BSP Financial Group Ltd. · ASX:BFL
BSP Financial — FY2020 Earnings Presentation
19 slides from BSP Financial's earnings presentation, Aug 13, 2021
Slide 1: Shareholder Presentation: 2020 Full Year Results
SHAREHOLDER PRESENTATION 2020 Full Year Results Group CEO – Robin Fleming
Slide 2: South Pacific market leader
South Pacific market leader We continue to grow and build scale enhancing our market leadership position. K13.5b 123 branches and sub-branches In lending Largest network K21.7b K4.6m In deposits Sponsorships and donations K569m ~ 3.1m Dividends paid Active customer accounts K5.61b ~ 12.5 m per month
Slide 3: Diversification
Diversification BSP provides banking, asset finance, life insurance, funds management and corporate advisory services across the South Pacific and South East Asia. We continue to explore both organic and inorganic growth opportunities within our chosen markets and service lines … in order to mitigat
Slide 4: 2020 results
2020 results A resilient performance in 2020, giving regard to the significant COVID-19 pandemic related challenges faced by the business in every country. 2020 2020 vs 2019 ● Profit [NPAT, Km] 806 - 9.5% ● Net assets [Kb] 3.4 + 10.2% ● Cost-to-income ratio [%] 37.4 - 33bps ● Capital adequacy ratio
Slide 5: Group NPAT
Group NPAT NPAT decreased by K84m [9.5%] ... as the global pandemic triggered an inevitable year on year increase of K102m in loan impairment expenses. INCOME [Km] OPERATING LOAN IMPAIRMENT NPAT [Km] - K84m - K26m EXPENSE [Km] EXPENSE [Km] - K17m K102m (9.5%) (1.2%) (2.0%) 102.9% 890 2,171 887 2,166
Slide 6: NPAT by division
NPAT by division PNG and the OSB’s remained resilient despite the unprecedented economic downturn in the Pacific sub-region. PNG BANK [Km] OFFSHORE BRANCHES [Km] SUBSIDIARIES [Km] - K69m - K17m + K1m - 10.3% - 9.8% + 2.3% 668 52 54 170 649 44 153 599 151 2018 2019 2020 2018 2019 2020 2018 2019 2020
Slide 7: Group financial KPI’s
Group financial KPI’s BSP continues to grow its loans, assets and deposits ... validating the underlying strength of the business. NET LOANS TOTAL ASSETS [Kb] [Kb] 27.5 23.1 24.5 13.2 13.5 20.8 22.4 12.5 11.2 10.1 CAGR = 6.0% CAGR = 5.7% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 DEPOSITS GRO
Slide 8: Key ratios
Key ratios BSP Group has maintained strong results across all key performance ratios ... with increased provisioning levels reflecting a change in risk profile of lending customers on the back of contracting GDP. COST TO INCOME [%] ROE & ROA [%] (512bps) (65bps) (33bps) 30.7 3.7 3.7 41.0 29.7 24.6 3
Slide 9: Income stream trends
Income stream trends Total income reduced by -1.2% … largely due to the impact of PNG Bank ILR reduction by 1% on 1st April 2020, partially offset by lower cost of funds and increased investment income. Lending Investment Interest Fee FX Other Total KEY DRIVERS income income expense income income in
Slide 10: Expenditure trends
Expenditure trends Total operational costs decreased by 2.0% with strong cost containment measures across all businesses to mitigate the impact of income reductions. Staff Admin Premises/ Computing NLL Total costs costs equipment cost operating KEY DRIVERS costs ● Staff Costs – salaries , training,
Slide 11: Market strength
Market strength BSP is #1 in lending in 6 countries … and #1 in deposits in 6 markets. LOANS MARKET SHARE DEPOSIT MARKET SHARE Rank Rank #1 PNG 65% #1 PNG 64% Solomon Islands 52% #1 Solomon Islands 53% #1 Tonga 41% #1 Cook Islands 49% #1 Cook Islands 38% #1 Tonga 43% #1 Samoa 30% #1 Fiji 26% #1 Fiji
Slide 12: Competitor trends
Competitor trends BSP continues to deliver superior value to its customers and shareholders. PNG BANK NPAT TRENDS [Km] 890 844 806 12.5 13.2 13.6 2018 2019 2020 2018 2019 2020 YoY = (9.5%) YoY = (20.3%) YoY = (47.8%) YoY = 2.7% YoY = (14.2%) YoY = 64.1% YoY = (14.5%) 204 229 183 2.2 1.9 133 122 1.7
Slide 13: Channel investment
Channel investment Continued channel investment to improve customer service levels across the BSP Group. PNG Fiji Sol Is. Sam Cook Is. Van Ton Total Branches 83 46 16 8 5 2 4 2 40 38 0 0 0 0 0 2 Sub Branches ATMs 554 319 121 34 26 13 27 14 EFTPOS 11,033 6,879 2,126 297 448 449 426 408 Agent 458 295
Slide 14: PNG branch network
PNG branch network BSP remains committed to reaching unbanked Papua New Guineans and drive active participation in financial inclusion. P14
Slide 15: Group channel growth trends
Group channel growth trends Customer transactions were via digital channels [77%] in Q4-20, … an annual increase of +13%. We average ~ 12.5m digital transactions per month … most [64%] via mobile phones. TRANSACTION MIX BY TRANSACTIONS PER MONTH CHANNEL BY CHANNEL [million] [percentage] 10% 10% 9% 4
Slide 16: Digital Insights
Digital Insights BSP continues to enhance access to banking services for businesses and customers through alternative contactless payments. Accordingly BSP’s Top Three [3] performing Channels are Mobile Banking, ATM and EFTPOS. Mobile Banking *131# ATM & PoS Online Payments (IPG) Top 5 services: Top
Slide 17: Share Price
Share Price Dividend yield of 11.17% based on K12.00 share price … and market capitalization of K5.61b. 12.08 1,189 12.00 12.00 12.00 12.01 12.00 12.00 12.00 12.00 12.00 967 964 911 Share Price 11.82 609 K12.00 31st December 11.76 11.77 2020 448 365 403 245 113 137 51 57 Dec-19 Jan-20 Feb-20 Mar-20
Slide 18: COVID-19 strategic response
COVID-19 strategic response ● Supported BPNG’s rate reduction request, whereby BSP PNG’s indicator Lending Rate [ILR] was reduced by 100bps [1.0%] on 1 April 2020 This has come at some cost to BSP … ~ K7m per month. Further, BSP is the only bank to pass on the full 1.0% reduction to all variable rat
Slide 19: Conclusion
Conclusion ● Group NPAT of K806m in 2020, which is - 9.5% below our 2019 record of K890m … largely as a consequence of COVID-19 impacts ● Total Assets up 12.3% and Loans up 3.0% ● Cost to income stable at 37.4% … 37.7% in 2019 ● Capital adequacy steady at 23.3%, still well above BPNG requirement of