Slide 1: Investor Presentation FY24 Financial Results
ASX:BBC INVESTOR PRESENTATION FY24 Financial Results 29 August 2024 1
Slide 2: Agenda
Agenda ASX:BBC FY24 Results Overview Allan Savins Chief Executive Officer FY24 Financial Results Steve Kinsella Group CFO Strategy update and outlook Allan Savins Chief Executive Officer 2
Slide 3: Disclaimer
Disclaimer ASX:BBC This presentation contains certain forward-looking statements with respect to the financial condition, results of operations, business plans and objectives of management. All such forward‐looking statements involve known and unknown risks, significant uncertainties, assumptions, c
Slide 4: FY24 Results Overview
FY24 Results Overview ASX:BBC Allan Savins Chief Executive Officer 4
Slide 5: Allan Savins Chief Executive Officer
ASX:BBC “BNK has made solid strategic progress in the 2024 financial year, despite facing intense competition and inflationary pressures. Our purpose-driven strategy to focus on higher- margin and capital efficient assets, coupled with disciplined cost control is gaining traction. We have demonstrat
Slide 6: FY24 Results Overview
FY24 Results Overview ASX:BBC Financial results show improved trajectory $(6.7)m Statutory NPAT down $2.8m on FY23 $19.3m $21.6m 1.06% Net Interest Income Operating Expenses FY24 NIM down up 3% on FY23 down $1.5m on FY23 9bps on FY23 $(0.9)m Underlying NPAT* up $0.6m on FY23 2H24 Underlying NPAT 1.2
Slide 7: FY24 Results Overview
FY24 Results Overview ASX:BBC Strategic highlights show growth momentum • The strategic expansion into higher margin lending business to achieve sustainable profitability is starting to bear fruit. • Company trajectory is shifting: Underlying NPAT has improved by a further 40% YoY, while NII increas
Slide 8: BNK Loan Book, Deposits & Net Interest Income
BNK Loan Book, Deposits & Net Interest Income ASX:BBC Transitioning away from lower margin prime residential ASX:BBC Loan book ($m) Deposit book ($m) Net Interest Income ($m) Overall Loan Book steady in FY24 with a Deposit Book steady in FY24 Continued upward trend in NII focus on changing compositi
Slide 9: Risk-managed growth and diversification in the BNK-funded lending portfolio
Risk-managed growth and diversification in the BNK-funded lending portfolio ASX:BBC ASX:BBC Stable risk profile despite increase in higher margin loans On Balance Sheet Loans Portfolio By Loan Type FY24 FY23 FY24 FY23 Stable position Slight portfolio with borrower shift with equity continuing increa
Slide 10: Strong Cornerstone Portfolio
Strong Cornerstone Portfolio ASX:BBC BNK has focused on changing the lending book composition in FY24 with greater priority on ASX:BBC higher margin lending High quality customers Loan size increased • Approx. 44% of loan book are ahead in their • Average loan size increased from $382k to repayments
Slide 11: FY24 Financial Results
FY24 Financial Results ASX:BBC Steve Kinsella Chief Financial Officer 11
Slide 12: Strong portfolio performance in a competitive landscape
Strong portfolio performance in a competitive landscape ASX:BBC Economic & Business Environment • Higher absolute interest rates impacting borrowers including fixed rate maturities. • Increased competition for loans, especially Prime Residential. • Elevated funding costs with deposit competition ami
Slide 13: FY24 Financial Results
FY24 Financial Results ASX:BBC Improvement in underlying NPAT whilst Goodwill Impairment impact on statutory results $(6.7)m $(0.9)m Statutory ($’000) Underlying ($’000) Underlying to FY23 %* Net Interest NPAT downIncome $2.8m on 19,290NPAT* Underlying 19,290 ↑ 3% FY23 up $0.6m on FY23 Other Income
Slide 14: Performance – Underlying - FY24
Performance – Underlying - FY24 ASX:BBC Improvement in NII, Expenses and Credit Provisions, partly offset by increased Commissions expense FY24 v FY23 ($m) 1.3 (0.2) (0.9) (1.5) 0.8 0.1 (0.4) 0.5 (0.9) (0.6) Underlying Upfront Trail Net Interest Net Other Provision for Employee Expenses Tax* Underly
Slide 15: FY24 Key Metrics
FY24 Key Metrics ASX:BBC $(6.7)m $(0.9)m FY24 FY23 Change on PCP Total Assets $1,725m $1,680m ↑ 3% NPAT down $2.8m on Underlying NPAT* FY23 Loans up $0.6m on FY23 $1,368m $1,350m ↑ 1% $0.27m Deposits $1,731m $1,271m $1,252m ↑ 2% Net Interest Margin Group Assets 106bps 115bps ↓ 9bps up 3% on FY23 Cos
Slide 16: 2H24 Financial Results
2H24 Financial Results ASX:BBC Improvement in underlying NPAT from 1H24 $(6.7)m $(0.9)m 2H24 Underlying ($’000) 1H24 Underlying ($’000) Variance %* NPAT down $2.8m on Underlying NPAT* Net Interest FY23 Income 10,735 8,555 ↑ 25% up $0.6m on FY23 Other Income 676 409 ↑ 65% $0.27m $1,731m Expenses - Un
Slide 17: Performance – Underlying - 2H24
Performance – Underlying - 2H24 ASX:BBC Improvement in NII, Other Income and Credit Provisions, partly offset by increased Expenses 2H24 v 1H24 ($m) 0.4 0.4 2.2 (0.5) (0.2) 0.3 (0.6) (1.2) (0.1) (0.1) 1H24 Upfront Trail Net Interest Net Other Provision for Professional Expenses Other Tax* 2H24 Under
Slide 18: Net Interest Margin
Net Interest Margin ASX:BBC ASX:BBC Ongoing margin pressure in FY24 with improvement in the second half • Decline in NIM in FY24 with strong competition across both home loans and deposits. • Improvement in 2H24 NIM to 1.20% driven by improving yields from the loan book, improved investment returns
Slide 19: Fixed Rate Home Loans
Fixed Rate Home Loans ASX:BBC Remaining Fixed Rate maturities provide incremental margin uplift potential 62.5 • Remaining Fixed Rate HL book due to rollover during the next 18 months. • Working with our customers to provide attractive pricing and active retention. • NIM upside given the existing We
Slide 20: Funding Mix
Funding Mix ASX:BBC Increased competition for deposits as customers seek out higher yield 1% 16% 19% • TFF fully repaid in FY24. • Increased competition for Term Deposits has led to attractive rates for customers increasing 44% 40% funding costs. • Current yields for Term Deposits are below 6% 5% re
Slide 21: Operating Expenses
Operating Expenses* ASX:BBC Continued focus on cost discipline and productivity gains offsetting inflationary costs FY24 v FY23 Operating Expenses ($m) 25.0 0.4 0.5 3.2 20.0 (2.3) (0.1) 3.7 3.5 1.2 Reduction of costs 15.0 2.2 associated with 2.6 securitisation in FY23 10.0 14.2 14.1 5.0 0.0 FY23 OPE
Slide 22: Credit Quality & Loss Protection
Credit Quality & Loss Protection ASX:BBC Adequate credit provisioning despite household economic pressures Credit Loss Charge Credit Loss Provision 1195 9bps 10 3,500 22bps 23bps 23 3,269 8 152 2,969 3,000 995 124 6 18 1030 4 2,500 795 943 2 13 2bps 2,000 595 0 112 612 1,105 192 -2 1,500 103 8 395 -
Slide 23: Credit Quality & Arrears
Credit Quality & Arrears ASX:BBC Increase in Arrears as higher interest rates impact but showing signs of stabilising Loan Book Arrears breakdown Residential book Arrears ageing (% of Residential loan book) 5.00% Date (31-60 days) (61-90 days) (90+ days) Total (31 days+) 4.50% Jun-23 0.31% 0.21% 0.1
Slide 24: Credit Quality & Portfolio Profile
Credit Quality & Portfolio Profile ASX:BBC Customers showing resilience, portfolio strength Customer Repayment Profile Portfolio Loan to Value Ratios (LVR) % breakdown 70% 56% 60% 54% 57% 70% 58.6% 50% 60% 55.9% 50% 40% 34.9% 40% 34.5% 30% 15% 30% 20% 16% 18% 12% 20% 12% 11% 11%10%10% 8.5% 10% 2% 5%
Slide 25: Well Capitalised
Well Capitalised ASX:BBC Strong capital position remains well above regulatory minimums FY24 v FY23 Capital Adequacy Ratio 24.0% 0.02% 0.24% 23.36% 22.84% 0.21% 0.19% 0.69% 0.45% 22.0% (1.28%) 5.18% 20.0% 5.05% 18.0% 16.0% 14.0% 17.79% 18.18% 12.0% 10.0% FY23 RWA Credit RWA Earnings Goodwill Deferre
Slide 26: Capital Capacity
Capital Capacity ASX:BBC Repositioning the Balance sheet during 2H24 has created growth capacity 2H24 v 1H24 Capital Adequacy Ratio 24.0% 0.20% 23.36% 0.33% 0.60% 0.42% 2.84% (0.07%) 22.0% (0.81%) 5.18% 20.0% 19.85% 18.0% 4.48% 16.0% 14.0% 18.18% 15.37% 12.0% 10.0% Dec-24 RWA Credit RWA Earnings Goo
Slide 27: Strategy Update and Outlook
Strategy Update and Outlook ASX:BBC Allan Savins Chief Executive Officer 27
Slide 28: Strategic progress in FY24
Strategic progress in FY24 ASX:BBC Portfolio transformation to sustainable profit underway GROWTH MARGIN PROFITABILITY TARGET: Positive Underlying NPAT TARGET: Increase BNK’s TARGET: Move into higher margin in FY24. ROE of >10% and Cost to balance sheet asset book. lending with 15%-20% in commercial
Slide 29: Strategic focus for FY25
Strategic focus for FY25 ASX:BBC Clear vision, focused execution GROWTH MARGIN PROFITABILITY TARGET: 30% concentration of TARGET: Increase BNK’s Net TARGET: Focus on achieving steady, higher-margin assets to attain Interest Margin to >2% over the sustainable growth, with a ROE >10% optimal capital e
Slide 30: Summary & Outlook
Summary & Outlook ASX:BBC Building a strong foundation for SME growth ✓ Deliver sustainable underlying profitable growth. ✓ Strategically pursue high margin and/or high return of capital opportunities. ✓ Optimise and reallocate Risk-Weighted Assets: Reducing low-profit residential loans to fund high
Slide 31: Appendix
Appendix 31
Slide 32: Balance Sheet
Balance Sheet ASX:BBC ASX:BBC Group ($m) FY24 FY23 $ Var. % Var. Assets Cash & Equivalents 118.4 92.6 25.8 27.8% NPV Asset 11.4 16.8 (5.3) (31.9%) Loans & Advances 1,378.2 1,357.5 20.7 1.5% Other Assets 216.9 212.9 4.0 1.9% Total Assets 1,724.9 1,679.8 45.1 2.7% Liabilities Deposits 1,270.6 1,252.3