Kina Securities Ltd. · ASX:KSL
Kina Securities — FY2021 Earnings Presentation
32 slides from Kina Securities's earnings presentation, Feb 28, 2022
Slide 1: FY2021 Results – Investor Presentation (ASX/PNGX Announcement)
28 February 2022 ASX/PNGX | Announcement ASX Markets Announcement Office PNGX Markets Exchange Centre Harbourside West Building 20 Bridge Street Unit 1B.02, Level 1, Stanley Esplanade Sydney NSW 2000 Down Town, Port Moresby 121 Australia Papua New Guinea BY ELECTRONIC LODGEMENT FY2021 Results – Inve
Slide 2: Financial year results for the full year ended December 2021
Kina Securities Limited Financial year results for the full year ended December 2021 February 2022 1
Slide 3: Overview
Overview. Organic growth momentum Underlying NPAT up 27% Lending up 21%, Deposits up 19% Flat expense base Underlying Cost to Income 58% Diversified Revenue growth FX revenue up 19% Customer Acquisition Net Customer growth 8% Corporate Banking growth Shareholder returns Dividend payout ratio well su
Slide 4: Our Strategy
Our Strategy. brat Together t's possbie © To constantly improve the prosperity of Pu r ose the people, communities and markets that we serve * The most dynamic, progressive and ee accessible financial services organisation is | Oo n in the Pan Pacific region, proudly domiciled in Papua New Guinea ©
Slide 5: Key milestones: ANZ acquisition, rights issue, digital partners
September 2019 November 2020 September 2021 The completion of the ANZ Raised AUD $80m Corporate Lending loan portfolio increased Simplified Non Growth in Digital Payment ANZ Acquisition Corporate renouncement Target Partners Structure Rights Issue Segments September 2020 January 2021 Transparent and
Slide 6: Non-financial Highlights
Non-financial Highlights. • Brand and marketing refresh include key leadership appointments. Implemented a new best in class website with capabilities for digital on-boarding and integration into full suite of digital marketing services • e-KYC program of work on track. MVP delivered and at scale ex
Slide 7: Gaining market share – 2nd largest PNG Bank in lending
Gaining market share – 2nd largest PNG Bank in lending Market share percentage - lending Market share percentage - deposits 11.8% 14.5% 11.7% 12.0% 10.1% PGK'bn PGK'bn 13,822 13,499 13,465 11.3% 25,693 21,100 22,739 1,402 1,615 1,951 2,461 2,561 3,037 Dec19 FY Dec20 FY Dec21 FY Dec19 FY Dec20 FY Dec
Slide 8: Financial Results
Financial Results Together i's possible
Slide 9: Financial Highlights
Financial Highlights. Full Year Ended Dec-21 Dec-20 % • Underlying NPAT increased by 27% to PGK 96.2m Underlying NPAT (PGK m) 96.0 76.0 27 • Statutory NPAT PGK 70.8m Statutory NPAT (PGK m) 70.8 76.0 (7) • The Loan book grew by 21% Revenue (PGK m) 334.4 314.8 6 • FX revenue growth of 19% Cost to Inco
Slide 10: Strong underlying NPAT growth
Strong underlying NPAT growth Revenue 364 NPAT trend 96.2 345 76.0 Westpac separation 237 60.9 70.8 PGK'm PGK'm 146 150 110 90 91 54 57 55 66 49 36 42 Underlying NPAT Statutory NPAT Interest on Loans Interest on Foreign Exchange Others Total FY 19 NPAT FY 20 NPAT FY 21 NPAT Investments Income Dec FY
Slide 11: Capital Management
Capital Management Capital Adequacy Leverage Ratio 11.2% 25.4% 9.5% 23.3% 21.5% 8.5% 6.0% 12.0% Jun19 HY Dec19 FY Jun20 HY Jun19 HY Dec19 FY Jun20 HY Capital Adequacy: T1 + T2 BPNG minimum total risk based capital Leverage Ratio BPNG minimum leverage ratio 10
Slide 12: Shareholder Returns
Shareholder Returns Dividend per Share Earnings per share 26.9 26.8 37.3 35.9 Westpac separation 25.5 33.5 24.7 Westpac separation 10.4 14.8 13.8 10.0 10.0 13.2 9.3 Dec19 FY Dec20 FY Dec21 FY Dec19 FY Dec20 FY Dec21 FY DPS (PGK toea) DPS (AUD cents) EPS (PGK toea) EPS (PGK toea) underlying EPS (AUD
Slide 13: Underlying ROE remains stable
Underlying ROE remains stable Return on Equity 20.4% 16.8% 16.7% Westpac separation 12.3% ROE - Underlying ROE - Statutory Dec19 FY Dec20 FY Dec21 FY 12
Slide 14: Net Interest Margin
Net Interest Margin NIM – Full year NIM – Half on half 8.8% 8.8% 7.5% 7.0% 7.0% 7.0% 6.7% 6.7% 7.5% 89 92 80 85 170 177 69 115 46 Dec19 FY Dec20 FY Dec21 FY Jun19 HY Dec19 HY Jun20 HY Dec20 HY Jun21 HY Dec21 HY Net Interest Income (PGK'm) Net Interest Margin (%) Net Interest Income (PGK'm) Net Inter
Slide 15: Lending Portfolio
Lending Portfolio 1,330 1,059 881 PGK'm 450 390 321 81 79 87 95 98 68 20 22 30 Overdraft Term Loans Investment Property Loan Asset Financing Housing Loan Dec19 FY Dec20 FY Dec21 FY 14
Slide 16: Asset Quality
Asset Quality Gross Loans and Advances 9.8% 8.7% 6.1% 5.9% 5.6% 3.7% 3.3% 3.1% 2.6% 2.1% 1.9% 1.3% 1.4% 0.4% 0.3% Loan impairment Non-performing loans - 90 day arrears - Gross non-performing Total provision expense (Loans & and loans in arrears loans (> 180 days) 20.8m 48.4m 61.8m advances) Dec19 FY
Slide 17: Loan Portfolio
Loan Portfolio 607 554 538 517 380 351 PGK'm 330 294 279 169 106 105 110 105 87 92 95 70 19 15 23 27 20 18 20 7 9 1 11 14 15 17 8 13 14 15 7 1 1 Dec19 FY Dec20 FY Dec21 FY Agriculture, Forestry & Fishing Mining Manufacturing Electrical, Gas & Water Building and Construction Wholesale & Retail Hotel
Slide 18: Deposits Tenure
Deposits Tenure Dec21 FY Dec20 FY 12 months 12 months 24 months 3% 5% 1% 6 months 6 months 5% 1% 3 months 24 months 7% 0% 3 months 12% 2 months 4% 2 months 3% 1 month 6% 1 month 6% On Call On Call 72% 75% 17
Slide 19: Deposits Portfolio
Deposits Portfolio 1,298 1,068 1,008 786 721 PGK'm 585 556 544 510 368 322 293 Fixed Term Cash Management Accounts Current Account Savings Account Dec19 FY Dec20 FY Dec21 FY 18
Slide 20: Kina Wealth
Kina Wealth Funds under administration Funds under management 14.29 8.91 843 13.82 818 8.33 PGK,bn PGK'bn 12.55 7.95 790 Dec19 FY Dec20 FY Dec21 FY Dec19 FY Dec20 FY Dec21 FY FuA (PGK'bn) Member ('000) 19
Slide 21: Outlook
Outlook. 20
Slide 22: PNG Economy
PNG Economy. • PNG economy on the road to recovery with forecasted 5.4% real growth in 2022 • Solid rebound in 2021 post COVID-19 contraction in 2020 • Economy has performed solidly relative to peers in East Asia and the Pacific. 21
Slide 23: Recovery expected to continue in 2022
Recovery expected to continue in 2022 • Recommencement of Porgera Mine with Barrick Interest from Australian Companies Gold • Fortescue Future Industries • Est. US$1.5b FDI to re-mobilise • Hydropower and Geothermal projects • Final Investment Decision for Wafi-Golpu with Newcrest • Santos acquisiti
Slide 24: 2022 Outlook
2022 Outlook National Elections set to drive retail activity growth • Bank Card usage rate up 17% from 2020 > 2021 • Jan ‘22 highest on record with 27% increase y/y. Risks • Inflation forecast at 5.6% • Global supply-chain bottlenecks • Imported inflationary pressures • Fixed Exchange Rate regime. 2
Slide 25: Priorities
Priorities. Strategic initiatives for FY22 24
Slide 26: Corporate Structure
Corporate Structure. Kina Funds Management Limited Kina Group Kina Securities Limited (Amalgamated entity) Kina Nominees Limited Kina Wealth Management Limited kinabank Together t's possbie
Slide 27: About Kina Bank
About Kina Bank. To be the most dynamic, progressive and accessible financial services company in Papua New Guinea. 26
Slide 28: Key Statistics for 2021
Key Statistics for 2021. 183,553 Total customers 11% Customer growth over 3 years 15% Market share lending 46% Active personal customers 31% Digitally enabled customers 17 Number of branches 688 Number of staff kinabank Together t's possbie
Slide 29: Locations
W Locations Visit one of our 17 Kina Bank locations across PNG. 28
Slide 30: Adopting a master brand strategy to target key market segments
Adopting a master brand strategy to target key market segments. 29
Slide 31: MiBank is the Group brand for Financial Inclusion
MiBank is the Group brand for Financial Inclusion. 30
Slide 32: Kinabank — together its possible
Kinabank — together its possible