Bnk Banking Corporation Limited · ASX:BBC
Bnk Banking — Investor Presentation (March 2021)
42 slides from Bnk Banking's investor presentation, Mar 29, 2021
Slide 1: BNK Group Investor Presentation
BNK Banking Corporation Limited Level 14, 191 St Georges Terrace Perth WA 6000 ASX Release, 29 March 2021 BNK GROUP INVESTOR PRESENTATION BNK Banking Corporation Limited (ASX:BBC) (“BNK” or the “Group”) today released an investor presentation update which is attached. ENDS Investor Enquiries Brett M
Slide 2: Who is BNK Banking Corporation Limited?
BNK Banking Corporation Limited Level 14, 191 St Georges Terrace Perth WA 6000 Who is BNK Banking Corporation Limited? Banking The company has operated as an APRA-regulated authorised deposit-taking institution (ADI) for over 38 years. As such our customers benefit from the Australian government dep
Slide 3: Slide 3
Slide 4: Disclaimer
Disclaimer 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, contingen
Slide 5: Presenters
Presenters ‘a Brett Morgan BNK & Better Choice CEO £ John Kolenda Finsure CEO Q Andrew Kitchen Group CFO Brett is a highly credentialed finance industry professional who has distinguished himself in the sector for more than two decades. He spent close to a decade on the executive teams at ING Austra
Slide 6: Agenda
Agenda Topic Description Who We Are What sets us apart Banking Divisional Update Accelerating lending volumes and increasing returns Aggregation Divisional Update How we are achieving record growth Group Results Profitable and growing Investor Value proposition A compelling investment case Q&A Let u
Slide 7: Wr es
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Slide 8: BNK Banking Corporation Limited
BNK Banking Corporation Limited Combining the best of the Australian mortgage industry We are an ASX-listed financial services company that was formed in 2018 following the merger between Finsure Group and Goldfields Money. BNK Banking Corp provides a broad range of consumer and business financial s
Slide 9: The merger combines mortgage distribution and manufacturing strengths
Margin @ snk ()rinsure C BNK COMBINED BANKING © W & Target a oy , fg’ a wee, o wo oe” os con ss a oo? or? a co a o We are here Oo G)FINsuRE AGGREGATION Merger Sept 2018 The merger combines mortgage distribution and manufacturing strengths ¢ Finsure provides BNK with a national distribution footprint
Slide 10: Our unique model generates revenue across the lending value chain
Our unique model generates revenue across the lending value chain Finsure @ Insure A mortgage aggregation fintech Better Choice Home Loans PR Better choice A proven mortgage lender An emerging challenger bank & ‘Bac pa 1,900+ Brokers 65 Lenders on Panel ofl $50b Loan Book $20b Settlements p.a. a Fil
Slide 11: Our group is connected to a $50b+ per annum mortgage market
Our group is connected to a $50b+ per annum mortgage market Which has enabled us to write higher volumes of BNK-funded mortgages at 8x the margin @) FINSURE connective” % Mortgage Loan V% choice Market Finsure Other Aggregators on Better Choice’s Panel $1.6b Monthly Settlements $3-4b Monthly Settlem
Slide 12: What sets us apart
What sets us apart A unique business model combining the best of the mortgage industry * Unique model monetising the entire lending value chain including mortgage aggregation, product manufacturing and funding diversity * Fast growing businesses and profitable group * Significant growth and margin t
Slide 13: BNK and Better Choice Update
BNK and Better Choice Update Banking (BeNK G& Better choice
Slide 14: We provide banking solutions to Consumer and SME segments
We provide banking solutions to Consumer and SME segments Our near term focus is to accelerate growth within existing core mortgage and deposit product categories Customer Segments Business Transactional Account Cash Management § Commercial & Term Deposits Loans SME i 1 I 1 H 1 Overdraft ! 1 1 1 1 1
Slide 15: We have a diversified and low risk BNK-funded lending portfolio
We have a diversified and low risk BNK-funded lending portfolio Dec-20 Geographical Lending Mix (%) Dec-20 Portfolio Mix (%) 7.6%. ~~ Vy =NSW = VIC =QLD #SA, TAS, NT & ACT =WA =Prime Mortgages = Other Loans COVID-19 Relief Packages Historical Credit Charges (% of customers) (% of loan book) 5.0% 0.1
Slide 16: With surplus deposits and a strong capital position
With surplus deposits and a strong capital position BNK Deposits ($b) Capital Adequacy Ratio (CAR) (LEVEL 2) %' 23.8 0.39 0.35 21.2 0.31 ns) 0.06 0.29 1H20 2H20 1H21 1H20 2H20 1H21 Proforma 1H21 = BNK Funded Loans =Surplus Deposits 1. Pro-Forma includes impact of Tier 2 Hybrid Capital Issuance 4
Slide 17: We have an established and growing broker distribution network
We have an established and growing broker distribution network ~6,000 accredited brokers across Finsure and other aggregation groups A strong panel of aggregators With continued growth in accredited brokers 5,963 © FINSURE connective” ‘Ve Mortgage 5,116 Ne Choice choice Loan el APLAN Custom —— 3,023
Slide 18: And are targeting to be a Finsure top lender
And are targeting to be a Finsure top 10 lender Using data driven insights to innovate across product, policy and broker experience is delivering strong settlement growth #10 Monthly Settlements through Finsure _ $55m x3 growth $24m Sep-20 Dec-20 Jan-Feb 21 AVG Next Hurdle 6
Slide 19: We have recommenced higher margin lending
We have recommenced higher margin lending Our BNK-funded loan book grew by 8% in Jan and a further 8% in Feb Lending Portfolio ($b) Settlements ($m) 2.49 gorse COVID-19 Impacted Period------» 136 53 151 81 48 42 1H20, 2H20 1H21 1H20, 2H20 1H21 ™ BNK Funded = White Label ™BNK Funded mWhite Label BNK
Slide 20: 20 - 30bps 20 - 30bps 20 - 30bps
20 - 30bps 20 - 30bps 20 - 30bps 160 - 180bps 160 - 180bps 160 - 180bps
Slide 21: We have a simple pathway to Bank profitability
We have a simple pathway to Bank profitability Leveraging our strong lending team for higher margin BNK-funded loan growth ($m) -1.3 1H21 NPAT* T2 Income* T2 Cost# Income ($100m)** *Banking division in 1H21 recorded an NPAT of $1.9m after the impact of the one-off atm write-off “ Forecast half yearl
Slide 22: Finsure Update
Finsure Update Aggregation © FINsure
Slide 23: Aggregation performance
Aggregation performance Finsure * NPAT of $4.33m 1H2021 up 50% YoY * 1,910 brokers, 15% increase YoY * Annual settlements of $18.13b up 37% YoY * Large investments in technology platform have already been incurred. * Infrastructure in place to continue to scale the business sustainably with minimal
Slide 24: Drivers of Finsure growth
Drivers of Finsure growth Finsure has an industry-leading business services model offering comprehensive solutions that attract a wide range of brokers Industry Leading Service Proposition — Driving a broad revenue base & Flexible commissions seal Structure flexible based on the brokers’ needs * Tra
Slide 25: Increased Revenue
Increased Revenue Full broker support model providing additional revenue Services r 1 I l H f Commercial White ! Label i l 1 H a it oy 2 ny 0 < Product Diversity Recently introduced service offerings Established service offerings planned service offerings
Slide 26: National network of 1,900+ loan writers
National network of 1,900+ loan writers *Over 60 lenders on panel
Slide 27: Wr es
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Slide 28: Group financial performance
Group financial performance Underlying NPAT ($m) 24% increase 3.00 (0.70) 2H20 Other Income NII Other Costs Profit Exc ATM ATM Losses 2.34 1H21
Slide 29: Merger delivering NPAT momentum
Merger delivering NPAT momentum BNK's (previously Goldfields Money) post-merger integration with Finsure is yielding strong results NPAT ($m ($m) Merger 3.0* Pe -0.4 -1.0 FY17 FY18 FY19 FY20 1H21 *Profit excludes ATM losses
Slide 30: Segment performance
Segment performance Aggregation and Bank NPAT* ($m) Broker Numbers (#) 4.33 1,910 3.80 2.89 4,740 ()Finsure west a 1H20 2H20 1H21 1g 2H20 1421 NPAT ($m) Net Interest Income ($m) 3.3 1H20 2H20 1H21 7 28 26 (B BNK Better Choice - 1H20 2H20 4H21 -1.99 “loss from ATM and tax * Underlying NPAT 28
Slide 31: Net Interest Margin
Net Interest Margin Solid improvement in 1H21 ™@ Increase ™ Decrease @ Total 0.65% ; 1.63% f . p 1.40% (0.29%) ; (0.05%) 2H20 Lending Rate Investing Rate Deposit Rate Deposit Mix Other Interest 1H21 29
Slide 32: Capital
Capital Capital Adequacy Ratio (CAR) 21.2% Es =“ (1.8%) Jun-20 CET1 RWA (0.2%) Operational Dec-20 Hybrid Proforma 30
Slide 33: Investor Value Proposition
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Slide 34: A compelling investment case
A compelling investment case Investor value proposition * Group underlying NPAT (excl. ATM write-off) grew 24% to $3M for 1H21 * Infrastructure and team in place to substantially scale the profitable Finsure business Ability to distribute BNK-funded loans through ~6,000 accredited mortgage brokers *
Slide 35: Questions
Questions (Bank PW eettercnoice (G)FINSURE
Slide 36: Appendix
Appendix ob BNK’ | Better Choice ()FINsuRE
Slide 37: Group Financial Snapshot
Group Financial Snapshot Solid result in a challenging environment i eres) Group Underlying NPAT excl. ATM ($000's) 2,969 + 23.7% Group Underlying NPAT ($000's) 2,338 Y 2.5% Cost to Income Ratio (Exc. ECL) 79% + 0.3% Statutory NPAT ($000's) 2,176 + 6.4% Bank Loan Spot Book Size ($000's) 306 t 7.4% N
Slide 38: Balance Sheet
Balance Sheet * Portfolio growth in Finsure resulting in growth in NPV Asset and Other Assets HoH. * Growth in on balance sheet loans (up +7.8%) and deposit book (up +13.2%) despite a challenging 1H21 * Lower cost transaction account deposit mix improved to 65% * $132m of cash and liquid holdings +
Slide 39: Underlying Group ($m) Profit & Loss Statement
Underlying Group ($m) Aggregation Wholesale Bank Eli 4HFY2021' 2H 2020" $Var. Var. Gross Revenue Commission Income/(Exp.) 180.3 77 - (6) 1875 149.8 79 5% Interest Income/(Fxp.) 00 00 49 oa 50 54 4) =2% Fees & Other Income 5.8 0.4 05 - 66 67 (co) -1% TotalGross Revenue 1562 aa 53 (05) 16941 161.4 78
Slide 40: Board Of Directors
Board Of Directors - Jon Sutton CHAIRMAN OF THE BOARD Mr Jon Sutton is a successful senior executive with over 24 years’ experience in financial services including over eight years banking CEO experience. Jon was the CEO and Managing Director of the Bank of Queensland (BOQ) and retired in 2018. Prio
Slide 41: Board Of Directors
Board Of Directors John Kolenda EXECUTIVE DIRECTOR & FINSURE CEO Mr Kolenda was appointed a Director on 13 March 2018. Mr Kolenda is the Managing Director of Finsure Group and has extensive experience in the mortgage broking and aggregation sector. Finsure was ranked sixth in BRW Magazine’s Fast 100
Slide 42: Experienced and Refreshed Management Team
Experienced and Refreshed Management Team 22 @ Brett Morgan John Kolenda Andrew Kitchen BNK/BCHL CEO Finsure CEO Chief Financial Officer Amber Smith Allan Savins Simon Bednar David Maher Chief Operating GM - Banking GM Aggregation Head of Officer & Wholesale Marketing Dara Wettner Malcolm Cowell Tal