Mystate Limited · ASX:MYS
Mystate — H1 FY2017 Earnings Presentation
34 slides from Mystate's earnings presentation, Feb 17, 2017
Slide 1: Correction to Investor Presentation
17 February 2017 The Manager For personal use only Company Announcements Australian Securities Exchange 20 Bridge Street Sydney NSW 2000 MyState Limited – Correction to Investor Presentation Please be advised that an amendment has been made to pages 4, 11 and 22 of the MYS Investor Presentation rele
Slide 2: FY17 Half-Year Results Presentation
For personal use only 17 February 2017 MyState Limited FY17 Half-Year Results Presentation
Slide 3: Agenda
Agenda 1 Overview Melos Sulicich For personal use only CEO & Managing Director 2 Financial Results David Harradine Chief Financial Officer 3 Summary and Outlook Melos Sulicich CEO & Managing Director The MyState Student Film Festival is Tasmania’s premier youth artistic event. GROWTH – INVESTMENT –
Slide 4: Key messages
Key messages • Sound result in a difficult market. • Momentum in loan book growth continues, particularly in lower For personal use only risk segments. High quality loan book with NIM and ROE • Exemplary asset quality and credit performance. ahead of peers • Disciplined execution on strategy with Tr
Slide 5: 1H17 results overview
1H17 results Total operating income: Return on equity: overview 0.8% -20bps For personal use only $61.8m 10.2% Net profit after tax: Earnings per share: NPAT growth and $15.2m 0.7% 17.3cps Steady maintained EPS despite sectoral headwinds Net interest margin: Cost-to-income ratio: 1.94% -18bps 66.4%
Slide 6: Performance and returns
Performance and returns For personal use only NPAT uplift on pcp with EPS maintained Cost to income impacted by M&A costs carried into 1H17 Excluding M&A activity cost growth held to 1.5% on pcp *1H17 cost to income ratio 64.4% excluding significant M&A project costs (refer to slide 21) 1H15 and pri
Slide 7: Applications and settlements maintained at higher levels
Applications and settlements For personal use only maintained at higher levels Strong broker and retail relationships reflected in settlements growth 1H 2017 settlements exceeded the pcp by 26%. Home loan book growing at 2.4x system1 Increased conversion rate of applications reflects higher service
Slide 8: Low LVR growth strategy
Low LVR growth strategy For personal use only Low-risk loan book and low LVR lending continues Geographic concentration reduced Outstanding arrears performance GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 7
Slide 9: Delivering on our strategic goals for 2H17
Delivering on • • $4b+ loan book with home loans growing at 2.4x system Modest revenue growth in a challenging environment our strategic GROW Growth in our • Strong and stable customer deposit growth For personal use only revenue drivers • Loan book re-pricing in January 2017 providing some momentum
Slide 10: Our transformation roadmap
Our transformation roadmap For personal use only . . . GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 9
Slide 11: Agenda
Agenda 1 Overview Melos Sulicich For personal use only CEO & Managing Director 2 Financial Results David Harradine Chief Financial Officer 3 Summary and Outlook Melos Sulicich CEO & Managing Director MyState’s vision is to make a genuine difference to our customers and communities everyday. GROWTH –
Slide 12: Financial results
Financial 1H 2016 2H 2016* 1H 2017 Change (v 1H 2016) Change (v 2H 2016) results Total operating income For personal use only 61.3 62.1 61.8 0.8% -0.5% ($m) Net Profit after tax ($m) 15.1 16.0 15.2 0.7%.. -5.1% Net interest margin (%) 2.12 2.13 1.94 -18bps -19bps Profitability maintained
Slide 13: 1H NPAT steady
1H NPAT steady ($m) For personal use only Continuing strong credit and bad and doubtful debt performance • 1H earnings maintained in a challenging revenue environment. • RBA cash rate reductions resulting in lower asset yields, with funding costs (in particular customer deposit pricing) slower to re
Slide 14: Net Interest Margin
Net Interest Margin For personal use only NIM pressure continues from lower for longer rate environment, growth in lower risk lower margin owner occupier / low LVR lending and higher customer deposit spreads A repricing of the home loan book in Jan 2017 to provide margin and revenue benefits Margin
Slide 15: Growing in a low risk manner
Growing in a low risk manner is For personal use only a strategic imperative 1H17 growth entirely from <80% LVR lending GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 14
Slide 16: Growth in owner-occupier lending
Growth in owner-occupier For personal use only lending Despite continued competition, MyState has continued its above system growth, with housing loan growth at 2.4x system1 With investor lending growth well within regulatory requirements 1. Source - APRA banking statistics December 2016 GROWTH – IN
Slide 17: Continued geographic diversification
Continued geographic December 2016 diversification with Tasmanian For personal use only concentration down to 52% 0.1% $3.0M 15.5% $609.3M 2.3% $91.7M June 2016 1.1% $42.8M 15.1% $595.0M 0.1% $2.9M 16.2% 13.0% December 2015 $594.3M $511.3M 2.6% $92.9M 1.2% 52.0% 0.1% $42.6M $2,048.4M $2.9M 16.3% 11.
Slide 18: Credit performance
Credit performance continues to be at For personal use only industry leading levels Impaired assets at 4bps of loan book GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 17
Slide 19: A stable funding mix
A stable funding ($m) mix supported For personal use only by growth in customer deposits RMBS issuance in November 16 further diversified the Group’s wholesale investor base *Annualised growth GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 18
Slide 20: Challenging Wealth business environment
Challenging Wealth business For personal use only environment Wealth business impacted by Trustee revenues FUM performance very strong in 1H 2017 GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 19
Slide 21: Wealth: a sustainable pathway to growth
Wealth A sustainable pathway to growth For personal use only • Stabilise and grow existing revenue whilst building out new revenue streams • Leverage income fund capability through specialist offering into growth markets • Continue active will reviews and acquisition of quality clients • Improve pro
Slide 22: Tight operating cost management continues
Tight operating cost management For personal use only continues A significant due diligence project cost was reported in FY16, with additional related costs of $1.3m continuing into early 1H17 Excluding M&A related costs, cost to income ratio increased by 36 bps on PCP and costs grew by 1.5% Expense
Slide 23: Capital ratio remains sound
Capital ratio remains sound For personal use only Reactivation of DRP to support continued loan book growth and technology investment program GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 22
Slide 24: Credit growth has moderated
Credit growth has moderated For personal use only • Housing credit growth remains solid, albeit there has been further moderation over the final months of 1H 2017 • Growth in investor credit has picked up in the final months of 1H 2017 to 6.2%, consistent with an increase in housing loan approvals w
Slide 25: Tasmanian economy reaching new heights
Tasmanian Tasmanian economic growth is reaching new heights: economy • Tasmania’s economy continues to grow, with State Final Demand recording For personal use only its 14th consecutive quarter of growth in September in trend terms. reaching new • Tourism continues to thrive, with more people visiti
Slide 26: Dividend Reinvestment Plan Details
• Dividend • MyState has announced the reactivation of the DRP for existing Shareholders. The DRP will be priced at a 2.5% discount to the VWAP calculated over Reinvestment 5 trading days between 27 February 2017 and 3 March 2017. For personal use only • Shareholders will have until 24 February 2017
Slide 27: DRP Timetable
DRP Timetable For personal use only Announcement of DRP activation 17 February 2017 Ex dividend date 22 February 2017 Dividend record date 23 February 2017 Deadline for shareholder participation in the DRP 24 February 2017 DRP pricing period 27 February - 3 March 2017 Dividend payment & DRP share is
Slide 28: Agenda
Agenda 1 Overview Melos Sulicich For personal use only CEO & Managing Director 2 Financial Results David Harradine Chief Financial Officer 3 Summary and Outlook Melos Sulicich CEO & Managing Director Being part of the community supports our purpose as a company. GROWTH – INVESTMENT – PERFORMANCE MyS
Slide 29: Landscape and outlook
Landscape and outlook For personal use only Economic outlook • Tasmanian economy remains buoyant with foundations for continued growth. • Australian economy continues to experience low inflation and subdued growth. • International economic and political developments continue to create some economic
Slide 30: Landscape and outlook (continued)
Landscape and outlook (continued) For personal use only MyState’s response • Above system growth and continued geographic diversification. • Margin management and productivity as a core focus. • Pursuit of quality credit growth. • Strong balance sheet supported by a healthy capital ratio. • Discipli
Slide 31: Delivering a platform for continued profitable growth
Delivering a platform for continued profitable growth For personal use only What we’re currently What’s to come: What we’ve achieved: working on: • Loan book growth well above peers. • Product rationalisation • Continued investment in • MTN program and sub-debt issuance. and aligned core technology
Slide 32: Glossary
Glossary For personal use only 1H: First half of financial year MYS: MyState Ltd 2H: Second half of financial year MSB: MyState Bank 30DPD: 30 days past due NIM: Net Interest Margin 90DPD: 90 days past due RBA: Reserve Bank of Australia AFS: Available for sale ROE: Return on equity APRA: Australian
Slide 33: Disclaimer
Disclaimer 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 purport to summarise all i
Slide 34: Disclaimer
Disclaimer Forward-looking statements including projections, indications or guidance on future earnings or financial position and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Should one or more of the risks or uncer