Kina Securities Ltd. · ASX:KSL
Kina Securities — H1 2019 Earnings Presentation
19 slides from Kina Securities's earnings presentation, Aug 23, 2019
Slide 1: Kina Securities Limited Half Year Results - 30 June 2019
Kina Securities Limited Half Year Results - 30 June 2019 23 August 2019
Slide 2: Important notice and disclaimer
Important notice and disclaimer You must read this notice before reading or making any use of this document or any information contained in this document. By accepting this document, you agree to the following terms and conditions, including any modifications to them. Confidentiality: This Presentat
Slide 3: Financial results
Financial results Organic business remains steady while ensuring strategic acquisition of ANZ business continues on plan and on budget Interim dividend AUD 4.0 cents per share or PGK 10.0 toea Net profit after tax up 14% on PCP to PGK 23.6m Revenue up by 7% on PCP to PGK 83.7m Net interest income gr
Slide 4: Highlights
Highlights Delivered several key e-commerce outcomes that will transform the business and improve cost efficiency Refreshing transactional banking, cash management and home loan offers incorporating online origination Customer online transactions up by 30% First bank to connect to the Bank of PNG’s
Slide 5: Business growth
Business growth FX income up 33% to PGK 18.7m on PCP Deposit growth grew 29% compared to 1H 2018 and 8% compared to 2H 2018 Modest loan book growth, confident of 2H acceleration Customer numbers grew to 23,788 up by 15% Kina Funds Management grew to PGK 8.1bn up by PGK 600m from Dec 2018
Slide 6: Integration update
Integration update Program continues to track well and according to plan Certified two new data centres Visa scheme certification completed with EMV chip debit and credit cards now in production Program to embed cultural change progressing well and incorporates transitioning ANZ staff 96% of impacte
Slide 7: Economic update
Economic update New government appointed in May Transition of power relatively smooth but led to some uncertainty New government has announced it will honour Total agreement allaying uncertainty IMF forecast GDP expanding 3.8% in 2019 and 3.1% in 2020 Foreign exchange situation has improved with som
Slide 8: Key revenue measures
Key revenue measures Revenue (PGK’m) Prior Period Comparison - June Prior Period Half-Yearly Comparison 47 47 a 2 42 43 38 38 19 22 49 18 2 20 ag 19 19 14 wo J 7 "| 0 10 A 3 | lt ll 2 2 ool 2/8 OE o20 Beal Gell 2 Interest onLoans _Interest on Foreign Others Jun17 (HY) Dec17 (HY) Jun18 (HY) Dec18 (HY
Slide 9: Key revenue measures
Key revenue measures NIM (PGK’m) Prior Period Comparison - June en 33.6 i | : a 7.3% a ee Jun17 (HY) Jun18 (HY) Jun19 (HY) mmm Net interest income Net interest margin (%) Prior Period Half-Yearly Comparison ao © wg N a ss — i Q Jun17 (HY) Dec17(HY) Juni8(HY) + Dec18(HY) —Jun19 (HY) mmm Net interest
Slide 10: Productivity
Productivity Cost to income Prior Period Comparison - June 67.8% 9 58.2% 57.1% Jun17 (HY) Jun18 (HY) Jun19 (HY) Prior Period Half-Yearly Comparison 67.8% 58.2% 57.1% 54.9% 50.2% Jun17(HY) Decl7(HY) Jun18(HY) Decl8(HY) Jun19(HY) Return on equity Prior Period Comparison - June 17.5% 16.1% 8.0% Jun17 (
Slide 11: Shareholder returns
Shareholder returns Earnings per share Prior Period Comparison - June 14.4 126 .~ fin ie = Jun17 (HY) Jun18 (HY) Jun19 (HY) m Earnings per share (PNG Toea) = Earnings per share (A cents) Prior Period Half-Yearly Comparison 16.7 14.4 12.2 12.6 67 46 48 vo fe in i 1 z Jun17 (HY) Dec17 (HY) Jun18(HY) D
Slide 12: Balance sheet
Balance sheet LOAN BOOK PORTFOLIO Loans FY18 FY18 Loans HY19 Esi loan Overdraft Esi loan Overdraft 4% 6% 4% 7% Housing Loan Housing Loan 14% 16% Asset Financing 2% Asset Financing 2% Investment Property Loan Investment 5% Property Loan 8% Term Loans 68% Term Loans 64% Deposits FY18 Deposits HY19 24
Slide 13: Capital management
Capital management Capital adequacy Leverage ratio 30% 29% 29% 28% 28% 12% 12% 12% 12% 12% Jun17 (HY) Dec17 (FY) Jun18 (HY) Dec18 (FY) Jun19 (HY) Capital Adequacy: T1 + T2 BPNG minimum total risk based capital 13
Slide 14: Asset quality
Asset quality Structure of loan book 14
Slide 15: Portfolio
Portfolio 300 261 254 249 247 250 208 200 182 155 147 145 150 100 81 84 83 73 70 50 50 40 21 22 23 12 15 14 14 6 6 5 5 4 9 - 3 - 2 4 4 1 1 1 4 - Dec-17 Dec-18 Jun-19 Agriculture, Forestry & Fishing Mining Manufacturing Electrical, Gas & Water Building and Construction Wholesale & Retail Hotel & Rest
Slide 16: New growth with digital strategy
New growth with digital strategy Customer Number Growth (PGK Bln) 25,000 23,788 20,000 20,625 18,442 17,271 15,000 15,101 10,000 5,000 - Jun17 (HY) Dec17 (HY) Jun18 (HY) Dec18 (HY) Jun19 (HY) 16
Slide 17: Market share gains
Market share gains Market share percentage Market share percentage – Lending (PGK’m) – Deposits (PGK’m) Market Share-Deposits 6.4% 6.4% 7.0% 6.5% 5.3% 6.0% 4.8% 4.5% 5.8% 5.5% 685 732 786 852 866 1,098 1,316 1,418 965 1,019 Jun 17 (HY) Dec 17 (FY) Jun 18 (HY) Dec 18 (FY) Jun 19 (HY) Jun 17 (HY) Dec
Slide 18: Rebalancing deposits (PGK'm)
Rebalancing deposits (PGK’m) 18
Slide 19: Wealth management
Wealth management Funds under Administration (PGK’b) Funds under Management (PGK’b) Member numbers in ‘000s (PGK Bln) FUM (Consistent Growth) Total (PGK Bln) Members (000) 14.00 900 771 750 717 12.31 11.72 800 12.00 708 11.38 10.51 700 10.00 600 9.00 8.08 8.00 7.46 8.00 6.97 7.14 500 6.60 7.00 6.22