Kina Securities Ltd. · ASX:KSL
Kina Securities — Investor Presentation (July 2024)
24 slides from Kina Securities's investor presentation, Jul 22, 2024
Slide 1: Investor Presentation Notice
22 July 2024 ASX/PNGX | Announcement ASX Markets Announcement Office PNGX Markets Exchange Centre Monian Tower 20 Bridge Street Office 2, Level 1, Douglas Street Sydney NSW 2000 Port Moresby 121 Australia Papua New Guinea BY ELECTRONIC LODGEMENT Investor Presentation Notice Please find attached the
Slide 2: Presentation to clients of MST Financial
Presentation to clients of MST Financial 24 July 2024 1
Slide 3: Kina Bank’s Vision
Kina Bank’s Vision. To be the most dynamic, progressive and accessible financial services company in the Pan Pacific. “PNG’s leading digital bank.” 2
Slide 4: Kina Bank – Overview
Kina Bank – Overview. • Kina Securities Limited (Kina Bank) was established in 1985 and is now Papua New Guinea's second largest bank and financial services company. • Kina Bank offers customers end-to-end financial solutions – from savings accounts to business loans, investments to mortgages, finan
Slide 5: Key milestone
Key milestone. Key dates 2004 2020 kina Funds Management 2018 * Divested Esiloan portfolio to MiBank 1986 Iiechad king ser anogement 2013 fabrand to Kina Bank, Divsetment “ins becomes digital sevice provider to MiBank sna begin operations a Kina Finance Li Limited lunched, Kine becomes sina Wealth M
Slide 6: From a Bank to a Market Maker
From a Bank to a Market Maker. 2020-21 2022-24 2025 Your trusted bank Your trusted financial services partner Your trusted partner in the Pan Pacific Region + Traditional banking + Traditional banking + Investment Banking Bank Services + Pan Pacific diversified investment bank + Digital banking + Di
Slide 7: Market share gains and strong customer growth
Market share gains and strong customer growth. Market share percentage - lending Market share percentage - deposits 16,176 33,106 30,018 13,465 14,142 15.8% 25,693 13.1% 15.3% 12.9% PGK'bn PGK'bn 14.5% 11.8% 1,951 2,159 2,562 3,037 3,879 4,345 FY2021 FY2022 FY2023 FY2021 FY2022 FY2023 Total System L
Slide 8: Loan portfolio growth of 19% in 2023
Loan portfolio growth of 19% in 2023. 1,735 PGK'm 1,420 1,330 534 576 450 79 80 98 98 94 110 72 93 30 Overdraft Term Loans IPL Asset Financing Housing Loan FY2021 FY2022 FY2023 7
Slide 9: Kina Bank – non lending operations
Kina Bank – non lending operations. • Kina Bank offers customers end-to-end financial solutions from savings accounts to business loans, investments to mortgages, financial advice to investment management. • It is also the largest wealth management business in PNG, with more than PGK10 billion funds
Slide 10: Kina Wealth
Kina Wealth. Funds under management Funds under administration 940 17.96 17.35 920 922 14.29 PGK'bn 900 880 880 10.00 860 840 843 8.91 8.92 820 800 FY2021 FY2022 FY2023 FY2021 FY2022 FY2023 FuA (PGK'bn) Member ('000) 9
Slide 11: Financial Highlights
Financial Highlights. FY23 FY22 Movement % Net Interest Income (PGK m) 203.3 181.2 12% Revenue (PGK m) 454.2 410.0 11% Net Profit before Tax (PGK m) 175.5 148.4 18% Underlying NPAT(PGK m) 105.0 106.1 (1%) Cost to income ratio (%) 54.1 58.2 7% Underlying ROE (%) 16.8 17.9 (6%) Ordinary Dividend (AUD
Slide 12: Delivering our strategy
Delivering our strategy. • New retail customer acquisition up 20% against PCP and new commercial customer acquisition up by 9% against PCP. Growth & • Loan book growth was extremely strong for the year at 19% growth, reflecting very strong drawdown performance and active pipeline management in busin
Slide 13: Solid loan growth
Solid loan growth. Net Loans Underlying ROE Revenue 2,562 454 Impacted by higher 2,159 410 corporate 1,951 tax rate 364 PGK'bn 17.9% PGK'm 16.8% 16.7% FY21 FY22 FY23 FY21 FY22 FY23 FY21 FY22 FY23 12
Slide 14: Underlying NPAT
Underlying NPAT. NPAT trend NPBT trend FY23 impacted by new CIT rate Underlying NPAT 175.3 116.5 Tax Expense 105.2 148.4 96.2 106.1 133.7 70.1 Deferred Tax credit 42.3 Westpac separation 70.8 37.5 PGK m 106.1 105.2 Statutory NPAT 96.2 Underlying NPAT FY2021 FY2022 FY2023 FY2021 FY2022 FY2023 • Comme
Slide 15: Asset Quality
Asset Quality. 8.7% 8.7% 6.8% 6.3% 5.6% 5.4% 3.1% 1.9% 1.9% 1.9% 2.0% 0.8% 0.3% 0.4% 0.2% Impairment Exp % of GLA NPL % of GLA + 90 day arrears + 180 day arrears Provision % of GLA Dec21 FY Dec22 FY Dec23 FY 14
Slide 16: Loan portfolio by industry
Loan portfolio by industry. 42 Other* 46 70 34 Equipment Hire 44 20 68 Transport & Storage 23 18 75 Hotel & Restaurants 79 95 Post & 97 Telecommunication - - Building and 184 FY2023 Construction 171 105 FY2022 286 Other Business 213 FY2021 169 Real 360 Estate/Renting/Business 316 Services 351 699 Pe
Slide 17: Net Interest Margin
Net Interest Margin. 7.4% 7.4% 7.0% 7.0% 7.1% 6.7% 6.5% 6.5% • Net Interest Margin impacted by: 6.2% 6.0% 6.5% 5.5% 5.6% • Lower yields on central bank treasury bills. 5.8% • Strong growth in corporate wholesale deposits 5.5% 5.3% • Solid growth in commercial lending 3.4% 3.4% 85.4 91.9 92.5 88.7 92
Slide 18: Deposit by products
Deposit by products. 1,864 1,637 1,471 1,443 1,298 PGK'm 786 585 497 512 472 368 327 Fixed Term Cash Management Accounts Current Account Savings Account FY2021 FY2022 FY2022 17
Slide 19: Looking ahead in 2024
Looking ahead in 2024. • Growth in lending market share through strong organic growth across retail, SME and business lines. Growth & • Growth in digital channel by driving scale in payments platforms and partnerships. Prosperity • Restored growth in foreign exchange income. • Growth in Private Bank
Slide 20: Shareholder returns
Shareholder returns. Capital Adequacy Dividend per share Statutory Earnings per Share 26.8 40.6 23.3% 26.4 22.5% 25.6 36.7 20.0% 24.7 12.0% 10.6 16.4 10.0 10.0 13.9 9.3 FY2021 FY2022 FY2023 FY2021 FY2022 FY2023 FY2021 FY2022 FY2023 Capital Adequacy (T1+ T2) DPS (PGK toea) DPS (AUD cents) EPS (PGK to
Slide 21: Economic outlook
Economic outlook. 2024 Growth Forecasts 8.0 Projection 6.0 Total GDP Growth 5.3% 4.0 Percent 2.0 Resource GDP 7.0% 0.0 2019 2020 2021 2022 2023 2024 2025 2026 2027 -2.0 Non-Resource GDP 4.7% -4.0 -6.0 World GDP Emerging & Developing Asia PNG 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% Global Outloo
Slide 22: Corporate Tax
Corporate Tax. • In December 2022, the PNG Government announced an increase in Corporate Income Tax on Commercial Banks from 30% to 45% for the 2023 fiscal year. • KPMG commissioned to prepare submission on behalf of the PNG Banker’s Association to PNG Treasury for a repeal of the corporate tax rate
Slide 23: Guidance
Guidance. • For the Half year ending 30 June 2024, Kina Bank expects to report NPAT in the range of PGK41.2m to PGK42.9m. • For the Full year ending 31 December 2024, Kina Bank expects to report NPAT in the range of PGK109.5m to PGK111.2m. • This guidance takes into account the customer fraud incide
Slide 24: Thank you
23 Thank you Kina Securities Limited