 AGM PRESENTATION Q1-2022 profit contribution by business The large reduction in PNG Bank’s NPAT, was a direct impact of the ACT. Consequently, OSB’s NPAT contribution increased to 64% of Q1 Group NPAT, but will rebalance over the For personal use only remaining three quarters of 2022. PNG BANK
Slide 36: Additional Company Tax (ACT)
2022 AGM PRESENTATION Additional Company Tax (ACT) The ACT is a non-deductible super tax applied only to BSP in the Banking Sector and is payable in Q3-2022. In accordance with accounting requirements, BSP has recognised the K190m tax in the Q1-2022 results which led to a reduced NPAT of K69m from K
Slide 37: Tax impacts
2022 AGM PRESENTATION Tax impacts BSP’s ASX market capitalisation fell from A$2.62b [K6.8b] post dividend record date, to A$2.24b [K5.8b] days after the confirmation of the Act … reducing BSP’s value by circa For personal use only A$380m [K968m] , or 14%. When the Tax is applied to PNG’s 2021 result
Slide 38: Potential responses to the Tax
2022 AGM PRESENTATION Potential responses to the Tax BSP is carefully considering options to mitigate losses to shareholders and return ROE to historic levels. These options typically impact our customers and the communities we serve For personal use only and we will endeavour to avoid such measures
Slide 39: Shareholder returns and concluding remarks
2022 AGM PRESENTATION For personal use only Shareholder returns and concluding remarks
Slide 40: 2021 dividends
2022 AGM PRESENTATION 2021 dividends BSP declared a record K1.1bn NPAT in 2021 and subsequently declared a record dividend. A final dividend of K1.34, brings our total dividend to K1.73 for 2021 … representing a payout ratio of 75%. For personal use only TOTAL Dividend PER FULL YEAR DIVIDEND SHARE (
Slide 41: Our profits
2022 AGM PRESENTATION Our profits Strong performance enabling consistent returns to shareholders, particularly the super funds and their members … working class Papua New Guineans and Pacific For personal use only Islanders. SHAREHOLDER RETURNS [toea] TOP 10 SHAREHOLDERS [Apr-2022] 200 75.5% 75.9% 7
Slide 42: Share price trends
2022 AGM PRESENTATION Share price trends BSP’s PNGX share price finished 2.5% higher in the trailing 52 weeks at K12.30, with average prices of K12.09 in April-22 and K12.37 so far in May as at Friday, 13-May. ASX prices reached an all-time high of A$6.00 after the K1.1bn profit announcement, but fe
Slide 43: Tax impacts on ASX share price
2022 AGM PRESENTATION Tax impacts on ASX share price Large reductions in ASX share price, coincided with the new Tax being advanced through the PNG legislative process. Large shareholder gains following the announcement of BSP’s For personal use only record K1.1bn profit, were diminished in the sell
Slide 44: Concluding remarks
2022 AGM PRESENTATION Concluding remarks Overall an outstanding performance in 2021, as the countries we operate in begin to recover from COVID-19 impacts. For personal use only The new Tax has had a significant impact on our Q1-2022 results. The ATC is unfair and inequitable. Accordingly, for the b
Slide 45: Annual General Meeting
For personal use only Annual General Meeting 20th May 2022 Ballrooms 1 & 2, Level 1, APEC Haus, Port Moresby
Slide 46: General Business and Ordinary Business
General Business For personal use only Approve and adopt the Minutes of the previous Annual General Meeting of Shareholders held 21/05/2021. Ordinary Business 1. Receive and approve the BSP Group Financial Statements, Director’s Report and Auditor’s Report for the Year Ended 31/12/2021. 2. Adopt the
Slide 47: Minutes of the Previous Annual General Meeting
General Business Minutes of the Previous Annual General Meeting of Shareholders For personal use only held on 21st May 2021 To receive, consider and accept the Minutes of the previous Annual General Meeting held on 21st May 2021 as a correct record of that meeting. P46
Slide 48: Minutes of AGM held 21 May 2021
HISSP BSP Financial Group MINUTES OF ANNUAL GENERAL MEETING OF SHAREHOLDERS OF BSP FINANCIAL GROUP LIMITED \Mirutes of the Annual General Meeting of BSP Financial Group Limited held as 2 virtual Meeting at SSP First Lounge Room, Ground Floor, Ravalien Hows, Port Moresby, National Capital District, P
Slide 49: Minutes: resolutions and director elections
Moved: Hari Rabura Seconded: Ronesh Dayal Resolution: ‘That the Balance Sheet and profit and loss account for the year ended 31 December 2020, together with reports of Directors and Auditors be and is hereby approved. Resolution 3 Re- election of Directors Robert Bradshaw & Arthur Sam Moved: Peter B
Slide 50: Close of Meeting
pag) pag) There being no further business the meeting was deciared closed at 11.20am_ Close of Meeting:
Slide 51: AGM attendance confirmation
HISSP PNG REGISTRIES LIMITED (Beal (peal CLIENT: BSP FINANCIAL GROUP LIMITED MEETING TYPE: ANNUAL GENERAL MEETING MEETING ID: BSPAG202101 VENUE: ONLINE VIRTUAL MEETING DATE: FRIDAY 21 MAY 2021 TIME: 10:30 am ANNUAL GENERAL MEETING ATTENDANCE CONFIRMATION PRESENT ONLINE PRESENT IN ABSENT BOARDROOM BO
Slide 52: Item 1: Annual Report and Financial Statements
Ordinary Business Item 1: Annual Report and Financial Statements for the Year Ended For personal use only 31st December 2021 To receive the Annual Report, including the Financial Statements, Director’s Report and Auditor’s Report, for the Company and its subsidiaries for the year ended 31st December
Slide 53: Item 2: Remuneration Report
Ordinary Business Item 2: Remuneration Report for the Year Ended For personal use only 31st December 2021 To adopt the Remuneration Report of the Company for the year ended 31st December 2021. P52
Slide 54: Item 3: Re-election of Directors
Ordinary Business Item 3: Re-election of Directors For personal use only • Dr. Matagialaofi Lua’iufi • Stuart Davis P53
Slide 55: Item (a): Re-election of Directors
Ordinary Business For personal use only Item 3 (a): Re-election of Directors To elect the following director: (a) Dr. Matagialofi Lua’iufi who retires by rotation and offers herself for re-election as a director of the Company. P54
Slide 56: Item (b): Re-election of Directors
Ordinary Business For personal use only Item 3 (b): Re-election of Directors To elect the following director: (b) Stuart Davis who retires by rotation and offers himself for re-election as a director of the Company. P55
Slide 57: Item 4: Election of Director
Ordinary Business For personal use only Item 4: Election of Director To elect the following director: Patricia Taureka-Seruvatu who was appointed to fill a casual vacancy and offers herself for election as a director of the Company. P56
Slide 58: Item 5: Appointment of Auditor
Ordinary Business For personal use only Item 5: Appointment of Auditor To appoint PricewaterhouseCoopers as Auditor of the Company from the conclusion of this meeting until the conclusion of the next annual meeting of the Company and that the Board be authorized to fix their remuneration. P57
Slide 59: Item 6: Any Other Business
Ordinary Business For personal use only Item 6: Any Other Business To consider any other business of the day. P58
Slide 60: Shareholder Question & Answer
For personal use only Shareholder Question & Answer Q&A P59
Slide 61: Thank you for attending
For personal use only Thank you for attending ***End of Meeting*** P60