Bsp Financial Group Ltd. · ASX:BFL
Bsp Financial — FY2022 Earnings Presentation
35 slides from Bsp Financial's earnings presentation, 2023
Slide 1: Investor Presentation 2022 Full Year Results
Investor Presentation 2022 Full Year Results Ronesh Dayal – Acting Group CEO BSP Financial Group Limited [ARBN: 649 704 656, Incorporated in Papua New Guinea]
Slide 2: Disclaimer
Disclaimer NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES This presentation has been prepared and issued by BSP Financial Group Limited (the "Company"), and may not be reproduced in whole or in part, nor may any of its contents be disclosed to any other per
Slide 3: South Pacific market leader
South Pacific market leader BSP provides financial services to seven South Pacific countries and two in South East Asia. BSP remains the largest South Pacific bank, with the most extensive branch network. K14.4b [A$5.8b] In net lending1 K33.9b [A$13.7b] In total assets1 K5.8b on PNGX [A$2.3b on ASX]
Slide 4: Diversification
Diversification BSP is a diversified financial services provider, with businesses in banking, asset finance, life insurance, funds management and corporate advisory services. BSP continues to explore both organic and inorganic growth opportunities within our markets and service lines. BANKING ASSET
Slide 5: 2022 results
2022 results BSP has delivered a record financial performance in 2022 … underpinned by income growth, on the back of improved economic activity following the re-opening of international borders post COVID-19. 2022 2022 vs 2021 ● Profit [NPAT, Km] 1,081 + 0.5% ● Net assets [Kb] 4.0 + 5.7% ● Cost-to-i
Slide 6: Group NPAT
Group NPAT Strong year on year income growth of K227m to K2.6b, coupled with a loan impairment credit more than offset the increase in operating expenses … contributing to a statutory Group NPAT of K1.081b. INCOME OPERATING IMPAIRMENT NPAT [Km] EXPENSE [Km] OF FINANCIAL [Km] +9.6% ASSETS [Km] +0.5%
Slide 7: Underlying NPAT
Underlying NPAT BSP Group’s underlying result excluding new tax impacts was K1.136b in 2022, up 5.7% from 2021. Results were impacted by the K190m Additional Company Tax and a one-off K135m credit to tax expense that resulted from the restatement of deferred tax balances for PNG Bank from 30% to 45%
Slide 8: NPAT by division
NPAT by division The Offshore Banks’ contribution to Group NPAT has increased materially … driven largely by continued growth in our Fiji businesses. Excluding the K190m ACT1 and K135m one-off credit to tax expense, PNG Bank’s underlying NPAT was up K37m from the prior year. PNG BANK OFFSHORE BANKS
Slide 9: Group financial KPIs
Group financial KPIs Strong growth in deposits and lending on the back of improved economic activity … further strengthening the balance sheet in terms of both capital and liquidity. NET LOANS TOTAL ASSETS [Kb] [Kb] +11.3% +5.5% 33.9 14.4 30.4 13.6 23.1 2022 A$13.7b A$5.8b 12.5 CAGR = +2.8% CAGR = +
Slide 10: Key ratios
Key ratios BSP’s key ratios are robust. Improved credit quality saw a reduction in provisions to loans and capital adequacy is well above BPNG’s minimum requirement. ROA and ROE were lower, driven by growth in assets and retained earnings respectively coupled with incremental growth in NPAT as a res
Slide 11: Income stream trends
Income stream trends Total income increased by 9.6% to K2,599 million, driven by growth in net interest income, improved transactional volumes following reopening of international borders and favourable foreign exchange earnings, due to improved inflows. Lending Investment Interest Other Fee income
Slide 12: Expenditure trends
Expenditure trends Total operating costs increased by 11.3% year-on-year. Staff, computing and premises costs were higher … driven by continued investment in channel capability, annual maintenance costs for the new core banking system, new retail branches and increased AML capacity. Premises & Total
Slide 13: Market strength
Market strength BSP is #1 in lending and deposit taking in 5 of the 7 countries we operate in. Our loan and deposit portfolios are predominantly PNG domiciled. LOANS MARKET SHARE1 [2022, %] DEPOSIT MARKET SHARE1 [2022, %] Rank Rank PNG 65% #1 PNG 67% #1 Solomon Island 45% #1 Cook Island 55% #1 Tonga
Slide 14: Balanced portfolio
Balanced portfolio We have a balanced portfolio of personal and corporate customers. Our corporate banking business is the market leader in both PNG and Fiji. LENDING PORTFOLIO BY SECTOR Agribusiness [Km] 997 Oil and gas Constructions 1,076 394 Manufacturing Mining 412 Transport and 1,143 communicat
Slide 15: PNG banks competitor trends
PNG banks competitor trends BSP continues to outperform its PNG competitors, despite the K190m ACT1 in 2022 … with profitability in line with lending market share. NPAT TREND [Km] GROSS INCOME TREND [Km] BSP - 66% BSP - 65% 2020 2021 2022 2020 2021 2022 YOY = +4.5% 859 822 805 1,996 1,813 604 1,595
Slide 16: Digital channels
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Slide 17: Channel growth trends
Channel growth trends Increasing adoption of digital channels … with average digital transactions per month increasing by 2.8 million [or 18.7%] year-on-year to 17.7 million driven by growing customer use of BSP’s mobile banking services in PNG. TRANSACTION MIX BY TRANSACTIONS PER CHANNEL [%] MONTH
Slide 18: Banking made easy
Banking made easy BSP continues to innovate with new services to enhance customer service. We continue to offer a suite of safe, secure and convenient 24/7 cashless payments channels. TOP 3 PERFORMING CHANNELS IN PNG ONBOARDED MERCHANTS MOBILE BANKING *131# 128.4 542 54% of total transactions, perfo
Slide 19: Network investment
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Slide 20: Channel network and location
Channel network and location BSP has the largest branch network in the South Pacific … with continued investment to improve customer service levels across the BSP Group. Branches Sub Branches BSP only Bank in Town FY 22 20
Slide 21: Network investment
Network investment BSP continues to invest in expanding our retail branch network to improve customer service levels across the Pacific. NEW BRANCHES/SUB BRANCHES – PAST 12 MONTHS IN PNG ● Palmalmal (Upgrade of Sub- Branch to Hybrid) ● Eriku (5th branch in Lae) ● NCDC Boroko Lending Centre BSP HAS P
Slide 22: Customer account trends
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Slide 23: Financial literacy
Financial literacy BSP has continued to reduce account fees and charges in 2022, bringing estimated total fee income forgone to circa K91m per year when taking all fees reduced or waived since 2014 into consideration. ● Youth account SUMATIN ACCOUNT Banking made easier for ● Card, mobile and interne
Slide 24: Growing middle class wealth
Growing middle class wealth Our home loan product for first-time homebuyers, provides an opportunity for citizens to own homes in PNG with an attractive 4% fixed interest rate, over a maximum 40-year term. FIRST HOME OWNERSHIP LOAN (FHOL) BSP FIRST HOME OWNERSHIP LOAN (FHOL) YoY ● K200,000 minimum l
Slide 25: Facilitating economic growth
Facilitating economic growth BSP continues to support the PNG government’s economic policy to grow the number and capacity of PNG’s SMEs. The government’s SME credit enhancement scheme loan (CESL) program began in May 2021, and BSP has funded K310.1m under the CESL as at 31-Dec-22. SME CREDIT ENHANC
Slide 26: Corporate social responsibility
Corporate social responsibility 26
Slide 27: Community projects
Community projects BSP continues to support our communities through donations and charity work. With our extensive branch network in PNG and around the Pacific, BSP uses its reach to support communities through both funding and participating in community projects. BSP COMMUNITY PROJECTS IN 2022 68 p
Slide 28: Sponsorships & paying our fair share
Sponsorships & paying our fair share In 2022, BSP spent K1.6 million on sponsorships, including supporting the PNG Orchids, the Morobe Show, and various other cultural events around PNG. Further, BSP provides a significant share of PNG’s corporate income tax (CIT) … averaging 21% in the last 3 years
Slide 29: Shareholder returns
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Slide 30: 2022 dividend
2022 dividend BSP’s final dividend of K1.40 per share brings our total dividend paid to shareholders to K1.74 per share in 2022. This represents an incremental 0.6% increase in dividends from 2021, which would have been materially higher if not for the impact of the K190m tax targeted at BSP. PLANNE
Slide 31: Share price trends
Share price trends In 2022, BSP’s share price remained relatively stable, despite market volatility … with prices moderating around K12.40 and A$4.90 on the PNGX and ASX respectively. BSP’s Market Capitalisation1 on the PNGX was K5.8 billion and A$2.3 billion on the ASX at the end of December 2022.
Slide 32: Top 10 shareholders
Top 10 shareholders BSP’s Top 10 shareholders hold 78.4% of total issued shares at the end of December 2022. TOP 10 SHAREOLDERS [31-December-2022] PNGX Shares ASX Shares Total Holding Rank Name Holding [in millions] [in millions] [in millions] ❶ Kumul Consolidated Holdings Limited 84.8 - 84.8 18.2%
Slide 33: Taxation developments and sector impacts
Taxation developments and sector impacts The Additional Company Tax (ACT), applicable to BSP in 2022, was repealed in the 2023 National Budget and replaced by an increase in the PNG banking sector’s company tax rate from 30% to 45%. ADDITIONAL COMPANY TAX UPDATE TAX RATE INCREASE FROM 30% TO 45% ● T
Slide 34: Closing comments
Closing comments HI BSP Our Bank. Our People. \9\\| 20) nl (2) ae \
Slide 35: Summary
Summary ● Record underlying profit result excluding new tax impacts was K1.136b in 2022, up 5.7%. ● Record statutory Group NPAT of K1.081b in 2022, [0.5%] above prior year of K1.075b, net of the Additional Company Tax (ACT) of K190m and a one-off credit of K135m tax expense resulting from the restat