MYS - MyState Limited

[System]

MyState Limited (MYS) is a major Tasmanian based listed diversified financial group formed in September 2009 following the merger of MyState Financial (MSF), an authorised deposit-taking institution, and Tasmanian Perpetual Trustees (TPT), a trustee and wealth management company.

http://www.mystatelimited.com.au

 

[catchic8]

Anyone following this stock?
Wondering whether there's a reason for the drop in share price over the past few days.

 

[tinhat]

Hi catchic8. I had it on my watchlist at one stage when it was yielding higher but never purchased.

The market is off. Financials have come off. Compare the chart to the chart for banks such as ANZ.

 

[chiff]

Have had these for at least two years...know of no reason for recent drop in price...they do not have many announcements and not much in the media about them ever.I was mildly surprised when they pushed to nearly five dollars on no news.

 

[catchic8]

I've noticed that they don't do many announcements at all.
Compared to other banks, I feel that MYS has the advantage of having a low share price. For the likes of CBA, etc., the share price is just too high for those who don't have tens of thousands to invest.

 

[peter2]

I don't know much about this bank(?), but I like the charts.
The monthly charts (left) shows a series of bullish outside reversal bars and the trend remains strong as price found support at a prior resistance level (3.90).

The weekly chart (right) shows price breaking to a new yearly high (4.80) and going through weekly resistance. The daily volume is low, which is my only concern.

 

[Smurf1976]

Am I missing something here regarding the now month long move sideways in a very narrow range?

When I first looked at the chart I thought perhaps a takeover offer but it seems not.

 

[Trav.]

@Smurf1976 not sure mate, but it did rise +21% in the month previous to this one (catalyst was announcement on the 21/10), so maybe some consolidation has something to do with the figures below.

extract form announcement

 

[The Triangle]

Am I missing something here regarding the now month long move sideways in a very narrow range?

When I first looked at the chart I thought perhaps a takeover offer but it seems not.

View attachment 117351

I thought maybe BOQ had looked at them? They are trying to expand and a little one like this would probably fit their smaller local branding/customer focus.

Even with a run up in price at a 12.5 cent half year divi - the yield is looking very good considering SP is 4.30. Ill have to do a little more research in to the risk and mortgage side of things.

 

[divs4ever]

MYSTATE LIMITED DELIVERS RECORD HALF YEAR PROFIT
23 February 2023 – MyState Limited has delivered a record first half profit for the period ended 31
December 2022 with higher earnings per share and return on equity.
• Net profit after tax (NPAT) up 20.7% to $20.1 million
• Home lending book up 10.5% to $7.6 billion
• Customer deposits up 13.5% to $6.3 billion
• New to bank customers up 54% on the prior corresponding period (pcp)
• Cost to income ratio down 558 bps to 63.2%
• Return on equity grew from 8.0% to 9.2%
• Dividend 11.5 cps, in line with the 2022 final dividend
Managing Director and CEO Brett Morgan said MyState Limited was building on its sound financial
position, 18-months into the 2025 Growth Strategy.
“The results show the execution of MyState Limited’s 2025 Growth Strategy is working and is providing
real benefits for customers, investors and staff,” Mr Morgan said.
“In the first half of the 2023 financial year, we have delivered a record net profit after tax.
“This record result is being driven by strong above-system growth in deposits and the second fastest
growing home loan book in Australian banking1.
“We are delivering on our 2025 Growth Strategy. Our return on equity has increased to 9.2%, which puts
us on track to deliver a cumulative return of 30% over three years. We are achieving this more efficiently
with a sharply lower cost to income ratio as we increase scale through our operations.”
• Earnings per share (EPS) up 18% to 18.59 cps
• Core earnings up 36.7% to $30.3 million
• Net interest margin (NIM) 1.71%, up 14 bps on 2H22
• Total capital ratio was up 173 bps to 14.14%
“Australian banking is increasingly competitive in the Covid-recovery era,” Mr Morgan said. “But, MyState
is well placed to continue to grow despite industry and market headwinds.
“Our 2025 Growth Strategy has driven strong increases in market share, with significant gains in every
state along Australia’s eastern seaboard from Tasmania to Victoria, New South Wales and Queensland.
Our plan sets us in good stead to continue to grow our market share.
“We see opportunity in the challenges that the industry is facing, as an unprecedented number of
Australians must consider refinancing as their fixed rate loan terms expire.
“MyState is focussed on both retaining existing and picking up new customers by executing the
fundamentals; offering competitive rates, closely partnering with our broker network, providing among
ASX ANNOUNCEMENT
23 February 2023
ASX: MYS
the sector’s fastest turnaround times, and service that customers are happy to recommend to family and
friends.
“Our Tasmanian based bank has attracted customers in record numbers across the country, with 14,500
new bank customers during the period, a 54% increase on 12 months ago. Nearly two thirds of our home
loan customers are now from outside of our home state.
“Since we started our 2025 Growth Strategy 18 months ago, MyState’s home lending book has grown by
39%, to $7.6 billion. Our rate of growth has increased to around 3.5 times system over that time.
“The biggest growth has been in one of our key target markets, Victoria, which increased by 69% in the
18 months to 31 December 2022, followed by New South Wales, up by 43%, and Queensland, which
grew by 42%.
“These three states now represent 63% of MyState’s total home loan book, compared with 58% when
we started our Growth Strategy in July 2021.”
Record net profit after tax: MyState has delivered the biggest half year NPAT in MyState Limited’s
history in the first half of the 2023 financial year. NPAT increased by 20.7% compared with the pcp, to
reach $20.1 million.
Competitive market drives net interest margin: Relative to the second half of FY22, NIM increased by
14 bps, reflecting increased net interest income on the back of rising interest rates. This was partly offset
by the competition in the lending and retail deposit markets.
Home loan book growth 4.3 times system: MyState’s home loan book has grown at 4.3 times system,
to reach $7.6 billion which represents 10.5% growth in the six months to 31 December 2022.
Credit quality: MyState’s balance sheet strength is underpinned by lending to quality borrowers. The
bank remains focussed on low-risk, owner occupied lending with a loan to value ratio (LVR) of less than
80% which represents around 76% of loans. There has been a small uptick in arrears, with 30+ day
arrears at 0.61% and 90+ days to 0.24%, but both remain below industry average.
Capital position: MyState is managing capital effectively and added capital flexibility through the
inaugural issue of Additional Tier 1 capital in August 2022. At 31 December 2022, total capital increased
to 14.14%. The Australian Prudential Regulation Authority’s new bank capital framework requirements
were effective from 1 January 2023. On a pro forma basis, MyState expects an increase in the total
capital ratio of approximately 130 bps.
TPT Wealth providing income diversification: Funds under management were 3.0% lower in the half,
while operating income remained steady. This reflects a 5.3% increase in trustee services income, offset
by lower management fee income.
Outlook: MyState 2025 Growth Strategy: MyState will continue to focus on executing its long term
plan of growing market share on a profitable and sustainable basis, with the target of reducing its cost to
income ratio to less than 60% in the medium term and creating cumulative ROE and EPS growth of 30%
over the next three years.
ENDS


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DYOR

i hold MYS

 

[divs4ever]

Trading update and guidance for FY24 MyState Limited (ASX:
MYS) today provides a trading and guidance update for FY24.
Given market conditions, MyState has taken the considered decision to prioritise margin ahead of growing its lending book at multiples of system in FY24.
While home loan book growth was 1.9x system in October, growth over the four-month period to 31 October 2023 was broadly in-line with system growth1
Managing Director and CEO Brett Morgan said, “Given the economic and competitive environment, MyState has taken the decision to temper its FY24 lending growth. We now expect growth to be closer to system.”
As at 30 November 2023, customer funding as a percentage of total funding was in-line with guidance at 70%.
There has been a continued shift from lower cost transaction and savings accounts to higher cost term deposits.
Driven by the competitive environment for lending and the change in the deposit product mix, average NIM for 1H24 is projected to be in the range 1.45% to 1.49% (2H23:1.55%).
Mr Morgan continued, “Total expenses for the Group for the five-month period ended 30 November 2023 were lower than the same time last year, reflecting MyState’s ongoing focus on operating efficiency in a high-inflation environment.”
As at 30 November 2023, total capital remained strong at approximately 15.4% while 30-day arrears of 0.93% remained below the industry average (30 June 2023: 0.81%).
Borrowers continue to show remarkable resilience to the higher cost of living and the impact of rising interest rates.
MyState Bank currently has no mortgagee in possession loans. Based on current market conditions,
MyState now expects the following outcomes in FY24:
 MyState Bank lending growth: >1.0x system (previous guidance: 2.0x system)
 MyState Bank deposit composition: >70% of funding (previous guidance: >70% of funding)
 Earnings per share: down 7.5% to 12.5% on FY23 (previous guidance: 35.5cps)
 MyState Bank cost to income ratio: 64% to 66% (previous guidance: 60.8%)
 Return on equity: between 7.5% and 8.0% (previous guidance: 8.7%)


i hold MYS

am interested in adding , but at a lower price

 

[divs4ever]

MyState strengthens balance sheet and delivers stable dividend
23 February 2024 –

MyState Limited has continued to grow its new to bank customers and lending book within a challenging operating environment.
The Board has declared a stable dividend that is close to the mid-point of the MyState target payout ratio range.

Key highlights relative to 2H FY23:
New to bank customers up 4% or 7,690
 Home lending up 1% to $7.9 billion
 Net promoter score up 7 points to +41
 Net Interest Margin (NIM) at 1.46%, down 9 basis points (bps)
 Operating costs 1.5% lower to $49.8 million
 Core earnings down 5.3% to $26 million
 Total capital ratio up 16 bps to 15.6%
 TPT funds under management back above $1 billion at 31 December 2023
 Interim dividend stable at 11.5 cents per share

Managing Director and CEO Brett Morgan said “MyState Limited had a solid first half, with growth across lending and funds under management delivered off a lower cost base.”
“The current operating environment has created short-term challenges. Competition in the home lending and retail deposit markets has driven industry NIMs lower and high inflation has impacted costs.”
“MyState continually evaluates the balance between growth and margin which led to our decision to temporarily rebalance our lending growth aspirations for FY24. Further, our focus on extracting efficiencies and expense management has delivered a first half reduction in operating costs.” “While expenses were lower, we continued to invest in strategically important initiatives including customer experience, digitisation and cyber and fraud resilience.”
“Pleasingly, MyState attracted almost 7,700 new to bank customers over the half. Our customer growth has come while maintaining high customer advocacy, as measured by our net promoter score.” “We are happy to report that credit quality remains sound.
While there was a small increase, Bank arrears rates continue to be below the industry average, losses are negligible and there are no Mortgagee in Possession loans as at 31 December 2023.” During the half TPT Wealth delivered growth in funds under management, increased Trustee Services revenue and lowered costs.
Mr Morgan said, “It is pleasing that after a challenging period, TPT is starting to see benefits as we execute our strategy.” MyState’s capital position has strengthened with a total capital ratio of 15.6% at 31 December 2023.
Mr Morgan commented, “Since launching our growth strategy in 2021, we have grown our mortgage and deposit portfolios by 45% and 37% respectively.
MyState is ready to further accelerate growth as the operating environment improves”.
Demonstrating the Board’s confidence in MyState’s financial position and its potential to grow, the Interim dividend has been maintained at 11.5 cents per share, representing a payout ratio of 72.6%.
The dividend is fully franked and is payable on 22 March 2024 to all shareholders on the register at the record date of 29 February 2024.
The Dividend Reinvestment Plan (DRP) will be offered to shareholders for the Interim dividend with an election date of 1 March 2024.
DRP shares will be issued at no discount to the volume weighted average price for the period 4 March to 8 March 2024 inclusive.

Customer growth: MyState welcomed 7,690 new to bank customers over the half year with strong growth in Tasmania, Victoria, New South Wales, and Queensland.
Home loan book growth: MyState’s home loan book grew to $7.9 billion at 31 December 2023, with growth centred on the lower risk <80% LVR segment of the market. Competitive market drives net interest margin:
NIM fell 9 bps over the half year to 1.46%, reflecting continued competition for deposits and mortgages, deposit switching by existing customers, an increase in term securitisation funding and higher liquid assets. Credit quality: in line with the broader industry, there has been a small increase in arrears.
Arrears remain below the industry average with 30+ day arrears at 0.91% and 90+ day arrears at 0.39%.
Cost-to-income: overall costs fell 1.5%.
The Group cost-to-income ratio increased 170 bps to 65.7% primarily as a result of NIM compression.

Capital:

MyState continues to focus on maintaining a sound capital position and balance sheet.
During the half MyState completed a $500m capital relief term RMBS transaction and drew down on a committed warehouse facility established in June 2023. FY24 outlook:

Based on current market conditions, MyState is focused on profitably and sustainably executing its growth strategy.
MyState expects to achieve the following for FY24:
 MyState Bank lending: lending growth around 1x system  MyState Bank deposit composition: customer deposits >70% of funding
 Earnings per share: 31.1 to 32.8 cents per share
 MyState Bank underlying cost to income ratio: 64% to 66%
 Return on equity: between 7.5% and 8.0%

i hold MYS