bsp qtr.3/2016 results summary · •bsp remains well-capitalised with capital adequacy at 21.0% in...

BSP Qtr.3/2016 Results Summary

Sub - title of Presentation Slide 1 2

BSP’s Geographical footprint today

Investor Pack


Financial Ratios

Investor Pack

44.2%

44.9%

45.5%

43.3% 43.5%

Q3-15 Q4-15 Q1-16 Q2-16 Q3-16

Cost to Income Ratio

Cost to income Ratio

2.8% 3.2% 3.1% 3.3% 3.4%

25.5% 28.5% 27.2%

29.5% 31.6%

Q3-15 Q4-15 Q1-16 Q2-16 Q3-16

ROE and ROA ( annualised)

ROA ROE

252.5

262.9 263.7 267.2

281.2

7.8% 7.7% 7.4% 7.1% 7.2%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

230

240

250

260

270

280

290

Q3-15 Q4-15 Q1-16 Q2-16 Q3-16

Net Interest Income( K’m) and NIM ( annualised)

Net interest income NIM

381 419 397

433 456

203 207 196 212 222

124 141 143 158 165

Q3-15 Q4-15 Q1-16 Q2-16 Q3-16

Profitability ( Km)

Total Income Total Costs NPAT


Profit and Loss (K’m)

Investor Pack

165.3

456.0

23.7

198.4

24.0

174.4

0

100

200

300

400

500

600

700

Net Profit(After tax

plusassociates)

TotalRevenue

Loan lossprovisioning

OtherOperatingExpenses

Depreciationand

Amortisation

Oth Op Expless Depnand A'mn

Km

's

Profit and Loss

Q3-15 Q4-15 Q1-16 Q2-16 Q3-16

Group NPAT in Q3’16 is up 5% (+K7.2m) to K165.3m from K158.07m (Q2’16).

Total Revenue of K456m is up 5% in Q3’16 vs Q2’16. The increase includes the addition of Vanuatu to Group results in Q3’16. Net interest income increased by K14m. Fees contributed K3.2m, FX income K2.3m and other income K3.3m for a total K23m increase over the previous quarter’s revenue.

Other Operating Expenses (less depreciation) are K174.4m for Q3’16 representing a 6.7% increase over the previous quarter. The increase includes the addition of Vanuatu to Group results in Q3’16. The Group continues to prudently manage Operating Expenses with BSP’s Cost to Income ratio maintained at 43.5% (43.3% Q2’16).

Depreciation & amortisation charges reduced slightly by K0.3m in Q3’16, from K24.4m in the previous quarter.

Loan Loss provisioning expenses decreased by K0.7m to K23.7m this quarter compared to Q2’16.


Total Income and Total Assets

Total Income increases by 5% in Q3 over Q2

Total Assets increases by 4% in Q3 over Q2

Investor Pack

252.5

70.2 42.9

16

381.3

281.2

95.2 67.6

12

456.0

0.0

100.0

200.0

300.0

400.0

500.0

Interest Income Fee and Commission FX income Other Income Total Income

Income Categories (K’m)

Q3'15 Q4'15 Q1'16 Q2'16 Q3'16

1.4 1.3 2.3 0.9

7.8

0.8 2.3

0.7

17.4

1.3 1.4 2.8

0.9

10.0

0.8 2.4

1.0

20.5

0.0

5.0

10.0

15.0

20.0

25.0

Cash &Balances

with CentralBank

Stat Depositwith Central

bank

Treasury &Central Bank

Bills

AmountsDue from

Other Banks

Loans &Advances toCustomers

Property,Plant &

Equipment

Otherfinancial

assets

Other Assets Total Assets

Asset Categories (K'bn)

Q3'15 Q4'15 Q1'16 Q2'16 Q3'16

Sub - title of Presentation Slide 1 Investor Pack 6

Balance Sheet (K’bn)

10.0

6.0

16.3

20.5

-

5

10

15

20

25

Loans Other Int EarningAssets

Deposits Total Assets

K' B

n's

Balance Sheet

Q3-15 Q4-15 Q1-16 Q2-16 Q3-16

Total Assets increased by 4% (+K802m) to K20.5b at end of Q3’16, compared to K19.7b in Q2’16. The Q3’16 increase reflects the acquisition of Vanuatu assets, loan growth in the quarter of 3.8% in PNG, as well as some increases arising from fx translation of non-PNG businesses.

Assets grew in the quarter for BSP PNG and BSP Solomon Islands by K165m and K140m respectively. The acquisition of Vanuatu added K415m to group asset balances.

Other Interest Earning Assets (IEA) comprised of Investments as well as Amounts Due from Other Banks reduced marginally by 2% (-K97m) in Q2’16 to K6.0b in Q3’16.

Total deposits increased by 4.3% (+K680m) to K16.3b at Q3’16. This includes K364m from the addition of Vanuatu deposits to the group. PNG deposits grew 2% (K232m) in the quarter, with the balance of the growth coming from non-PNG countries including increases arising from fx translation.


Market Share - Loans

Commentary

• BSP’s combined market share for loans stands at 38% in Q3’16, after the inclusion of BSP Vanuatu with its market share of 12%.

• PNG loans increased by K243m in the quarter and market share stands at 55.2% in Q3’16 compared to 55.7% in Q2’16.

• BSP Fiji maintained its market share at 22%, and similarly BSP’s operations in other jurisdictions maintained market share, on average.

• BSP’s loan portfolio remains predominantly based in PNG, with PNG accounting for 68% of the group’s loan balances.

55%

22%

46%

34% 39%

22%

12%

PNG Fiji SolomonIslands

CookIslands

Tonga Samoa Vanuatu

Q3-15 Q4-15 Q1-16 Q2-16 Q3-16

BSP PNG 68%

BSP Fiji 21%

BSP Solomon Islands

2%

BSP Tonga 2% BSP Samoa

3%

BSP Cook Islands

2%

BSP Vanuatu 2%

Composition of Loan Portfolio


Market Share - Deposits

Commentary

• BSP’s combined deposit market share stands at 44% in Q3’16, after the inclusion of BSP Vanuatu with its market share of 17%.

• BSP PNG deposits grew by 2% (K232m) in the quarter, and PNG market share moves to 57.3%, compared to 57.2% in Q2’16. Fiji market share is steady at 24%.

• The mix of group deposits changed slightly in Q3’16 with demand deposits increasing by K980m and term deposits reducing by K235m.

57%

24%

57%

67%

35%

22% 17%

PNG Fiji SolomonIslands

CookIslands

Tonga Samoa Vanuatu

Q3-15 Q4-15 Q1-16 Q2-16 Q3-16

10.45 11.06 12.04

4.23 4.53 4.29

-

4.00

8.00

12.00

16.00

20.00

Q1'16 Q2'16 Q3'16

K'b

n

Deposits Mix

Demand Deposits Term Deposits

BSP PNG 73%

BSP Fiji 16%

BSP Solomon Islands

4%

BSP Tonga 1%

BSP Samoa 2%

BSP Cook Islands

2%

BSP Vanuatu 2%

Composition of Deposit Portfolio


Financial Risk Management

Capital Adequacy Provisions to Loans

Investor Pack

• Capital Adequacy ratio is at 21.0% in Q3’16, compared to 21.9% in Q2’16, still well in excess of the prudential requirement. The reduction of the capital ratio in Q3 reflects the interim dividend paid in October taken up in the calculations of the Q3’16 ratio.

14.8% 19.0% 19.0%

14.8% 13.9%

8.1%

4.1% 5.8%

7.1% 7.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Q3-15 Q4-15 Q1-16 Q2-16 Q3-16

Tier 1 Tier 2 BPNG requirement

• BSP’s Provisions to Loans ratio maintained at 4.8% in Q3’16.

4.8% 4.9%

4.7% 4.8% 4.8%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

5.50%

Q3-15 Q4-15 Q1-16 Q2-16 Q3-16


Qtr.3-2016 Performance Summary

Profit and Loss

• Q3’16 Net Profit After Tax of K165.3m up 5% (K7.2m) from the previous quarter

• Q3’16 revenue increased by 5% from Q2’16. This was driven by growth in the loan portfolio, as well as growth in FX income, Fee and other income, for a total increase of K23m.

• Operating expenses for Q3’16 increased by 4.5% over Q2’16, but expenses remain well managed with BSP’s Cost to Income ratio maintained at 43.5%.

• This Q3’16 result also reflects the acquisition of BSP Vanuatu, and it’s incremental impact on Group results compared to the previous quarter.

Balance Sheet

• Total Assets grew by 4% (K802m) to K20.5b at the end of Q3’16, with the inclusion of Vanuatu assets into the Group as well as organic loan growth in the loan portfolio

• Group loan market share stands at 38% whilst deposits market share is at 44%.

• BSP remains well-capitalised with capital adequacy at 21.0% in Q3’2016, well above BPNG requirements of 12%.

Other

• BSP’s share price increases 12% in three months to K9.10 (30th Sep) from K8.10 (30th Jun)

Investor Pack


Share Price

K4.252bn market

Cap

Share Price K9.10

30th September

Dividend Yield – 9.4% …compares favourably to top performing banks in comparable markets

PE Ratio - 9.1 times

Investor Pack

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

K6.20

K6.70

K7.20

K7.70

K8.20

K8.70

K9.20

K9.70

Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16

Closing price (Kina) red

Volume traded (millions)

green

Share Price


Thank You

bsp qtr.3/2016 results summary · •bsp remains well-capitalised with capital adequacy at 21.0% in...

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