Mystate Limited · ASX:MYS
Mystate — 1H 2016 Earnings Presentation
27 slides from Mystate's earnings presentation, Feb 22, 2016
Slide 1: Investor Presentation February 2016
For personal use only February 2016 Investor Presentation
Slide 2: Agenda
Agenda 1 Overview For personal use only Melos Sulicich CEO & Managing Director 2 Financial Results David Harradine Chief Financial Officer 3 Outlook Melos Sulicich CEO & Managing Director The MyState Community Foundation is proud to support Second Bite, an organisation focused on improving the nutri
Slide 3: Overview of 1H 2016 Financial Performance
Overview of • Record 1H NPAT of $15.1m, up 1.5% on prior corresponding 1H 2016 period (pcp). (1H NPAT growth of 4.1% on underlying pcp NPAT For personal use only Financial post divestment of Cuscal shares.) • Interim dividend 14.0 cps maintained. Performance • 1H 2016 revenue of $61.3m, up 1.5% on p
Slide 4: Key performance metrics heading in the right direction
Key performance For personal use only metrics heading in the right direction *1H15 and prior periods include Cuscal dividends; 1H15 Cuscal dividends were $0.4 million. GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 4
Slide 5: Applications maintained at higher levels
Applications maintained at For personal use only higher levels Strong broker flows and retail focus. Settlement momentum continuing, with 1H 2016 settlements exceeding the pcp by 32%. Home loan book growing at 2x system.1 1. Source: APRA banking statistics December 2015. GROWTH – INVESTMENT – PERFOR
Slide 6: Delivering on our strategic goals
Delivering on our • Record settlements, with growth achieved in both retail and broker channels. • Record loan book size. Growth in our For personal use only GROW • Continued revenue growth in 1H 2016, with further upside into 2H 2016. strategic revenue drivers • Profit growth achieved in both banki
Slide 7: Agenda
Agenda 1 Overview For personal use only Melos Sulicich CEO & Managing Director 2 Financial Results David Harradine Chief Financial Officer 3 Outlook Melos Sulicich CEO & Managing Director The MyState Australian Wooden Boat Festival celebrates Tasmania’s rich maritime history and $70 million wooden b
Slide 8: Strong revenue and NPAT performance
Strong revenue 1H 2015 2H 2015* 1H 2016 Change Change (v 1H 2015) (v 2H 2015) and NPAT Revenue ($m) 60.4 59.1 61.3 1.5% 3.7% For personal use only performance… Net Profit after tax ($m) 14.9 ** 14.8 15.1 1.5%..** 1.9% with further Net interest margin (%) 2.36 2.18 2.12 -24bps -6bps uplif
Slide 9: Australian credit growth still healthy
Australian Credit growth in Australia remains sound. credit growth For personal use only Since June 2015: still healthy • Credit growth across the Australian economy increased marginally driven by improvements in business and personal credit growth. • Housing credit continues to grow at a rate of ov
Slide 10: Continued improvement in the Tasmanian economy
Continued The Tasmanian economy continues to show improvement: improvement in • Unemployment rate at 6.6%. For personal use only the Tasmanian • Construction work remains strong. economy • Retail spending growth continues. • Population growth at 0.4%. • Drought impacting agribusiness activity. • Reg
Slide 11: Sustainable dividend performance
Sustainable dividend For personal use only performance Key dividend considerations • Seek to maintain or increase nominal dividend whilst being alert to capital generation needs. • Maintain payment ratio that is sustainable in the long term. • Pay fully franked dividends given high franking credit s
Slide 12: Record 1H NPAT achieved through income growth
Record 1H NPAT achieved For personal use only through income growth Strong loan book growth and margin improvement underpinned revenue growth. Competition for both lending and deposits is intensifying. • 1H earnings growth with momentum continuing. • Strong loan growth has underpinned 1H 2016 Net In
Slide 13: Net Interest Margin
Net Interest Margin For personal use only NIM compression has eased subsequent to loan book repricing late in 1H 2016. Funding costs have improved but wholesale markets continue to experience some volatility. GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 13
Slide 14: Growing sustainably is a strategic imperative
Growing sustainably is For personal use only a strategic imperative 72% of home loan growth achieved from <80% LVR lending. GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 14
Slide 15: Investor lending well below industry average
Investor lending well For personal use only below industry average… Competition for owner- occupied business has increased. Despite the competition, MyState has continued its above system growth, with housing loan growth at 2x system.1 1. Source - APRA banking statistics December 2015. GROWTH – INVE
Slide 16: Continued geographic diversification with Tasmanian concentration below 60%
Continued geographic For personal use only diversification with Tasmanian concentration below 60% GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 16
Slide 17: Credit performance continues
Credit performance For personal use only continues… Impairment charges 3bps of gross loans. Impairment charges continue to fall reflecting sound credit quality. Management overlay applied as a prudent measure as loan book continues to grow. With arrears still well below peers. GROWTH – INVESTMENT –
Slide 18: A stable funding mix supported by growth in customer deposits
A stable funding mix For personal use only supported by growth in customer deposits MTN program provides further funding diversification and tenor. GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 18
Slide 19: Wealth continues to deliver consistent, stable returns
Wealth continues For personal use only to deliver consistent, stable returns to the business Appointed new General Manager Wealth Management in February 2016. GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 19
Slide 20: Tight operating cost management continues
Tight operating cost For personal use only management continues, with cost growth restricted to 0.85% on 1H 2015 Cost to income ratio improves by 50bps to 64.0% on pcp. GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 20
Slide 21: Increased capital diversity through MTN issue
Increased capital diversity For personal use only through MTN issue… ...with a range of capital options to support continued lending growth. S&P review resulted in a reassessment of MyState’s prospects, with a BBB positive outlook and likely to move to BBB+ within 12 months. GROWTH – INVESTMENT – PE
Slide 22: Dividend Reinvestment Plan Details
Dividend • MyState has announced activation of the DRP for shareholders. Reinvestment • Allows existing MyState shareholders to invest further in MyState. For personal use only Plan Details • DRP pricing will be based on a 3% discount to the volume weighted average price (VWAP) calculated over the 7
Slide 23: Indicative DRP Timetable
Indicative DRP Timetable For personal use only Announcement of DRP activation 22 February 2016 Ex dividend date 29 February 2016 Dividend Record date 02 March 2016 Deadline for shareholder election to participate in the DRP 03 March 2016 DRP pricing period 07 – 15 March 2016 Dividend payment & DRP s
Slide 24: Agenda
Agenda 1 Overview For personal use only Melos Sulicich CEO & Managing Director 2 Financial Results David Harradine Chief Financial Officer 3 Outlook Melos Sulicich CEO & Managing Director The MyState Student Film Festival showcases young Tasmanian talent to Australia – and the world. GROWTH – INVEST
Slide 25: Pending regulatory reform and industry developments
Pending regulatory International developments • Investor lending to attract higher risk weighting. For personal use only reform and • Lower LVR lending to benefit. • industry “Basel 4” – higher capital and mortgage risk weighting. developments Domestic developments • Higher level of industry oversig
Slide 26: The journey so far
The journey so far… What we’ve What we’re currently What’s to come: achieved: working on: For personal use only • Loan growth 2x system through improved • Product • Potential M&A rationalisation and opportunities sales culture. aligned core with like-minded • New loan origination systems. businesses
Slide 27: Important notice and disclaimer
Important The material in this presentation contains summary background information about the business of notice and MyState Limited (MYS) as at the date of this presentation. The information contained in this presentation For personal use only is in summary form and is not, and does not purport to