Bsp Financial Group Ltd. · ASX:BFL
Bsp Financial — H1 2021 Earnings Presentation
29 slides from Bsp Financial's earnings presentation, Aug 20, 2021
Slide 1: Cover letter to ASX
Group Chief Financial Officer 19th August 2021 For personal use only Mr. Elvis Onyura ASX Limited Exchange Centre 20 Bridge Street Sydney NSW 2000 Australia By Electronic Lodgement Dear Mr. Onyura, Investor Presentation – Half Year 2021 In accordance with the ASX Listing Rules, please find enclosed
Slide 2: Investor Presentation 1H-2021
For personal use only Investor Presentation 1H-2021 Robin Fleming – Group CEO BSP Financial Group Limited [ARBN: 649 704 656, Incorporated in Papua New Guinea]
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Disclaimer NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES This presentation has been prepared and issued by BSP Financial Group Limited (the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 We service more customers than any other South Pacific bank … via our market leading distribution network. For personal use only K14.3b [A$5.4b] 116 branches and sub-branches In lending Largest network K23.0b [A$8.7b] K864k [1H-21] In deposits Sponsorships and donations K
Slide 5: Economic outlook
Economic outlook Subdued Pacific region economic growth (+ 0.3%) forecast in 2021 … in the face of continued pandemic-related headwinds and PNG FDI delays. In 2022, growth is expected to rebound to 4.0%, aided by easing border restrictions. For personal use only PNG’s economy is expected to grow 2.5
Slide 6: 1H-2021 results overview
1H-2021 results overview A strong improvement in 1H-2021 performance, after a challenging 1H-2020. For personal use only 1H-21 1H-21 vs 1H-20 ● Profit [NPAT, Km] 449 + 17.6% ● Total assets [Kb] 28.9 + 15.9% ● Cost-to-income ratio [%] 38.5 + 8bps ● Capital adequacy ratio [%] 23.0 + 170bps ● Earnings
Slide 7: Group NPAT trends
Group NPAT trends Income growth, coupled with loan impairments returning to pre-COVID-19 levels, more than offset the increase in operating expenditure … resulting in a 17.6% increase in NPAT. For personal use only INCOME [Km] OPERATING LOAN IMPAIRMENT NPAT [Km] EXPENSE [Km] EXPENSE [Km] +8.4% -43.9
Slide 8: NPAT contribution by business
NPAT contribution by business All business divisions returned to growth after a difficult corresponding period in 2020. The PNG Bank and Offshore Branches profit contribution exceeded our 2019 results. For personal use only PNG BANK [Km] OFFSHORE BRANCHES [Km] SUBSIDIARIES [Km] +K53m + K13m + K2m +1
Slide 9: Underlying performance driver trends
Underlying performance driver trends Subdued overall loan growth across all countries, due to constrained economic conditions. Group deposits grew 18%, with the surplus funds invested in Government securities. For personal use only LOANS [Kb] TOTAL ASSETS [Kb] + 1.2% + 15.9% 13.39 28.90 13.23 23.39
Slide 10: Key ratios
Key ratios All key ratios remain at robust levels … particularly BSP’s capital position, which is above comparative industry benchmarks and well above regulator requirements (12%). For personal use only COST TO INCOME [%] ROE & ROA [annualised, %] + 8bps + 10bps + 163bps 3.7% 38.5% 38.5% 38.5% 30.5%
Slide 11: Income stream trends
Income stream trends With the exception of loan interest income, all incomes streams delivered positive growth in 1H-2021. Loan interest income in the 1H-2021 was comparatively lower than 1H-2020, as a consequence of following BPNG guidance, whereby BSP reduced all For personal use only variable len
Slide 12: Expenditure trends
Expenditure trends Exchange rate movements contributed to increased costs in foreign currency related expense categories, which includes computing and information technology related costs. The amortisation of certain core banking capital items post Vanuatu “Go Live” was also a key For personal use o
Slide 13: Provisions to loans
Provisions to loans All countries’ provisions increased commensurately to estimated loan losses … with provisioning corresponding to the loan growth, as well as the prevailing economic conditions in each country. For personal use only PROVISIONS TO LOANS GROUP 6.2% 6.6% 5.2% 5.7% 6.1% 4.6% 4.7% 5.3%
Slide 14: Funding
Funding Strong deposit growth has positioned the Bank to accommodate any potential increase in demand for loans as the recovery progresses. For personal use only LOANS TO DEPOSITS [%] DEPOSIT MIX [1H-2021, %] 75.5% 71.9% 61.9% PNG Bank 68.3% Offshore 30.8% Banks Non Banks 0.9% 1H-19 1H-20 1H-21 13
Slide 15: Market position and portfolio composition
Market position and portfolio composition BSP is #1 in lending and deposits in five of its countries. Our loan and deposit portfolios are predominantly PNG domiciled. For personal use only LOANS MARKET SHARE [1H-2021, %] DEPOSIT MARKET SHARE [1H-2021, %] Rank Rank PNG 65% #1 PNG 65% #1 Solomon Islan
Slide 16: Channel network
Channel network BSP has the largest channel network in the South Pacific … with continued investment to improve customer service levels across the BSP Group. For personal use only #1 Rank TWO NEW BRANCHES Branches ● Koroba Hybrid Branch, Hela Province [7-Jul] ● Namatanai Branch, New Ireland Provin
Slide 17: Channel growth trends
Channel growth trends Encouragingly, adoption of digital channels is experiencing robust growth with 22% CAGR since the first half of 2019. For personal use only TRANSACTION MIX BY TRANSACTIONS PER CHANNEL MONTH BY CHANNEL [percentage] [million] 1.7 11% 10% 8% 1.7 1.8 65% 70% 15.7 74% 12.6 10.5 CAGR
Slide 18: Key achievements in 1H-21
Key achievements in 1H-21 Successful Vanuatu core banking system replacement … with PNG to follow in 1H-2022 … and admission to the ASX were significant achievements, requiring substantial commitment from our people. For personal use only Core system “go-live” on 19-April ● The introduction of FLEXC
Slide 19: Digital innovation
Digital innovation Safe, secure and convenient 24/7 cashless payments and lending services … we continue to innovate and pioneer new services and products to improve customer service levels. For personal use only BSP Pay Domestic eCommerce – No Card, Just Pay In recognizing the rapid adoption and in
Slide 20: Financial inclusion
Financial inclusion BSP is committed to expanding its reach to the unbanked and drive active participation and financial inclusion. For personal use only ACTIVE AGENTS SUB-BRANCHES NEW CUSTOMER ACCOUNTS OPENED 112 64 536 620 173,61 306 1 234 64,348 45 39 1H-2020 1H-2021 1H-2020 1H-2021 1H-2020 1H-20
Slide 21: Group strategy … successful 2021 first half
Group strategy … successful 2021 first half For personal use only ● Advance digital strategy, initiatives and capability … BSP and its Fintech partner successfully launched its ecommerce solution, BSP Pay ● Improve customer digital and financial literacy … initiatives during the first half include B
Slide 22: Interim dividend
Interim dividend Interim dividend increase to 39 toea … an 56% and 3% increase over 2020 and 2019 respectively For personal use only PLANNED PROCESSING 2020 Interim 2021 Interim YoY ∆ DATES ● Ex-date: 24-Sep-21 Vs = ● Record date: 27-Sep-21 K0.25 K0.39 56% ● Payment date: 18-Oct-21 SHAREHOLDER RETUR
Slide 23: Share price trends
Share price trends PNGX dividend yield of 11.7%, based on K12.30 share price … and market capitalisation of K5.7b. Initial ASX trade at A$5.00 and ASX retail trades have continued to support the BFL price For personal use only at around A$5.50 to A$5.60 … representing a market cap circa A$2.6b. PNGX
Slide 24: Top Shareholders
Top 10 Shareholders BSP’s Top 10 shareholders represented 83% of total issued shares as at Jul-2021. For personal use only TOP 10 SHAREHOLDERS [Jul-2021] Rank Name % Held ❶ Kumul Consolidated Holdings Ltd 18.2% ❷ Nambawan Super Ltd 11.8% ❸ Petroleum Resources Kutubu Ltd 9.9% ❹ National Superannuatio
Slide 25: Q2-2021 results
For personal use only Q2-2021 results 24
Slide 26: Q2-21 profit
Q2-21 profit Quarterly momentum was maintained, with continued income growth (+11%) and reducing loan impairment expenses (-26%) … the latter owing to more certainty around For personal use only the COVID-19 impacts … contributing to a 22% increase in NPAT. INCOME OPERATING LOAN IMPAIRMENT NPAT [Km]
Slide 27: Q2-21 capital adequacy
Q2-21 capital adequacy All of BSP’s banking operations exceed their prudential capital requirements. For personal use only CAPITAL ADEQUACY [%] GROUP 25.0 16.6 17.9 17.7 41.7 39.7 21.3 23.0 3.4 3.4 35.3 3.9 3.4 5.3 5.6 12.0 12.0 15.0 T2 16.0 21.1 17.4 T2 13.2 14.5 14.3 T2 35.3 41.7 39.7 T1 T1 T1 2Q-
Slide 28: Closing comments
For personal use only Closing comments 27
Slide 29: Conclusion
Conclusion ● Sound profitability levels maintained, despite COVID-19 impacts … with Group NPAT For personal use only increasing by 17.6% to K449m in 1H-21 ● Economic conditions constrained loan growth across all countries … positive deposit growth in 1H-2021 ● BSP Group has maintained positive resul