Bnk Banking Corporation Limited · ASX:BBC
Bnk Banking — Investor Presentation (February 2021)
34 slides from Bnk Banking's investor presentation, Feb 26, 2021
Slide 1: BNK Banking Corporation FY2021 Half Year Results
BNK Banking Corporation ASX:BBC FY2021 Half Year Results February 2021 1
Slide 2: Disclaimer
Disclaimer This presentation contains certain forward-looking statements with respect to the financial condition, results of operations, business plans and objectives of management. All such forward‐looking statements involve known and unknown risks, significant uncertainties, assumptions, contingen
Slide 3: FY2021 Half Year Results
FY2021 Half Year Results Brett Morgan Chief Executive Officer
Slide 4: BNK Banking Corporation: Our businesses
BNK Banking Corporation Our businesses BNK Banking Corporation % Bank Aggregation A fast growing challenger bank A mortgage aggregation fintech with a mortgage focus. servicing mortgage brokers across all % lending products. 4
Slide 5: Business Snapshot 1H21
Business Snapshot 1H21 Bank Aggregation Total Lending Of which On Balance Aggregation Settlements Settlements Sheet Settlements $193m $42m $9.9b % Lending Of which On Balance Portfolio Sheet Lending Aggregation Book $2.4b $306m $50b Deposit Of which Transaction Finsure Brokers Book Accounts % $391m
Slide 6: Bank Highlights 1H21
Bank Highlights 1H21 Given the uncertain impact from COVID, BNK proactively reduced on balance sheet lending in 2H20 and 1H21 to conserve capital Settlements COVID-19 Impacted Period Lending Portfolio ($m) ($b) 231 217 193 2.50 2.50 2.40 183 2.20 2.20 2.10 151 % 136 81 48 42 0.27 0.29 0.31 1H20 2H20
Slide 7: Bank Highlights 1H21
Bank Highlights 1H21 New C-Suite and key senior hires Implemented key loan origination initiatives supporting complementing existing management strength broker experience and delivering operational efficiencies Recommenced on balance sheet lending growth Continued growth in low cost deposit generati
Slide 8: Aggregation Highlights 1H21
Aggregation Highlights 1H21 Broker Numbers Settlements Loan Book (#) ($b) ($b) 1,910 50.1 9.9 % 8.2 7.3 45.5 1,740 1,667 41.9 % 1H20 2H20 1H21 1H20 2H20 1H21 1H20 2H20 1H21 • Continued settlement, book and broker growth • Proprietary “Infynity” platform a successful driver of broker recruitment • Se
Slide 9: FY2021 Half Year Results
FY2021 Half Year Results Andrew Kitchen Chief Financial Officer
Slide 10: Financial Performance
Financial Performance Underlying NPAT Net Interest Income ($m) ($m) 3.3 3.0 2.5 2.5 2.6 2.4 2.3 1H20 2H20 1H21 1H21 Exc ATM1 1H20 2H20 1H21 CAR RATIO (LEVEL 2) %2 Credit Provisions3 (bps) 23.8 21.2 30 18.7 26 17.9 12 1H20 2H20 1H21 Proforma 1H21 1H20 2H20 1H21 1.ATM Bailment one-off write off 2.Pro-
Slide 11: Financial Performance (cont.)
Financial Performance (cont.) Underlying NPAT ($m) 24% increase ↑ 11
Slide 12: Group Financial Snapshot
Group Financial Snapshot Solid result in a challenging environment 1H21 Change1 Group Underlying NPAT excl. ATM ($000's) 2,969 ↑ 23.7% Group Underlying NPAT ($000's) 2,338 ↓ 2.5% Cost to Income Ratio (Exc. ECL) 79% ↓ 0.3% Statutory NPAT ($000's) 2,176 ↓ 6.4% Bank Loan Spot Book Size ($000's) 306 ↑ 7
Slide 13: Segment Performance
Segment Performance Aggregation and Bank NPAT* ($m) Broker Numbers (#) 4.33 1,910 3.80 2.89 1,740 1,667 1H20 2H20 1H21 1H20 2H20 1H21 Loan Book ($b) NPAT ($m) 1H20 2H20 1H21 -0.35 0.27 0.29 0.31 2.20 2.20 2.10 -1.29 -1.42 -0.70^ -1.99 1H20 2H20 1H21 Off Balance Sheet On Balance Sheet ^loss from ATM
Slide 14: Net Interest Margin
Net Interest Margin Solid improvement in 1H21 14
Slide 15: Expenses ($m)
Expenses ($m) Remained flat 15
Slide 16: Expected Credit Loss Provisions
Expected Credit Loss Provisions 1H20 2H20 1H21 Estimated Credit losses (bps) 12 26 30 2.2 -6.4 -3.8^ GDP growth (%) 5.1 7.4 6.6 Unemployment (%) 558 554 574 Residential property prices ($ 000’s) COVID-19 Relief Packages (% of customers) 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% ^Sep-20
Slide 17: Capital
Capital Capital Adequacy Ratio (CAR) 17
Slide 18: 1H21 Highlights & Outlook
1H21 Highlights & Outlook
Slide 19: Aggregation Highlights
Aggregation Highlights Continued growth Finsure to continue to drive profitable growth via broker acquisition and adjacencies • Core businesses in sync with key market trends • Market disruption providing tailwinds • Profitable growth to continue via broker growth and additional fee revenue • Contin
Slide 20: Proprietary Technology Platform
Proprietary Technology Platform Key to Finsure’s Success Finsure’s proprietary Customer Relationship Management (CRM) system ‘Infynity’ utilises the latest cloud based technology to give our brokers market leading business tools. Finsure continues to build new features to maintain technology leaders
Slide 21: Proprietary Technology Platform
Proprietary Technology Platform Finsure has replaced the offline home loan application process with technology Dynamic questions allow Advanced workflow allows for accurate and detailed brokers to manage identification of borrower customer needs with requirements and goals minimal effort Technology
Slide 22: Proprietary Technology Platform
Proprietary Technology Platform Infynity is a complete origination platform with proprietary architecture and sophisticated integrations Distribution National network of 1,900+ loan writers Intuitive UX to assist users who aren’t tech savvy CRM Platform In-built Proprietary architecture for serv
Slide 23: Bank Highlights & Outlook
Bank Highlights & Outlook Balance sheet growth and margin transformation Balance sheet growth has recommenced Revenue transformation Deposit generation has commenced capability in place 23
Slide 24: Bank Highlights & Outlook
Bank Highlights & Outlook Group and broader distribution in place supporting lending growth Group Target: Become a Top 10 lender on the Finsure Panel Bank Settlements through Finsure #10 $55M Growing with Finsure % Leverage 1,900+ loan writers #22 x3 growth Develop white label partnerships #32 $17M
Slide 25: Bank Highlights & Outlook
Bank Highlights & Outlook Increased on balance sheet settlements driving NIM $29m settled on balance sheet in January, driving balance sheet growth of 8% in a single month Lending Book ($m) 330 306 285 2H20 1H21 Jan-21 25
Slide 26: Bank Highlights & Outlook
Bank Highlights & Outlook Margin transformation Margin transformation has commenced through on balance sheet lending, including recent hybrid which increases capacity to lend by approximately 50% Settlement Mix Weighted Lending Return (bps) 115 38% 20 - 30bps ~2.3x increase 82% 20 - 30bps 50 62% 160
Slide 27: Bank Highlights & Outlook
Bank Highlights & Outlook More diverse portfolio Building a more diversified and lower risk portfolio Geographical Lending Mix (%) Transaction Deposit Mix (%) 65% 35% June 20 Dec 20 65% 27.2% 28.2% 41.9% 46.3% 35% 11.4% 11.8% 12.4% 14.6% 3.5% 2.7% Jun-20 Dec-20 NSW VIC QLD SA, TAS, NT & ACT WA NSW V
Slide 28: Outlook Summary
Outlook Summary Foundation for success. Group underlying NPAT (exc ATM write-off) grew 24% to $3M for 1H21 Delivering profitable Aggregation profits continue to grow growth Bank’s balance sheet growth and margin transformation will deliver profitability in the near term Fast growing fintech Settleme
Slide 29: Appendix
Appendix
Slide 30: Appendix Reconciliation
Appendix Reconciliation 1H21 2H20 1H20 Statutory Net Profit After Tax ($’000s) 2,176 2,325 2,999 Revenue adjustments Non-recurring gain on sale of bonds - (270) (882) ATM insurance receivable recognised - (2,917) - Disposal of AAA (57) - - Expense adjustments IFRS fair value adjustments from
Slide 31: Profit & Loss Statement
1 1 Underlying Group ($m) Aggregation Wholesale Bank Eli 1H FY2021 2H 2020 $ Var. % Var. Gross Revenue Commission Income/(Exp.) 150.3 7.7 - (0.6) 157.5 149.6 7.9 5% Interest Income/(Exp.) 0.0 0.0 4.9 0.1 5.0 5.1 (0.1) -2% Fees & Other Income 5.8 0.4 0.5 - 6.6 6.7 (0.0) -1% TotalGross Revenue 156.2 8
Slide 32: Balance Sheet
Group ($m) 1H21 2H20 $ Var. % Var. Assets Cash & Equivalents 132.4 93.1 39.4 42.3% NPV Asset 443.3 387.2 56.1 14.5% Loans & Advances 305.6 283.6 22.0 7.8% Other Assets 74.5 75.4 (0.9) (1.2%) Total Assets 955.9 839.3 116.6 13.9% Balance Sheet Liabilities Deposits 391.3 345.8 45.5 13.2% • Portfolio gr
Slide 33: Experienced and Refreshed Management Team
Experienced and Refreshed Management Team Brett Morgan John Kolenda Andrew Kitchen BNK/BC CEO Finsure CEO Chief Financial Officer Amber Smith Allan Savins Simon Bednar David Maher Chief Operating GM – Banking GM Aggregation Head of Officer & Wholesale Marketing Dara Wettner Malcolm Cowell Talia Swer
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