BSP Financial Group Ltd. · ASX:BFL
BSP Financial — Q3 2020 Earnings Presentation
19 slides from BSP Financial's earnings presentation, Oct 26, 2020
Slide 1: Investor Presentation Q3-2020 Results
INVESTOR PRESENTATION Q3-2020 Results Author Robin Fleming – Group CEO
Slide 2: South Pacific market leader
South Pacific market leader We continue to consolidate across the Pacific K13.4b 117 branches and sub-branches In lending Largest network K25.5b ~ 2.5m In total assets Active customer accounts K5.6b > 11m per month Market capitalisation Digital transactions P2
Slide 3: Q3-2020 results
Q3-2020 results Sound financial performance in difficult economic conditions across the region Q3-20 Q2-20 vs Q3-20 ● Profit [NPAT, Km] 216 + 31.7% ● Total assets [Kb] 25.5 + 2.6% ● Cost-to-income ratio [%] 37.3 - 67bps ● Capital adequacy ratio [%] 22.0 - 250bps ● Annualised earnings per share [toea
Slide 4: Group NPAT
Group NPAT NPAT for the quarter rebounded strongly by K52m, or 31.7% ... due largely to impairments moderating back to historic levels in Q3-2020 and increased interest from government bonds. INCOME [Km] OPERATING LOAN IMPAIRMENT NPAT [Km] EXPENSE [Km] EXPENSE [Km] +31.7% -72.2% 213 543 211 86 218 2
Slide 5: NPAT by business
NPAT by business All BSP business divisions grew their profits in Q3-2020 and their profits are in-line with prior year results … a strong outcome, given business conditions and a reduction in BSP PNG’s indicator Lending Rate [ILR] by 100bps on 1 April 2020. PNG BANK [Km] OFFSHORE BRANCHES [Km] SUBS
Slide 6: Balance sheet trends
Balance sheet trends BSP’s loan portfolio continues to grow, despite challenging economic conditions LOANS [Kb] TOTAL ASSETS [Kb] + 1.5% + 2.6% 13.4 25.5 24.9 13.2 13.1 23.7 13.1 23.4 Annual growth = + 2.6% Annual growth = + 8.1% Q3-19 Q1-20 Q2-20 Q3-20 Q3-19 Q1-20 Q2-20 Q3-20 DEPOSITS [Kb] DEPOSIT
Slide 7: Key ratios
Key ratios BSP Group has maintained sound results across all key performance ratios, giving regard to difficult macroeconomic conditions. COST TO INCOME [%] ROE & ROA [%] + 60bps - 67bps 30.2% 39.7% 27.2% 3.7% 24.8% 25.3% 3.6% + 9bps 39.2% 37.9% 3.2% 37.3% 3.1% Q3-19 Q1-20 Q2-20 Q3-20 Q3-19 Q1-20 Q2
Slide 8: Income stream trends
Income stream trends Growth in interest income from loans and investments were the key drivers of overall income growth in Q3-20, when compared to the prior quarter. Interest – Interest – Fee/ FX Other Total net KEY DRIVERS loans investments commission income income income ● Interest from loans – YO
Slide 9: PNG lending interest income
PNG lending interest income The ILR reduction [100bps] has come at some cost to BSP in PNG … ~ K7m per month. Further, BSP is the only bank to pass on the full 1.0% [100bps] reduction to all variable rate products and BSP’s ILR remains well below other banks. PNG – NET LENDING INTEREST INCOME Home [
Slide 10: Expenditure trends
Expenditure trends Cost management in-light of market conditions. Exchange rate movements are having an impact on computing hardware and service costs. Staff Admin Premises/ Computing NLL Total costs costs equipment cost operating KEY DRIVERS costs ● Staff Costs – salaries , training, additional sta
Slide 11: Market position
Market position BSP is the #1 lender in 6 countries … and #1 deposit taker in 5 countries. Our loan and deposit portfolios are predominantly PNG domiciled. LOANS MARKET SHARE [Q3-20, %] DEPOSIT MARKET SHARE [Q3-20, %] Rank Rank PNG 65% #1 PNG 64% #1 Solomon Islands 53% #1 Solomon Islands 54% #1 Tong
Slide 12: Channel investment
Channel investment Continued channel investment to improve customer service levels across the BSP Group Total Branches 77 40 16 8 5 2 4 2 40 38 0 0 0 0 0 2 Sub Branches ATMs 550 315 121 34 26 13 27 14 EFTPOS 11,373 7,289 2,056 304 451 449 426 398 EFTPOS 316 106 44 50 41 10 32 33 Agent P12
Slide 13: Group channel growth trends
Group channel growth trends Just over three-quarters [77%] of all customer transactions were via digital channels in Q3-20 … an annual increase of +10%. Channel activity rebounded by +2.8% post Q2-20 COVID-19 lockdown disruptions. TRANSACTION MIX BY TRANSACTIONS PER CHANNEL MONTH BY CHANNEL [percent
Slide 14: BSP … digital leader in PNG
BSP … digital leader in PNG BSP’s new Customer Self Service App allows customers to apply for a Personal Loan via their smartphone or tablet … on both Android and Apple devices P14
Slide 15: Growing PNG's digital economy
Growing PNG’s digital economy BSP is experiencing rapid growth in merchant demand for its market leading e- commerce platform [IPG]. The number of PNG merchants using our platform will triple in 2020 … and we expect this trend to continue with the launch of “BSP Pay”. ● In Q4-2020 BSP will launch a
Slide 16: Growing PNG's digital economy
Growing PNG’s digital economy BSP led the way by hosting a virtual forum to present digital commerce opportunities … and more importantly, to build PNG business confidence and capacity to go digital. ● On the 31-Aug, BSP Digital and BCPNG hosted 295 participants in a full day virtual forum ● The vir
Slide 17: BSP supporting PNG SMEs
BSP supporting PNG SMEs BSP is a strong supporter of the PNG Government’s economic policy to grow the number and capacity of PNG’s SMEs. BSP has been lending to SMEs for many years and now has a loan portfolio of ~ K84m. PNG Government SME Support Programme ● On 20-Oct, BSP received K100m appropriat
Slide 18: Share price
Share price K12.00 share price remains stable … representing an annual increase of 4%. 2020 interim dividend of K115m [25 toea per share] paid on 16 October. 1,260 12.08 1,189 12.00 12.00 12.01 12.00 12.00 12.00 967 964 911 11.82 K5.6b 11.76 11.77 market Cap 11.65 Share Price 11.63 K12.00 30 Sep 202
Slide 19: Conclusions
Conclusions ● Sound profitability levels maintained, despite COVID-19 impacts … with NPAT rebounding strongly by K52m, or 31.7% in Q3-2020 ● All BSP business divisions grew their profits in Q3-2020 and their profits are better or in- line with prior year results … a strong outcome, given business co