Bnk Banking Corporation Limited · ASX:BBC
Bnk Banking — H1 2025 Earnings Presentation
29 slides from Bnk Banking's earnings presentation, Feb 26, 2025
Slide 1: Investor Presentation: 1H25 Financial Results
ASX:BBC INVESTOR PRESENTATION 1H25 Financial Results 26 February 2025 1
Slide 2: Agenda
Agenda ASX:BBC 1H25 Results Overview Allan Savins Chief Executive Officer 1H25 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: 1H25 Results Overview
1H25 Results Overview ASX:BBC Allan Savins Chief Executive Officer 4
Slide 5: CEO statement on strategic shift to higher-margin lending
ASX:BBC "BNK's strategic shift towards higher-margin lending is delivering results. The focus on selective, capital-efficient growth is driving stronger returns, reflected in increased net interest income, improved margins, and higher fee income. While lending settlements have declined in line with
Slide 6: 1H25 Results Overview
1H25 Results Overview ASX:BBC Improved financial results as a result of balance sheet repositioning Statutory NPAT up $0.3m $2.1m on 1H24 $11.1m $12.8m $11.4m Net Interest Income Total Income up 58% Underlying Operating up 29% on 1H24 on 1H24 Expenses up 11% on 1H24 Underlying NPAT* $1.8m up $3.0m o
Slide 7: Strategic highlights show profit growth momentum
1H25 Results Overview ASX:BBC Strategic highlights show profit growth momentum • Growth trajectory is shifting: Underlying NPAT of $1.8m in 1H25 has increased by $3.0m from 1H24, while NII increased 29% on 1H24. • 1H25 NIM improved by 19 bps from 2H24 to 1.39%. • 1H25 Other Income has increased by $
Slide 8: BNK Loan Book, Deposits & Net Interest Income
BNK Loan Book, Deposits & Net Interest Income ASX:BBC Active Asset and Liability Management leading to higher Net Interest outcomes ASX:BBC Loan book ($m) Deposit book ($m) Net Interest Income ($m) Loan Book reduction in 1H25 as composition Deposit Book reduction during 1H25 Continued upward trend i
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 Residential Portfolio By Loan Type 1H25 1H24 1H25 1H24 Stable position Stable split with borrower between Investor Interest I
Slide 10: Strong Cornerstone Portfolio
Strong Cornerstone Portfolio ASX:BBC There has been continued focus on changing the lending book composition in 1H25 with ASX:BBC greater priority on higher margin lending. High quality customers Loan size increased • Approx. 45% of loan book are ahead in their • Average loan size decreased slightly
Slide 11: 1H25 Financial Results
1H25 Financial Results ASX:BBC Steve Kinsella Chief Financial Officer 11
Slide 12: Solid portfolio performance in a competitive landscape
Solid portfolio performance in a competitive landscape ASX:BBC Economic & Business Environment • Interest rate reduction cycle has commenced – cautious outlook from RBA. • Asset Competition remains elevated. • Reduced funding costs with higher proportion of savings accounts and immediate pass throug
Slide 13: 1H25 Financial Results
1H25 Financial Results ASX:BBC Improvement in statutory and underlying NPAT driven by improved NIM and fee income. $(6.7)m $(0.9)m Statutory to 1H24% Statutory ($’000) Underlying ($’000) Underlying to 1H24 %* Net Interest NPAT downIncome $2.8m on 11,050 Underlying NPAT* ↑ 29% 11,050 ↑ 29% FY23 Incom
Slide 14: Performance – Underlying – 1H25
Performance – Underlying – 1H25 ASX:BBC Improvement in NII and Other income, partly offset by increased operating expenses 1H25 v 1H24 ($m) 0.4 2.6 (0.3) (0.8) 2.5 (1.4) 1.8 (1.2) (0.1) Underlying NPAT Trail Commission Interest Income Other Income Credit Losses Employee Other Expenses Tax* Underlyin
Slide 15: 1H25 Key Metrics
1H25 Key Metrics ASX:BBC $(6.7)m $(0.9)m 1H25 1H24 Change on PCP* NPAT down $2.8m on Loans Underlying NPAT* $1,178m $1,474m ↓ 20% FY23 up $0.6m on FY23 Deposits $1,097m $1,549m ↓ 29% $0.27m Net Interest Margin $1,731m 139bps 92bps ↑ 47bps Group Assets Cost-Income Ratio (underlying) up 3% on 81% FY23
Slide 16: Net Interest Margin
Net Interest Margin ASX:BBC ASX:BBC Increased NIM in 1H25 due to improving funding mix and yields from the loan book 1H25 v 1H24 NIM 0.89% 0.73% 0.03% 1.39% • Increase in NIM in 1H25 to 1.39% from 1.20% (0.24%) (0.35%) 2H24. 0.92% (0.58%) • Improvement in 1H25 NIM from 2H24 driven by improved produc
Slide 17: Fixed Rate Home Loans
Fixed Rate Home Loans ASX:BBC Minimal amount of Fixed Rate loan book remaining 31.2 • Approx 71% of the remaining Fixed Rate HL book due to rollover in 2H25. • NIM upside for maturities in 2H25 given the existing Weighted Average Interest Rate 4.71% (WAIR) but declining impact as book reduces. 11.7
Slide 18: Funding Mix
Funding Mix ASX:BBC Funding mix evolving, lowering overall cost of funds and positioning for rate reduction cycle 14% 19% • Composition of the book has changed to reduce overall 21% funding costs and positioning for rate reductions. 28% 49% 40% • Increase Digital flows during 1H25 with elevated trad
Slide 19: Operating Expenses
Operating Expenses* ASX:BBC Increased CBS spend driving IT and professional services expenses 14.0 1H25 v 1H24 OPEX 0.3 12.2 0.9 12.0 0.9 (0.1) 1.7 10.3 10.0 1.2 1.8 0.3 2.0 8.0 1.1 6.0 4.0 7.0 7.3 2.0 0.0 1H24 OPEX Prof Services Expenses IT Expenses Employee Expenses Other Expenses 1H25 OPEX Start
Slide 20: Credit Quality & Loss Protection
Credit Quality & Loss Protection ASX:BBC Adequate credit provisioning despite household economic pressures Credit Loss Charge / (Write Back) Credit Loss Provision 380 5 4,500 26bps 25 330 352 4,000 22bps 4 280 3,321 20 3,500 3,183 230 3 124 152 15 3,000 180 2bps 839 2 2,500 1229 10 130 1 2,000 630 8
Slide 21: Credit Quality & Arrears
Credit Quality & Arrears ASX:BBC Arrears impacted by higher interest rates but broadly stable Total 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% Dec-23 0.52% 0.55% 0.57% 1.64% 4.00% Mar
Slide 22: Credit Quality & Portfolio Profile
Credit Quality & Portfolio Profile ASX:BBC Continued customer resilience and portfolio strength Customer Repayment Profile Portfolio Loan to Value Ratios (LVR) % breakdown 60% 54% 56% 54% 50% 70% 60% 56.2% 58.6% 40% 50% 30% 37.4% 34.9% 40% 20% 15%16% 15% 13% 12% 12% 30% 12% 11% 10% 20% 10% 5% 5% 4%
Slide 23: Well Capitalised
Well Capitalised ASX:BBC Repositioning of the Balance sheet over the last 12 months has created future growth capacity 1H25 v 1H24 Capital Adequacy Ratio 28.0% 0.81% 0.14% 26.98% 0.44% 0.51% 26.0% 5.41% 0.05% 0.60% 24.0% (0.83%) 5.78% 22.0% 19.85% 20.0% 18.0% 4.48% 21.20% 16.0% 14.0% 15.37% 12.0% 10
Slide 24: Strategy Update and Outlook
Strategy Update and Outlook ASX:BBC Allan Savins Chief Executive Officer 24
Slide 25: Strategic progress in 1H25
Strategic progress in 1H25 ASX:BBC Portfolio transformation to sustainable profit continues GROWTH MARGIN PROFITABILITY TARGET: Focus on achieving TARGET: 30% concentration of TARGET: Increase BNK’s Net steady, sustainable growth, with a higher-margin assets to attain Interest Margin to >2% over the
Slide 26: Strategic focus for 2H25
Strategic focus for 2H25 ASX:BBC Clear vision, continued 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
Slide 27: Summary & Outlook
Summary & Outlook ASX:BBC Strengthening the foundation for sustainable SME growth ✓ Diversified income streams and strategic portfolio shifts support sustainable underlying profitable generation, with non-linear progress expected. ✓ Focused on asset mix optimisation, high-margin lending and cost-eff
Slide 28: Appendix
Appendix 28
Slide 29: Balance Sheet
Balance Sheet ASX:BBC ASX:BBC 29