Kina Securities Ltd. · ASX:KSL
Kina Securities — FY2022 Earnings Presentation
22 slides from Kina Securities's earnings presentation, Feb 27, 2023
Slide 1: Full Year Results 2022
Full Year Results 2022 27 February 2023 1
Slide 2: Overview
Overview. Organic growth momentum Statutory NPAT up 65%, Underlying NPAT up 10% Deposits up 28%, Lending up 11% Customer Acquisition Net Customer growth 19% (+30,000) Second largest Bank by total footings (Deposits and Loans) Shareholder returns Underlying ROE 17.9%, up 7% Earnings per share 10.6 ce
Slide 3: Update on Corporate Tax
Update on Corporate Tax. • In December 2022, the PNG Government announced an increase in Corporate Income Tax on Commercial Banks from 30% to 45% for the 2023 fiscal year. • The increase in rate is effective 1 January 2023. • KSL’s deferred taxes at December 2022 have been revalued at the new rate i
Slide 4: Strong Revenue Growth
Strong Revenue Growth Revenue Underlying ROE Net Loans 17.90% 410 2,158 1,951 1,615 364 PGK'bn PGK'm 345 16.80% 16.70% FY20 FY21 FY22 FY20 FY21 FY22 FY20 FY21 FY22 4
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 6
Slide 7: Delivering our strategy
Delivering our strategy. • New retail customer acquisition up 19% against PCP and new commercial customer acquisition up by 17% against PCP. Growth & • Home loan growth up 19%, SME growth (25%) Prosperity • Further growing non-interest income revenue streams with Corporate Business Advisory Unit ser
Slide 8: Financial Results
Financial Results. W Kina SecuritiesLimited
Slide 9: Financial Highlights
Financial Highlights. 2022 Full Year Results Dec-22 Dec-21 % Underlying NPAT (PGK m) 106.1 96.2 10.3 Revenue (PGK m) 410.0 364.0 9.6 Cost to Income 58.2 58.1 0.2 Return on Equity - Underlying 17.9 16.7 7.2 Ordinary Dividend (AUD cents) 10.6 10.0 6.0 Total Capital Ratio (T1 + T2) 22.5% 23.3% 3.4 9
Slide 10: Solid NPAT growth
Solid NPAT growth. NPAT trend Underlying NPAT Trend 116.5 Statutory NPAT 106.1 Underlying NPAT Deferred Tax Credit 96.2 96.2 106.1 76.0 76.0 70.8 PGK'mm Westpac separation FY2020 FY2021 FY2022 FY2020 FY2021 FY2022 • Core business continues to perform in line with expectations • Less Capital intensiv
Slide 11: Shareholder returns
Shareholder returns. Statutory Earnings per Share 40.6 Dividend per Share 37.3 26.9 26.8 26.4 25.4% Capital Adequacy 23.3% 22.5% 24.7 16.4 10.0 10.0 10.6 13.2 12.0% 9.3 FY2020 FY2021 FY2022 FY2020 FY2021 FY2022 FY2020 FY2021 FY2022 Capital Adequacy: T1 + T2 BPNG minimum total risk based capital DPS
Slide 12: Market share gains and strong customer growth
Market share gains and strong customer growth. Market share percentage - Lending Market share percentage - Deposits 27,311 26,880 27,943 57,722 14% 15.3% 50,220 43,953 12.9% 12.0% PGK'bn PGK'bn 11.8% 11.3% 3,036 3,710 4,212 5,086 5,810 7270.5 FY2020 FY2021 FY2022 FY2020 FY2021 FY2022 Total System De
Slide 13: Net Interest Margin
Net Interest Margin. NIM Half Yearly 7.5% 7.0% 7.0% 6.7% 6.2% 6.0% • NIM movements impacted by: • Lower yields on central bank treasury bills. • Strong growth in corporate wholesale deposits and link to 91.9 92.5 FX flows 89.3 88.7 • Deliberate participation in corporate lending, including 85.4 synd
Slide 14: Loan portfolio growth
Loan portfolio growth. 1,420 1,330 1,059 PGK'm 534 450 390 81 79 80 95 98 94 72 22 30 Overdraft Term Loans Investment Property Loan Asset Financing Housing Loan FY2020 FY2021 FY2022 14
Slide 15: Loan portfolio by industry
Loan portfolio by industry. Loan Portfolio 694 607 615 554 517 PGK'm 380 351 330 316 213 169 171 106 105 110 105 95 79 44 14 15 17 8 13 14 23 15 27 20 7 18 1 20 4 16 19 7 23 1 FY2020 FY2021 FY2022 Agriculture, Forestry & Fishing Mining Manufacturing Electrical, Gas & Water Building and Construction
Slide 16: Asset Quality
Asset Quality. Asset Quality - Gross Loans & Advances 9.8% 8.7% 8.7% 6.8% 6.1% 5.6% 3.7% 3.1% 1.9% 2.1% 1.9% 1.9% 1.3% 0.3% 0.2% Loan impairment expense (Loans & Non-performing loans and loans in - 90 day arrears - Gross non-performing loans (> 180 Total provision advances) 5.6m 20.8m arrears days)
Slide 17: Deposit tenure
Deposit tenure. FY2022 FY2021 12 months 12 months 24 months 3% 24 months 7% 6 months 0% 0% 5% 3 months 6 months 7% 11% 2 months On Call 4% 3 months On Call 1 month 3% 2 months 1 month 1 month 2 months 6% 3 months 2 months 7% 6 months 3 months 12 months 6 months 1 month 24 months 12 months On Call 8%
Slide 18: Deposit by products
Deposit by products. Deposits 1,637 1,443 1,298 1,008 PGK'm 786 721 585 510 472 327 322 368 Fixed Term Cash Management Accounts Current Account Savings Account FY2020 FY2021 FY2022 18
Slide 19: Kina Wealth
Kina Wealth. Funds under management Funds under administration 17.35 880 13.82 14.29 PGK'bn 843 8.91 8.92 818 8.33 FY2020 FY2021 FY2022 FY2020 FY2021 FY2022 FuA (PGK'bn) Member ('000) 19
Slide 20: Economic Outlook
20 Economic Outlook. W Kina SecuritiesLimited
Slide 21: PNG Economy
PNG Economy. PNG’s Growth prospect compared to Global & Regional Growth 4.0% Real Growth forecasted in 2023 15 8 6 10 4 5 2 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 -5 -2 -10 -4 -6 -15 World Emerg. & Dev. Asia PNG Total Real GDP Non-Resource Real
Slide 22: Looking ahead in 2023
Looking ahead in 2023. • Business banking expansion with 10 additional Business advisory • Commercial lending hubs in regional areas Growth & Prosperity • Home loan, personal loans growth expected to remain at 2022 levels • Growth in Private Bank as Kina across Banking and Wealth Management • Bank a