BSP Financial Group Ltd. · ASX:BFL
BSP Financial — Shareholder Meeting (May 2014)
36 slides from BSP Financial's shareholder meeting presentation, May 23, 2014
Slide 1: Presentation to Shareholders
Presentation to Shareholders 23 May 2014 Robin Fleming - Group CEO
Slide 2: Vision and Strategic Imperatives
Vision “To be the Leading Bank in PNG and the South Pacific”. Strategic Imperatives “To maintain, develop, and foster customers that will deliver value to BSP; through customer care, best employees and innovation, and a continuing contribution to community development”. 2
Slide 3: Strategic Focus 2013
Strategic Focus 2013 • In 2013 BSP moved from “transformation ” to “implementation” • BSP has placed a sharper focus on strategically critical areas and cost control measures • This focus has supported short term results in 2013 and is expected to positively impact future results 3
Slide 4: Strategic Imperatives 2014
Strategic Imperatives 2014 • A key component of BSP’s strategy will be a whole of bank sales and service program integrated with our vision, our values, our culture • Linkage of BSP’s values of integrity, professionalism, leadership, quality, people, and teamwork is intrinsic to embedding a true ser
Slide 5: Strategic Imperatives 2014
Strategic Imperatives 2014 • BSP’s optimal sales and service culture is to place customer satisfaction at the forefront of planning processes and operational activities • Customer satisfaction should then translate to improved returns for shareholders • BSP is placing a renewed emphasis on training
Slide 6: Strategic Imperatives 2014
Strategic Imperatives 2014 “Improved customer Sales & Service” will be delivered through market leadership in innovation, technological advances and the modernization of all our systems and procedures, and the continued simplification & automation of all our operational & support processes. “Appropr
Slide 7: Financial Performance 2013
Financial Performance 2013 7
Slide 8: Group Profit After Tax
Group Profit After Tax (Kina ‘million) 500 437 450 408 400 350 300 250 200 150 87 100 50 - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 8
Slide 9: Group Profit & Loss Trends
Group Profit & Loss Trends CAGR, last 5 (Millions of Kina) 2009 2010 2011 2012 2013 Years Income Net Interest Income 474 544 597 682 741 14.5% Foreign Exchange Income 104 139 193 224 353 22.7% Fee and other Income 147 272 304 380 428 29.6% Total Income 726 955 1,094 1,285 1,522 19.6% Expenses Operat
Slide 10: Group Balance Sheet Trends
Group Balance Sheet Trends CAGR, last 5 (Millions of Kina) 2009 2010 2011 2012 2013 Years Assets Cash & Short Term Deposits 1,188 1,344 1,501 2,134 3,476 37.1% Loans & Advances 3,639 4,091 4,301 4,805 5,306 17.8% Investments 3,886 3,857 4,724 4,861 5,571 10.6% Fixed Assets + Other Assets 685 735 1,1
Slide 11: Cost To Income Ratio – BSP Group
Cost To Income Ratio – BSP Group 70.0% 60.0% 55.3% 57.3% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 11
Slide 12: BSP continues to expand its service channels
BSP continues to expand its service channels BSP Group Banking Services as at April 2014 BSP Rural AGENTS/ sub- Rural Branches branches ATM's EFTPOS Outlets PNG 42 39 295 12,535 * 225 FIJI 18 - 108 1,838 42 SI 7 - 18 129 17 * PNG – 8,456 merchants 12
Slide 13: Group Income Growth 2009 - 2013
Group Income Growth 2009 - 2013 (Kina ‘million) 1,600 1,400 1,200 Other Income 1,000 Net Insurance Income Fx Income 800 Banking Fee and Commissions 600 Net Interest Income 400 200 0 2009 2010 2011 2012 2013 13
Slide 14: PNG Profit After Tax
PNG Profit After Tax Year Ended 30 September 2013 (Kina ’million) WPAC, 235.7Mn BSP, 393.8Mn ANZ, 313.0Mn 14
Slide 15: Fiji
Fiji 2013 Profit After Tax (FJD ’million) Banks BSP Life (FJD 11.6m profit) BOB, BSP, 80.0 5.7Mn 8.7Mn WPAC, 60.0 50.1Mn 40.0 20.0 0.0 Revenue Expense ANZ, 2012 2013 49.2Mn 15 15
Slide 16: Solomon Islands
Solomon Islands 2013 Profit After Tax (SBD ’million) ANZ, 19.9Mn BSP, 29.2Mn WPAC, 35.8Mn 16
Slide 17: Group Objectives – Four Themes
Group Objectives – Four Themes 1. Financial: Income growth through serving all segments (whole of bank proposition) across all market segments, higher yielding products; revenue leakage mitigation through diversification of BSP’s customer base 2. Customer: Brand preservation, effectively servici
Slide 18: Group Objectives – Four Themes (cont’d)
Group Objectives – Four Themes (cont’d) 3. Operational Excellence: Continually challenge and improve internal processes, and realise efficiencies through technology and other significant investments to materially reduce cost 4. People: Foster a culture committed to teamwork and accountability. F
Slide 19: BSP’s Core Values
BSP’s Core Values Theme of 2014 Managers Conference BSP’s Core Values are shared by and serve to underpin, guide, and shape everything we do as we work toward realising the vision of being the leading bank of the South Pacific 1. Integrity 2. Professionalism 3. Leadership 4. Quality 5. People 6. T
Slide 20: Capital Management
Capital Management Capital Adequacy The Capital Base of the 30.0% BSP Group exceeds 25.0% regulatory standards for an adequately capitalised bank 20.0% 15.0% • The decrease in the 10.0% overall ratio is reflected in the build up of 5.0% capitalised fixed assets, 0.0% and in larger holdings of 2010 2
Slide 21: Capital Management
Capital Management Equity to Loans Other “capital management Equity to RWA KPIs” are trending well Equity to total deposits • BSP’s capital is mainly Equity to total assets profits, paid up equity, and reserves. 40% 35% • Sound, stable capital 30% position over the long 25% term 20% 15% 10% 5% 0% 20
Slide 22: Return on Equity
Return on Equity ROE EPS (toea) • ROE is stable, very 100.0% 0.93 strong 90.0% 0.86 • Earnings per share 80.0% 0.75 continues to increase: • 20.6% CAGR from 2006 70.0% 0.56 0.59 to 2013 60.0% 0.50 50.0% 0.42 40.0% 31.7% 34.7% 39.5% 28.7% 28.3% 30.0% 30.6% 29.0% 20.0% 0.25 27.4% 10.0% 0.0% 2006 2007
Slide 23: Share Price
Share Price 8.20 0.7 8.00 0.6 Share b’back ceased March 2013 0.5 7.80 Share Volume K3.6bn 0.4 Price market Traded in 7.60 Cap in 0.3 millions Kina 7.40 Dec’2011 K7.53 Share 0.2 Price 7.20 K7.78 0.1 30th Apr 7.00 0.0 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 23
Slide 24: Dividend
Dividend • increase with profit • 8.6% yield 46 • Pay June 20 20 66 toea • Interim toea toea • Full • Final 24
Slide 25: BSP Qtr.1/2014 Results Summary
BSP Qtr.1/2014 Results Summary Johnson Kalo, Group Deputy CEO / Group CFO Annual General Meeting, May 2014 25
Slide 26: Profit & Loss
Profit & Loss (Kina ‘million) Qtr.1 2014 profit after tax of K136m is above Qtr. 4 2013 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 by K9m. 450 425 • Q1/14 Revenue is in line with 400 the previous quarter - forex 350 earnings remain strong 300 • Bad and Doubtful debts 250 211 increase on the previous 200 quarter
Slide 27: Balance Sheet
Balance Sheet (Kina ‘billion) • Slight growth in loans but fx translation also Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 impacting 18.0 15.7 16.0 • Other Interest Earning assets decline slightly 14.0 12.0 driven by reduction in 12.0 C-Bills and T-Bills 10.0 8.0 • Slight decline in 5.7 5.2 deposits 6.0 4.0 • Tot
Slide 28: Financial Risk Management
Financial Risk Management Capital Adequacy Provisions to Loans Tier 2 Capital Tier 1 Capital 5.2% BPNG requirement - 12% 5.0% 5.0% 25.0% 20.0% 4.8% 5.6% 15.0% 4.6% 10.0% 4.4% 14.4% 5.0% 4.2% 0.0% 4.0% 28
Slide 29: Funds
Funds Deposit Mix (K ‘billion) Deposit Type (K ‘billion) Wholesale Retail 14.0 120% Current 12.0 100% 10.0Bn 10.0 27% 83% 80% 8.0 60% 6.0 40% 4.0 73% Term , 20% 2.0Bn, 2.0 17% 0.0 0% Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 29
Slide 30: Qtr.1-2014 Performance Summary
Qtr.1-2014 Performance Summary • Revenues – Q1/14 Revenue is in line with the previous quarter - forex earnings remain strong – Channel growth continuing with more eftPOS devices in market • Balance Sheet – Stable lending market share in PNG • Capital Adequacy – Improvement in Q1 of 2014 to 20.0% 30
Slide 31: Summary
6 aa OURBANK OURVALUES @h( fe 9 Summary QUALITY PROFESSIONALISM PEOPLE INTEGRITY LEADERSHIP TEAMWORK
Slide 32: 2013 was another successful year
“2013 was another successful year” - NPBT of K595 Million, NPAT of K436.8 Million - Net Income K1.52 Billion - Total Assets now at K15.8 Billion - Continued positive Loan & Deposit Growth - Very strong Capital & Liquidity position. 32
Slide 33: Papua New Guinea continues to be the predominant driver
• Papua New Guinea continues to be the predominant driver of BSP’s performance • Strong growth in international services product lines • Continued growth in net interest income from increased loan assets off-setting margin compression in a more competitive lending market • Income contribution emergi
Slide 34: Substantial investment in critical IT infrastructure
• Substantial investment in critical IT infrastructure all but complete in 2013, bar the relocation of core systems to new Pacific Operations Center in Q1/2015 • Full depreciation associated with IT investments now captured in expense base • Higher depreciation expense expected to normalise in 2016
Slide 35: Investments as enablers of productivity and sales capability
• Investments seen as enablers to increase productivity and increased sales capability • There is a recognition of the largely untapped sales potential of the BSP branch network • BSP remains the only major Financial Institution in PNG truly committed to taking “cost effective” banking services to a
Slide 36: Thank You
6 aa OURBANK OURVALUES @h( fe 9 Thank You QUALITY PROFESSIONALISM PEOPLE INTEGRITY LEADERSHIP TEAMWORK