In This Article:
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Underlying NPAT: $1.8 million, up 250% from the previous corresponding period.
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Statutory NPAT: $320,000, up $2.1 million from a first half '24 loss.
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Total Income: $12.8 million, up 58% compared to the first half '24.
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Net Interest Income: $11.1 million, up from $8.6 million in the first half '24.
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Net Interest Margin (NIM): Improved by 47 basis points to 1.39% compared to the first half '24.
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Other Income: Increased by $2.6 million or 187% compared to the first half '24.
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Lending Settlements: Declined by 29% compared to the first half '24.
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High Margin Assets: Comprise nearly 22% of the total portfolio.
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Capital Adequacy Ratio: 26.98%.
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Loan Book: Decreased by 20% since the first half '24.
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Deposit Book: Decreased by 29% since the first half '24.
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Operating Expenses: Increased by 11% year-on-year.
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Arrears Over 90 Days (Residential): Reduced to 0.47% in December 2024.
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Arrears Over 90 Days (Commercial): Decreased from 1.41% to 0.98% over the same period.
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Fixed Rate Loans: Reduced to 4% of the portfolio as of December 24.
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Return on Investments: Improved relative to the prior corresponding period.
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Cost-Income Ratio: 81%.
Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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BNK Banking Corp Ltd (ASX:BBC) reported a significant improvement in underlying impact, up 250% year-on-year to $1.8 million.
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Net interest income increased by 29% to $11.1 million compared to the prior period.
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The company's strategic shift towards high margin lending is delivering results, with high margin assets now comprising 22% of the portfolio.
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The capital adequacy ratio is strong at 26.98%, providing capacity to support strategic initiatives.
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The risk margin improved by 47 basis points compared to the first half '24, reaching 1.39%.
Negative Points
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Lending settlements declined by 29% compared to the first half '24, aligning with the strategic decision to prioritize high margin lending.
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The loan book decreased by 20% due to the strategic focus on transitioning away from lower margin Prime Residential loans.
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The deposit book decreased by 29%, reflecting a deliberate strategy to optimize the funding mix.
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Underlying operating expenses rose by 11%, influenced by technology investment, transaction fees, and inflationary impacts.
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The competitive market conditions and higher interest rates continue to place pressure on margins.
Q & A Highlights
Q: Can you provide an overview of BNK's financial performance for the first half of FY25? A: Allan Savins, CEO, highlighted that BNK's strategic shift towards high-margin lending is yielding positive results. The company reported an underlying impact of $1.8 million, up 250% from the previous period, and a statutory NPAT of $320,000, marking a significant improvement from a loss in the first half of FY24. Net interest income increased by 29% to $11.1 million, and total income rose by 58% to $12.8 million.