Liberty Financial Group Ltd · ASX:LFG
Liberty Financial — FY2021 Earnings Presentation
32 slides from Liberty Financial's earnings presentation, Aug 30, 2021
Slide 1: Liberty Financial Group Full Year Results
Click to edit Master text styles Liberty Financial Group Full Year Results 30 AUGUST 2021
Slide 2: Presenting today
Presenting today… Click to edit Master text styles James Boyle Peter Riedel Chief Executive Officer Chief Financial Officer 2
Slide 3: Agenda
Agenda Click to edit Master text styles 01 Business Update 02 Financial Update 03 Outlook 04 Q&A 3
Slide 4: Business Update
Click to edit Master text styles Business Update
Slide 5: Business
Business Click to edit Master text styles Liberty Financial Durable Business Model Diversified Portfolio Started 1997 and only investment Advanced risk-management grade non-bank (BBB-/positive/A-3) capabilities Pioneered specialty finance industry Proprietary technology supports in Australia and New
Slide 6: Strategy
Strategy ClickPurpose to edit Master text styles Focus Capabilities Tec ng hn ici ol erv og S y Helping more k Management Customer Experience Risk Adjusted Returns people get Culture financial Ris is D tr ib ng u tio di n Fu n Customer Choice Free-Thinking Values Fair Learning Accountable Invested R
Slide 7: Business Highlights
Business Ongoing growth in loan originations and average assets Highlights Click to edit Master text styles Ongoing growth in net revenue and net profit Continuing strength in return on assets COVID portfolio risk exposure managed effectively Strong capital and liquidity position Investment-grade ra
Slide 8: Financial Highlights
Financial Highlights Click to edit Master text styles % Underlying NPATA Net revenue NIM $226.0m ($140.6m) $600.1m ($508.1) 3.08% (2.65%) +61% +18% +43bps BDD Cost to income Underlying ROA 0bps (28bps) 22.8% (24.7%) 1.9% (1.2%) -28bps -190bps +70bps * Balances represent: FY21 (FY20) change between t
Slide 9: Business Highlights
Business Highlights Click to edit Master text styles Average financial assets New assets originated COVID arrangements $12.0b ($11.5b) $4.1b ($3.5b) $84m ($1,133m) +4% +17% -93% FTE Staff Broker NPS Customer NPS 490 (434) 75 (63) 53 (49) +13% +19% +8% * Balances represent: FY21 (FY20) change between
Slide 10: Prospectus Forecast
Prospectus Forecast Click to edit Master text styles Key Metric FY21 Actual Forecast Avg earning assets $12.0b $11.9b Actual performance better than prospectus forecast across each key metric New loans originated $4.1b $3.5b Total revenue $853m $838m Net revenue $600m $542m Underlying NPATA $226m $1
Slide 11: Financial Update
Click to edit Master text styles Financial Update
Slide 12: Profit Performance
Profit Performance Click to edit Underlying Master text styles NPATA ($’m) Statutory NPATA ($’m) 226.0 197.2 160.2 19.6 140.6 140.6 FY20 FY21 FY20 FY21 Growth of 61% in FY21 compared to FY20 One-time IPO costs explains difference between FY21 • 41% growth excluding impact of $19.6m underlying NPATA
Slide 13: Profit Drivers
Profit Drivers Average Assets ($’b) Impairment Cost ($’m) Click to edit Master text styles 12.0 New financial asset origination 32.5 FY20 result includes collective 11.5 $4.1b (v$3.5b) growth of 17% provision for COVID Discharges (competition) and FY21 no expense as realised losses prepayments (affo
Slide 14: Profit Drivers
Profit Drivers Total Revenue ($’m) BDD (bps) Click to edit Master text styles 433.1 Stable revenue 2H21 v 2H20 27 2H20 BDD driven by 23bps increase 419.1 419.9 Revenue decline 3% 2H21 v 1H21 in collective provision for COVID from customer rate reductions 2H21 realised losses (3bps) lower following R
Slide 15: Revenue
Revenue Average Assets ($’b) Lending Income ($’m) Click to edit Master text styles 12.2 Average asset growth 5% 2H21 v 36 Reduction in 2H21 as increasing loan 12.0 33 11.7 2H20 and 2% v 1H21 31 life spreads fee income over longer New financial asset origination period $2.1b (v$2.0b 1H21 and $1.7b 2H
Slide 16: Cost of Funds
Cost of Funds Click to edit Master text styles Cost of Funds (bps) Total Financing ($’b) 12.3 0.0 (0.1) 12.2 267 217 200 225 210 199 42 7 1 Dec-20 Term W’Sale Jun-21 2H20 1H21 2H21 Issues Mov’t Reduction in average 1M BBSW from 7bps in 1H21 to 1bps in Obtained $2.6b new funding in 2H21 ($4.9b in FY2
Slide 17: BDD
BDD 2H20 (27 bps) 2H21 (0 bps) Click to edit Master text styles 23 3 (6) 8 6 3 0 (10) Realised Specific Specific Collective Realised Specific Specific Collective Loss Provision Provision Provision Loss Provision Provision Provision (Release) (Increase) (Release) (Increase) 1H21 (0 bps) 2H21 BDD (0bp
Slide 18: Cost to Income
Cost to Income $’m 2H20 1H21 2H21 Click to edit Master text styles Cost of commissions paid to brokers Fees and commissions (gross) 94.5 106.3 99.9 allocated over longer period with increasing loan life Operating expenses Personnel 37.2 39.8 42.1 Personnel costs reflect increase in FTE to 490 (Jun-2
Slide 19: COVID
COVID Click to edit Master COVID text styles impacted customers making +30 day delinquency (%) partial payments ($’m) 8.41 1,133 (9.7%) 887 3.92 262 (2.2%) 84 (0.7%) 2.71 240 232 73 29 11 6 1 0 Jun-20 Dec-20 Jun-21 2H20 1H21 2H21 Material reduction in customers impacted by COVID Delinquency measures
Slide 20: Loss Provisions
Loss Provisions Portfolio by Stage Collective Provision by Stage Provisions by Nature ($’m) Specific provisions at Jun-21 Click($’m) to edit Master text styles ($’m) ($21m) consistent with prior 77 77 75 periods 11,712 12,020 12,280 56 54 54 Collective provisions at Jun-21 56 54 54 ($54m) consistent
Slide 21: Segments
Segments Average Assets ($’m) Net Revenue ($’m) Click to edit12,307 Master text styles 11,991 Average asset growth in all 297 Growth in 2H21 net revenue in all 11,749 303 8,723 segments in 2H21 v 2H20 and 1H21 262 segments v 2H20 and 1H21 8,530 111 105 8,450 As expected, stronger growth 97 achieved
Slide 22: Financial Position
Financial Position $’m Dec-20 Jun-21 Click to edit Master text styles Cash 771 604 Stable balance sheet and leverage Final unfranked distribution 24 cents per Financial assets 11,976 12,239 Security representing seven months’ trust distribution in Liberty Financial Group Trust Loans to related parti
Slide 23: Outlook
Click to edit Master text styles Outlook
Slide 24: Outlook
Economic indicators supportive of credit growth Outlook Click to edit Master text styles Competition for customers will continue to be fierce Providing support to more COVID impacted customers Reducing borrowing cost should support NIM Plan to launch expanded auto finance solutions Continue investme
Slide 25: Questions
Click to edit Master text styles Questions
Slide 26: Appendix
Click to edit Master text styles Appendix
Slide 27: Profit or Loss
Profit or $’000 Interest income FY20 648,796 FY21 622,035 Loss Click to edit Master text styles Other income 203,517 231,035 Total revenue 852,313 853,070 Finance expense (532,777) (459,138) Bad and doubtful debts (32,501) (370) Personnel expenses (70,646) (95,082) Other expenses (60,641) (86,082) P
Slide 28: Reconciliation Statutory to Underlying
Reconciliation $’m FY20 FY21 Statutory totext styles Click to edit Master Statutory NPAT 134.7 185.4 Pro-Forma IP Amortisation 5.9 11.8 Statutory NPATA 140.6 197.2 Non-recurring personnel costs - 20.1 IPO offer costs - 12.4 Tax effect of adjustments - (3.7) Adjustments - 28.8 Underlying NPATA 140.6
Slide 29: Balance Sheet
$’000 Jun-20 Jun-21 Balance Cash and cash equivalents 498,467 603,869 Financial assets 11,658,874 12,239,391 Sheet Click to edit Master text styles Intangible assets 299,937 288,987 Loans to related parties 325,871 157,212 Other assets 252,917 277,708 Total assets 13,036,066 13,567,167 Financing (11
Slide 30: Products & Services
Products & Services Residential Finance Financial Services Australian mortgages Personal loans Click to edit Master text styles • Personal loans in Australia • Prime and custom lending for residential owner occupier and investment properties SME loans • SME loans in Australia New Zealand mortgages G
Slide 31: Disclaimer
Disclaimer The information provided in this presentation and any information supplied in connection with this No offer of securities presentation (“Presentation”) has been prepared by Liberty Financial Group Limited (ACN 125 611 574) This Presentation is not, and does not constitute, an offer to sel
Slide 32: Thank you
Click to edit Master text styles Thank you
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