Kina Securities Ltd. · ASX:KSL
Kina Securities — H1 2023 Earnings Presentation
22 slides from Kina Securities's earnings presentation, Aug 30, 2023
Slide 1: Financial results for the half year ended 30 June 2023
Financial results for the half year ended 30 June 2023 30 August 2023 1
Slide 2: Overview
Overview. Organic growth momentum NPAT up 2% NPBT up 19% Deposit up 37%, Lending up 10% Diversified Revenue growth Interest on Loans up 21% Digital revenue up 53% Customer Acquisition Net Customer growth 6% Market share growth, second largest by total footings (Deposits and Loans) Shareholder return
Slide 3: 1H23 Highlights strong revenue growth
1H23 Highlights strong revenue growth. Revenue Return on Equity Net Loans 2,368 213 197 15.9% 2,053 15.6% 170 1,759 PGK'm PGK'bn 13.9% Jun21 HY Jun22 HY Jun23 HY Jun21 HY Jun22 HY Jun23 HY Jun21 HY Jun22 HY Jun23 HY 3
Slide 4: Our Strategy
Our Strategy. Fairness Reflection Honesty Imagination Togetherness To constantly improve the prosperity of the people, communities and Purpose markets that we serve. The most dynamic, progressive and accessible financial services Vision organisation in the Pan Pacific region. • Growth & prosperity •
Slide 5: 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 + Tra ditional banking + Tra ditional banking + Investment Banking Bank Servi ces + Pa n Pa cific diversified i nvestment bank + Di gital banki
Slide 6: Delivering our strategy
Delivering our strategy. • Retail customer base growth of 9% in the first half. Significant momentum of customer onboarding leading into the second half through Growth & branch onboarding campaigns in Port Moresby, Lae, Madang and Mt Hagen. Prosperity • Business customer base growth of 8%, supported
Slide 7: Financial Results
Financial Results. 7
Slide 8: Financial Highlights
Financial Highlights. 2023 Half Year Results Jun-23 Jun-22 Movement NPAT (PGK m) 46.4 45.6 2% NPBT (PGK m) 77.7 65.6 19% Revenue (PGK m) 187.4 179.1 5% Cost to Income (%) 56.2 62.3 10% Return on Equity (%) 15.2 15.9 4% Ordinary Dividend (AUD cents) 4.0 4.1 2% Total Capital Ratio (T1 + T2) (%) 20.8 2
Slide 9: NPBT growth of 19%
NPBT growth of 19%. 1st Half NPAT Income Tax • NPBT increase by 19% to PGK77.7m vs PCP • Commercial loans and digital revenue driving core business +19% 77.7 performance. 65.6 +16% • Less capital intensive lines of business contributing close to 56.6 45% 31.4 50% of income. 30% 20.0 PGK'mm 30% 16.9
Slide 10: Shareholder return
Shareholder return. Capital Adequacy Statutory Earnings per Share 24.0% 22.0% Dividend per Share 15.9 16.2 20.8% 10.3 13.9 9.7 8.3 12.0% 6.3 6.6 4.1 4.0 5.1 3.0 Jun21 HY Jun22 HY Jun23 HY Jun21 HY Jun22 HY Jun23 HY Jun21 HY Jun22 HY Jun23 HY DPS (PGK toea) DPS (AUD cents) EPS (PGK toea) EPS (AUD cen
Slide 11: Customer growth driving market share
Customer growth driving market share. Market share percentage - lending Market share percentage - deposits 15,128 13,415 13,801 31,778 15.7% 27,704 24,527 13.1% 14.9% 12.2% PGK'bn PGK'bn 11.3% 13.1% 2,773 3,392 4,154 1,759 2,053 2,368 Jun21 HY Jun22 HY Jun23 HY Jun21 HY Jun22 HY Jun23 HY Total Syste
Slide 12: Total operating income
Total operating income. +4% 187.4 179.1 17.6 Wealth Management +5% 16.7 Other Banking Income +3% PGK 'm 69.9 71.7 Net Interest Income +6% 92.5 98.1 HY22 HY23 12
Slide 13: Total operating expense
Total operating expense. -6% 111.6 105.4 8.8 5.2 Other operating costs -41% 24.9 19.0 Occupancy -24% PGK 'm 33.9 39.0 Administration +15% Staff -4% 44.0 42.2 HY22 HY23 13
Slide 14: Net Interest Margin
Net Interest Margin. Net Interest Income (PGK'm) Net Interest Margin (%) Interest Spread (loans) % Interest Spread (investment) % 100.0 8.0% 7.4% 7.0% 6.5% 7.0% 7.0% • NIM movement impacted by: 95.0 5.8% 6.2% 6.0% • Lower yields on central bank treasury bills. 5.5% 5.0% • Strong growth in corporate
Slide 15: Loan portfolio growth
Loan portfolio growth. 1,603 1,357 1,184 PGK'm 548 493 409 80 94 86 99 95 98 77 53 23 Overdraft Term Loans Investment Property Loan Asset Financing Housing Loan Jun21 HY Jun22 HY Jun23 HY 15
Slide 16: Loan portfolio by industry
Loan portfolio by industry. 87 Other* 114 102 59 Transport & Storage 19 19 70 Hotel & Restaurants 92 101 96 Post & Telecommunication - - 155 Jun23 HY Building and Construction 122 109 Jun22 HY Jun21 HY 266 Other Business 208 155 346 Real Estate/Renting/Business Services 350 357 642 Personal Banking
Slide 17: Asset Quality
Asset Quality. 9.3% 9.0% 7.7% 7.1% 6.4% 6.4% 2.6% 2.2% 2.1% 2.0% 1.9% 1.3% 0.2% 0.2% 0.1% Impairment Exp % of GLA Non-performing loans and +90 day arrears +180 days arrears Total provision % of GLA loans in arrears Jun21 HY Jun22 HY Jun23 HY 17
Slide 18: Deposits tenure
Deposits tenure. Jun23 HY Dec22 FY 24 months 12 months 24 months 12 months 0% 7% 0% 11% 6 months 11% 6 months 7% 3 months 3 months 3% 2% 2 months 6% 2 months 7% 1 month 8% On Call On Call 1 month 64% 66% 8% 18
Slide 19: Deposit by products
Deposit by products. 1,718 1,454 1,488 1,154 1,139 PGK'm 763 544 503 479 403 348 326 Fixed Term Cash Management Accounts Current Account Savings Account Jun21 HY Jun22 HY Jun23 HY 19
Slide 20: Kina Wealth
Kina Wealth. Funds under Management Funds under Administration 9.49 17.65 17.24 14.19 896 8.96 PGK'bn 8.49 860 832 Jun21 HY Jun22 HY Jun23 HY Jun21 HY Jun22 HY Jun23 HY FuA (PGK'bn) Member ('000) 20
Slide 21: Economic Outlook
Economic Outlook. ( Kina Securities Limited
Slide 22: PNG Economy
PNG Economy. PNG’s Growth prospect compared to Global & Regional Growth 4% Rea l Growth forecasted i n 2023 8 15 Projection Projection 6 10 4 5 2 0 0 2019 2020 2021 2022 2023 2024 2019 2020 2021 2022 2023 2024 2025 2026 2027 -5 -2 -4 -10 Source: IMF – World Economic Outlook Database: April 2023 Sour