Bsp Financial Group Ltd. · ASX:BFL
Bsp Financial — Q1 2022 Earnings Presentation
27 slides from Bsp Financial's earnings presentation, Apr 26, 2022
Slide 1: ASX cover letter for Q1/2022 Investor Presentation
Company Secretary 25th April 2022 For personal use only Ms. Nicola Lombardi ASX Limited Exchange Centre 20 Bridge Street Sydney NSW 2000 Australia By Electronic Lodgment Dear Ms. Lombardi, BSP Financial Group Limited – Q1/2022 Investor Presentation In accordance with the ASX Listing Rules, BSP Finan
Slide 2: Investor Presentation Q1-2022
For personal use only Investor Presentation Q1-2022 Robin Fleming – Group CEO BSP Financial Group Limited [ARBN: 649 704 656, Incorporated in Papua New Guinea] BSP Classification: Internal Use Only
Slide 3: 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Disclaimer NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES This presentation has been prepared and issued by BSP Financial Group Limited (the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 4: 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. For personal use only K14.1b [A$5.1b] In net lending K32.2b [A$11.7b] In total assets K5.6b on
Slide 5: Q1-2022 Financial Performance
For personal use only Q1-2022 Financial Performance Q1 22
Slide 6: Q1-2022 results overview
Q1-2022 results overview Strong Q1 results were driven by improving economic conditions and loan growth, however the new K190m Additional Company Tax (ACT) is a significant drag on Q1 results. For personal use only Q1-21 Q1-22 Q1-22 vs Q1-21 ● Normalised Profit [NPAT, Km] before 203 259 + 27.8% Addi
Slide 7: Group NPAT trends
Group NPAT trends Income growth and lower loan impairment expense, resulted in an increase in Group NPAT to K259m, compared to K203m last year. In accordance with accounting standards BSP recognised the full K190m ACT in the Q1-22, reducing Group NPAT to K69m despite For personal use only our strong
Slide 8: NPAT contribution by business
NPAT contribution by business The large reduction in PNG Bank’s NPAT was a direct impact of the ACT … consequently OSB’s NPAT contribution increased to 64% of Q1 Group NPAT, but will rebalance over the remaining three quarters of 2022. For personal use only PNG BANK [Km] OFFSHORE BRANCHES [Km] SUBSI
Slide 9: Underlying performance driver trends
Underlying performance driver trends Loan growth contributed to an increase in assets and demand deposits increased in Q1. For personal use only NET LOANS [Kb] TOTAL ASSETS [Kb] +6.0% +3.1% 32.2 14.1 30.4 13.6 28.9 28.9 13.4 13.3 CAGR= +0.4% CAGR= +1.0% A$5.1b A$12.0b Q1-21 Q3-21 Q4-21 Q1-22 Q1-21 Q
Slide 10: Key ratios
Key ratios Group ROE and ROA ratios are lower as a result of reduced Profits due to the ACT. Capital adequacy ratios were above regulatory minimum, while loan portfolio quality saw an improvement. For personal use only COST TO INCOME [%] ROE & ROA [annualised, %] -90bps -580bps +30bps 40.3% 3.6% 29.
Slide 11: Income stream trends
Income stream trends The Group’s overall income remains robust … with total interest income representing almost three-quarters [73%] of total income. For personal use only Interest – Interest – Fee/ FX Other Total loans investments commission income income income DEFINITIONS QOQ: (1.5%) 3.6% 0.5% (1
Slide 12: Expenditure trends
Expenditure trends Computing cost increases, as BSP continues to invest in IT delivery, were almost offset by lower costs in other categories … with an overall expenditure increase of 2.2% in Q1-22, For personal use only when compared to the prior quarter. Staff Computing Premises/ Admin cost Total
Slide 13: Market position and portfolio composition
Market position and portfolio composition BSP continues to dominate the market with five countries at #1 in lending and deposits. Our loan and deposit portfolios are predominantly PNG domiciled. For personal use only LOANS MARKET SHARE [Q1-2022, %] DEPOSIT MARKET SHARE [Q1-2022, %] Rank Rank PNG 67%
Slide 14: Branch Network & Channel Growth
For personal use only Branch Network & Channel Growth Q1 22
Slide 15: Channel network and location
Channel network and location BSP has the largest channel network in the South Pacific region … and continues to invest to improve customer service levels across the Group. Between 2017 and 2022, BSP has invested K690m on new incremental projects in PNG. For personal use only Branches Sub Branches BS
Slide 16: Bank branch access in comparable markets
Bank branch access in comparable markets BSP branch access ranks highly when compared to other leading banks in comparable markets [i.e. countries presented in the World Bank PNG Economic Update Feb-2022 report]. BSP’s PNG footprint is the largest, with 84 branches and sub-branches … For personal us
Slide 17: PNG's poor bank branch coverage
PNG’s poor bank branch coverage If competitors were to provide the same level of access BSP provides to Papua New For personal use only Guinean’s … PNG’s bank branch coverage ranking, recently published by the World Bank, would improve considerably. NATIONAL BRANCH COVERAGE NATIONAL BRANCH COVERAGE
Slide 18: Channel growth trends
Channel growth trends We continue to experience increased digital channel adoption … with average digital transactions per month increasing by 2.9 million to 16.5m transactions. For personal use only TRANSACTION MIX BY TRANSACTIONS PER CHANNEL MONTH BY CHANNEL [percentage] [million] 1.9 10% 9% 8% 1.
Slide 19: Key digital achievements in Q1-22
Key digital achievements in Q1-22 Underpinning the earlier reported growth in digital transactions has been our continued investment in digital services to improve customer service levels. For personal use only BSP PAY MOBILE MERCHANTS SCHOOL FEE MERCHANTS 100% PNG MADE ONLINE PAYMENT SOLUTION ● 16
Slide 20: Recent fee reductions to benefit customers
Recent fee reductions to benefit customers BSP continues to review its fees and charges and has NOT increased a single fee in PNG since 2014. We estimate that the cumulative annual fee income forgone is circa K91m in For personal use only 2022. 2021 FEES REDUCED 2022 FEES REDUCED Merchant EFTPOS fee
Slide 21: Share Price & Top Holders
For personal use only Share Price & Top Holders Q1 22
Slide 22: Share price trends
Share price trends BSP’s share price on the PNGX finished 0.4% higher in the trailing 52 weeks at K12.05, with average prices of K12.21 in Mar-22. ASX prices reached an all-time high of A$6.00 after the K1.1bn profit announcement, but fell after new Tax’s confirmation. Dividend yields1 were For pers
Slide 23: Top shareholders
Top 10 shareholders BSP’s Top 10 shareholders represent 79.6% of total issued shares, as at Mar-2022. For personal use only TOP 10 SHAREOLDERS [Mar-2022] No of PNGX No of ASX % Rank Name Total Holding Shares Shares Holding ❶ Kumul Consolidated Holdings Limited 84,811,597 - 84,811,597 18.2% ❷ Petrole
Slide 24: Additional Company Tax
Additional Company Tax The Market Concentration Levy, now called the Additional Company Tax (the new Tax) became operational on 25 March 2022. A key change to the terms of the new Tax, is the K190m being paid in a single payment on 30 September 2022. For personal use only ADDITIONAL COMPANY TAX BROA
Slide 25: Tax impacts on share price
Tax impacts on share price Large reductions in ASX share price, coincided with the new Tax being advanced through the PNG legislative process. Large shareholder gains following the announcement of BSP’s For personal use only record K1.1bn profit, were diminished in the sell-off following the confirm
Slide 26: Closing Comments
For personal use only Closing Comments Q1 22
Slide 27: Conclusion
Conclusion ● Underlying Profitability levels increased with YTD Group NPAT (before ACT) of K259m, compared to K203m last year [+K56m, or 27.9%]. For personal use only ● One-off impact of the ACT, with subsequent quarters performance to be aligned to Group NPAT before ACT deductions. ● Growth in OSBs