Slide 1: Full-Year Results Investor Presentation ASX Announcement
27 February 2020 ASX Markets Announcement Office Exchange Centre 20 Bridge Street Sydney NSW 2000 BY ELECTRONIC LODGEMENT Full-Year 2020 Results Investor Presentation Please find attached for release to the market, Kina Securities Limited’s Full-Year 2020 Results Investor Presentation. -ENDS- This P
Slide 2: Kina Securities Limited Full year results 2019
Kina Securities Limited Full year results 2019 February 2020 1
Slide 3: Important notice and disclaimer
Important notice and disclaimer You must read this notice before reading or making any use of this document or any information contained in this document. By accepting this document, you agree to the following terms and conditions, including any modifications to them. Confidentiality: This Presentat
Slide 4: Financial Results
Financial Results • Organic business growth on target • Included three months of income from the acquisition of ANZ PNG’s Retail, SME and Commercial business • Final Dividend AUD 6.4 cents per share or PGK 15.5 toea • Full Year Dividend AUD 10.4 cents or PGK 25.5 toea per share • NPAT up 27% on 2018
Slide 5: Highlights
Highlights • Completed the ANZ acquisition making Kina the second largest retail bank in PNG • Acquired 15% stake in Nationwide Microfinance Bank (MiBank) to support financial inclusion and finance to the micro-SME sector • USD 10.0m investment by AAA rated Asian Development Bank to become the secon
Slide 6: Highlights
Highlights • Strong focus on home lending which increased by 44% • Organic home loan book up 26% • ANZ acquisition delivered materially under budget and on time • Finalised 2025 Strategic Plan: Building the Bank of the Future. Sets a five year pathway to becoming PNG’s leading digital bank • Deliver
Slide 7: Business Growth
Business Growth • FX income up 23% to PGK 42m • Total Deposits grew by 89% to PGK 2.48b • Total Loans grew by 65% to PGK 1.40b • Customer numbers now total over 165,000 and reach extends to over 1.2m Papua New Guineans with MiBank and Kina Investment and Superannuation Services • Funds Management gr
Slide 8: Economic update
Economic update • Calm transition to the Marape Government formed in May 2019 • Economy recovering from external shocks, growth outlook soft due to rising uncertainties • GDP growth of 5.6% modest, forecast to fall to 3.1 – 3.5% over 2020/21 • Building an inclusive and sustainable economy requires s
Slide 9: Key revenue measures
Key revenue measures Revenue 63 43 47 47 42 PGK'm 38 30 23 20 23 22 19 19 18 18 10 10 13 14 14 14 9 5 2 Interest on Loans Interest on Investments Foreign Exchange Income Others Jun17 (HY) Dec17 (HY) Jun18 (HY) Dec18 (HY) Jun19 (HY) Dec19 (HY) NPAT 40.0 37.3 35.0 27.5 30.0 23.6 25.0 20.0 20.6 PGK'm 2
Slide 10: Key revenue measures
Key revenue measures NIM 8.8% 80.0 10.0% 68.9 70.0 8.1% 9.0% 7.3% 7.6% 7.6% 7.0% 8.0% 60.0 7.0% 50.0 45.9 45.7 38.9 41.6 6.0% 40.0 33.6 5.0% 30.0 4.0% 3.0% 20.0 2.0% 10.0 1.0% - 0.0% Jun17 (HY) Dec17 (HY) Jun18 (HY) Dec18 (HY) Jun19 (HY) Dec19 (HY) Net interest income (PGK'm) Net interest margin (%)
Slide 11: Productivity
Productivity Cost to income 67.8% 58.2% 57.1% 57.0% 54.9% 50.2% Jun17 (HY) Dec17 (HY) Jun18 (HY) Dec18 (HY) Jun19 (HY) Dec19 (HY) Return on equity 20.4% 18.3% 17.5% 16.1% 8.0% 8.9% Jun17 (HY) Dec17 (HY) Jun18 (HY) Dec18 (HY) Jun19 (HY) Dec19 (HY) 10
Slide 12: Shareholder returns
Shareholder returns Earnings per share 21.3 16.7 14.4 12.2 12.6 8.8 6.7 5.8 4.6 4.8 1.8 0.7 Jun17 (HY) Dec17 (HY) Jun18 (HY) Dec18 (HY) Jun19 (HY) Dec19 (HY) Earnings per share (PNG Toea) Earnings per share (A cents) Dividends per share 15.5 12.1 10.0 10.0 10.0 6.4 5.0 4.0 4.0 5.0 4.0 2.0 Jun17 (HY)
Slide 13: Balance sheet
Balance sheet Loans FY18 Deposits FY18 Housing Esi loan Overdraft 12 months 24 months Loan 4% 7% 0% 7% 14% 6 months Asset 15% Financing 2% Investment 3 months Property 5% Loan On Call 5% 2 months 58% 7% Term 1 month Loans 8% 68% Loans FY19 Deposits FY19 Esi loan Overdraft 12 months 24 months 3% 5% 6
Slide 14: Capital management
Capital management Capital adequacy 28% 28% 29% 29% 30% 22% 12% 12% 12% 12% 12% 12% Jun17 (HY) Dec17 (FY) Jun18 (HY) Dec18 (FY) Jun19 (HY) Dec19 (FY) Capital Adequacy: T1 + T2 BPNG minimum total risk based capital Leverage ratio 16% 16% 16% 15% 14% 9% 6% 6% 6% 6% 6% 6% Jun17 (HY) Dec17 (FY) Jun18 (H
Slide 15: Asset quality
Asset quality 5.9% 4.2% 3.3% 3.3% 2.6% 2.4% 2.2% 2.2% 2.1% 2.2% 2.1% 1.8% 1.8% 1.4% 1.4% 1.5% 1.4% 1.1% 1.0% 0.9% 0.8% 0.6% 0.5% 0.6% 0.4% 0.4% 0.2% 0.2% 0.2% 0.2% Loan impairment expense Non-performing loans and - 90 day arrears - Gross non-performing loans Total provision loans in arrears (> 180 d
Slide 16: Portfolio
Portfolio 600 538 500 400 294 300 279 249 247 208 200 182 147 155 84 87 92 100 81 73 70 50 40 21 15 22 19 15 6 6 12 4 4 5 7 9 1 11 - 3 - 2 1 1 1 - Dec-17 Dec-18 Dec-19 Agriculture, Forestry & Fishing Mining Manufacturing Electrical, Gas & Water Building and Construction Wholesale & Retail Hotel & Re
Slide 17: Customer growth
Customer growth 160000 (PGK Bln) 165,014 140000 136,617 120000 100000 80000 60000 40000 28,397 20000 23,788 18,442 20,625 15,101 17,271 0 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19 Total Organic customer base Total Acquired customer base Customer Number Growth 16
Slide 18: Market share gains
Market share gains Market share percentage - lending 10.1% PGK'm 6.0% 6.4% 6.4% 5.5% 5.8% 786 852 866 1,402 685 732 Jun 17 (HY) Dec 17 (FY) Jun 18 (HY) Dec 18 (FY) Jun 19 (HY) Dec 19 (FY) Total System lending {Source BPNG} Kina Loan Book Kina Lending Market Share Market share percentage - deposits 1
Slide 19: Balancing deposits
Balancing deposits 1200 1,087 1000 800 661 650 602 PGK'm 585 585 600 556 544 456 396 400 357 302 298 316 293 251 200 93 103 60 18 21 18 19 20 0 Fixed Term Cash Management Accounts Current Accounts Savings Accounts Jun17 (HY) Dec17 (FY) Jun18 (HY) Dec18 (FY) Jun19 (HY) Dec19 (FY) 18
Slide 20: Wealth management
Wealth management Funds under administration Funds under management 14.00 900 790 771 12.55 750 12.31 717 800 12.00 11.72 11.38 9.00 708 10.51 700 8.00 8.08 7.95 10.00 7.46 600 7.00 7.14 6.97 6.60 8.00 500 6.00 6.22 5.00 PGK'bn 400 6.00 4.00 300 4.00 3.00 200 177 2.00 2.00 100 1.00 - - - Jun17 Dec17
Slide 21: together it's possible
«kina e= >. together it’s possible