BSP Financial Group Ltd. · ASX:BFL
BSP Financial — Bank of South Pacific — FY2018 Earnings Presentation
25 slides from BSP Financial's earnings presentation, February 2019
Slide 1: Shareholder Presentation: FY 2018 and Q4-18 Results
SHAREHOLDER PRESENTATION FY 2018 and Q4-18 Results Group CEO – Robin Fleming
Slide 2: Disclaimer
Disclaimer NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES This presentation has been prepared and issued by Bank of South Pacific Limited (the “Company”), and may not be reproduced in whole or in part, nor may any of its contents be disclosed to any other p
Slide 3: Where BSP operates
Where BSP operates BSP is the leading financial services provider in the countries in which we operate #1 Loan market share in 5 countries #1 Deposit market share in 5 countries POMSOX Share Price of K10.30 as at 22- Feb-19, Market cap of K4.8b BSP Classification: Internal Use Only FY 2018 and Q4-18
Slide 4: BSP's growing service offering
BSP’s growing service offering BSP is the only wholly owned Papua New Guinean bank with operations across the Pacific and in South East Asia Papua New Solomon Guinea Fiji Islands Samoa Cook Islands Vanuatu Tonga Cambodia Bank Bank Bank Bank Bank Bank Bank BSP’S TOP 10 SHAREHOLDERS Finance Finance Fi
Slide 5: 2018 highlights
2018 highlights The BSP Group continues to perform well with 2018 NPAT up 11.5% to K844m. Further, the 2018 result represents three [3] consecutive years of double digit profit growth. Profit (NPAT) up Total Income up Total Assets up Cost to Income ratio 11.5% to 8.4% to 3% to improves to K844.1m K2
Slide 6: Group financial KPI's
Group financial KPI’s BSP Group has maintained strong results across all key performance ratios COST TO INCOME ROE & ROA 27.8% 29.6% 30.6% 30.7% 44.7% 42.9% 41.0% ROE ROA 42.6% 3.1% 3.3% 3.5% 3.7% 2015 2016 2017 2018 2015 2016 2017 2018 CAPITAL ADEQUACY PROVISIONS TO LOANS / NPL TO LOANS 3.2% 4.9% 4
Slide 7: Group financial KPI's
Group financial KPI’s Balance sheet indicators illustrate continued growth in 2018. LOANS TOTAL ASSETS [Kb] 11.2 12.5 [Kb] 20.8 22.4 23.1 10.1 18.2 8.6 CAGR = 13.5% CAGR = 8.1% 2015 2016 2017 2018 2015 2016 2017 2018 DEPOSITS DEPOSIT MIX CAGR [Kb] 16.9 17.9 18.2 [Kb] 14.6 4.5 4.3 12.7% 3.0 4.1 CAGR
Slide 8: Contribution by business
Contribution by business All countries have contributed positively to BSP’s NPAT and total asset growth. NPAT CONTRIBUTION TOTAL ASSETS CONTRIBUTION [Km] [Km] 880 844 10 6 2 2 24,000 23,050 3 41 840 52 7 6 23,00022,370 20 107 187 167 58 57 43 800 22,000 757 760 21,000 720 20,000 680 19,000 640 18,00
Slide 9: Income stream trends
Income stream trends Total income increased by 8.4% YOY, notwithstanding more subdued economic conditions … despite BSP reducing / removing its fees in recent years. Net interest Fee/ FX income Other Total KEY DRIVERS income commission income income ● Interest income – loans, T- YOY: 8.1% 2.7% 13.9%
Slide 10: Expenditure trends
Expenditure trends Total costs rose marginally [4.1%] in 2018 … below the three year average of 4.8% per annum. Computing costs grew by 10%, which is in-line with our digital strategy and core banking replacement Staff Admin Premises/ Computing NLL Total KEY DRIVERS costs costs equipment cost operat
Slide 11: Market strength
Market strength BSP’s loan and deposit portfolios are predominantly PNG domiciled. During 2018, BSP Samoa improved to #1 in both its loan and deposit market share. LOANS MARKET SHARE DEPOSIT MARKET SHARE [2018] Rank [2018] Rank PNG 61% #1 PNG 61% #1 Solomon Islands 56% #1 Solomon Islands 52% #1 Tong
Slide 12: Channel growth
Chanel growth Continued channel investment to improve service levels across the BSP Group Total Branches 83 46 17 8 3 2 3 4 Branches 45 43 0 0 0 0 0 2 Sub Branches ATMs 529 314 118 30 22 9 23 13 Sub Branches EFTPOS ATMs 13,042 9,203 1,863 341 405 402 427 401 EFTPOS 591 372 45 75 37 9 29 24 Agent FY
Slide 13: Digital initiatives
Digital initiatives BSP will continue to enhance customer experience … largely through digital investment BSP’s track record ● BSP was the first bank in PNG to pioneer multichannel ● Over the years, BSP’s innovative processes and experiences across PNG when ATMs, EFTPOS and debit technology, continu
Slide 14: BSP and the community....
BSP and the community.... Our corporate social responsibility … 2018 support Our Community Project of “Solar Light was over K8m in cash and kind. Installation”, enabled BSP to deliver 45 projects to the value of K1.16m in PNG in 2018 ... and offshore branches to the value of K148,000 Sponsorship ● 3
Slide 15: Growing PNG's middle class wealth
Growing PNG’s middle class wealth Our home loan products, particularly the FHOS, are providing Papua New Guineans with the opportunity to grow their personal wealth and consequently greater future financial freedom / security ● Attractive 4.00% per annum rate FIRST HOME OWNERSHIP SCHEME LOAN over a
Slide 16: Delivering greater value to customers
Delivering greater value to customers Zero fee increases since 2014 and forgone fee income in the order of K40.2m per annum in 2018, due to fees reduced or waived … … since 2014, we estimate that the cumulative annual fee income forgone will increase to just under K50m in 2019. 2014 to 2017 2014 to
Slide 17: BSP Group strategic focus
BSP Group strategic focus In 2019 BSP will focus on developing and executing its Digital Strategy and the implementation of its new Banking system. It will also be maintaining its geographic and service diversification strategy. ● Successful implementation of Core Banking system replacement over a t
Slide 18: Conclusions
Conclusions 2018 was an outstanding year with NPAT increasing by 11.5% to K844m … with improvements 1 across virtually all financial metrics 2 ROE maintained > 30%, ROA at 3.7% is at highest level in the last five [5] years Cost-to-income ratio down to 41.4% … its lowest level in the last five [5] y
Slide 19: APPENDIX – Q4-18 results
APPENDIX – Q4-18 results FY 2018 and Q4-18 Results BSP Classification: Internal Use Only 19
Slide 20: Profit and Loss [Q4-18]
Profit and Loss [Q4-18] BSP’s NPAT declined slightly by 4.5% between Q3-18 and Q4-18 … due to retrospective system license costs, driven by accounts growth. NPAT grew by 3.4% YOY [Q4-17 vs Q4-18] Total Income Operating Lending Write- NPAT costs offs HIGHLIGHTS PQ 3.1% 10.7% 31.4% (4.5%) ● Q4-18 oper
Slide 21: Balance sheet [Q4-18]
Balance sheet [Q4-18] Our balance sheet continues to strengthen, with increases in loans and deposits in Q4-18 of K175m and K114m respectively. Q4-18 total assets remain at K23bn Loans and Deposits Total Total Net assets / HIGHLIGHTS advances Assets Liabilities SH equity ● Total loans increased by K
Slide 22: Group key ratios [Q4-18]
Group key ratios [Q4-18] All key ratios remain positive COST TO INCOME TREND ROE [annualised] 31.1% 32.5% 32.0% 28.8% 29.2% 42.2% 41.6% 43.1% 40.6% 40.1% Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 ROA [annualised] LOAN TO DEPOSIT RATIO 3.9% 3.8% 3.6% 3.5% 3.6% 62.6% 63.9% 65.4% 68.3
Slide 23: Group key risk ratios [Q4-18]
Group key risk ratios [Q4-18] Our risk ratios remain stable and asset quality remains sound CAPITAL ADEQUACY HIGHLIGHTS 3.2% 4.9% 3.1% ● Capital adequacy ratio declined 6.9% 7.3% slightly to 22.9% in Q4-18 due to payment of dividend, but 21.3% 12.0% 22.9% 20.3% 19.8% remaining well in excess of the
Slide 24: Share price
Share price Dividend yield of 12.3%, based on K10.30 share price … and market capitalization of K4.8b. 22nd FEBRUARY 2018 TO 22nd FEBRUARY 2019 K10.70 Share Price Volume traded K10.20 (millions) 5.0 green K9.70 Closing price (Kina) 4.0 K9.20 red K4.817b Market K8.70 Cap Share Price 3.0 K8.20 K9.48 S
Slide 25: Thank you
THANK YOU FY 2018 and Q4-18 Results BSP Classification: Internal Use Only 25