Mystate Limited · ASX:MYS
Mystate — FY2015 Earnings Presentation
27 slides from Mystate's earnings presentation, Aug 21, 2015
Slide 1: Investor Presentation August 2015
For personal use only August 2015 Investor Presentation MyState is proud to continue its principal sponsorship of the Australian Wooden Boat festival, estimated to have contributed $80 million to the Tasmanian economy in 2015.
Slide 2: Agenda
Agenda 1 Overview Melos Sulicich For personal use only CEO & Managing Director 2 Financial Results David Harradine Chief Financial Officer 3 Outlook Melos Sulicich CEO & Managing Director The Rock proudly supports the CQ NRL bid. GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentatio
Slide 3: Overview of FY2015 Financial Performance
Overview of • Statutory NPAT $32.5m, up 10% on prior year. FY2015 • Underlying NPAT $29.7m, up 0.3% on prior year. For personal use only Financial • Underlying revenue $119.5m, up 0.2% on prior year. Performance • Record settlements $1bn, up 75% on prior year. • Loan book $3.6bn, up 16.3% on prior y
Slide 4: Continued growth in revenue drivers focus on strategic priorities
Continued Growth in our • Record settlements – up 75% on prior year. revenue drivers • Restored loan book growth of 16.3% (at 2.3x system). focus on GROW For personal use only strategic Simplifying processes • Enhanced systems will further improve service and priorities SIMPLIFY for third party and
Slide 5: Loan book growth accelerated through the year
Loan book growth For personal use only accelerated through the year Settlements reach $1bn for the first time in the Group’s history Continued acceleration in settlements with 2H 2015 ~50% above 1H 2015 FY15 settlements grew at 75% above prior year GROWTH – INVESTMENT – PERFORMANCE MyState Limited I
Slide 6: Agenda
Agenda 1 Overview Melos Sulicich For personal use only CEO & Managing Director 2 Financial Results David Harradine Chief Financial Officer 3 Outlook Melos Sulicich CEO & Managing Director MyState and Tasmanian Perpetual Trustees partnered to showcase the very best in local Tasmanian produce at 2015’
Slide 7: Revenue increases despite competition and RBA rate cuts
Revenue 2014 2015 (Statutory) 2015 (Underlying) Change (Underlying v 2014) increases For personal use only Revenue ($m) 119.3 125.1 119.5 0.2% despite Earnings ($m) 29.6 32.5 29.7 0.3% competition Net interest margin (%) 2.43 2.28 2.28 -15bps and RBA rate cuts Cost-to-income ratio (%) 64.5 62.
Slide 8: Reconciliation of underlying earnings with statutory profit
Reconciliation FY 2015 FY 2014 of underlying For personal use only Underlying earnings after tax $29.7m $29.6m earnings with statutory profit $3.9m Profit on sale of Cuscal shares 1 – Restructuring costs 2 ($1.1m) – 1. Cuscal share sale - Sale of non-strategic asset to support growth and reinvestmen
Slide 9: Economic conditions continue to improve in Tasmania
Economic The Tasmanian economy continues to improve: conditions • Business confidence high, with private investment spending posting solid For personal use only gains during the financial year after a period of weakness. continue to • The major project pipeline is healthy and conditions are favourab
Slide 10: Mixed economic conditions in Queensland
Mixed economic The Queensland economy is mixed: conditions in • Falling mining investment representing a challenge. For personal use only Queensland • Major areas are benefitting from an increase in dwelling approvals. • The labour market remains soft. • Low interest rates and a lower Australian dol
Slide 11: Sound underlying result and building for FY16
Sound underlying result For personal use only and building for FY16 Revenue improves despite competitive intensity and NIM compression Lending book velocity to • Earnings stable, laying the foundations for FY16 earnings growth. underpin future growth and • RBA rate cuts and loan book growth presente
Slide 12: Net Interest Margin
Net Interest Margin For personal use only Competition, RBA rate cuts and business growth impacting margin Targeted asset repricing to ease NIM pressure Funding costs expected to continue to ease in FY16 GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 12
Slide 13: A targeted strategy and commitment to execution deliver record organic growth
A targeted strategy and For personal use only commitment to execution deliver record organic growth Housing loan growth at 2.5x system GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 13
Slide 14: Product and pricing strategy successful in attracting quality lending business
Product and pricing strategy For personal use only successful in attracting quality lending business GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 14
Slide 15: Sound loan book growth with investor loans below APRA ADI average
Sound loan book growth For personal use only with investor loans below APRA ADI average Investor loans comprise 13% of the loan book …well below the APRA ADI average of 35% 1 1. APRA banking statistics June 2015. GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 15
Slide 16: Diversified funding base supports loan growth
Diversified funding base For personal use only supports loan growth Successful RMBS transaction completed in 1H 2015 provides further support for growth 1. APRA banking statistics June 2015. GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 16
Slide 17: 2H 2015 acceleration of retail deposits increases share of system growth
2H 2015 acceleration of For personal use only retail deposits increases share of system growth Source: APRA Banking Statistics June-15 (MYS = MSB + ROK) GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 17
Slide 18: Diversifying the loan book and lower geographic concentration
Delivering on our strategy to For personal use only further diversify the loan book and achieve lower geographic concentration 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 GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 19
Slide 20: Tight operating cost management continues
Tight operating cost For personal use only management continues • Cost to income ratio (underlying earnings) improves by 20bps to 64.3% GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 20
Slide 21: Strong credit quality and decline in bad and doubtful debts
Strong credit quality and For personal use only conditions reflected in the continued decline in bad and doubtful debts GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 21
Slide 22: Strong asset growth contributed to a decline in the Group's capital ratio
Strong asset growth For personal use only contributed to a decline in the 13.94% Group’s capital ratio • Capital further enhanced through $25 million Tier 2 medium term notes issue post balance date. GROWTH – INVESTMENT – PERFORMANCE MyState Limited Investor Presentation 22
Slide 23: Agenda
Agenda 1 Overview Melos Sulicich For personal use only 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 24: Employee Connectivity and Customer Engagement both increase
Employee Connectivity For personal use only and Customer Engagement both increase 2014 2015 Analysis of the Employee Connectivity Customer Engagement strength driven by: Survey points to the following factors: • Improvement in new customers’ • New leadership and company direction experience of on-bo
Slide 25: Pending Regulatory Reform
Pending Regulatory Developments • Higher capital and mortgage risk Regulatory For personal use only weighting Reform • Potential for federal government deposit tax (Financial Claims Scheme) Implications for MyState • MYS Tier 1 capital position remains well above industry average • Levelling of comp
Slide 26: Sustained growth, targeted transformative investment, enhanced performance
Sustained growth… For personal use only Foundations for sustained growth • Clear vision, strategy and commitment to execution • Restored third party relationships and systems and sales culture • Record settlements and loan book growth • Capital and credit quality as a cornerstone of sustainable grow
Slide 27: Important notice and disclaimer
Important The material in this presentation contains summary background information about the business of MyState Limited (MYS) as at the date of this presentation. The information contained in this presentation notice and is in summary form and is not, and does not purport to be, complete. For pers