Kina Securities Ltd. · ASX:KSL
Kina Securities — FY2023 Earnings Presentation
22 slides from Kina Securities's earnings presentation, Feb 28, 2024
Slide 1: Full Year Results 2023
Full Year Results 2023 28 February 2024 1
Slide 2: Overview
Overview. Organic growth momentum NPBT up 18% NPAT down 1% (corporate tax rate up from 30% to 45%) Deposits up 12%, Lending up 19% Customer Acquisition Net Customer growth 19% (+40,000) Market share growth, second largest Bank by total footings (Deposits and Loans) Shareholder returns Underlying ROE
Slide 3: Corporate Tax
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 was effective as of 1 January 2023. • KSL’s deferred taxes at December 2022 were revalued at the new rate in line w
Slide 4: Delivering our strategy
Delivering our strategy. • New retail customer acquisition up 20% against PCP and new commercial customer acquisition up by 9% against PCP. Growth & • Loan book growth was extremely strong for the year at 19% growth, reflecting very strong drawdown performance and active pipeline management in busin
Slide 5: Solid loan growth
Solid loan growth. Underlying ROE Net Loans Revenue 2,562 454 Impacted by higher 2,159 410 corporate 1,951 tax rate 364 PGK'bn 17.9% PGK'm 16.7% 16.8% FY21 FY22 FY23 FY21 FY22 FY23 FY21 FY22 FY23 5
Slide 6: Shareholder returns
Shareholder returns. Capital Adequacy Dividend per share Statutory Earnings per Share 23.3% 26.8 26.4 40.6 22.5% 25.6 36.7 20.0% 24.7 12.0% 10.6 16.4 10.0 10.0 13.9 9.3 FY2021 FY2022 FY2023 FY2021 FY2022 FY2023 FY2021 FY2022 FY2023 Capital Adequacy (T1+ T2) DPS (PGK toea) DPS (AUD cents) EPS (PGK to
Slide 7: Financial Results
Financial Results. 7
Slide 8: Financial Highlights
Financial Highlights. FY23 FY22 Movement % Net Interest Income (PGK m) 203.3 181.2 12% Revenue (PGK m) 454.2 410.0 11% Net Profit before Tax (PGK m) 175.3 148.4 18% Underlying NPAT(PGK m) 105.2 106.1 (1%) Cost to income ratio (%) 54.2 58.2 7% Underlying ROE (%) 16.8 17.9 (6%) Ordinary Dividend (AUD
Slide 9: Underlying NPAT -1%
Underlying NPAT -1%. NPAT trend NPBT trend 116.5 FY23 impacted by new CIT rate Underlying NPAT 175.3 Tax Expense 105.2 148.4 96.2 106.1 133.7 70.1 Deferred Tax credit Westpac separation 42.3 70.8 37.5 PGK m Statutory NPAT 96.2 106.1 105.2 Underlying NPAT FY2021 FY2022 FY2023 FY2021 FY2022 FY2023 • C
Slide 10: Loan portfolio growth of 19%
Loan portfolio growth of 19%. 1,735 1,420 1,330 PGK'm 534 576 450 79 80 98 98 94 110 72 93 30 Overdraft Term Loans IPL Asset Financing Housing Loan FY2021 FY2022 FY2023 10
Slide 11: Asset Quality
Asset Quality. 8.7% 8.7% 6.8% 6.3% 5.6% 5.4% 3.1% 1.9% 1.9% 1.9% 2.0% 0.8% 0.3% 0.2% 0.4% Impairment Exp % of GLA NPL % of GLA + 90 day arrears + 180 day arrears Provision % of GLA Dec21 FY Dec22 FY Dec23 FY 11
Slide 12: Net Interest Margin
Net Interest Margin. 7.4% 7.4% 7.0% 7.0% 7.1% 6.7% 6.5% 6.5% • NIM impacted by: 6.2% 6.0% 6.5% 5.5% 5.6% • Lower yields on central bank treasury bills. 5.8% • Strong growth in corporate wholesale deposits 5.5% 5.3% • Solid growth in commercial lending 3.4% 3.4% 85.4 91.9 92.5 88.7 92.5 110.8 Jun21 H
Slide 13: Kina Wealth
Kina Wealth. Funds under management Funds under administration 940 17.35 17.96 920 14.29 922 900 880 PGK'bn 880 10.00 860 840 843 8.91 8.92 820 800 FY2021 FY2022 FY2023 FY2021 FY2022 FY2023 FuA (PGK'bn) Member ('000) 13
Slide 14: Market share gains and strong customer growth
Market share gains and strong customer growth. Market share percentage - lending Market share percentage - deposits 16,176 33,106 30,018 13,465 14,142 15.8% 25,693 13.1% 15.3% 12.9% PGK'bn PGK'bn 14.5% 11.8% 1,951 2,159 2,562 3,037 3,879 4,345 FY2021 FY2022 FY2023 FY2021 FY2022 FY2023 Total System L
Slide 15: Loan portfolio by industry
Loan portfolio by industry. Other* 42 46 70 Equipment Hire 34 44 20 Transport & Storage 23 68 18 Hotel & Restaurants 75 79 95 Post & - 97 Telecommunication - Building and 171 184 FY2023 Construction 105 FY2022 Other Business 213 286 169 FY2021 Real Estate/Renting/Busin 316 360 ess Services 351 Perso
Slide 16: Deposit by products
Deposit by products. 1,864 1,637 1,443 1,471 1,298 PGK'm 786 585 497 472 512 327 368 Fixed Term Cash Management Accounts Current Account Savings Account FY2021 FY2022 FY2022 16
Slide 17: Deposit tenure
Deposit tenure. FY2023 FY2022 12 months 24 months 24 months 7% 0% 12 months 1% 9% 6 months 6 months 11% 9% 3 months 3% 3 months 2 months 3% 7% On Call 1 month 2 months 4% 1 month On Call 2 months 8% 64% 3 months 6 months 12 months 1 month 7% 24 months On Call 67% 17
Slide 18: Our Strategy
Our Strategy. Fairness Responsive Together Inspire Serve To constantly improve the prosperity of the people, communities and Purpose markets that we serve. The most dynamic, progressive and accessible financial services Vision organisation in the Pan Pacific region. • Growth & prosperity • Dynamic p
Slide 19: From a Bank to a Market Maker
From a Bank to a Market Maker. 2020-21 2022-24 2025 Your trusted bank Your trusted financial services partner Your trusted partner in the Pan Pacific Region + Traditional banking + Traditional banking + Investment Banking Bank Services + Pan Pacific diversified investment bank + Digital banking + Di
Slide 20: Looking ahead in 2024
Looking ahead in 2024. • Growth in lending market share through strong organic growth across retail, SME and business lines. Growth & • Growth in digital channel by driving scale in payments platforms and partnerships. Prosperity • Restoring growth in foreign exchange income. • Growth in Private Ban
Slide 21: Economic Outlook
21 Economic Outlook Kina Securities Limited
Slide 22: Economy
Economy. 2024 Growth Forecasts 8.0 Projection 6.0 Total GDP Growth 5.3% 4.0 Percent 2.0 Resource GDP 7.0% 0.0 2019 2020 2021 2022 2023 2024 2025 2026 2027 -2.0 Non-Resource GDP 4.7% -4.0 -6.0 World GDP Emerging & Developing Asia PNG 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% Global Outlook Domesti