Slide 1: FY23 Results Investor presentation
FY23 Results Investor presentation For the full year ended 30 June 2023 18 August 2023 1
Slide 2: Agenda
Agenda 1 Overview and highlights Brett Morgan { Managing Director & CEO 2 Financial results { Gary Dickson Chief Financial Officer 3 Outlook Brett Morgan{ Managing Director & CEO 4 Appendices { 2
Slide 3: Overview and highlights
Overview and highlights 1 Brett Morgan Managing Director & CEO 3
Slide 4: Our growth strategy
Our growth strategy Our ambition is to grow our share in deposits, lending and funds under management. Over the first two years of our growth strategy, we have grown our major portfolios of mortgages and deposits by 43% and 40% respectively. Together for the better Transaction Savings accounts Home
Slide 5: FY23 highlights; record earnings
FY23 highlights; record earnings $7.8b $6.2b 25,690 Home loan book Customer deposits New to bank customers acquired +14.1% growth +12.3% growth +33% on pcp 2.9x system1 2.0x system2 $57.7m 60.8% 35.5 cps Core earnings Bank cost to income ratio Earnings per share +30.3% on pcp -641 bps on pcp +16.8%
Slide 6: Creating customer wow
Creating customer wow At MyState we continue to invest in making things easier. Customer care Economic conditions ● Personalised customer service from our Tasmanian- based customer care teams ● RBA cash rate increased 400 bps in 15 months { ● 'MyAssist' program supports customers struggling ● Pressu
Slide 7: ESG
ESG We understand the importance of ESG to create and sustain value in a rapidly changing world. 6 ESG topics matter most to us: Governance, Helping our Digital Supporting Environmental Community conduct people be enablement and customers sustainability investment and culture their best data securit
Slide 8: Financial results
Financial results 2 Gary Dickson Chief Financial Officer 8
Slide 9: FY23 financial performance
FY23 financial performance Metric FY23 FY22 Change v FY22 ● Core earnings up 30.3% to $57.7m Core earnings ($m) 1 57.7 44.3 +30.3% ▲ ● Record NPAT up 20.2% to $38.5m ● Earnings per share up 16.8% to 35.5 cps Statutory net profit after tax ($m) 38.5 32.0 +20.2% ▲ ● NIM down 4bps on pcp reflecting mar
Slide 10: Highest full year NPAT on record
Highest full year NPAT on record Net profit after tax ($m) 1.6 0.5 6.8 3.3 0.8 22.3 2.8 Increase Decrease 20.2% increase 38.5 32.0 FY22 Statutory Net interest Other banking Wealth Operating Net bad and Gain on Income tax FY23 Statutory NPAT income income management expenditure doubtful debts revalua
Slide 11: Operating costs well managed
Operating costs well managed ● Operating costs increased by 7.1% ($6.8m) on pcp ● Personnel costs increased by 3.5% on higher salary costs ● Marketing costs largely flat on pcp ● Technology costs increased 7.8% reflecting higher software maintenance fees and SaaS system amortisation ● Other expenses
Slide 12: MyState Bank
MyState Bank
Slide 13: NIM a reflection of market competition
NIM a reflection of market competition ● Net interest margin down 4 bps on FY22 ● Lending market still remains highly competitive due to slowing credit growth ● Funding costs impacted by the intense competition for retail deposits and widening credit spreads ● MyState optimising growth and return NI
Slide 14: Home loan book growth well above system
Home loan book growth well above system Home loan book – applications and settlements ($b) 1H 2H Applications Settlements 4.9 ● Home loan portfolio up $961m (or 14.1%) on pcp to $7.8b (2.9x 3.5 3.0 system) 2.6 2.6 2.3 ● Home loan settlements down 13.8% on pcp reflecting slower 1.6 1.3 credit growth
Slide 15: Continued high credit quality
Continued high credit quality 30+ days S&P arrears data MyState SPIN Majors ● Maintaining quality lending growth underpins our balance sheet strength SPIN Regionals 2.40% ● Our focus is on low-risk, owner occupied lending with a LVR of less than 2.00% 80% 1.60% ● Growth in higher LVR loans reflects
Slide 16: Prudent loan provisioning
Prudent loan provisioning ● Increase in total collective provisions consistent with rising Credit provisions ($m) arrears in an increasing interest rate environment 6.9 ● Provision coverage ratios are consistent with pre COVID-19 5.9 levels 5.4 2.4 4.2 4.5 1.8 ● Forward looking overlay uplift from J
Slide 17: Continued growth in customer funding
Continued growth in customer funding Funding mix (%) ● Customer deposits +12.3% on pcp to $6.2b (+39.7% since June 2021) and represent 73% of the funding mix ● Continued growth in the award winning Bonus Saver Account (+28.1% on 25.8% 17.6% 14.4% 16.3% 30 June 2022) 9.0% 12.5% 10.9% 5.1% ● Customers
Slide 18: Ongoing diversification of capital base
Ongoing diversification of capital base ● Total capital ratio up 302 bps ● Effective capital strategy underpinning lending growth ● During the year capital flexibility has been provided by Additional Tier 1 issuance in August, a term RMBS in December and a new committed warehouse funding agreement i
Slide 19: TPT Wealth
TPT Wealth]
Slide 20: TPT Wealth providing income diversification
TPT Wealth providing income diversification Operating income ($m) -3.5% ● TPT provided $14.3m in fee revenue and income diversification for the Group 14.8 14.3 13.7 ● Income was down 3.5% on pcp, with lower Investment 5.2 4.1 5.0 Services income reflecting a fall in FUM (-6.4% on pcp) ● Focus remain
Slide 21: Outlook
Outlook 3 Brett Morgan Managing Director & CEO 21
Slide 22: Outlook
Outlook Based on current market conditions we are focused on profitably and sustainably executing our growth strategy. FY23 result FY24 guidance MyState Bank lending 2.9x system Lending growth 2x system MyState Bank deposit composition 72.8%% Customer deposits >70% of funding Earnings per share 35.5
Slide 23: Why MyState?
Why MyState? Comprises a fast growing Trusted Tasmanian brand bank and { a trusted wealth with strong { market share management business and leading advocacy Proven and consistent Delivering on growth { strategy { financial performance 23 23
Slide 24: Appendices
Appendices 4 24
Slide 25: Corporate profile
Corporate profile MyState is a provider of banking, trustee and wealth management services to over 180,000 customers across Ratings MyState Limited MyState Bank Australia through its retail brands – MyState Bank and TPT Wealth. MyState listed on the ASX in 2009. Moody’s Baa3 Baa2 MyState has a marke
Slide 26: What does this mean for:
What does this mean for: : ‘¥ = Our shareholders | We deliver sustainable, profitable growth ‘VY Our community L Together for a the better. We invest into and support | our local communities What does this mean for: i eee B: ¥ Our customers and clients — We care about what matters Our purpose ¥ Ourp
Slide 27: Focusing on community
Focusing on community MyState Bank Arena MyState Foundation Naming rights sponsorship of the Over 20 years of supporting the new home { of entertainment and community. { Over $2.5m in grants sport in Tasmania. provided to not-for-profit organisations. Tasmania JackJumpers Football Tasmania Principal
Slide 28: Operating costs
Operating costs Operating costs breakdown ($m) ● Expense growth of 7.1% on pcp 102.6 95.9 10.2 ● Personnel costs increased by 3.5% reflective of higher salary costs 84.9 10.3 6.4 19.1 ● Marketing spend flat on pcp 17.7 16.2 ● Other expenses have increased in line with transactional volume 29.0 25.1
Slide 29: Home loan book growth
Home loan book growth Loan balance and lending flows ($b) ● Growth driven by lower risk owner occupied P&I lending with LVR <80% 1.2 ● Variable rate lending as a proportion of total flow increased to 97.5% in 0.7 1.1 2.6 FY23 (75.5% in pcp) reflective of the rising rate environment ● While run-off r
Slide 30: Forward looking economic overlay assumptions
Forward looking economic overlay assumptions Assumptions June 24 June 25 Unemployment (year ended) ● Forward looking overlay increased from $0.9m to $1.6m reflecting growth in arrears and deterioration in economic outlook Base Case 4.00% 4.50% ● At 30 June 2023, the key assumptions used to determine
Slide 31: Fixed rate home loan profile
Fixed rate home loan profile New HL flow – fixed rate issuance Fixed rate HL expiry schedule as at 30 June 23 $533m 600.0 m 100% 536.4 m 90% 500.0 m 447.9 m 80% 400.0 m 375.9 m 70% $294m 60% $249m 300.0 m 50% $178m 40% 200.0 m 162.3 m 30% $113m $72m 100.0 m 20% $24m $23m $43m 38.4 m 11.1 m 9.9 m 14.
Slide 32: Board
Board Vaughn Richtor (Board Chair) Robert Gordon (Deputy Chair) Appointed September 2019 Appointed February 2009 ● Group Risk Committee ● Group Risk Committee (Chair) ● Group Audit Committee ● Group People Remuneration & Nominations Committee ● Group People Remuneration & Nominations Committee Sibyl
Slide 33: Management team
Management team Brett Morgan Gary Dickson Mandy Khanna Janelle Whittle Managing Director Chief Financial Officer Chief Risk Officer GM People, Community & CEO Appointed October 2019 Appointed January 2015 & Public Affairs Appointed January 2022 Appointed January 2018 Claudio Mazzarella Paul Moss Tim
Slide 34: Glossary
Glossary 1H: First half of financial year EPS: Earnings per share NIM: Net Interest Margin 2H: Second half of financial FHLDS: First Home Loan Deposit Scheme NPAT: Net Profit after Tax year FUM: Funds under management NPBT: Net Profit before Tax ADI: Authorised deposit-taking institution FY: Financi
Slide 35: Disclaimer
Disclaimer Summary information Past performance not indicative of future performance The material in this Presentation is general background information about MyState Limited (ABN Past performance information, including past share price information, should not be relied upon 26 133 623 962) and its