Bsp Financial Group Ltd. · ASX:BFL
Bsp Financial — FY2023 Earnings Presentation
28 slides from Bsp Financial's earnings presentation, Feb 22, 2024
Slide 1: Full Year Results 2023
22 February 2024 Full Year Results 2023 Investor Presentation BSP Financial Group Limited ARBN: 649 704 656, Incorporated in Papua New Guinea Klinki St, Port Moresby National Capital District, Papua New Guinea www.bsp.com.pg | Investor.relations@bsp.com.pg investor.relations@bsp.com.pg
Slide 2: Important information
Important information NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR The Company reserves the right to take any action, whether in or out of the presentation or its contents or otherwise arising in connection with it or as a INDIRECTLY, IN OR INTO THE UNITED STATES ordinary course of business, whi
Slide 3: Contents
Contents Overview FY23 Results Summary 01 02 03 Mark T. Robinson Ronesh Dayal Mark T. Robinson PAGE 4 PAGE 12 PAGE 25 2023 Full Year Results Presentation investor.relations@bsp.com.pg 3
Slide 4: Overview
Overview Mark T. Robinson, Group Chief Executive Officer investor.relations@bsp.com.pg 4
Slide 5: Building a better future
Building a better future Caring for our customers and our communities Improving customer Investing for Strong and stable experience the future Enhance customer segment value Partnering with leading technology Strong balance sheet and disciplined propositions and advisory firms risk management
Slide 6: BSP's evolution
BSP’s evolution Larger, stronger and more profitable SIZE STRENGTH PROFITABILITY COMPARABLES GROSS LOANS CAPITAL ADEQUACY NPAT +134% +40bps +75% ROE VS ASX LISTED BANKS 16.7 890 BSP 21.5% 24.0% 24.4% 507 Kb 7.1 A$6.6b % Km Bank 1 13.9% A$374m Bank 2 Dec 14 Dec 23 Dec 14 Dec 23 FY14 FY23 12.3% Bank 3
Slide 7: Results summary
Results summary Group fundamentals remain strong PGK [millions] FY221 FY23 Change AUD3 [millions] FY22 FY23 Change Revenue 2,603 2,822 8% Revenue 1,065 1,185 11% ˗ Net interest income 1,745 1,845 6% ˗ Net interest income 714 774 8% ˗ FX income 362 458 26% ˗ FX income 148 192 30% ˗ Fee income 419 428
Slide 8: South Pacific market leader
South Pacific market leader LENDING MARKET SHARE DEPOSIT MARKET SHARE PNG #1 65.6% PNG #1 64.9% Solomon Islands #1 44.0% Cook Islands #1 55.0% Cook Islands #2 35.5% Solomon Islands #1 50.6% Tonga #1 35.2% Tonga #1 44.5% Samoa #1 29.2% Samoa #1 39.9% Fiji #1 26.6% Fiji #2 23.8% Vanuatu #4 12.6% Vanua
Slide 9: Operating highlights
Operating highlights Customer and payments growth highlights leadership in digital transactions AVERAGE MONTHLY TRANSACTIONS [YOY] ACCOUNTS [millions] 16.0m Digital ▲20% YOY +3% 4.9m EFTPOS terminals ▲13% 3.34 3.25 4.7m ATM ▼3% 1.2m Branch1 & agency ▼17% 2022 2023 1 Excludes rural branch transaction
Slide 10: Our market
Our market BSP is the largest financial institution in the South Pacific, a changing market with favourable tailwinds BSP Position External environment South Pacific Foundation for Changing market Favourable trends Leader growth conditions Largest financial Set for next BSP Growth institution phase
Slide 11: Building a world class bank
Building a world class bank Strategic priorities that will deliver long term growth Deepen customer relationships, with seamless banking experiences, leverage Our customers the largest customer base in the South Pacific, deliver more and improved services to customers, more often Corporate banking
Slide 12: FY23 Result Presentation
FY23 Result Presentation Ronesh Dayal, Group Chief Financial Officer investor.relations@bsp.com.pg
Slide 13: Statutory versus underlying NPAT
Statutory versus underlying NPAT Underlying profit result remains strong, with increased tax rate impacting statutory profit FY22 FY23 Change Statutory NPAT [Km] 1,085 890 -18% FY22 impact included one-off K190 million Additional Company Tax, partially offset by an increase in deferred tax assets
Slide 14: Underlying NPAT breakdown
Underlying NPAT breakdown Income growth from a well diversified portfolio helped absorb the impact of increased impairment expenses Underlying -3.6% Statutory -17.9% A$374m A$461m Km 2023 Full Year Results Presentation 14
Slide 15: Total income
Total income Margin compression offset by stronger lending and FX volumes YOY +8.4% Net interest income up Driven by strong FX income 5.7%, loan volume growth growth [26%] of 12% Margin reduced by 31bps A$1,065m A$1,185m Km 2023 Full Year Results Presentation investor.relations@bsp.com.pg 15
Slide 16: Net Interest margin [NIM]
Net Interest margin [NIM] Largely stable, other than reduced investment yields from government securities Bps 2023 Full Year Results Presentation investor.relations@bsp.com.pg 16
Slide 17: Operating expenses
Operating expenses Stable cost to income ratio, with new investments cost to income cost to income 38.0% 38.5% +9.9% Investments in risk and compliance Increased Higher Salary inflation To optimise system costs volumes in operational Infrastructure and additional Pacific processing and m
Slide 18: Credit quality
Credit quality Impairment expenses higher, following reversal of COVID-19 provisions in the prior 2 years IMPAIRMENT EXPENSE DELINQUENCY RATES GROSS IMPAIRED ASSETS 90+ days, as a percentage of total loans 664 A$260m 182 4.1% 259 452 481 3.1% 3.2% 158 201 Km A$76m 406 -5 294 281 -43 % Km FY21 FY22 F
Slide 19: Provisions
Provisions Provisions to loans remain stable, despite increased delinquency PROVISIONS TO LOANS PROVISIONS AND SCENARIOS 761 712 5.1% 4.3% 4.3% 644 % Km Dec 21 Dec 22 Dec 23 Base Scenario Reported provisions Downside Scenario Note: Based on scenarios derived by changing the relative weighting of key
Slide 20: Balance sheet
Balance sheet Strong deposit and loan growth GROSS LOANS TOTAL ASSETS +9.5% A$14.5b 37.0 +12.3% 33.8 30.4 A$6.6b 14.4 14.9 16.7 Kb Kb Dec 21 Dec 22 Dec 23 Dec 21 Dec 22 Dec 23 DEPOSITS DEPOSIT MIX +10.8% A$1.2b YoY A$10.5b 29.8 A$11.7b 2.9 3.0 26.9 2.8 23.9 26.8 3.1% Term deposits 21.2 24.0 Demand d
Slide 21: Loan book composition
Loan book composition Double digit loan growth in key market categories Retail Mortages, 15% Business +10% Loans, 59% Unsecured A$3.9b Personal Loans, 13% Business Segment ~66% Others, 5% Business Overdrafts, 7% +12% +23% +37% -10% A$1.0b A$0.9b A$0.5b A$0.3b Kb 8.9 9.8 2.3 2.6 1.8 2.2 0.9 1.2 1.0 0
Slide 22: Dividends K1.43
Dividends Full year dividend of K1.43, an 18% reduction driven by an increase in the income tax rate EX-DATE 27 Feb 2024 FULL RECORD DATE FINAL 28 Feb 2024 INTERIM K1.43 K1.06 [A$0.56] K0.37 PAYMENT DATE 22 Mar 2024 FY23 payout = K668m [AUD 262m] 2023 Full Year Results Presentation investor.relation
Slide 23: Shareholder returns
Shareholder returns • Consistent double-digit dividend yields • Dividends paid every year since our 2001 PNGX listing 10-YEAR ANNUAL DIVIDEND AND PAYOUT RATIO 100% 2.50 90% 80% 75% 76% 76% 76% 75% 75% 75% 75% 2.00 70% 70% SHAREHOLDER RETURNS SUMMARY 70% 60% 1.50 2021 2022 2023 Change 50% EPS [K] 2.3
Slide 24: Key ratios
Key ratios Our business fundamentals remain strong RETURN ON EQUITY COST TO INCOME CAPITAL ADEQUACY [Annualised] +50bps -610bps -70bps 29.7% 27.6% 37.5% 38.0% 38.5% 21.5% 25.7% 25.1% 24.4% % 12% % % Dec 21 Dec 22 Dec 23 Dec 21 Dec 22 Dec 23 Dec 21 Dec 22 Dec 23 RETURN ON ASSETS LOAN TO DEPOSIT LEVER
Slide 25: Summary
Summary Mark T. Robinson, Group Chief Executive Officer investor.relations@bsp.com.pg
Slide 26: Pacific economic outlook
Pacific economic outlook We remain cautiously optimistic about the region’s growth prospects PNG is entering an investment super-cycle, GDP Growth 2022e 2023e 2024e with projects of K100b [A$42b] at various Pacific Region 6.1 3.5 2.9 stages of progression PNG1 3.2 2.0 2.6 Porgera gold mine reope
Slide 27: Summary
Summary We are investing for growth as we build a world class bank with an intense focus on our customers Data strategy to deliver customer insights enabling distinctive value propositions and uplift in risk and operational capabilities Consistent service levels and seamless banking experience
Slide 28: Thank You
Thank You Full Year Results 2023 Investor Presentation BSP Financial Group Limited ARBN: 649 704 656, Incorporated in Papua New Guinea Klinki St, Port Moresby National Capital District, Papua New Guinea +675 305 7799 | www.bsp.com.pg | Investor.relations@bsp.com.pg invest@bsp.com.pg