BSP Financial Group Ltd. · ASX:BFL
BSP Financial — Bank of South Pacific — Shareholder Meeting (May 2017)
32 slides from BSP Financial's shareholder meeting presentation, May 26, 2017
Slide 1: Presentation to Shareholders
Presentation to Shareholders Robin Fleming – Group CEO May 26, 2017
Slide 2: Disclaimer
Disclaimer NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY. This presentation has been prepared and issued by Bank of South Pacific Limited (the “Company”), and may not be reproduced in whole or in part, nor may any of its contents be disclosed to any other person without the prior writt
Slide 3: BSP's Geographical footprint
BSP’s Geographical footprint #2 in Fiji by total assets BSP SubAnnual - title of General Presentation Meeting 2017 Slide 13
Slide 4: PNG economic outlook
PNG economic outlook Economic growth is positive, though lower than 8% (average) in the last decade. Agriculture sector is promising, comprising 23% (expected) of GDP in 2017. Real GDP (K'billion) Real GDP growth (%, annual) Inflation 2017 Contribution to GDP (K’bn) 11.8% Agriculture 14.63 8.4% 7.7%
Slide 5: FX challenges
FX challenges PGK declined by 4.2% and by 3.7% against AUD and USD respectively over the 12-months to March 2017. 0.47 11.0 Foreign reserves (K’bn) 10.0 AUD 0.46 0.45 8.0 7.2 7.2 0.44 15.9 15.8 0.43 12.6 10.6 11.6 0.42 0.41 0.40 1-Mar-16 1-Jun-16 1-Sep-16 1-Dec-16 1-Mar-17 8,417 6,841 5,981 5,226 5,
Slide 6: Non-PNG Outlook
Non-PNG Outlook The Pacific region is expected to grow by 2.9% in 2017 and 3.3% in 2018. Fiji and Vanuatu recovering from natural disasters in 2015. Vanuatu and Cook Islands will experience higher growth rates in the region. Inflation eased in most economies in 2016. Fiji 5.3 Solomon Islands 4.7 4.0
Slide 7: Highlights for 2016
Highlights for 2016 Profit (NPAT) up 21% to K643.5m Group NPAT (PGK ‘m) Total Income up 16% to K1.79bn 643 Total Assets up 14.5% to K20.8bn 532 507 437 Cost to Income ratio improves to 42.9% 408 Capital Adequacy maintained at 23.1%, exceeds BPNG requirement of 12% Loan Provisions to total loans stea
Slide 8: Financial Ratios
Financial Ratios Cost to Income ROE, ROA 52.5% 54.3% 46.9% 29.0% 29.7% 29.6% 44.7% 42.9% 28.3% 27.8% 3.3% 3.0% 3.2% 3.1% 3.3% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Loans to Deposit Capital Adequacy 59.7% 59.1% 53.2% 22.3% 24.0% 23.1% 23.1% 44.2% 43.5% 18.0% 2012 2013 2014 2015 2016 2012
Slide 9: Profit and asset growth by business
Dec 15 BSP Profit… 532 PNG Bank 52 Fiji Bank 16 SubAnnual - title of Sol Isl 13 8 Tonga General Non Bank 14 Business Presentation 5 Samoa 3 Vanuatu Meeting 2017 1 2015 Assets Cook Isl (Km) 18,196 Dec 16 Profit… 643 PNG Bank 1,511 Vanuatu Fiji Bank 337 281 Non Bank Business Sol Isl 140 131 Profit con
Slide 10: Loans and Deposit growth
Loans and Deposit growth Net Loans Loan portfolio composition (K’m) Mar-17 10,102 Cook Islands 1.7% 8,622 Tonga 1.9% 6,757 Vanuatu 2.1% 4,805 5,306 Samoa 3.0% Solomon Islands 3.6% Fiji 21.3% PNG 66.4% 2012 2013 2014 2015 2016 Total Deposits Deposit Mix (K’m) Demand Deposits Term Deposits 16,912 14,5
Slide 11: Group Total Assets Trend
Group Total Assets Trend (Kina ’billion) Total Assets 14.5% 20.80 Loans 17.2% Investment 20.8 10.6% 18.2 13.33 10.1 8.6 4.7 5.2 Investments Loans and Advances Total Assets 2012 2013 2014 2015 2016 2015 2016 BSP SubAnnual - title of General Presentation Meeting 2017 Slide111
Slide 12: Income Stream Growth (K'm)
Income Stream Growth (K’m) 17% 42% 33% 16% 10% 1,792 1,547 1,108 1,006 310 362 254 179 51 68 Net Interest Fee and FX Income Other Income Total Income Income Commision 2015 2016 BSP SubAnnual - title of General Presentation Meeting 2017 Slide 112
Slide 13: Expenses scaling with growth (K'm)
Expenses scaling with growth (K’m) Cost to Income 33% 23% 17% 47% 54% 11% 44.7% 770 691 42.9% 337 275 189 222 159 107 78 17 26 51 Dep'n, Staff costs Administration Non-lending Computing and Total Costs Amort'n, FA and Premises losses Other Impairment 2015 2016 BSP SubAnnual - title of General Presen
Slide 14: Market Strength
Market Strength Loans market share Deposits market share Cook Isl Cook Isl Sol Isl 34% Samoa Sol Isl 69% Samoa 46% 22% 56% 23% Tonga Tonga Fiji 22% Fiji 24% 39% 37% PNG Vanuatu PNG Vanuatu 55% 39% 12% 57% 43% 13% BSP SubAnnual - title of General Presentation Meeting 2017 Slide 114
Slide 15: PNG Industry Environment-Peer Comparison
PNG Industry Environment-Peer Comparison Total Assets (K'm) 14,756 NPAT ( K'm) 13,217 13,670 485 468 7,620 6,603 6,732 209 3,953 4,245 4,084 172 164 146 986 1,266 341 29 31 2014 2015 2016 BSP ANZ Westpac Kina BSP ANZ Westpac Kina 2015 2016 Return on Equity Capital Adequacy 54.3 30.0 29.0 28.0 24.6 2
Slide 16: BSP Key Strengths
BSP Key Strengths BSP SubAnnual - title of General Presentation Meeting 2017 Slide 116
Slide 17: Dual Listing Project Phases
Dual Listing Project 2 Phases Singapore Phase Total cost K8.9m Singapore stock Exchange decision process became prolonged and outside desired project timeline. Australia Phase Total cost K8.6m Recently announced, the board is not currently of the view that there will be a significant public offer of
Slide 18: Strategic Focus – 2017 Onwards
Strategic Focus – 2017 Onwards Grow corporate loan portfolio within specific products and industry sectors in alignment with economic activity, and facilitate medium to long term relationships with customers Continue to develop workforce through: o Preparing, training, nurturing and developing t
Slide 19: Board Strategic Imperatives: Core Banking System Upgrade
Board Strategic Imperatives Core Banking System Upgrade (Oracle’s Flexcube Product) 1. Implementation of Core Banking Program (3 years) has commenced. 2. Added system capabilities and features provide more opportunities for improved product offering and customer service. 3. All Countries will be mig
Slide 20: Board Strategic Imperatives: BSP Finance
Board Strategic Imperatives BSP Finance 1. BSP Finance is following BSP’s regional expansion program by exploring opportunities to expand to other geographies that BSP Bank already exist in. • Central Bank of Solomon Island (CBSI) has in Apr’17 approved our License Application to operate BSP Finance
Slide 21: Board Strategic Imperatives: Liquidity and Insurance
Board Strategic Imperatives Accessibility to Liquidity: 1. BSP is considering various options to provide access to liquidity to its shareholders, one of this dual listing opportunity in a reputable stock exchange. Insurance Market Entry Options 1. BSP is seeking various growth options to its BSP Lif
Slide 22: Q1/2017 Results
Q1/2017 Results BSP SubAnnual - title of General Presentation Meeting 2017 Slide 122
Slide 23: Quarterly Financial Ratios
Quarterly Financial Ratios Cost to Income Ratio Net Interest Income and NIM ( annualized) 320 7.4% 7.4% 8.0% 7.4% 48.5% 7.1% 7.2% 309.3 7.0% 45.5% 43.3% 43.5% 300 40.2% 296.6 K'000 6.0% 280 281.2 5.0% 267.2 263.7 4.0% 260 3.0% 240 2.0% Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Cost
Slide 24: Profit and Loss (K'm)
Profit and Loss (K’m) Group NPAT in Q1’17 is up 19% (+K26.9) from Q1’16 Profit and Loss (Km) Total Income increased by 21% compared to Q1’16. Net interest income contributed mostly in the quarter with K13m. 481.1 FX Income increased by 54% since Q1’16 . 396.7 Operating expense increased in the quart
Slide 25: Balance Sheet (K'bn)
Balance Sheet (K’bn) Total Assets increased by 2% (+K354m) to K21.2b at end of Q1’17. Loan growth in Balance Sheet ( K’bn) Q1’17 was K320m, 3% increase from Q4’16. 21.2 18.5 17.0 PNG loan growth was K66m. Other entities 14.7 grew by net K254m PNG growth was lower due to payout of SPI 10.4 8.8 facili
Slide 26: Market Share - Loans
Market Share - Loans 57% Commentary ( QoQ’) 46% 38% 29% • BSP’s combined market share for loans 22% 24% remains at 38% in Q1’17, 12% • PNG which has the largest market PNG Fiji Solomon Cook Tonga Samoa Vanuatu share increased by 2% to 57% in Q4’16 Islands Islands with an increase in loan volume in t
Slide 27: Market Share - Deposits
Market Share - Deposits 58% 56% 63% Commentary ( QoQ’) 37% • BSP’s combined deposit market share remains 27% steady at 43% in Q1’17. 21% • BSP PNG deposits grew by K128m in the 13% quarter with market share increasing by 2% to 58% in Q1’17. PNG Fiji Solomon Cook Tonga Samoa Vanuatu • Fiji market sha
Slide 28: Financial Risk Management
Financial Risk Management Capital Adequacy Provisions to Loans 5.0% 4.9% 4.8% 4.9% 4.9% 5.8% 3.3% 4.8% 7.1% 7.1% 19.0% 19.8% 20.1% 14.8% 13.9% Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Tier 1 Tier 2 BPNG requirement • Capital Adequacy ratio is 25.1% in Q1’17, • BSP’s Provisions to
Slide 29: Share Price
Share Price Closing price (Kina) Volume traded K9.70 red (millions) 4.0 Share Price green K9.20 K4.430bn 3.0 K8.70 market Cap K8.20 2.0 K7.70 Share Price K9.48 K7.20 28 Apr’17 1.0 K6.70 K6.20 0.0 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Dividend Yield : 10.9% ( @share price K9.48) PE Ratio : 6.9 times BSP
Slide 30: Dividends
Dividend 79 25 toea • Interim toea 104 toea • Full • Final BSP SubAnnual - title of General Presentation Meeting 2017 Slide 130
Slide 31: Conclusion
Conclusion • 2016 was an outstanding year with better than market performance • Cost to income ratio of 42.9% reinforces a strong cost focus • Capital adequacy, loan loss reserves, dividend yield and EPS all market leading • BSP’s expansion in the South Pacific well executed • Increasing contributio
Slide 32: Thank You
Thank You BSP SubAnnual - title of General Presentation Meeting 2017 Slide 132
Bank of South Pacific — Shareholder Meeting (May 2017) on 6ix