Kina Securities Ltd. · ASX:KSL
Kina Securities — H1 2024 Earnings Presentation
22 slides from Kina Securities's earnings presentation, Aug 29, 2024
Slide 1: Financial results for the half year ended 30 June 2024
Financial results for the half year ended 30 June 2024 29 August 2024 1
Slide 2: Overview
Overview. Organic growth momentum • Gross revenue up 17% • Underlying NPAT up 7% • Statutory NPAT down 9%, materially impacted by fraud loss provision of PGK13.5m (pre -tax) and PGK7.4m (post-tax) • Deposit up 8%, Lending up 12% vs June 2023 Diversified Revenue growth • Interest on loans up 16% • Di
Slide 3: Delivering our strategy
Delivering our strategy. • Digital channels and partnerships growth of 35% year on year has benefited from operating model alignment with the Business Banking team, and Growth & Prosperity additional focus on our e-commerce partnerships and independent products such as the Pei Beta bill payment plat
Slide 4: Solid Revenue and Loan Growth in 1H
Solid Revenue and Loan Growth in 1H. Revenue Net Loans Return on Equity 250 2,645 15.9% 15.2% 213 2,368 13.2% * 197 2,053 PGK'm PGK'bn PGK'm Jun22 HY Jun23 HY Jun24 HY Jun22 HY Jun23 HY Jun24 HY Jun22 HY Jun23 HY Jun24 HY * Underlying ROE would have been 15.6% 4
Slide 5: Shareholder Return
Shareholder Return. Capital Adequacy Statutory Earnings per Share 22.0% Dividend per Share 20.8% 16.2 19.3% 10.6 15.9 10.3 14.7 9.7 12.0% 4.1 4.0 4.0 6.3 6.6 5.5 Jun22 HY Jun23 HY Jun24 HY Jun22 HY Jun23 HY Jun24 HY Jun22 HY Jun23 HY Jun24 HY DPS (PGK toea) DPS (AUD cents) EPS (PGK toea) EPS (AUD ce
Slide 6: Financial Results
Financial Results. 6
Slide 7: Financial Highlights
Financial Highlights. 2024 Half Year Results Jun-24 Jun-23 Movement Net Interest Income (PGK m) 111.6 98.1 14% Foreign Exchange Income (PGK m) 37.0 21.6 71% Underlying Cost to Income (%) 58.9 56.2 (270bps) Underlying Return on Equity (%) 15.6 15.2 40bps Ordinary Dividend (AUD cents) 4.0 4.0 - Total
Slide 8: 1H NPAT impacted by one-off expense
1H NPAT impacted by one-off expense. 1H Stat. NPAT 1H Stat. NPAT line 1H Underlying NPAT line 49.6 • Statutory NPAT declined by 9% YoY to PGK42.2m, impacted by non-lending loss provision of PGK7.4m after tax. PGK'mm 46.4 45.6 PGK7.4m Non lending • Commercial loans and foreign exchange income Loss pr
Slide 9: Total operating expense
Total operating expense. +29% 147.4 9.4 Other operating costs +45% 13.5 1H24 Fraud loss provision 105.4 21.2 Occupancy +10% PGK 'mm 5.2 19.0 Administration +24% 51.2 39.0 Staff costs +19% 52.1 42.0 9 Jun23 HY Jun24 HY
Slide 10: Loan portfolio growth
Loan portfolio growth. 1,822 1,603 1,357 PGK'm 548 589 493 94 86 86 95 98 108 53 77 96 Overdraft Term Loans Investment Property Loan Asset Financing Housing Loan Jun22 HY Jun23 HY Jun24 HY 10
Slide 11: Asset Quality
Asset Quality. 9.3% 7.7% 7.7% 7.1% 6.4% 5.9% 2.2% 2.2% 1.8% 2.0% 1.9% 1.3% 0.1% 0.2% 0.3% Impairment Exp % of GLA Non-performing loans and +90 day arrears +180 days arrears Total provision % of GLA 5.6m 20.8m loans in arrears Jun22 HY Jun23 HY Jun24 HY 11
Slide 12: Net Interest Margin
Net Interest Margin. 120.0 8.0% 7.1% 7.2% 7.0% 7.0% 6.5% 6.5% 100.0 6.1% 6.0% • NIM movement impacted by: 5.5% 5.6% 5.6% 6.0% • Solid growth in commercial lending continues to 80.0 5.5% 5.0% hold NIM at 5.6% 5.3% • Lower yields on central bank and treasury bills. 60.0 4.0% • Growth in corporate whol
Slide 13: Kina Wealth
Kina Wealth. Funds under Management Funds under Administration 10.60 938 896 9.49 PGK'bn 19.40 8.96 860 17.65 17.24 Jun22 HY Jun23 HY Jun24 HY Jun22 HY Jun23 HY Jun24 HY FuA (PGK'bn) Member ('000) 13
Slide 14: Market Share
Market Share. Market share percentage - Lending Market share percentage - Deposits 16,799 15,128 33,391 13,801 15.7% 15.7% 31,778 13.4% 27,704 13.1% PGK'bn PGK'bn 14.9% 12.2% 2,053 2,368 2,645 3,392 4,154 4,474 Jun22 HY Jun23 HY Jun24 HY Jun22 HY Jun23 HY Jun24 HY Total System Lending (Source BPNG)
Slide 15: Loan portfolio by industry
Loan portfolio by industry. 77 Other* 87 144 57 Transport & Storage 59 19 87 Hotel & Restaurants 70 92 97 Post & Telecommunication 96 - Jun24 HY 196 Building and Construction 155 Jun23 HY 122 341 Jun22 HY Other Business 266 208 363 Real Estate/Renting/Business Services 346 350 721 Personal Banking 6
Slide 16: Deposit by products
Deposit by products. 1,718 1,682 1,454 1,488 1,488 1,154 PGK'm 793 503 479 512 403 348 Fixed Term Cash Management Accounts Current Account Savings Account Jun22 HY Jun23 HY Jun24 HY 16
Slide 17: Deposits tenure
Deposits tenure. Jun24 HY FY2023 24 months 12 months 1% 24 months 12 months 1% 10% 9% 6 months 6% 6 months 9% 3 months 3% 3 months 3% 2 months 6% 2 months 4% 1 month 7% 1 month On Call 7% 67% On Call 67% 17
Slide 18: Purpose
Purpose. Our Strategy Priorities ‘Our Vision is to be the most d financial services organis: ‘Our defining purpose is to constantly improve th e of the people, communities, and markets that Prosperity for our communities is Kina’s DNA. Serving our v & \ communities, supporting the growth of Papua Ne
Slide 19: 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 20: Economic Outlook
20 Economic Outlook. W Kina SecuritiesLimited
Slide 21: PNG Economy
PNG Economy. Domestic Outlook 4% Real Growth forecasted in 2024 • Real GDP growth for 2024 is projected at 4.6% by the IMF in 2024. This will be driven 8.0 by the resources sector with the full resumption of Porgera Gold Mine operations. The 5.2 spin-off benefits of Porgera is expected to support ‘n
Slide 22: PNG Economy
PNG Economy. Regional growth remains solid Regional Outlook • Overall global growth is expected to remain stable at 3.2% in 2024, and 3.3% in 2025, 6 with upward revisions to commodity prices, including a rise in non-fuel prices by 5% this year. 5.2 5 • Energy commodity prices are expected to fall b