BNK Banking Corporation Limited
Level 14, 191 St Georges Terrace
Perth WA 6000
bnk.com.au | info@bnk.com.au | 1300 BNK BANK | ABN 63 087 651 849 | AFSL/Australian Credit License 246884 | BSB 806043
BNK Banking Corporation Limited – Half Year Report
(Appendix 4D) for the half year ended 31 December 2024
The Directors of BNK Banking Corporation Limited (the “Company”) are pleased to
announce the results of the Company for the half year ended 31 December 2024 as
follows:
Results for announcement to the market
Extracted from the Interim Financial
Statements for the half year ended
Movement
$’000
31 December 2024
$’000
31 December 2023
Revenue from operations
58%
12,757
8,065
Profit/(loss) after tax attributable to
Members
118%
320
(1,816)
No dividend was paid or declared by the Company in the period and up to the date of this
report. No dividends were paid or declared by the Company in respect of the previous half
year
31 December 2024
31 December 2023
Net Tangible Assets per share
$0.99
$1.00
The remainder of the information requiring disclosure to comply with Listing Rule 4.2A is
contained in the attached copy of the Interim Financial Statements and comments on
performance of the Company included in the Investor Presentation dated 26 February 2025.
Further information regarding BNK Banking Corporation Limited and its business
activities can be obtained by visiting the Company’s website at bnk.com.au.
Yours faithfully
Jennifer Spicer
Company Secretary
BNK Banking Corporation Limited
ABN 63 087 651 849
Interim Financial Report
For the six months ended 31 December 2024
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 2 of 23
CONTENTS
CORPORATE INFORMATION ..................................................................................................................................... 3
DIRECTORS’ REPORT ................................................................................................................................................. 4
AUDITOR’S INDEPENDENCE DECLARATION .............................................................................................................. 6
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION ...................................................................... 7
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME .............. 8
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ....................................................................... 9
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS ................................................................................. 10
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS ................................................. 11
DIRECTORS’ DECLARATION ..................................................................................................................................... 21
INDEPENDENT AUDITOR’S REVIEW REPORT .......................................................................................................... 22
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 3 of 23
CORPORATE INFORMATION
ACN: 087 651 849
Directors
Mr. Jon Denovan
(Chairman and Non-Executive Director)
Ms. Elizabeth Aris
(Independent Non-Executive Director)
Mr. Calvin Ng
(Independent Non-Executive Director)
Mr. David Gration
(Non-Independent Non-Executive Director)
Mr. Warren McLeland
(Non-Independent Non-Executive Director)
Company Secretary
Ms Jenifer Spicer
The registered office and principal place of business of the Company is:
Level 14, 191 St George’s Terrace
Perth WA 6000
Phone: +61(8) 9438 8888
Other Locations:
Gold Coast Office
Level 5, 50 Cavill Avenue
Surfers Paradise Qld 4217
Sydney Office
Level 11, 9 Castlereagh Street
Sydney NSW 2000
Share Registry:
Automic Group
Level 5, 126 Phillip Street
Sydney NSW 2000
Tel +61 2 9698 5414
Tel 1300 288 664
Exchange Listing
Australian Securities Exchange Limited
Level 40, Central Park
152-158 St George’s Terrace
Perth WA 6000
ASX Code: BBC
Auditors:
Grant Thornton Audit Pty Ltd
Grosvenor Place
Level 26, 225 George Street
Sydney NSW 2000
Website Address:
www.bnk.com.au
Corporate Governance:
A copy of the Corporate Governance Policy Statement can be located using the following website address:
https://bnk.com.au/investor-centre/corporate-governance/
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 4 of 23
DIRECTORS’ REPORT
The Directors present their report on the consolidated entity comprising BNK Banking Corporation Limited (“BNK”
or the “Company”) and the entities it controlled (“the Group”) as at or during the half-year ended 31 December
2024.
DIRECTORS
The names of the Company’s Directors in office during the half-year and until the date of this report are set out
below. Directors were in office for the entire period unless otherwise stated.
Mr J Denovan
Chairman and Non-Executive Director
Ms E A Aris
Non-Executive Director
Mr K W Ng
Non-Executive Director
Mr D Gration
Non-Executive Director
Mr W McLeland
Non-Executive Director
PRINCIPAL ACTIVITIES
The principal activities of the Group were the provision of retail banking and wholesale mortgage management.
The Group provides banking products and services such as loans and deposits under the BNK, Goldfields Money
and Better Choice brands.
Loans are distributed through the Better Choice business, via online applications with the accredited broker
network, and may be funded by deposits, securitisation vehicles or third-party funders. Existing securitised
funding warehouses remain in place with Goldman Sachs ($500m) and Bendigo & Adelaide Bank ($300m) along
with a self-securitisation warehouse of $300m.
Introducer broker channels receive commissions for loan origination and ongoing trail. Better Choice Wholesale
earns and pays commissions on the loan books from the white label funders.
Deposits are originated under the Goldfields Money / BNK brand directly and through third party deposit brokers.
The Group earns net interest income and service fees from providing a range of services to its retail and small
business customers.
RECONCILIATION BETWEEN THE STATUTORY RESULTS (IFRS) AND THE MANAGEMENT REPORTED (NON IFRS)
RESULTS
The discussion of operating performance in the operating and financial review section of this report is presented
on a statutory basis under IFRS with certain adjustments to reflect a management reported basis of the underlying
performance of the business, unless otherwise stated. Management reported results are non-IFRS financial
information and are not directly comparable to the statutory results presented in other parts of this financial
report.
A reconciliation between the two is provided in this section and the guidance provided in Australian Securities
and Investments Commission Regulatory Guide 230 'Disclosing non IFRS financial information' ('RG 230') has been
followed when presenting the management reported results. Non-IFRS financial information has not been
audited by the external auditor but has been sourced from the financial reports.
The reconciliation between the statutory results (IFRS) and the management/underlying reported (non-IFRS)
results is presented below:
1H25
1H24
Change
Statutory Net Profit/(Loss) After Tax ($’000s)
320
(1,816)
118%
Expense adjustments
•
CBS Replacement Project implementation costs
845
-
Non-Cash Elements
•
Movement in Contract Assets/Contract Liabilities
1,252
899
Tax effect of adjustments
(631)
(258)
Underlying Net Profit/(Loss) after Tax ($’000s)
(Management-reported results)
1,786
(1,175)
252%
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 5 of 23
DIRECTORS’ REPORT (cont’d)
REVIEW AND RESULTS OF OPERATIONS
The Group recorded an underlying net profit after tax from operations of $1.79 million for the half-year ended
31 December 2024, an improvement of $3.0m (252.0%) on the prior comparative period. Statutory net profit
after tax of $0.3m resulted in earnings per share of 0.27 cents per share, an increase of 118% from H1 FY24: (loss
of (1.53) cents per share).
Net interest income of $11.1m resulted in a 29% uplift from H1 FY24 being $8.6m, whilst operating expenses
increased by 18.8% to $12.2m. Within operating expenses, the group has incurred $0.8m of contracted costs in
relation to the replacement of a Core Banking System (excluded from Underlying net profit).
The Group’s Average Net Interest Margin (NIM) for the 6 months to 31 December 2024 was 1.39%, up from 1.06%
for the 12-month period to 30 June 2024 and 0.92% for the comparable six-month period to 31 December 2023.
The increase in NIM has been driven by shifts in the composition of the Group’s assets and liabilities.
Lending settlements dropped 29% during the half year to $261m compared to the period to 31 December 2023.
This was expected as the Group continues its focus on selective higher margin lending and a reduced focus on
prime residential loans. The total managed loan book, excluding offset balances, decreased to $2.3bn (30 June
2024: $2.5bn) of which the directly funded loan book decreased 14% to $1.18bn (30 June 2024: $1.37bn).
The loan book comprises 92% residential mortgages with an average weighted loan to valuation ratio of 60.45%.
The Commercial loan book increased 24.3% from 30 June 2024 to $95.0m at 31 December 2024 with average
weighted loan to valuation of 61.74%. Credit quality remains strong with loans more than 90 days in arrears
equating to 0.6% of total loans.
The Group maintained a capital adequacy ratio of 26.98% compared to 23.36% at 30 June 2024 and 19.85% at 31
December 2023.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There have been no significant changes in the state of affairs during the reporting period.
EVENTS SUBSEQUENT TO BALANCE DATE
On 21/02/2025, Bendigo Bank reached an agreement with the Bullion Trust to purchase $220.6m of Residential
Home Loans. The transaction will generate a net profit of approximately $2m, subject to finalisation of treatment,
to be reflected in H2 FY25. On the effective date of settlement, the loans being sold will cease to be held on the
balance sheet but will continue to be serviced by the Group, for which the Group will receive Servicing Fee
income.
In the opinion of the Directors, there have been no other matters arising in the period between the end of the
reporting period and the date of this report that are likely to significantly affect the operations of the Group.
AUDITOR'S INDEPENDENCE DECLARATION
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is
set out immediately after this Directors' Report.
ROUNDING
These consolidated financial statements are presented in Australian dollars which is the Company’s functional
currency. The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 and in accordance with that instrument, amounts in the consolidated financial statements
and Directors’ Report have been rounded off to the nearest thousand dollars, unless otherwise stated.
This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations
Act 2001.
Jon Denovan
Chairman and Non-executive Director
Dated this 26th day of February 2025
Grant Thornton Audit Pty Ltd
Level 26
Grosvenor Place
225 George Street
Sydney NSW 2000
Locked Bag Q800
Queen Victoria Building NSW
1230
T +61 2 8297 2400
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www.grantthornton.com.au
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556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
Auditor’s Independence Declaration
To the Directors of BNK Banking Corporation Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the review
of BNK Banking Corporation Limited for the half-year ended 31 December 2024. I declare that, to the best of my
knowledge and belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the
review; and
b no contraventions of any applicable code of professional conduct in relation to the review.
Grant Thornton Audit Pty Ltd
Chartered Accountants
C L Scott
Partner – Audit & Assurance
Sydney, 26 February 2025
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 7 of 23
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
In thousands of AUD
Note
31 Dec 2024
$
30 Jun 2024
$
Assets
Cash and cash equivalents
11
129,078
118,352
Due from other financial institutions
12
108,012
91,972
Other financial assets
14
113,210
115,113
Loans and advances
15
1,185,042
1,378,211
Trade and other receivables
13
3,000
5,881
Contract assets
9,518
11,421
Property, plant and equipment
63
189
Goodwill and other intangible assets
16
3,762
3,771
Total Assets
1,551,685
1,724,910
Liabilities
Deposits
17
1,097,091
1,270,643
Other financial liabilities
19
321,696
321,438
Trade and other payables
18
5,807
5,296
Trail commission payable
2,881
3,532
Provisions
1,055
985
Deferred tax liabilities (net of assets)
2,079
1,899
Total Liabilities
1,430,609
1,603,793
Net Assets
121,076
121,117
Equity Attributable to Equity Holders
Contributed equity
Issued capital, net of raising costs
20
100,329
100,329
Reserves
1,281
1,641
Retained earnings
19,466
19,147
Total Equity
121,076
121,117
The accompanying notes should be read in conjunction with the financial statements
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
.
Page 8 of 23
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE SIX MONTHS ENDED 31 DECEMBER
In thousands of AUD
Note
31 Dec 2024
31 Dec 2023
$
$
Interest revenue from banking activities
6
45,749
46,784
Interest expense on banking activities
6
(34,699)
(38,229)
Net interest income
11,050
8,555
Commission income
7
1,064
3
Commission expense
7
(3,326)
(1,877)
Net commission expense
(2,262)
(1,874)
Other income
8
3,969
1,384
Total net revenue
12,757
8,065
Operating expenses
9
(12,242)
(10,307)
Impairment of loans, advances and other receivables
15
85
(352)
Profit/(Loss) before income tax
600
(2,594)
Income tax (expense)/benefit
10
(280)
778
Profit/(Loss) for the period
320
(1,816)
Other comprehensive income
Items that may be reclassified subsequently to profit and loss
-
-
Total comprehensive profit/(loss) for the period
320
(1,816)
Earnings per share
Basic earnings per share (cents)
25
0.27
(1.53)
Diluted earnings per share (cents)
25
0.27
(1.53)
The accompanying notes should be read in conjunction with the financial statements
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 9 of 23
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER
In thousands of AUD
Attributable to equity holders
Issued
Capital
Equity
Raising
Costs
Treasury
Shares
Liquidity
Reserve
Share-based
Payments
Reserve
Retained
Earnings
Total
Equity
$
$
$
$
$
$
$
Balance at 30 June 2024
103,664
(3,335)
-
360
1,281
19,147
121,117
Profit for the period
-
-
-
-
-
320
320
Total comprehensive income
-
-
-
-
-
320
320
Transactions with owners of the Company
Special purpose vehicle reserve
-
-
-
(360)
-
-
(360)
Issue of share capital
-
-
-
-
-
-
-
Balance at 31 December 2024
103,664
(3,335)
-
-
1,281
19,466
121,076
Balance at 30 June 2023
103,664
(3,335)
(103)
725
1,281
25,951
128,183
(Loss)/Profit for the period
-
-
-
-
-
(1,816)
(1,816)
Total comprehensive income
-
-
-
-
-
(1,816)
(1,816)
Transactions with owners of the Company
Special purpose vehicle reserve
-
-
-
(267)
-
-
(267)
Issue of share capital
-
-
-
-
-
-
-
Balance at 31 December 2023
103,664
(3,335)
(103)
458
1,281
24,135
126,100
The accompanying notes should be read in conjunction with the financial statements
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 10 of 23
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 DECEMBER
31 Dec 2024
31 Dec 2023
Note
$
$
In thousands of AUD
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received
45,749
46,784
Fees and commissions received
6,965
3,445
Interest and other costs of finance paid
(34,175)
(37,781)
Payments to suppliers and employees
(11,527)
(15,279)
Net decrease/(increase) in loans, advances and other
receivables
191,831
(125,927)
Net (decrease)/ increase in deposits
(173,553)
296,242
Payment of income taxes
(100)
-
Net payments for investments
(14,136)
(103,169)
Net cash from operating activities
11,054
64,315
CASH FLOWS FROM INVESTING ACTIVITIES
Receipts for sale of property, plant and equipment
-
15
Payment for property, plant and equipment
(34)
(18)
Net cash used in investing activities
(34)
(3)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
257
10,527
Repayment of borrowings
(361)
(14,089)
Payments for lease liabilities
(190)
(182)
Net cash used in financing activities
(294)
(3,744)
Net increase in cash held
10,726
60,568
Cash and cash equivalents at 1 July
118,352
92,573
Cash and cash equivalents at the end of the period
129,078
153,141
The Consolidated Statement of Cash Flows includes all cash flows of the Group.
The accompanying notes should be read in conjunction with the financial statements
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 11 of 23
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1.
CORPORATE INFORMATION
BNK Banking Corporation Limited (“the Company”) is a company incorporated and domiciled in Australia. These
condensed consolidated interim financial statements (“interim financial statements”) as at and for the six months
ended 31 December 2024 comprise the Company and its subsidiaries (together referred to as “the Group”). The
principal activities of the Company are the provision of retail banking and wholesale mortgage management.
2.
BASIS OF PREPARATION
These interim financial statements are general purpose financial statements prepared in accordance with Australian
Accounting Standard (AASB) 134 'Interim Financial Reporting' and the Corporations Act 2001, and with IAS 34 'Interim
Financial Reporting'.
The interim financial statements do not include all the information required for a complete set of annual financial
statements. However, selected explanatory notes are included to explain events and transactions that are significant
to an understanding of the changes in the Group’s financial position and performance since the last annual
consolidated financial statements as at and for the year ended 30 June 2024.
These interim financial statements were authorised for issue by the Company’s Board of Directors on 26th February
2025.
The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191
and in accordance with the legislative instrument, amounts in the consolidated interim financial statements and
Directors’ Report have been rounded off to the nearest thousand dollars, unless otherwise stated.
Changes in Accounting Standards
A. Changes adopted in the current period.
There are no new accounting standards becoming effective during the reporting period that have resulted in changes
to the preparation of these condensed consolidated interim financial statements.
B. Changes to be adopted in future periods.
A number of new standards and amendments to standards are effective for annual periods beginning after 1 January
2025 and earlier application is permitted. The Group has not adopted any of the forthcoming new or amended
standards in preparing these condensed consolidated interim financial statements.
3.
CRITICAL ACCOUNTING ESTIMATES AND SIGNIFICANT JUDGEMENTS
The preparation of these interim financial statements that affect the application of accounting policies and the
reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
The significant judgements made by management in applying the Group’s accounting policies and the key sources of
estimation uncertainty were the same as those described in the last annual financial statements at 30 June 2024.
The Company’s application and measurement of fair values is explained in note 24.
4. CHANGE IN ACCOUNTING POLICY
Except as described below, the accounting policies applied in these interim financial statements are the same as those
applied in the Group’s consolidated financial statements as at and for the year ended 30 June 2024. The policy for
recognising and measuring income taxes in the interim period is consistent with that applied in the previous interim
period and is described in note 10.
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 12 of 23
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
In thousands of AUD
5. SEGMENT INFORMATION
AASB 8 requires operating segments to be identified on the basis of internal information provided to the chief
operating decision makers, the Board of Directors, in relation to the Group’s business activities.
All elements within this interim financial report to December 2024 relate to the single reporting segment of the
Bank.
Loans and advances
38,717
38,808
Deposits with other institutions
7,032
7,976
Total interest income
45,749
46,784
Interest expense
Deposits
24,810
29,730
Securitisation liabilities
8,728
7,343
Subordinated debt
1,157
1,123
Lease liabilities
2
10
Other
2
23
Total interest expense
34,699
38,229
7. COMMISSION INCOME AND EXPENSE
31 Dec 2024
31 Dec 2023
$
$
Upfront commission income
1,303
30
Trail commission income
1,664
1,997
Movement in net present value of future trail commission receivable
(1,903)
(2,024)
Total commission income
1,064
3
Upfront commission expense
2,278
1,030
Trail commission expense
1,699
1,973
Movement in net present value of future trail commission payable
(651)
(1,126)
Total commission expense
3,326
1,877
8. OTHER INCOME
31 Dec 2024
31 Dec 2023
$
$
Service fees and residual income
2,564
478
Lending fees
582
512
Transaction fees
463
388
Other
360
6
Total other income
3,969
1,384
6. INTEREST INCOME AND EXPENSE
31 Dec 2024
31 Dec 2023
$
$
Interest income
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 13 of 23
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
In thousands of AUD
9. OPERATING EXPENSES
31 Dec 2024
31 Dec 2023
$
$
Employee benefits
7,321
7,046
Information technology
2,010
1,147
Professional services
1,195
325
Other administration expenses
795
1,052
Banking services delivery
204
201
Marketing
244
99
Depreciation and amortisation
168
166
Occupancy
163
157
Securitisation expenses
142
114
Total operating expenses
12,242
10,307
10. INCOME TAX
31 Dec 2024
31 Dec 2023
$
$
The major components of income tax benefit recognised are:
Current income tax expense
100
-
Deferred income tax expense/(benefit)
180
(778)
Income tax expense/(benefit)
280
(778)
Income tax expense is recognised at an amount determined by multiplying the profit (loss) before tax for the
interim reporting period by the annual income tax rate expected for the full financial year, adjusted for the tax
effect of certain items recognised in full in the interim period.
Deferred income tax expense/(benefit) reflects movements in deferred tax asset and deferred tax liability balances
during the year as well as unused tax losses.
USE OF JUDGEMENTS AND ESTIMATES
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset
can be utilised. The Group assesses the probability through the consideration of factors leading to losses and the
preparation of forecasts that indicate the Group’s ability to generate taxable profits in the future.
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 14 of 23
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
In thousands of AUD
11. CASH AND CASH EQUIVALENTS
31 Dec 2024
30 Jun 2024
$
$
Reconciliation of cash:
Cash at the end of the period as shown in the statement of cash flows is
reconciled to the related items in the statement of financial position as
follows:
Cash at bank and on hand
94,160
81,750
Cash at Bank – restricted
34,918
36,602
129,078
118,352
Restricted Cash is the cash reserves maintained in accordance with the Bullion Trust Deed and the Primus Trust
Deed and is available to meet certain shortfalls in respect to losses and liquidity. The cash is not available as
free cash for the operations of the Group without certain predefined conditions being met.
12. DUE FROM OTHER FINANCIAL INSTITUTIONS
31 Dec 2024
30 Jun 2024
$
$
Security deposits
17,620
17,620
Negotiable certificate of deposit and term deposits
70,434
34,528
Other ADI deposits
19,958
39,824
108,012
91,972
13. TRADE AND OTHER RECEIVABLES
31 Dec 2024
30 Jun 2024
$
$
Accrued commission income
213
242
Prepayments
1,603
1,802
Trade and other receivables
1,184
3,837
3,000
5,881
14. OTHER FINANCIAL ASSETS
31 Dec 2024
30 Jun 2024
$
$
Investments in debt securities (measured at amortised cost)
113,210
115,113
113,210
115,113
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 15 of 23
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands of AUD
15. LOANS AND ADVANCES
31 Dec 2024
30 Jun 2024
$
$
(a) Classification
Residential loans
1,082,552
1,291,483
Commercial loans
95,038
76,485
Personal loans
59
35
Overdrafts
3,239
4,716
Total gross loans and advances
1,180,888
1,372,719
Add: Unamortised broker commissions
5,777
6,679
Add: Unamortised premium
1,560
2,081
Gross loans and receivables
1,188,225
1,381,479
Provision for impairment
(3,183)
(3,268)
1,185,042
1,378,211
(b) Provision for impairment
Expected credit loss provision
Stage1
Stage 2
Stage 3
Total
$
$
$
$
Opening balance at 1 July 2024
1,978
242
1,048
3,268
Movements during the period:
Residential loans
(122)
(81)
(153)
(356)
Commercial loans
104
65
96
265
Bullion warehouse
6
-
-
6
Closing balance at 31 December 2024
1,966
226
992
3,183
The decrease in the expected credit loss provision is partly due to the decrease in the gross carrying amount of loans
and advances, reflecting a redirection towards Commercial lending, as well as a reduction in the delinquency rates
observed and outlined below.
(c) Credit quality – loans and advances
31 Dec 2024
30 Jun 2024
$
$
Past due but not impaired
30 days & less than 90 days
4,251
6,589
90 days & less than 182 days
2,486
6,066
182 days or more
3,556
3,973
10,293
16,628
Impaired - mortgage loans
Mortgage loans greater than 90 days
644
644
Overdrafts greater than 90 days
29
56
673
700
Total past due and impaired
10,966
17,328
Neither past due nor impaired
1,169,922
1,355,391
Total gross loans and advances
1,180,888
1,372,719
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 16 of 23
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands of AUD
16. GOODWILL AND OTHER INTANGIBLE ASSETS
31 Dec 2024
30 Jun 2024
$
$
Goodwill
3,500
3,500
Brand names, trademarks and domain names
170
170
Other intangible assets (less accum amortisation)
92
101
Total goodwill and other intangible assets
3,762
3,771
At 31 December 2024, Bank CGU was tested for impairment using the value in use approach, by discounting future
cash flows (5 years) estimated from the continuing use of the CGU. The recoverable amount for the CGU was
determined to be above the carrying amount.
The key assumptions used in the estimation of the recoverable amount are set out below. The values assigned to
the key assumptions represent the Group’s best estimates of future CGU performance, after considering internal
and external sources of information.
Input
Dec
2024
Jun
2024
Discount rates (post-tax)
11.9%
11.8%
Terminal value growth rate
2.5%
2.5%
Budgeted net income growth rate (average of next 5 years)
25%
29%
Budgeted cost rates (average of next 5 years)
9%
7%
Discount rates were determined after assessing the Group’s weighted average cost of capital and adjusting for
risks specific to the CGU and/or the risks inherent to the cash flow forecasts. The cash flow projections include
specific estimates from companies considered comparable over five years and a terminal growth rate thereafter.
The terminal growth rate was determined based on management’s estimate of the long-term growth rate,
consistent with the assumptions that a market participant would expect.
Budgeted revenue was based on the Group’s five year forward looking plans for the CGU taking into account past
experience and adjustments regarding expectations of future outcomes including economic conditions.
No impairment loss has been recognised for the CGU at 31 December 2024.
Sensitivity Scenario
Management have reviewed both the Long-term growth and discount rate included in the impairment testing. In
order to demonstrate the sensitivities within the impairment testing, management has stress tested these two key
assumptions to the point at which impairment would be triggered.
The two factors stress tested are Discount rate and Net Income growth rate.
Input
Standard
Stressed
movement +/
Discount rates (post-tax)
11.9%
6.69%
Budgeted NPAT growth rate (average of years 4-5)
40.6%
50.6%
The outcomes of these sensitivity tests are;
•
An increase in the discount rate of 6.69% to 18.61% would result in impairment of the CGU
•
A reduction in the growth rates in Yrs. 4 and 5 by 50.6% to 4.2% would result in impairment of the CGU
Based on the above stress testing, management is satisfied that levels are appropriate and sufficient headroom
remains given the approach already taken during the core testing and the stress testing performed. Management
will continue to assess the carrying value of goodwill against forward forecasts and economic conditions.
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 17 of 23
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands of AUD
17. DEPOSITS
31 Dec 2024
30 Jun 2024
$
$
Call deposits
704,655
638,999
Term deposits
392,436
631,644
1,097,091
1,270,643
18. TRADE AND OTHER PAYABLES
31 Dec 2024
30 Jun 2024
$
$
Trade creditors and accrued expenses
5,710
5,014
Accrued commission payable
97
94
Lease liabilities
-
188
5,807
5,296
19. OTHER FINANCIAL LIABILITIES
31 Dec 2024
30 Jun 2024
$
$
Securitisation liabilities
297,707
297,517
Subordinated debt
23,989
23,921
Total borrowings
321,696
321,438
The Subordinated debt characteristics remain unchanged from the annual financial statements to 30 June
2024.
Securitisation liabilities represent the continued utilisation of the securitisation warehouse funding facility
established in 2021. The securitisation warehouse has a facility limit of $300 million.
20. SHARE CAPITAL
Number of shares
31 Dec 2024
Issued capital
$
Beginning of the interim period
118,719,405
103,664
Movements in the period
Exercise of performance rights
-
-
Issue Share Options
-
-
Balance at the end of the interim period
118,719,405
103,664
Equity raising costs
Balance at the beginning of the interim period
(3,335)
Costs incurred from exercise of performance rights
-
Balance at the end of the interim period
(3,335)
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 18 of 23
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands of AUD
21. DIVIDENDS
No dividends were paid or proposed during the interim period.
22. SHARE-BASED PAYMENTS
During the interim period ended 31 December 2024, no new share-based payment arrangements were entered
into.
23. COMMITMENTS AND CONTINGENT LIABILITIES
31 Dec 2024
30 Jun 2024
$
$
At the reporting date, the company had the following loan and
overdraft commitments outstanding:
Loans approved but not advanced
331
2,681
Loan funds available for redraw
59,071
57,064
Unutilised overdraft limits
247
301
59,649
60,046
24. FINANCIAL INSTRUMENTS
A. ACCOUNTING CLASSIFICATIONS AND FAIR VALUES
Fair value
Carrying amount
In thousands of AUD
31 Dec
2024
30 Jun
2024
31 Dec
2024
30 Jun
2024
$
$
$
$
Financial assets
Cash and cash equivalents
129,078
118,352
129,078
118,352
Due from other financial institutions
108,012
91,972
108,012
91,972
Other financial assets
110,288
110,895
113,210
115,113
Loans and advances
1,185,382
1,380,566
1,185,042
1,378,211
Other receivables
214
242
214
242
Total financial assets
1,532,974
1,702,027
1,535,556
1,703,890
Financial liabilities
Deposits
1,096,756
1,269,584
1,097,091
1,270,643
Accrued commission payable
97
94
97
94
Other financial liabilities
321,695
321,438
321,695
321,438
Creditors and other payables
5,710
5,013
5,710
5,013
Total financial liabilities
1,424,258
1,596,129
1,424,593
1,597,188
B. FAIR VALUE MEASUREMENT
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Wherever possible, fair values are calculated by the
Group using unadjusted quoted market prices in active markets for identical instruments. A quoted price in an
active market provides the most reliable evidence of fair value. For all other financial instruments, the fair value
is determined by using other valuation techniques.
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 19 of 23
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands of AUD
24. FINANCIAL INSTRUMENTS (CONT’D)
B. FAIR VALUE MEASUREMENT (Cont’d)
As part of the fair value measurement, the Group classifies its assets and liabilities according to a hierarchy that
reflects the observability of significant market inputs. The three levels of the hierarchy are described below:
•
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
•
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable in an active market.
•
Level 3 — Valuation techniques for which significant inputs to the fair value measurement are not based on
observable market data.
There were no reclassifications between the levels during the interim reporting period or the previous reporting
period.
25. EARNINGS PER SHARE
The following reflects the net income and share information used in the
calculation of basic and diluted earnings per share:
31 Dec 2024
$
31 Dec 2023
$
Profit/(Loss) for the period ($’000s)
320
(1,816)
Number
Number
Weighted average number of ordinary shares used in the calculation of basic
earnings per share:
118,719,405 118,719,405
Weighted average number of ordinary shares used in the calculation of diluted
earnings per share
118,785,030 118,785,030
Basic earnings per share (cents)
0.27
(1.53)
Diluted earnings per share (cents)
0.27
(1.53)
26. RELATED PARTIES
During the reporting period the Group sub-leased office space from AURA Group Services, a related entity of Mr
Calvin Ng (Director). Rental expense paid during the reporting period totaled $43,021 (H1 Dec 2023: $47,676).
There was no balance payable at 31 December 2024 (2023: Nil).
The group also paid Commissions to FirstMac Limited for commissions on deposits raised through BNK (David
Gration as BNK Director). During H1 FY25 BNK paid $66,368 and $125,747 in H1 FY24 (Dec 2023). This
arrangement transitioned to an in house BNK solution effective 1 November 2024.
The group received trail commission income from two wholesale related parties where BNK Directors hold key
positions. Resimac Limited (Warren McLeland as BNK Director) and FirstMac Services Pty Ltd (David Gration as
BNK Director), contributed $192,273 and $25,123 respectively of trail income commissions to the Group during
H1 FY25 (incl GST). (H1 FY24 $242,017 and $44,932 respectively).
All related party transactions are made on terms equivalent to an arm’s length transaction.
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 20 of 23
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In thousands of AUD
27. EVENTS SUBSEQUENT TO BALANCE DATE
On 21/02/2025, Bendigo Bank reached an agreement with the Bullion Trust to purchase $220.6m of Residential
Home Loans. The transaction will generate a net profit of approximately $2m, subject to finalisation of treatment,
to be reflected in H2 FY25. On the effective date of settlement, the loans being sold will cease to be held on the
balance sheet but will continue to be serviced by the Group, for which the Group will receive Servicing Fee
income.
In the opinion of the Directors, there have been no other matters arising in the period between the end of the
reporting period and the date of this report that are likely to significantly affect the operations of the Group.
BNK Banking Corporation Limited
Interim Financial Report
31 December 2024
Page 21 of 23
DIRECTORS’ DECLARATION
In accordance with a resolution of directors of BNK Banking Corporation Limited, I state that:
In the opinion of the directors:
(a)
The consolidated financial statements and notes set out on pages 7 to 20 of BNK Banking
Corporation Limited for the half-year ended 31 December 2024 are in accordance with the
Corporations Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 31 December 2024 and of its
performance for the six month period ended on that date; and
(ii)
complying with Accounting Standard AASB 134 'Interim Financial Reporting' the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
and
(b)
There are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
Signed in accordance with a resolution of the directors:
Jon Denovan
Chairman and Non-executive Director
Dated this 26th day of February 2025
Sydney
Grant Thornton Audit Pty Ltd
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Queen Victoria Building NSW
1230
T +61 2 8297 2400
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Legislation.
Independent Auditor’s Review Report
To the Shareholders of BNK Banking Corporation Limited
Report on the interim financial report
Conclusion
We have reviewed the accompanying interim financial report of BNK Banking Corporation Limited (the
Company) and its subsidiaries (the Group), which comprises the condensed consolidated statement of
financial position as at 31 December 2024, and the condensed consolidated statement of profit or loss and
other comprehensive income, condensed consolidated statement of changes in equity and condensed
consolidated statement of cash flows for the half year ended on that date, including material accounting
policy information, other selected explanatory notes, and the directors’ declaration.
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe
that the accompanying interim financial report of BNK Banking Corporation Limited does not comply with the
Corporations Act 2001 including:
a giving a true and fair view of the Group’s financial position as at 31 December 2024 and of its
performance for the half year ended on that date; and
b complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations
Regulations 2001.
Basis for Conclusion
We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the
Independent Auditor of the Entity. Our responsibilities are further described in the Auditor’s Responsibilities
for the Review of the Financial Report section of our report. We are independent of the Company in
accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of
the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
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Grant Thornton Australia Limited
Directors’ responsibility for the interim financial report
The Directors of the Company are responsible for the preparation of the interim financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the Directors determine is necessary to enable the preparation of the interim financial report
that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
Auditor’s responsibility for the review of the interim financial report
Our responsibility is to express a conclusion on the interim financial report based on our review. We conducted
our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial
Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the
procedures described, we have become aware of any matter that makes us believe that the interim financial
report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Group’s
financial position as at 31 December 2024 and its performance for the half-year ended on that date, and
complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations
2001.
A review of an interim financial report consists of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures. A review is substantially less in
scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not
enable us to obtain assurance that we would become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Grant Thornton Audit Pty Ltd
Chartered Accountants
C L Scott
Partner – Audit & Assurance
Sydney, 26 February 2025