Resimac Group Limited · ASX:RMC
Resimac — FY2019 Earnings Presentation
25 slides from Resimac's earnings presentation, Aug 28, 2019
Slide 1: FY19 Financial Results
For personal use only Resimac Group Ltd FY19 FINANCIAL RESULTS 28 AUGUST 2019
Slide 2: Performance Highlights
For personal use only PERFORMANCE HIGHLIGHTS Scott McWilliam, CEO Jason Azzopardi, CFO
Slide 3: FY19 Performance Highlights
FY19 PERFORMANCE HIGHLIGHTS For personal use only $47.2m $31.1m $117.9m 56.6% STATUTORY NORMALISED* NET INTEREST COST TO INCOME NPAT NPAT INCOME RATIO (NORMALISED) 86% 19% 15% 510bps $3.6b $10.2b $13.4b 1.5c PRINCIPALLY FUNDED PRINCIPALLY FUNDED TOTAL ASSETS UNDER FINAL DIVIDEND SETTLEMENTS AUM MANA
Slide 4: Financial Results Summary
PERFORMANCE HIGHLIGHTS FINANCIAL RESULTS SUMMARY For personal use only Strong earnings momentum and 510bps reduction in Cost to Income Ratio 2H19 settlements lower however Q4 settlements increased materially providing strong momentum into FY20 PE Ratio of 10.3 based on share price of 80c and n
Slide 5: Earnings Growth
PERFORMANCE HIGHLIGHTS EARNINGS GROWTH For personal use only Net interest income up 15% driven by 19% principally funded AUM growth, partly offset by lower margins. FY19 JAWS +9% driving 510bps decrease in Cost to Income Ratio. FY19 net fees and commissions increased $5.2m driven by higher RMB
Slide 6: Earnings Growth: Revenue, Earnings and Cost to Income
PERFORMANCE HIGHLIGHTS EARNINGS GROWTH For personal use only REVENUE & EARNINGS COST TO INCOME RATIO 70 62.8 18 70.0% 68.2% 60 55.1 16 51.0 51.6 68.0% 16.6 14 50 42.2 14.5 66.0% 40.3 12 12.9 13.3 64.0% 40 10 61.7% $m $m 10.5 62.0% 30 8 8.2 60.0% 6 57.8% 20 58.0% 56.6% 4 55.4% 10 56.0% 2 54.0% 0 0 H1
Slide 7: Group Margin
PERFORMANCE HIGHLIGHTS GROUP MARGIN For personal use only GROUP NET INTEREST MARGIN (BPS) 164 6 153 (5) (12) FY18 Home Loan Pricing Funding Costs BBSW FY19 BBSW (Spread over Cash) 60 50 40 FY18 FY19 30 Average 21bps Average 33bps 20 10 - bps Oct-17 Jan-18 Oct-18 Jan-19 Jul-17 Jul-18 Jul-19 Apr-18 Ap
Slide 8: Funding Program
PERFORMANCE HIGHLIGHTS FUNDING PROGRAM For personal use only Resimac has continued to strengthen its funding capabilities with new warehouse lines established with UOB (Singapore), MUFG (Sydney branch), and Deutsche Bank (Sydney branch), extending duration profiles and developing strategic relatio
Slide 9: Principally Funded Portfolio Performance
PERFORMANCE HIGHLIGHTS PRINCIPALLY FUNDED PORTFOLIO PERFORMANCE For personal use only ARREARS (%) LOAN PROVISIONS June 2019 BPS Coverage of $m ($m) AUM Prime 4.1 6bps Specialist / Near Prime 7.9 32bps RHG 2.7 55bps Other (incl. NZ) 1.8 32bps Total Provisions 16.5 16bps MORTGAGES PILLAR 3 TOTAL PAST
Slide 10: Principally Funded Portfolio Composition
PERFORMANCE HIGHLIGHTS PRINCIPALLY FUNDED PORTFOLIO COMPOSITION For personal use only 4% 1% Weighted average 4% portfolio LVR – Prime GEOGRPHIC LOCATION NSW LOAN PURPOSE 8% VIC 66.6%; Specialist 69.2% 42% 39% QLD Owner Occupied 16% WA Geographical spread of 58% Investment SA portfolio reflective
Slide 11: Industry Leading Performance FY19 vs. FY18
PERFORMANCE HIGHLIGHTS INDUSTRY LEADING PERFORMANCE FY19 vs. FY18 For personal use only Retail Bank (RBS) Consumer Division REVENUE REVENUE EXPENSES NPAT NPAT 2.7% 9.2% 15.0% 1.0% 19.0% (3.9%) (10.0%) (0.7%) (14.3%) REVENUE (NII) EXPENSES EXPENSES NPAT 11
Slide 12: Outlook & Priorities
For personal use only OUTLOOK & PRIORITIES Scott McWilliam, CEO
Slide 13: Market Considerations: Organisational Resilience
MARKET CONSIDERATIONS ORGANISATIONAL RESILIENCE For personal use only Political Environment Channel Strategy Following the Banking Royal Channel diversification developed Commission, we maintained our and implemented diligent responsible lending Direct sales team moved to Sydney practices cons
Slide 14: Market Considerations: Non-Bank Market Share, House Prices
MARKET CONSIDERATIONS ORGANISATIONAL RESILIENCE For personal use only Non-Bank Market Share House Prices Non-bank market share (c8.5%) continues to increase in Despite house price decreases over the last 18 line with increasing customer preference for the Broker months, our robust credit risk ma
Slide 15: Strategic Priorities: Customer Centric Process Improvement
STRATEGIC PRIORITIES CUSTOMER CENTRIC PROCESS IMPROVEMENT & DIGITAL AUTOMATION For personal use only Customer Group & Experience Definition Borrowers Brokers Investors Employees Shareholders Regulators Improved conversion rates Process Improvements and customer experience Functional proc
Slide 16: Strategic Priorities: Growth in Market Share
STRATEGIC PRIORITIES GROWTH IN MARKET SHARE For personal use only Increase Broker Channel Specialist Focus Expand Direct Channel Penetration Product, policy and Pricing and lead gen Brand awareness and pricing positioning strategy optimisation broker engagement focus Market leading Broker Team reloc
Slide 17: Financial Results
For personal use only FINANCIAL RESULTS Jason Azzopardi, CFO
Slide 18: Consolidated Statement of Profit or Loss
CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 30 JUNE 2019 For personal use only FY19 $m FY18 $m Interest income 445.3 358.3 Interest expense (327.4) (255.8) Net interest income 117.9 102.5 Fee and commission income 19.0 27.6 Fee and commission expense (31.5) (33.4) De-recognition of i
Slide 19: Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019 For personal use only $m 2019 $m 2018 $m $m 2019 $m 2018 $m Assets Cash reconciliation Cash and bank balances 224.8 198.9 Cash at bank and on hand 10.6 15.2 Trade and other receivables 10.7 7.3 Cash collections account 212.7 182.0 Loans
Slide 20: Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2019 For personal use only $m 2019 $m 2018 $m Cash flows from operating activities Interest received 452.3 373.5 Interest paid (318.6) (242.0) Receipts from loan fees and other income 51.7 56.8 Payments to suppliers and employees (150.3
Slide 21: Reconciliation of Net Profit to Cash Flow
RECONCILIATION OF NET PROFIT TO CASH FLOW FOR THE YEAR ENDED 30 JUNE 2019 For personal use only 2019 $m Profit before tax per statement of comprehensive income 63.9 Addback non-cash items Depreciation & amortisation 1.3 Amortisation of capitalised bond issuance costs 7.0 Fair value movement on inter
Slide 22: Scott McWilliam and Jason Azzopardi
For personal use only Scott McWilliam Jason Azzopardi Chief Executive Officer Chief Financial Officer Scott has been with Resimac Group since 2004 in senior Jason joined the Resimac group in July 2018 as Chief executive roles including Chief Operating Officer and Financial Officer. Prior to Resimac,
Slide 23: About Resimac
ABOUT RESIMAC CUSTOMERS 50,000+ Resimac Group is one of Australia and New For personal use only Zealand’s premier and most established non- SETTLEMENTS bank lenders with a history dating back to $4.1b P.A. 1985. Today, with 34 years experience in delivering home finance solutions to a diverse LOAN P
Slide 24: Important Notice & Disclaimer
IMPORTANT NOTICE & DISCLAIMER The information in this presentation provides an overview of the results for the full year ended 30 June 2019. It is general background For personal use only information about the activities of Resimac Group Ltd and is current as at the date of the presentation, 28 Augu
Slide 25: For personal use only
~< resimac Ajuo esn jeuosied JOS