Bsp Financial Group Ltd. · ASX:BFL
Bsp Financial — H1 2022 Earnings Presentation
32 slides from Bsp Financial's earnings presentation, Aug 22, 2022
Slide 1: ASX cover letter: 2022 Half Year Investor Presentation
Company Secretary 22nd August 2022 For personal use only Ms. Nicola Lombardi ASX Limited Exchange Centre 20 Bridge Street Sydney NSW 2000 Australia By Electronic Lodgment Dear Ms. Lombardi, BSP Financial Group Limited – 2022 Half Year Investor Presentation In accordance with the ASX Listing Rules, B
Slide 2: Investor Presentation 1H-2022
For personal use only Investor Presentation 1H-2022 Robin Fleming – Group CEO BSP Financial Group Limited [ARBN: 649 704 656, Incorporated in Papua New Guinea]
Slide 3: Disclaimer
Disclaimer NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES This presentation has been prepared and issued by BSP Financial Group Limited (the "Company"), and may not be reproduced in whole or in part, nor may any of its contents be disclosed to any other per
Slide 4: South Pacific market leader
South Pacific market leader BSP provides financial services to seven South Pacific countries and two in South East Asia. BSP is the largest South Pacific bank, with the most extensive branch network. For personal use only K13.9b [A$5.5b] In net lending 1 K31.6b [A$12.6b] In total assets 1 K5.8b on P
Slide 5: 1H-2022 results overview
1H-2022 results overview A strong improvement in 1H-2022 performance, with positive comparisons to 1H-2021. For personal use only 1H-22 1H-21 1H-22 vs 1H-21 ● Normalised Profit [NPAT, Km] before 586.1 449.3 +30.4% Additional Company Tax ● Profit [NPAT, Km] after Additional Company Tax 396.1 449.3 -1
Slide 6: 1H-2022 Group Financial Performance
For personal use only 1H-2022 Group Financial Performance
Slide 7: Group NPAT trends
Group NPAT trends The Group continues to deliver sustainable profit growth to shareholders, notwithstanding the K190m ACT reducing Group NPAT by -11.8%. For personal use only INCOME [Km] OPERATING LOAN IMPAIRMENT NPAT [Km] EXPENSE [Km] EXPENSE [Km] -11.8% after ACT +12.5% +6.4% +30.4% before ACT 470
Slide 8: NPAT contribution by business
NPAT contribution by business The Offshore Branches 1H-22 contribution to Group NPAT has increased materially … driven largely by BSP Fiji businesses. PNG’s strong underlying performance was impacted by the K190m ACT … falling by 25% as a consequence. For personal use only PNG BANK [Km] OFFSHORE BRA
Slide 9: Underlying performance driver trends
Underlying performance driver trends Net lending and deposit growth of 4.3% and 8.9% respectively in 1H-22 ... with the surplus funds invested in Government securities. For personal use only NET LOANS [Kb] TOTAL ASSETS [Kb] +9.4% +3.9% 13.9 31.6 13.4 28.9 13.2 24.9 A$12.6b 1H-22 A$5.5b CAGR = +2.5%
Slide 10: Key ratios
Key ratios All key ratios remain at robust levels. BSP’s capital position remains well above regulatory requirements of 12% and cost to income has improved. For personal use only COST TO INCOME [%] ROE & ROA [%] -240bps -200bps -30bps 38.5 38.6 12.4 13.2 36.6 10.8 1.5 1.6 1.3 1H-20 1H-21 1H-22 1H-20
Slide 11: Income stream trends
Income stream trends Increased lending activity in PNG and Fiji and interest income from investment securities arising from improved market liquidity in PNG, were the main income drivers. Increased fee and commission income from higher retail and merchant transactional volumes and FX For personal us
Slide 12: Expenditure trends
Expenditure trends Performance based annual salary adjustments and additional staff in Retail, Operations and Compliance has led to higher staff costs over the period. Depreciation, computing, and premises costs also contributed to BSP’s expenditure levels increasing by 6.4%. For personal use only A
Slide 13: Provisions to loans
Provisions to loans Credit quality improved in most countries … given improved economic conditions in a post COVID-19 recovery phase. Provision ratios are now comparable to pre COVID-19 levels. For personal use only PROVISIONS TO LOANS GROUP 5.9% 6.2% 5.0% 6.1% 4.4% 5.4% 4.7% 3.5% 4.5% 1H-20 1H-21 1
Slide 14: Market position and portfolio composition
Market position and portfolio composition BSP is #1 in loans and deposits, in five of the seven countries we operate in . Our loan and deposit portfolios are predominantly PNG domiciled. For personal use only LOANS MARKET SHARE [1H-2022, %] DEPOSIT MARKET SHARE [1H-2022, %] Rank Rank PNG 66% #1 PNG
Slide 15: Operational Performance
For personal use only Operational Performance
Slide 16: Group channel growth trends
Group channel growth trends Our channel activity continues to grow YoY, with transactions via digital channel increasing by 33% since 2020 … driven by growing BSP customer adoption. For personal use only TRANSACTION MIX BY TRANSACTIONS PER CHANNEL MONTH BY CHANNEL [percentage] [million] 1.9 10% 9% 8
Slide 17: Banking made easy
Banking made easy Safe, secure and convenient 24/7 cashless payments and lending services … we continue to innovate and pioneer new services and products to improve customer service levels. For personal use only PNG – TOP 3 PERFORMING CHANNELS ONBOARDED MERCHANTS MOBILE BANKING *131# 60 million 53.1
Slide 18: Digital innovation
Digital innovation Digital solutions that are meeting customer needs and driving digital channel activity growth For personal use only BSP PAY SCHOOL FEE MERCHANTS BSP IPG SERVICE – 100% PNG MADE ● 16 merchants offer BSP Pay, the non-card ● BSP has registered over 300 Schools & ONLINE PAYMENT SOLUTI
Slide 19: Continued network expansion
Continued network expansion BSP has the largest channel network in the South Pacific … with continued investment to improve customer service levels across the BSP Group. For personal use only CAPITAL EXPENDITURE [2017 to 2022] Value Expenditure items [Km] New core banking system 494.1 Branch expansi
Slide 20: Financial inclusion
Financial inclusion BSP has maintained its commitment to expanding its reach to the unbanked and drive active participation and financial inclusion. Consequently, year-on-year transactions are up 42% and 18% for Agency transaction and Sub-branch transaction respectively. For personal use only ACTIVE
Slide 21: Financial inclusion
Financial inclusion BSP offers a number of “fee free” accounts to its PNG customers … to support and encourage savings and financial inclusion. For personal use only ● Youth account SUMATIN ACCOUNT Banking made easier for ● Card, mobile and internet YoY SUMATIN ACCOUNT Jun-21 Jun-22 student on the g
Slide 22: Growing middle class wealth
Growing middle class wealth Our home loans products continue to grow providing opportunity to citizens to increase their personal wealth with an attractive 4% fixed interest rate over a 40 year term. For personal use only FIRST HOME OWNERSHIP SCHEME LOAN YoY Jun-21 Jun-22 Change Accounts [No.] 1,100
Slide 23: Facilitating economic growth
Facilitating economic growth BSP continues to support the PNG government’s economic policy to grow the number and capacity of PNG’s SMEs. The government’s SME credit enhancement scheme loan program For personal use only commenced in May 2021. Despite subdued economic conditions, BSP has funded K198m
Slide 24: Q2-2022 results
For personal use only Q2-2022 results 23
Slide 25: Q2-22 profit
Q2-22 profit Quarterly momentum was maintained, with continued income growth (+7.6%) and improved credit quality… contributing to a +26.2% increase in NPAT in comparison with For personal use only Q1-22 NPAT, before the deduction of the ACT. INCOME OPERATING LOAN IMPAIRMENT NPAT [Km] EXPENSE [Km] EX
Slide 26: Loans exposure to various economic sectors
Loans exposure to various economic sectors Commerce, Finance & Other Business sectors represent 51% of BSP’s lending portfolio. Loans to private households increased by K332m (10.3%) to K3.5b, reflecting BSP’s commitment to supporting its retail customers. For personal use only NET LOANS BY SECTOR 1
Slide 27: Shareholder returns
For personal use only Shareholder returns
Slide 28: Interim dividend
Interim dividend BSP’s 2022 interim dividend has reduced by 12.8% to 34 toea, due to the impact of the K190m Additional Company Tax (ACT). For personal use only PLANNED PROCESSING 2021 Interim 2022 Interim YoY ∆ DATES ● Ex-date: 23-Sep-22 Vs = - 12.8% ● Record date: 26-Sep-22 K0.39 K0.34 ● Payment d
Slide 29: Top Shareholders
Top 10 Shareholders BSP’s Top 10 shareholders represent 80% of total issued shares, as at July 2022. For personal use only TOP 10 SHAREHOLDERS [31-July-2022] No of Shares No of Shares % Rank Name Total Holding on PNGX on ASX Holding ❶ Kumul Consolidated Holdings Limited 84,311,597 - 84,311,597 18.0%
Slide 30: Updates on Additional Company Tax
Updates on Additional Company Tax BSP maintains that the Additional Company Tax (the Tax; ACT) is unfair and stifles investments. BSP has initiated a judicial review with the Supreme Court based on the constitutionality of the arbitrary Tax on BSP’s shareholders. For personal use only ADDITIONAL COM
Slide 31: Closing comments
For personal use only Closing comments 30
Slide 32: Conclusion
Conclusion ● The strong underlying business performance across the Group reported in the first For personal use only three-months of 2022 was maintained in the second quarter, resulting in an increased first-half 2022 Group net profit after tax of K586m, compared to K449m for the corresponding 2021