Kina Securities Ltd. · ASX:KSL
Kina Securities — FY2019 Earnings Presentation
20 slides from Kina Securities's earnings presentation, February 2020
Slide 1: Kina Bank Full Year Results 2019
KINA BANK FULL YEAR RESULTS 2019 FEBRUARY 2020 PAGE 1
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER You must read this notice before reading or making any use of this document or any information contained in this document. By accepting this document, you agree to the following terms and conditions, including any modifications to them. Confidentiality: This Presentat
Slide 3: Financial Results
FINANCIAL RESULTS • Organic business growth on target • Included three months of income from the acquisition of ANZ PNG’s Retail, SME and Commercial business • Final Dividend AUD 6.4 cents per share or PGK 15.5 toea • Full Year Dividend AUD 10.4 cents or PGK 25.5 toea per share • NPAT up 27% on 2018
Slide 4: Highlights
HIGHLIGHTS • Completed the ANZ acquisition making Kina the second largest retail bank in PNG • Acquired 15% stake in Nationwide Microfinance Bank (MiBank) to support financial inclusion and finance to the micro-SME sector • USD 10.0m investment by AAA rated Asian Development Bank to become the secon
Slide 5: Highlights
HIGHLIGHTS • Strong focus on home lending which increased by 44% • Organic home loan book up 26% • ANZ acquisition delivered materially under budget and on time • Finalised 2025 Strategic Plan: Building the Bank of the Future. Sets a five year pathway to becoming PNG’s leading digital bank • Deliver
Slide 6: Business Growth
BUSINESS GROWTH • FX income up 23% to PGK 42m • Total Deposits grew by 89% to PGK 2.48b • Total Loans grew by 65% to PGK 1.40b • Customer numbers now total over 165,000 and reach extends to over 1.2m Papua New Guineans with MiBank and Kina Investment and Superannuation Services • Funds Management gr
Slide 7: Economic Update
ECONOMIC UPDATE • Calm transition to the Marape Government formed in May 2019 • Economy recovering from external shocks, growth outlook soft due to rising uncertainties • GDP growth of 5.6% modest, forecast to fall to 3.1 –3.5% over 2020/21 • Building an inclusive and sustainable economy requires st
Slide 8: Key Revenue Measures
KEY REVENUE MEASURES REVENUE JUN 17 (HY) DEC 17 (HY) JUN 18 (HY) DEC 18 (HY) JUN 19 (HY) JUN 19 (HY) 63 PGK’m 47 47 42 43 38 30 23 20 23 22 19 19 18 18 13 14 14 14 10 10 9 2 5 INTEREST ON LOANS INTEREST ON INVESTMENTS FOREIGN EXCHANGE INCOME OTHERS NPAT 37.3 27.5 PGK’m 23.6 20.0 20.6 3.0 JUN17 (HY)
Slide 9: Key Revenue Measures
KEY REVENUE MEASURES NIM 8.8% 68.9 7.0% 7.6% 8.1% 7.6% 45.9 45.7 7.3% 38.9 41.6 33.6 JUN17 (HY) DEC17 (HY) JUN18 (HY) DEC18 (HY) JUN19 (HY) DEC19 (HY) NET INTEREST INCOME (PGK’M) NET INTEREST MARGIN (%) FX INCOME 23 20 19 PGK’m 14 5 2 JUN17 (HY) DEC17 (HY) JUN18 (HY) DEC18 (HY) JUN19 (HY) DEC19 (HY)
Slide 10: Productivity
PRODUCTIVITY COST TO INCOME 67.8% 54.9% 58.2% 57.1% 57.0% 50.2% JUN17 (HY) DEC17 (HY) JUN18 (HY) DEC18 (HY) JUN19 (HY) DEC19 (HY) RETURN ON EQUITY 20.4% 18.3% 17.5% 16.1% 8.9% 8.0% JUN17 (HY) DEC17 (HY) JUN18 (HY) DEC18 (HY) JUN19 (HY) DEC19 (HY) PAGE 10
Slide 11: Shareholder Returns
SHAREHOLDER RETURNS EARNINGS PER SHARE 21.3 16.7 14.4 12.2 12.6 8.8 6.7 5.8 4.6 4.8 1.8 0.7 JUN17 (HY) DEC17 (HY) JUN18 (HY) DEC18 (HY) JUN19 (HY) DEC19 (HY) EARNINGS PER SHARE (PNG TOEA) EARNINGS PER SHARE (A CENTS) DIVIDENDS PER SHARE 15.5 12.1 10.0 10.0 10.0 6.4 5.0 5.0 4.0 4.0 4.0 2.0 JUN17 (HY)
Slide 12: Balance Sheet
BALANCE SHEET LOANS FY18 DEPOSITS FY18 ESI LOAN OVERDRAFT 24 MONTHS ON CALL 4% 7% 0% 55% HOUSING LOAN TERM LOANS 12 MONTHS 14% 68% 7% ASSET FINANCING 6 MONTHS 2% 15% INVESTMENT 3 MONTHS PROPERTY LOAN 5% 5% 2 MONTHS 7% 1 MONTHS 8% LOANS FY19 DEPOSITS FY19 ESI LOAN OVERDRAFT 24 MONTHS ON CALL 3% 5% 3%
Slide 13: Capital Management
CAPITAL MANAGEMENT CAPITAL ADEQUACY 28% 28% 29% 29% 30% 22% 12% 12% 12% 12% 12% 12% JUN17 (HY) DEC17 (HY) JUN18 (HY) DEC18 (HY) JUN19 (HY) DEC19 (HY) CAPITAL ADEQUACY: T1 + T2 BPNG MINIMUM TOTAL RISK BASED CAPITAL LEVERAGE RATIO 16% 16% 16% 15% 14% 9% 6% 6% 6% 6% 6% 6% JUN17 (HY) DEC17 (HY) JUN18 (H
Slide 14: Asset Quality
ASSET QUALITY 5.9% 4.2% 3.3% 3.3% 2.6% 2.4% 2.2% 2.2% 2.2% 2.1% 2.1% 1.8% 1.8% 1.5% 1.4% 1.4% 1.4% 1.1% 1.0% 0.9% 0.8% 0.6% 0.6% 0.5% 0.4% 0.4% 0.2% 0.2% 0.2% 0.2% LOAN IMPAIRMENT NON-PERFORMING LOANS - 90 DAY ARREARS - GROSS NON-PERFORMING TOTAL PROVISION EXPENSE AND LOANS IN ARREARS LOANS(> 180 DA
Slide 15: Portfolio
PORTFOLIO 538 294 279 249 247 208 182 155 147 87 92 81 84 73 70 50 40 21 22 19 15 12 15 7 11 - 3 - 6 6 2 4 4 1 5 1 1 9 1 DEC-17 DEC-18 DEC-19 AGRICULTURE, FORESTRY & FISHING MINING MANUFACTURING ELECTRICAL, GAS & WATER BUILDING AND CONSTRUCTION WHOLESALE RETAIL HOTEL & RESTAURANTS TRANSPORT & STORAG
Slide 16: Customer Growth
CUSTOMER GROWTH 165,014 136,617 28,397 23,788 20,625 17,271 18,442 15,101 JUN17 DEC17 JUN18 DEC18 JUN19 DEC19 TOTAL ACQUIRED CUSTOMER BASE TOTAL ORGANIC CUSTOMER BASE CUSTOMER NUMBER GROWTH PAGE 16
Slide 17: Market Share Gains
MARKET SHARE GAINS MARKET SHARE PERCENTAGE - LENDING 10.1% 6.4% 6.0% 6.4% 5.5% 5.8% PGK’m 1,402 685 732 786 852 866 JUN17 (HY) DEC17 (HY) JUN18 (HY) DEC18 (HY) JUN19 (HY) DEC19 (HY) TOTAL SYSTEM LENDING {SOURCE BPNG} KINA LOAN BOOK KINA LENDING MARKET SHARE MARKET SHARE PERCENTAGE - DEPOSITS 11.8% 7
Slide 18: Balancing Deposits
BALANCING DEPOSITS 1,087 661 650 602 585 585 556 PGK’m 544 456 396 357 302 298 316 293 251 93 103 60 18 21 18 19 20 FIXED TERM CASH MANAGEMENT CURRENT ACCOUNTS SAVINGS ACCOUNTS ACCOUNTS JUN 17 (HY) DEC 17 (HY) JUN 18 (HY) DEC 18 (HY) JUN 19 (HY) DEC 19 (HY) PAGE 18
Slide 19: Wealth Management
WEALTH MANAGEMENT FUNDS UNDER ADMINISTRATION FUNDS UNDER MANAGEMENT 12.55 12.31 11.72 11.38 790 10.51 771 750 708 717 8.08 7.95 7.46 7.14 6.97 6.60 PGK’bn 6.22 177 JUN17 DEC17 JUN18 DEC18 JUN19 DEC19 JUN17 DEC17 JUN18 DEC18 JUN19 DEC19 FUNDS UNDER ADMINISTRATION (PGK’BN) MEMBERS ‘000 PAGE 19
Slide 20: PAGE 20
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