CREDIT CORPORATION PNG FULL YEAR RESULTS
31 December 2018
YEARS
Working together
CREDIT CORPORATION PNG FULL YEAR RESULTS 31 December 2018 YEARS - - PowerPoint PPT Presentation
CREDIT CORPORATION PNG FULL YEAR RESULTS 31 December 2018 YEARS Working together DISCLAIMER This presentation has been prepared and issued by Credit Corporation (PNG) Limited (the Company), and may not be reproduced in whole or in part,
31 December 2018
YEARS
Working together
Full year FY18 results 1 This presentation has been prepared and issued by Credit Corporation (PNG) Limited (the “Company”), and may not be reproduced in whole or in part, nor may any of its contents be disclosed to any other person without the prior written consent of the Company. This presentation is provided by the Company for general information purposes only, without taking into account any recipient’s personal objectives, fjnancial situation or needs. It should not form the basis of or be relied
in or refrain from investing in, any securities or other investment product. This presentation has not been fjled, lodged, registered, reviewed or approved by any regulatory authority in any jurisdiction and recipients of this presentation should keep themselves informed of, and comply with and observe, all applicable legal and regulatory requirements. The distribution of this presentation in certain jurisdictions may be restricted by law and, accordingly, recipients of this presentation represent that they are able to receive this presentation without contravention of any unfulfjlled registration requirements or other legal restrictions in the jurisdiction in which they reside or conduct business. Nothing in this presentation constitutes investment, legal, tax, accounting or other advice. The recipient should consider its own fjnancial situation, objectives and needs, and conduct its own independent investigation and assessments of the contents of this presentation, including obtaining investment, legal, tax, accounting and other advice as it considers necessary or appropriate. Any costs incurred by recipients in making such investigations and assessments, etc. are not the responsibility of the Company or any of its advisers, directors, employees or agents. Provision of this presentation is not a representation to any recipient or any other person that the shares or business of the Company or any of its subsidiaries will be sold. The Company may at any time negotiate with one or more interested parties and enter into a defjnitive agreement without prior notice to any or all interested parties. The Company also reserves the right to terminate, at any time, further participation in the investigation and proposed process by any party, to modify any of the rules or procedures set forth herein or any other procedures without prior notice or assigning any reason therefore or to terminate the process contemplated hereby. The Company reserves the right to take any action, whether in or out of the ordinary course of business, which the Company in its sole discretion deems necessary or prudent in the conduct of its business or the process contemplated by this presentation. This presentation has been prepared on the basis of publicly available information and/or selected information and does not purport to be all-inclusive or to contain all of the information that may be relevant to the
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DISCLAIMER
Full year FY18 results 2
SOLID RESULTS WITH CONTINUED GROWTH ACROSS OUR THREE CORE BUSINESS UNITS – FINANCE, PROPERTY AND INVESTMENT.
Statutory net profjt after tax
Increase to K98m Underlying core profjt
Increase to K86m Group ROE
Group ROA
Earnings per share
Up 33% to 32 toea per share Net asset backing
Up 5% to K2.79 per share Net interest margin
RESULTS HIGHLIGHT
Full year FY18 results 4
BUSINESS DRIVERS
CC Fiji (+19%), CCVL (+38%), while the loan book in CCSI decreased (-26%)
Full year FY18 results 5
loan impairment costs
changes in key management
place to manage operating costs across the Group
COST MANAGEMENT
Full year FY18 results 7
increase due to loan book growth
due to time lag in Reporting Requirements.
RISK MANAGEMENT
Full year FY18 results 8
— Syd Yates, Richard Sinamoi, James Kruse and Michael Varapik
GOVERNANCE FOCUS
Full year FY18 results 9
Key actions
The Board has also progressed a number of key focus areas since its appointment. These have included:
divisions of the Group
monthly newsletter.
GOVERNANCE, RISK AND COMPLIANCE
Full year FY18 results 11
» We will be a high performing fjnance company » We recognise our property and investment assets are capital generating segments for the Group » We will invest in capability, digital competency, distribution maturity and a prudent funding strategy » We will focus on improving fjnancial performance, generating customer value, embedding core systems & processes and developing our people.
NEW STRATEGIC DIRECTION
Full year FY18 results 13
EPS Net operating income
SOLID GROWTH
2H18 1H18 2H17 1H17 2H16 1H16
89,453 91,737 39,983 65,763 106,495 75,253 0.21 0.11 0.20 0.04 0.32 0.23
2H18 1H18 2H17 1H17 2H16 1H16
NPAT
69,661 28,262 64,612 34,325 61,795 11,843
2H18 1H18 2H17 1H17 2H16 1H16 2H18 1H18 2H17 1H17 2H16 1H16
0.04 0.04 0.10 0.11 0.06 —
DPS
*
*Board expected to declare a fjnal dividend after it meets in June 2019
Full year FY18 results 14
2H18 1H18 2H17 1H17 2H16 1H16
33,759 38,230 24,295 32,082 24,601
11.44% 11.55% 13.67% 12.94% 12.20% 12.35%
26,982
2H18 1H18 2H17 1H17 2H16 1H16
7.20% 6.02% 6.2% 5.55% 6.6% 5.3%
EFFICIENCY MEASURES
Cost to income
2H18 1H18 2H17 1H17 2H16 1H16
34.90% 42.60% 39.32% 44.30% 35.13% 37.65%
NIM Return on asset ROE
2H18 1H18 2H17 1H17 2H16 1H16
8.42% 4.36% 1.46% 7.51% 8.26% 10.38%
Calculated before any fair value changes of investment and movement in bad debts provisions. Core operating profjt divided by Equity. Core operating profjt divided by total asset.
Full year FY18 results 15
7.8%
6.3% 18.3%
6.4%
2H18 1H18 2H17 1H17 2H16 1H16
Deposit growth
BALANCE SHEET REMAINS SOUND
Net loan growth
2H18 1H18 2H17 1H17 2H16 1H16
2.32%
6.0% 14.70% 13% 7.7%
Full year FY18 results 16
FUNDING MIX
10.88% 24 months 0.11% On Call 5.37% 1 month 7.28% 2 months 28.51% 6 months 15.58% 3 months 32.27% 12 months 24 months On Call 1 month 2 months 6 months 3 months 12 months 24 months On Call 1 month 2 months 6 months 3 months 12 months
December 2018
24 months On Call 1 month 2 months 6 months 3 months 12 months 8.78% 24 months 0.03% On Call 11.39% 1 month 14.63% 2 months 17.62% 6 months 15.84% 3 months 31.72% 12 months 24 months On Call 1 month 2 months 6 months 3 months 12 months
June 2018
24 months On Call 1 month 2 months 6 months 3 months 12 months 24 months On Call 1 month 2 months 6 months 3 months 12 months 9.26% 24 months 0.01% On Call 7.85% 1 month 13.08% 2 months 21.19% 6 months 11.17% 3 months 37.44% 12 months
December 2017
Full year FY18 results 17
2H18 1H18 2H17 1H17 2H16 1H16
34% 29% 25% 25% 34% 18%
Leverage ratio Total risk weighted capital
2H18 1H18 2H17 1H17 2H16 1H16
183,635 189,641 201,404 183,185 188,068 198,580
CAPITAL ADEQUACY
Full year FY18 results 18
ASSET QUALITY
Impaired assets % of gross loans
2H18 1H18 2H17 1H17 2H16 1H16
4,036 9,446 12,408 6,812
12,860
Group impairment % gross loans
2H18 1H18 2H17 1H17 2H16 1H16
5.80% 5.40% 4.60% 5.80% 4.60% 17%
2H18 1H18 2H17 1H17 2H16 1H16
0.70% 2.60% 2.10% 1.20% 1.30% 3.9%
Loan impairment expense
Full year FY18 results 20
Rental income Occupancy
2H18 1H18 2H17 1H17 2H16 1H16
12,616 11,832 14,263 11,211 11,551 18,788
2H18 1H18 2H17 1H17 2H16 1H16
55% 44% 74% 44% 52% 76%
IMPROVED PROPERTY PERFORMANCE
Full year FY18 results 21
Era Dorina
Occupancy increased to 67% (56% in FY17) Era Matana
Occupancy increased to 69% (17% in FY17) Credit House
Occupancy increased to 92% (59% in FY17) Continued focus on refurbishments to enhance rental yields. Roll out CRM system to
to assist in improving tenant services. Improved occupancy rates for all properties. Core profjts
Increase in FY18
PROPERTY — KEY POINTS
Full year FY18 results 23
Mount Hagen, PNG Lae, PNG Kokopo, PNG Honiara, Solomon Islands Suva and Nakasi, Fiji Nadi and Lautoka, Fiji Port Vila, Vanuatu Port Moresby, PNG Dili, Timor-Leste
Our markets and operating environment
REGIONAL UPDATE
Country FY18* FY19* Papua New Guinea 0.5% 3.0% Fiji 3.2% 3.9% Solomon Islands 3.2% 3.0% Vanuatu 3.4% 3.2% Timor-Leste 0.6% 4.0%
*Source: Asian Development BankFull year FY18 results 24
REGIONAL SUMMARY
PNG
forecast to grow by up to 3% in 2019
tighten signifjcantly in 2019 applying pressure
weakening demand
announced during APEC
PNG’s fjrst sovereign bond (US$500m).
Fiji
forecast to increase by 3.9% in 2019
years of positive GDP growth
see liquidity tightening and greater competition for deposits putting pressure on interest rates.
Vanuatu
to increase by 3.2% in 2019
related to a slowdown in tourism revenues
and number of major tourism and travel stakeholders launched new tourism initiative Shared Vision 2030
to a major tourism expansion strategy.
Solomon Islands
by 3.4% in 2019
since the departure of the Regional Assistance Mission to Solomon Islands will be held in April 2019
challenging business environment.
Timor-Leste
estimated 0.6% in 2018 and is set to increase by 4% in 2019
demonstrating growing maturity as a democracy
approved use of the country’s petroleum fund to buy Shell and ConocoPhillips stakes in the Greater Sunrise project.
Full year FY18 results 25
REGIONAL MARKET SHARE
PNG
PNG market share for lease and assets fjnance is estimated at 33%.
Fiji
Of the 4 licensed fjnance companies in Fiji CCF — No.1 in market share holding an estimated 29.45% share.
Vanuatu
In asset fjnancing CCP Vanuatu has an estimated 90% share.
Solomon Islands
Finance business (lease fjnance, chattel mortgage) CCF has an estimated 90% share.
Timor-Leste
Market share estimated at approximately 1%.
Full year FY18 results 27
OUR VISION: Credit Corporation will be the best performing fjnancier in every market in which we operate for customer experience and profjtability.
foundation to maximise opportunities
value creation
back offjce systems — strengthening customer focus
remain key areas of focus
management remain a key focus
shareholder engagement.
PRIORITIES
www.creditcorporation.com.pg