Kiwibank Ltd. · NZX:KWBHB
Kiwibank — Debt Investor Presentation (March 2024)
27 slides from Kiwibank's debt investor presentation, March 2024
Slide 1: Kiwibank Debt Investor Update
Kiwibank Debt Investor Update March 2024 Steve Jurkovich (Chief Executive), Belinda Newman (Treasurer)
Slide 2: Disclaimer
Disclaimer This presentation provides information in summary form only and is not intended to be complete. This presentation may contain information (including information derived from publicly available sources) that has not been independently verified by Kiwibank Limited (“Kiwibank”). Under no cir
Slide 3: Contents
Contents Kiwibank Overview 4 Financial Results 13 Capital, Funding and Liquidity 18 Appendix 22 Contact 27 3
Slide 4: Kiwibank Overview
Kiwibank Overview 4
Slide 5: Kiwibank is the largest New Zealand-owned bank
Kiwibank is the largest New Zealand-owned bank. Kiwibank's founding vision was for New Zealand to have a real, relevant and credible alternative to the offshore-owned banks. That remains at the heart of who we are and why we exist. 5
Slide 6: Kiwibank is the only New Zealand government owned trading bank
Kiwibank is the only New Zealand government owned trading bank NZ Government: Foreign Currency Rating • We are a purpose-led bank, balancing purpose with performance New Zealand Moody’s Aaa (stable) Fitch AA+ (stable) • We're proud to be a B Corp certified Government company1 • New Zealand’s largest
Slide 7: This is Kiwi – our strategy
This is Kiwi – our strategy What we aim to achieve Kiwi Making Kiwi 1. Making our Tamariki (children) better off | Access to financial education PURPOSE Better Off 2. Making Kiwi (NZers) better off | Taking action to secure their financial future 3. Making Aotearoa (NZ) better off | Delivering susta
Slide 8: Sustainability highlights (6 months to Dec 23)
Sustainability highlights (6 months to Dec 23) Supported 62,210 12 Kāinga whenua students to be financially champions within the savvy through Banqer business to assist lending to Māori Released a financial NZ$71m sustainable 138 micro-loans wellbeing programme finance lent to businesses 51% of our
Slide 9: Lending Portfolio
Lending Portfolio • Kiwibank is primarily a retail mortgage bank • 7% share of mortgage market1 • We also provide lending to SMEs, Commercial NZ$31.0b and Corporate clients • No Institutional lending and no Agri lending within the farm gate Home Loan Portfolio HY24 FY23 Total home loan portfolio NZ$
Slide 10: Asset Quality
Asset Quality 90+ Days Past Due1 as a % of Total Loans2 • Small increase in arrears across the banking system but no 0.53% strong indication of significantly increased credit stress • Kiwibank mortgage arrears and impairments remain low, 0.34% below the industry average 0.26% 0.23% • Payment support
Slide 11: Credit Impairment Provisions
Credit Impairment Provisions ECL by Stage & Economic Scenario HY24 NZ$m 174 • Credit provisions have trended upwards due to asset growth and increased business customer risk 139 121 110 4 • Expected Credit Losses (ECL) are an estimate of 90 30 forward-looking losses based on a probability weighted v
Slide 12: Regulatory Landscape
Regulatory Landscape Commerce Commission Banking Market Study1 • Focusing on competition for personal banking services • Preliminary issues consultation completed, draft report expected in late March and the final report in due in August RBNZ Liquidity policy review2 • Retention of the RBNZ’s existi
Slide 13: Financial Results
Kiwi bank. Financial Results
Slide 14: Strong revenue result underpins performance
Strong revenue result underpins performance HY24 Financial Highlights Highlights for the six months to 31 December 2023 (HY24) • Net profit after tax of NZ$105m for HY24, up 7% from HY23 • Growth in operating income driven by higher NIM NZ$1.3b NEW NZ$1.1b GROWTH IN NZ$105m PROFIT CUSTOMER LENDING C
Slide 15: Profit underpinned by net interest income
Profit underpinned by net interest income Reported Profit after Tax NZ$m 175 Highlights for HY24 126 131 77 105 67 71 • Net profit after tax of NZ$105m for HY24 up 7% 57 6 105 from HY23 due to higher operating income 98 64 51 55 • Higher operating income is driven by net interest income, 12% above H
Slide 16: Change in reported net profit between HY23 & HY24
Change in reported net profit between HY23 & HY24 The prior half benefitted Higher net interest from net gains on Higher people and Increased provisions margin and strong financial instruments and technology costs to due to higher Retail lending growth sale of Tower Insurance support growth business
Slide 17: More Kiwi backing Kiwibank
More Kiwi backing Kiwibank Lending Growth (%) 14% 13.3% 55% 12% 50% 45% Key Focus Areas for HY24 10% 9.7% 40% 8.9% 35% 8% 7.1% 30% 6.9% 7.0% 6.9% 25% • Kiwibank continues to outperform the system in 6% 4.5% 20% lending and deposit growth. Overall net lending 4% 3.0% 15% growth was 2.8 times system,
Slide 18: Capital, Funding and Liquidity
Capital, Funding and Liquidity 18
Slide 19: Regulatory Capital Ratios
Regulatory Capital Ratios 1 Key focus areas Tot Cap 15.9% 16.0% • Capital as at 31 December 2023 remains Tier 1 13.2% 13.6% 14.3% 13.3% 14.0% comfortably in excess of regulatory 12.6% 11.9% 12.0% 11.7% requirements 10.5% • Kiwibank is well placed to meet higher RBNZ 8.5% capital requirements to be p
Slide 20: Funding Mix
Funding Mix Term Funding Maturity Profile by Type NZ$m1 Weighted average remaining term to maturity = 2.3yrs • Strong customer deposit base FLP/TLF 343 • Mixture of domestic and offshore long-term Sub Debt 200 funding 275 600 168 109 Australian Covered Bond • Full utilisation of RBNZ’s Funding for L
Slide 21: Liquidity
Liquidity • A diversified, high-quality portfolio of Liquid Assets Portfolio HY24 liquid assets • All securities are repo-eligible in NZ • Does not include NZ$2.3b of unencumbered internal RMBS also available for liquidity purposes RBNZ Regulatory Liquidity Ratios HY24 Minima Quarterly average 1-wee
Slide 22: Appendix
Appendix 22
Slide 23: Performance history
Performance history NZ$m FY20 FY21 FY22 FY23 HY24 Interest income 894 761 907 1,389 935 Interest expense (439) (233) (277) (595) (504) Net Interest Income 455 528 630 794 431 Net gains on financial instruments at fair value 13 8 7 (17) - Other operating income 65 41 43 39 17 Operating expenses (408)
Slide 24: Balance sheet history
Balance sheet history NZ$m FY20 FY21 FY22 FY23 HY24 Assets Loans and advances 22,222 25,283 27,751 29,682 30,988 Other assets 3,296 2,946 3,796 4,156 4,406 Total Assets 25,518 28,229 31,547 33,838 35,394 Liabilities Deposits and other borrowings 20,597 22,403 24,216 25,756 26,835 Debt securities iss
Slide 25: Kiwibank Executive
Kiwibank Executive Steve Jurkovich Chief Executive Mark Stephen Paul Chambers Charlotte Ward Vacant Chief Customer Chief of Finance Chief People Chief Risk Officer Officer and Operations Officer Mike Hendriksen Elliot Smith Hamish Rumbold Julia Jack Chief Legal Chief Customer Chief Digital and Chief
Slide 26: Kiwibank Board
Kiwibank Board Jon Hartley Chairman Anna Curzon Ian Blair Jon Macdonald Mary Jane Daly Director Director Director Director Kate Jorgensen Kevin Malloy Scott Pickering Director Director Director 26
Slide 27: Contact
Contact Belinda Newman Geoff Martin Treasurer Head of Funding [email protected] [email protected] +64 9 442 6384 +64 4 439 6932 Kiwibank Disclosure Statement: https://media.kiwibank.co.nz/media/documents/General_disclosure_statement_Dec23.pdf Kiwibank Sustainability Report: htt