Kina Securities Ltd. · ASX:KSL
Kina Securities — H1 2018 Earnings Presentation
23 slides from Kina Securities's earnings presentation, Aug 24, 2018
Slide 1: Kina Securities Limited Half Year Results – 30 June 2018
Kina Securities Limited Half Year Results – 30 June 2018
Slide 2: Important notice and disclaimer
Important Title here 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: Thi
Slide 3: Highlights
Highlights Highlights Statutory Profit of PGK20.6m Interim dividend of PGK10.0 toea/AUD4.0 cents Announced transformative acquisition of ANZ (PNG)’s retail, commercial and SME businesses Transfer of all of ANZ PNG’s retail branches, ATMs and EFTPOS terminals set to significantly increase Kina Bank’s
Slide 4: Solid underlying profit performance
Title here Solid underlying profit performance Underlying Profit (PGKm) Statutory NPAT (PGKm) 20.5 20.5 20.0 20.6 20.5 20.5 20.0 20.6 PGK'm PGK'm 10.0 3.0 Jun16 (HY) Dec16 (HY) Jun17 (HY) Dec17 (HY) Jun18 (HY) Jun16 (HY) Dec16 (HY) Jun17 (HY) Dec17 (HY) Jun18 (HY) Dividend per share 10 10 10 10 5 4
Slide 5: Well managed margins
Well managed margins 45 8.3% 8.4% 42 39 40 8.2% 8.1% 8.0% 34 34 35 31 8.0% 30 7.8% 25 7.6% PGK'm 7.6% 20 7.3% 7.4% 15 7.2% 10 5 7.0% - 6.8% Jun16 (HY) Dec16 (FY) Jun17 (HY) Dec17 (FY) Jun18 (HY) Net Interest Income {LHS} Net interest margin {RHS} Focus on margin improvement • Net interest margin (“N
Slide 6: Key financial ratios at a glance
Key financial ratios at a glance Cost to Income Ratio (excludes loan Loans to deposit ratio provisions and lease termination) 72.3% 72.0% 67.8% 70.0% 58.2% 68.9% 54.9% 48.3% 46.7% 64.4% Jun16 (HY) Dec16 (HY) Jun17 (HY) Dec17 (HY) Jun18 (HY) Jun16 (HY) Dec16 (HY) Jun17 (HY) Dec17 (HY) Jun18 (HY) Retu
Slide 7: Foreign exchange revenue restored
Foreign exchange revenue restored 14 13 PGK'm 8 5 2 Jun16 (HY) Dec16 (HY) Jun17 (HY) Dec17 (HY) Jun18 (HY) The process involved in securing a US Dollar correspondent Bank has had significant impact on FX Income since 2H 2017 flowing through into 2018 7 7
Slide 8: Driving loan book growth
Driving loan book growth Lending 2017 Lending 2018 Esi loan Overdraft Esi loan 4% Overdraft 5% 5% 10% Housing Loan Housing Loan 16% 15% Asset Financing Asset Financing 2% 3% Investment Investment Property Loan Property Loan 3% 3% Term Loans Term Loans 69% 65% Total lending PGK746m (gross) Total lend
Slide 9: Continued deposit growth
Continued deposit growth Deposits 2017 Deposits 2018 24 months 1% 24 months 3% 12 months 8% 12 months 9% On Call 40% On Call 41% 6 months 22% 6 months 26% 2 months 1 month 3 months 3 months 1 month 9% 11% 2 months 5% 8% 10% 7% Total deposits PGK1.014b Total deposits PGK1.100b 9 9
Slide 10: Strong balance sheet
Strong balance sheet Total Risk Based Capital (%) Leverage Ratio (%) 17% 30% 30% 29% 16% 16% 28% 28% 14% 13% 12% 12% 6% 6% Jun16 (HY) Dec16 (FY) Jun17 (HY) Dec17 (FY) Jun18 (HY) Jun16 (HY) Dec16 (FY) Jun17 (HY) Dec17 (FY) Jun18 (HY) Capital adequacy: T1 + T2 BPNG minimum total Leverage Ratio BPNG mi
Slide 11: Focus on costs
Focus on costs 23.5 19.3 16.1 14.6 13.8 12.9 PGK'm 8.8 8.6 8.2 6.6 6.6 4.7 4.8 5.0 3.5 1.3 1.8 1.3 1.1 0.6 1.5 0.7 1.0 0.8 0.2 - 0.3 0.3 0.3 0.4 0.1 0.3 (0.1) (0.3) - Administration Staff Occupancy Other Operating expenses Board of Directors cost Acquisition/Integration Investor Relationship Jun16 H
Slide 12: Balancing growth and returns
Balancing growth and returns 1,200 7.0% 1,098 1,019 6.0% 1,000 959 965 6.0% 5.8% 5.5% 5.3% 5.0% 800 4.7% 4.8% 786 4.5% 733 685 634 4.4% 4.0% PGK' m 605 600 3.5% 3.0% 437 3.0% 400 2.0% 200 1.0% - 0.0% Jun 16 (HY) Dec 16 (FY) Jun 17 (HY) Dec 17 (FY) Jun 18 (HY) Kina Loan Book Kina Deposit Book Kina Le
Slide 13: Sound credit quality – low impairments
Sound credit quality – low impairments 5.7% 5.4% 4.9% 4.2% 3.3% 3.0% 2.7% 2.3% 2.4% 2.1% 1.9% 1.8% 1.8% 1.8% 1.8% 1.4% 1.3% 1.1% 1.0% 0.8% 0.6% 0.5% 0.5% 0.4% 0.5% 0.2% 0.3% 0.4% 0.2% 0.2% Loan impairment expense Non-performing loans and - 60 day arrears - 90 day arrears - Gross non-performing loans
Slide 14: Divisional performance highlights: Banking
Divisional performance Divisional performance highlights highlights Banking Banking • Continued strong growth in new customers • Strong loan portfolio growth and increased market share • Reduced cost of funds by 23% • Non-interest income grew by 130% • Net interest income of PGK41.6m up 24% • FX inc
Slide 15: Divisional performance highlights: Wealth Management
performance Divisional highlights Wealth Management Wealth Management business is performing to expectations Realised growth in Funds Administration by over 100% Continued strong relationships with key superannuation funds Successfully onboarded major funds management accounts Now administer account
Slide 16: Economy
Economy The overall economic performance of PNG remains resilient despite tighter private sector lending and lower employment growth compared with recent years The Asian Development Bank forecast possible growth in the PNG economy to run at 2.8% due to one-off activity relating to the Asia-Pacific E
Slide 17: Partnership
Partnership ‘Life long customer relationships. Strong valued strategic partnerships’ Digital ‘Clarity in offering that surpasses anything in the market today, best user interface, operational excellence’ Responsible ‘Strong addition to the communities we serve. Positively contributing to a growing a
Slide 18: Partnerships – together it's possible
|together Partnerships it’s possible Now administering over 700,000 superannuation clients for the two largest provident funds in PNG and developing a differentiated value proposition to attract members as new customers. Working with one of PNG’s leading microfinance banks to expand their existing f
Slide 19: Digital – connect anytime, anywhere, anyhow
Digital | connect anytime, anywhere, anyhow Upgrades of core banking infrastructure continue to enhance our digital offer and better functional set with latest additions including online account on-boarding and loan application. Treasury module implementation project completed. SWIFT target hardenin
Slide 20: Responsible – value the communities we live in
| Value Responsible the we communities live in and build a better future Finalising our Total Societal Impact (TSI) Strategy which will incorporate the Environmental Social and Governance Global Framework. The TSI is concentrated on Financial Inclusion; Fostering Entrepreneurship and Innovation thro
Slide 21: Brand – local and strong
Brand | local and strong Rebranding of Kina to Kina Bank has been successfully completed with a very positive shift in market perception supported by a robust and comprehensive public relations, media and marketing plan. The success of this has been evidenced by higher new customer growth. Proactive
Slide 22: Knowledge – empowered and capable people
| empowered Knowledge and capable people Finalised People and Culture Plan with the objective of hiring and retaining the best talent. The key themes are culture and leadership development; strategic workforce planning; talent management; capacity building; and governance. Online Performance Managem
Slide 23: Kina Bank – together it's possible
Wkinabank together it’s possible