BSP Financial Group Ltd. · ASX:BFL
BSP Financial — Shareholder Meeting (May 2015)
42 slides from BSP Financial's shareholder meeting presentation, May 22, 2015
Slide 1: Presentation to Shareholders
Presentation to Shareholders Robin Fleming - Group CEO 22 May 2015
Slide 2: Vision and Mission
VISION: “To be the leading financial services provider in our chosen markets, helping customers, staff, shareholders, and communities prosper”. MISSION: “To create value for our stakeholders by delivering innovative and cost-effective financial services”. 2 2
Slide 3: Our Core Values
Our Core Values: • Integrity • Professionalism • Leadership • Quality • People • Teamwork • Community 3 3
Slide 4: Strategic Focus - 2014
Strategic Focus - 2014 BSP continued with important steps in 2014: 1. Increase and maximize income across all business channels; 2. Continue an ongoing disciplined approach to costs; 3. Develop new markets; 4. Invest in the development of our staff; 5. Improve our service culture; 4
Slide 5: Financial Performance 2014
Financial Performance 2014 5
Slide 6: Group Profit Before Tax
Group Profit Before Tax (Kina’ million) 800 719 700 607 600 Kina, Millions 500 400 300 200 142 100 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (Year Ending December) 6
Slide 7: Group Profit After Tax
Group Profit After Tax (Kina’ million) 600 507 500 437 Kina, Millions 400 300 200 99 100 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (Year Ending December) 7
Slide 8: Group Profit & Loss Trends
Group Profit & Loss Trends CAGR, last 5 (Millions of Kina) 2009 2010 2011 2012 2013 2014 Years Income Net Interest Income 474 544 597 682 741 853 12.5% Foreign Exchange Income 104 139 193 224 353 267 20.7% Fee and other Income 147 272 304 380 428 462 25.7% Total Income 726 955 1,094 1,285 1,522 1,58
Slide 9: Group Total Assets
Group Total Assets (Kina ’billion) 18 15.76 15.88 16 14 12 Kina, Billion 10 8 6 4 2.95 2 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (Year Ending December) 9
Slide 10: Group Balance Sheet Trends
Group Balance Sheet Trends CAGR, last 5 (Millions of Kina) 2009 2010 2011 2012 2013 2014 Years Assets Cash & Short Term Deposits 1,188 1,344 1,501 2,134 3,476 2,988 20.2% Loans & Advances 3,639 4,091 4,301 4,805 5,306 6,817 13.4% Investments 3,886 3,857 4,724 4,861 5,571 4,663 3.7% Fixed Assets and
Slide 11: Channel Performance 2010 to 2014
Channel Performance 2010 to 2014 11
Slide 12: BSP continues to expand its service channels
BSP continues to expand its service channels BSP Group Channel Infrastructure Branches BSP Rural ATM's EFTPOS AGENTS/Rural Outlets PNG 42 42 301 9,729 239 FIJI 18 - 112 1,999 41 SI 7 - 19 154 35 12
Slide 13: Retail Branch Profitability
Retail Branch Profitability Total Costs 2014 Profit / BSP Full Branches # (in K'm) % (Loss) (K'm) In Loss or less than K1m profit 25 140.9 38% -6.3 More than K1m profit per annum 17 226.5 62% 99.0 42 367.4 100% 92.7 Total Costs 2014 Profit / BSP Rural # (in K'm) % (Loss) (K'm) In Loss or less than K
Slide 14: Group Income Growth 2010-2014
Group Income Growth 2010-2014 (K’million) 1,800 1,600 Net Interest 147 142 Income 1,400 49 267 1,200 Banking Fee 353 and 28 224 Commissions 1,000 311 31 Fx Income 193 286 800 254 139 202 600 152 Net Insurance Income 400 853 682 741 597 Other Income 544 200 0 2010 2011 2012 2013 2014 (Year Ending Dec
Slide 15: Group Expense 2010-2014
Group Expense 2010-2014 (K’million) 1,000 900 15 79 58 800 0 77 176 700 71 127 Other expenses 0 84 600 25 1 53 Bad and doubtful 21 500 54 debt 400 Depreciation and SW Amort'n 658 300 597 612 547 Operating 469 Expenses 200 100 0 2010 2011 2012 2013 2014 (Year Ending December) 15
Slide 16: PNG: Profit After Tax
PNG: Profit After Tax (K’million) WESTPAC 210.3 Down 10.6% BSP 458.0 Up 8.3% ANZ 337.6 Up 8.0% 16
Slide 17: PNG – Loans
PNG – Loans (K’ million) WPAC 1,618.5 Nil Growth BSP 5,271.0 Up 24% ANZ 3,153.9 Up 7% 17
Slide 18: PNG - Deposits
PNG - Deposits (K’ million) WESTPAC 2,917.7 Up 3.4% BSP ANZ 10,888.2 4,780.4 Up 2% Up 7% 18
Slide 19: FIJI: Profit After Tax
FIJI: Profit After Tax (FJD ‘million) BOB 6.0 HFC 5.0 BSP No Change No Change 21.0 Up 133% WESTPAC 47.0 ANZ Down 6% 40.0 Down 22.5% 19
Slide 20: Solomon Islands: Profit After Tax
Solomon Islands: Profit After Tax (SBD ’million) ANZ 21.7 Up 8.5% BSP 33.7 Up 15.8% WPAC 25.9 Down 28% 20
Slide 21: BSP Strategy Settings 2015-2016
BSP Strategy Settings 2015-2016 21
Slide 22: Strategic Focus 2015/16
Strategic Focus 2015/16 Strategic Growth – Pursue growth initiatives with the objectives of: 1. diversifying Group income and assets; 2. creating growth options outside our core business; 3. accessing market segments outside the Pacific Region; 4. extending BSP’s footprint in the Pacific beyond PNG,
Slide 23: Strategic Focus 2015/16: Westpac Acquisition
Strategic Focus 2015/16 • Westpac Acquisition: 1. BSP entered into a sale agreement in January 2015 to acquire Westpac’s operations in Solomon Islands, Vanuatu, Samoa, Tonga and Cook Islands for A$125m. 2. Satisfies key strategic criteria which includes geographic and business line opportunities of
Slide 24: Strategic Focus 2015/16: BSP Finance
Strategic Focus 2015/16 • BSP Finance 1. Asset Finance business determined to meet a specific customer finance need that can not be satisfied through traditional banking channels. 2. BSP Finance established to meet this need and leverage branch network to extend reach to large customer base. 3. BSP
Slide 25: Strategic Focus 2015/16
Strategic Focus 2015/16 • Continued emphasis on embedding our Vision, our Values and our Culture across the BSP network. • Re-enforce linkage of BSP’s values of integrity, professionalism, leadership, quality, people, teamwork, and community as intrinsic to embedding a true service and sales culture
Slide 26: Strategic Focus 2015/16
Strategic Focus 2015/16 • Customer – continuing to promote and practice iCare to embed our Vision and Values in the organization and instil effective practices around responsiveness, accountability, and teamwork towards customer service. • People – Continuation of the Leadership Development Program
Slide 27: Strategic Focus 2015/16
Strategic Focus 2015/16 • Financial – Consolidation and Improvement of BSP’s regional market position. • Operational – Maintaining and Improving operational excellence for both external and internal customers through technology and internal process and productivity improvement programs. 27
Slide 28: Capital Management
Capital Management Capital Adequacy The Capital Base of the 30.0% BSP Group exceeds 25.0% 4.6% regulatory standards for an 20.0% 4.4% 4.9% adequately capitalised bank 4.1% 15.0% 10.0% 19.8% 19.4% • Capital Adequacy ratios 17.4% 13.9% 5.0% improved in 2014 driven 0.0% by improved profitability Dec-11
Slide 29: Capital Management
Capital Management Fixed assets & Intangibles to Equity Equity to RWA “Capital Management KPIs” Equity to total deposits Equity to total assets 60% are trending well 50% • BSP’s capital is mainly 40% profits, paid up equity, and reserves 30% 20% • Sound, stable capital 10% position over the long ter
Slide 30: Return on Equity
Return on Equity ROE EPS (toea) 108.30 45.0% 120.00 • ROE is stable, very 31.7% 40.0% 93.10 strong 100.00 35.0% • Earnings per share 30.0% 80.00 continues to 25.0% 28.3% 29.7% 60.00 increase: 20.0% • 14% CAGR from 15.0% 42.00 40.00 2007 to 2014. 10.0% 20.00 5.0% 0.0% - 2007 2008 2009 2010 2011 2012
Slide 31: Share Price
Share Price K8.70 3.0 2.5 K8.20 2.0 K7.70 Share Volume Traded Price K3.46bn 1.5 in in K7.20 market Cap Millions Kina 1.0 K6.70 0.5 Share Price K7.40 K6.20 30th Apr 0.0 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 31
Slide 32: Dividend
Dividend • increase with profit • 10.3% yield 56 • Pay June 19 20 toea • Interim toea 76 toea • Full • Final 32
Slide 33: BSP Qtr.1/2015 Results Summary
BSP Qtr.1/2015 Results Summary Johnson Kalo, Group Deputy CEO / Group CFO Annual General Meeting, May 2015 33
Slide 34: Profit & Loss
Profit & Loss (Kina ‘million) Qtr.1 2015 profit after tax of K130m is above Qtr.4 2014 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 by K7m. 450 400 388 • Q1/15 Revenue of K388m improves from the previous 350 quarter driven by growth in 300 lending volumes 250 • Bad and Doubtful debts 200 189 decline reflects incre
Slide 35: Balance Sheet
Balance Sheet (Kina ‘billion) Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 • Slight growth in loans reflects increase in PNG 18.0 lending portfolio 15.6 16.0 14.0 12.3 • Other Interest Earning 12.0 assets are stable 10.0 8.0 6.9 • Q1/15 decline in deposits is in line with seasonal 6.0 5.0 movement 4.0 2.0 • Total
Slide 36: Financial Risk Management
Financial Risk Management Capital Adequacy Provisions to Loans Tier 2 Capital 5.5% Tier 1 Capital Minimum BPNG requirement - 12% 5.0% 30.0% 4.5% 25.0% 4.0% 4.6% 4.8% 20.0% 5.6% 6.6% 3.5% 5.0% 4.8% 4.8% 15.0% 7.1% 4.7% 4.6% 10.0% 3.0% 19.4% 19.2% 14.4% 13.7% 5.0% 12.0% 2.5% 0.0% 2.0% 36
Slide 37: Funds
Funds Deposit Mix (K ‘billion) Deposit Type (K ‘billion) Wholesale Retail 14.0 120% Current 12.0 100% 10.4 Bn 84% 10.0 27% 24% 26% 26% 26% Kina Billions 80% 8.0 60% 6.0 40% 4.0 73% 76% 74% 74% 74% Term , 20% 2.0 2.0 Bn, 0.0 0% 16% Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 37
Slide 38: Qtr.1-2015 Performance Summary
Qtr.1-2015 Performance Summary • Revenues – Q1/15 Revenue improves from the previous quarter driven by growth in lending volumes • Balance Sheet – Stable lending market share in PNG • Capital Adequacy – Q1 of 2015 at 25.5%, still well above BPNG requirement 38
Slide 39: Summary
Beg xy OURBANK 6 (34 OURVALUES @ Summary Integrity Professionalism Leadership Quality People Teamwork Community
Slide 40: Performance Summary 2014 (1)
Performance Summary 2014 (1) “an outstanding profit outcome, despite a number of adverse events and shocks” • NPBT of K718.9 Million, NPAT of K507.3 Million ( up 16.1%) • Net Income K1.58 Billion (up 4.0%) • Revenues from foreign exchange income reduced from K184.5m for the 1st half of 2014, to K83m
Slide 41: Performance Summary 2014 (2)
Performance Summary 2014 (2) “through a combination of cost control measures and profitable balance sheet growth” • Group Operating Expenses show reductions of -4.3% – and operating expenses continue to be a focus in 2015. • Capital Adequacy of 24% - well above BPNG requirement of 12% – Strong Capit
Slide 42: Thank You
Beg xy OURBANK 6 (34 OURVALUES @ Thank You Integrity Professionalism Leadership Quality People Teamwork Community