Mystate Limited · ASX:MYS
Mystate — FY2017 Earnings Presentation
24 slides from Mystate's earnings presentation, Aug 18, 2017
Slide 1: FY17 Investor presentation
For personal use only 18 August 2017 Investor presentation FY17 FY17 INVESTOR PRESENTATION | 1
Slide 2: Agenda
For personal use only Agenda FY17 INVESTOR PRESENTATION 1. Overview & strategic landscape Melos Sulicich CEO & Managing Director 2. Financial results David Harradine Chief Financial Officer 3. Strategy & outlook Melos Sulicich CEO & Managing Director MyState are major sponsors of the Hobart Hurrican
Slide 3: Overview & strategic landscape
For personal use only Overview & strategic landscape MELOS SULICICH Highlights Results FY17 strategic progress FY17 INVESTOR PRESENTATION | 3
Slide 4: Highlights
Highlights For personal use only Underlying NPAT below prior year due to NIM compression, with NIM and ROE remaining above peers Executing on business Above system deposit and lending growth with transformation excellent credit quality Strong and efficient capital strategy with multiple RMBS issuanc
Slide 5: Results
Results 1 For personal use only Total income: Home loan book: $124.6m 1.0% $4.08b 11.3% 1.6x system Above system Customer deposits: 30-day arrears: lending and $3.0b 10.1% -19bps 0.51% deposit growth 1.8x system Capital adequacy ratio: Net profit after tax: 25bps -3.2% 13.3% $30.1m Full year dividen
Slide 6: FY17 strategic progress
FY17 strategic progress For personal use only Delivering on our strategic goals • $4b+ loan book with home loans growing at around 1.6x To improve system GROW scale • Strong and stable customer deposit growth OUR PURPOSE economies • Repricing of loan pools to support revenue growth • FUM growth at f
Slide 7: Financial results
For personal use only Financial results DAVID HARRADINE Results summary Performance Credit profile Loan book Funding Wealth FY17 INVESTOR PRESENTATION | 7
Slide 8: Results summary
Results summary 1 For personal use only Change FY16 FY17 (v FY16) Total operating income ($m) 123.4 124.6 1.0% Net Profit after tax ($m) 31.1 30.1 -3.2%. Result slightly down due to NIM Net interest margin (%) 2.13 1.93 -20bps compression Cost-to-income ratio (%) 63.2 65.9 270bps2 Capital ad
Slide 9: Net profit after tax
Net profit after tax For personal use only NPAT waterfall ($m) 0.8 0.7 1.9 0.8 2.8 M&A 0.9 expenditure 1.3 1.0 31.1 30.1 FY16 underlying Net interest Other income Banking non- Wealth income Operating Net bad & Tax FY17 income interest income expenditure doubtfuls Net interest income steady despite s
Slide 10: Net interest margin
Net interest For personal use only margin Industry term deposit * Spread above 3 month bank accepted bill rate Source: RBA – July 2017 spreads* (%) 0.90 0.70 0.58 NIM decline through competition in lower 0.50 0.45 risk, lower LVR owner occupier lending and 0.30 0.28 slightly elevated funding spreads
Slide 11: Expenses
Expenses For personal use only Cost growth in investment in digital Operating expenditure ($m) systems and 85 analytical capabilities 0.40 84 0.77 $ Millions 0.69 83 1.35 0.87 0.10 82 1.30 81 80 82.16 81.11 79 78 FY16 statutory Technology People costs Lending costs Depreciation & Merger & Impairment
Slide 12: Portfolio composition
Portfolio composition For personal use only Home loan book LVR profile ($b) Year on year $4.08 growth Investor loans 22% growth Growth in 21% of book* $3.66 in<80% LVR 0.31 >90% LVR lower risk, portfolio $3.34 -11% lower IO loans $0.30 85%-90% LVR $0.39 LVR loans 24% of book $0.42 80%-85% LVR $0.39
Slide 13: Credit quality
Credit quality For personal use only 30+ Days S & P arrears data (Majors and regionals two months behind) 2.50% Credit quality remains excellent 2.00% 1.50% Historically low impairments 1.00% 30 day arrears performance 0.50% improved in FY17 and remains 0.51% 0.00% well below industry Dec-15 Dec-16
Slide 14: Geographic loan book spread
Geographic loan For personal use only book spread Continued loan book 3 year CAGR spread with Tasmanian Geographic spread concentration below 50% VIC 9.1% 11.9% 13.2% +49.6% NSW 10.0% 11.5% 18.5% +47.7% NT $2.4m 0.1% QLD SA 0.9% 1.2% 1.0% +28.9% $600.7m WA 14.7% $83.2m 2.0% SA WA 2.6% 2.6% 2.0% +10.
Slide 15: Loan book
Loan book For personal use only Total book – composition ($m) $3,544 $3,853 $4,269 100% $79 $71 $63 98% $63 Total loan $51 $50 Overdrafts book growing at 96% $68 $66 $71 1.8 times system Business/agri/commercial 94% +11% Personal loans +10% +18% Home loans 92% $3,663 $3,343 $4,076 90% FY15 FY16 FY17
Slide 16: Funding
Funding For personal use only Customer deposits ($m) +10% A stable funding mix +9% $2,988 $2,715 supported by growth in $2,493 customer deposits 1,397 1,527 1,345 1,149 1,318 1,461 eSaver product successfully launched in 2H17 with online FY15 FY16 FY17 account opening enabling Customer at call depos
Slide 17: Capital
Capital For personal use only Total capital movements 1.90% 1.56% 0.57% 1.40% 1.96% 0.29% 13.3% 13.0% 1.33% Tier 2 1.61% 2.01% Tier 2 Tier 1 11.43% 11.28% Tier 1 FY16 Capital initiatives Profit Dividends paid Capitalised Securitised assets Secured mortgage Other asset FY17 intangibles lending growth
Slide 18: Wealth
Wealth For personal use only Funds under management and funds under advice ($m) Funds under $778 management $782 $738 growth of $81m (+8%) $1,017 $1,008 $1,089 Funds under advice growth of $40m (+5%) FY15 FY16 FY17 Funds under management Funds under advice Trustee revenue challenged but Operating in
Slide 19: Strategy & outlook
For personal use only Strategy & outlook MELOS SULICICH Sector overview Platform for continued growth Strategic overview FY17 INVESTOR PRESENTATION | 19
Slide 20: Sector overview
Sector overview For personal use only System credit growth moderating Changing Historically low interest rate environment continues industry dynamics Competition is fierce particularly in lower LVR owner occupied household lending Financial system stability concerns influencing regulator direction o
Slide 21: Platform for continued growth
Platform for continued growth For personal use only What we’ve achieved What we’re currently What’s to come working on Deposit and loan book Cost efficiencies Channel optimisation growth • Productivity and process review • Broaden digital for growth • Well above industry • Optimising physical distri
Slide 22: Strategic overview
Strategic overview For personal use only MyState’s strategy MyState’s transformation Future benefits The needs and expectations of customers are changing Lendfast and Apply and technology is opening opportunities to attract and COMPLETED: APRIL 2017 serve new customer segments across Australia. Cust
Slide 23: Glossary
Glossary For personal use only 1H: First half of financial year IRB: Internal ratings-based 2H: Second half of financial year LVR: Loan to valuation ratio ADI: Authorised deposit-taking institution M&A: Merger and acquisition APRA: Australian Prudential Regulation Authority MYS: MyState Ltd Avg: Ave
Slide 24: Disclaimer
Disclaimer For personal use only Summary Information This Presentation contains summary information about MyState and its activities current as at the date of this Presentation. The information is subject to change without notice and does not purport to be complete or comprehensive. It does not purp