More annual reports from MyState Limited:
2023 ReportTogether
for the better
Annual Report
2023
MyState Limited
Annual Report 2023
About MyState Limited
MyState Limited (MYS) is the non-operating
holding company of a diversified financial
services group listed on the ASX and is a
leading provider of banking, trustee and
wealth management services to customers
across the country through our retail brands
– MyState Bank and TPT Wealth.
At MyState Limited we understand the importance of tailoring financial services to all stages of life. We’re always ready to serve the best interests of our customers and shareholders. Contents
02 Our purpose 03 Our values
05 Highlights
06 Group
performance
08 Chair’s review
10 Chief Executive
Officer’s review
12
16
Our strategy
14
Approach
to risk
ESG update
24 Board of
Directors
26 Key
Management
Personnel
28 Directors’
report
35 Remuneration
report
53 Financial
report
104 Shareholder
information
105 Corporate
directory
Annual General Meeting
The 2023 Annual General Meeting of
MyState Limited will be held on Thursday,
19 October 2023 at 10:30 a.m. (Hobart time)
at the Best Western Hotel, 156 Bathurst
Street, Hobart and online.
In accordance with the Corporations Act 2001,
hard copies of the Notice of AGM (NoM) will
not be sent to shareholders unless they have
previously requested a hard copy. Instead,
the NoM and other related material, including
an online meeting guide, can be viewed and
downloaded from our AGM website accessible
via mystatelimited.com.au
Corporate Governance
The Board of MyState Limited is committed
to upholding the highest levels of corporate
governance and subscribes to the Corporate
Governance Principles and Recommendations
published by the ASX Corporate Governance
Council in order to promote investor
confidence in the company and within the
broader market. In addition, the Australian
Prudential Regulation Authority (APRA)
requires MyState Limited, as the non-
operating holding company of a bank, to
comply with the prudential obligations that
apply directly to its wholly owned subsidiary
MyState Bank Limited.
To this end, the Board of MyState Limited
has a governance framework whereby the
appropriate Board policies, meeting the
APRA prudential requirements, apply across
the Group.
MyState Limited’s Board-approved
Corporate Governance Statement is
available on the Company’s website
at mystatelimited.com.au
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
01
MyState LimitedAnnual Report 2023
Together for
the better.
Our purpose
We’re a Tasmanian-based financial
services company with big ambitions.
We make managing your money easy,
to help you achieve what matters most.
We invest in our people and communities,
so together we can thrive.
In late 2022, one of our defining
moments was reimagining
our purpose.
A purpose is the North Star of any
organisation, and when our people
told us our original purpose was
no longer resonating, we knew
something had to change.
Our team created a new purpose
from the ground up, working
together to capture the care for
our customers, and the need for
continued investment in our people
and the communities that we serve.
Our people were committed to
creating a purpose that represented
the ways we collaborate with
each other, our customers, our
shareholders and our community
to show how we all work together
to deliver the best outcomes.
The final result is a long form purpose
statement capturing who we are,
why we exist and our continued
focus on growth and investment.
Our purpose is lived through our
rally cry – Together for the better.
Since launching our purpose in
December 2022, it has already
informed a number of our business
decisions as we strive to become
a purpose-driven organisation.
What does
this mean for:
Our shareholders
We deliver sustainable,
profitable growth
Our community
We invest into and support
our local communities
Our customers
and clients
We care about what matters
Our people
We grow and achieve
great things
02
MyState LimitedAnnual Report 2023 p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
03
Our values
Create
customer ‘wow’
Chase
the better
Collaborate
to win
• We walk in our
customers’ shoes
and appreciate their
perspectives.
• We think and act
in the best interests
of our customers.
• We are clear, concise
and trustworthy in our
customer interactions.
• We design and deliver
exceptional customer
experiences, with a
human touch.
• We make things
simpler and easier
for our customers.
• We are bold in our
ambition.
• We seek out and
embrace the change
that is required to
succeed.
• We have the courage
to try new things and
grow from our failures.
• We simplify (and
digitise) to deliver
exceptional customer
experiences, with a
human touch.
• We seek industry-
leading productivity
and always drive for
better outcomes.
• We care for each other,
our customers, partners
and community.
• We give our best,
do the right thing, and
trust our colleagues
to do the same.
• We hold each other
to account.
• We openly share
information so that
everyone can make
informed decisions.
• We reach out across
teams to rapidly
solve problems – and
celebrate our successes
and learnings.
MyState LimitedAnnual Report 2023
We’re focused on the
long-term prosperity of our
customers and shareholders
and are committed to
growing our business
ethically and sustainably.
0404
MyState LimitedAnnual Report 2023 Highlights
Home loan book
+14.1%
From FY22
Customer deposits
+12.3%
From FY22
$7.8b
Home loan growth 2.9x
system in FY23
$6.2b
Strong deposit growth driving
favourable funding mix
Net profit after tax
Record
$38.5m
Highest NPAT
on record
New customer growth
+33%
From FY22
+25,690
New to bank
customers
Strong uplift on FY22
Cost to income ratio
-440bps
From FY22
Earnings per share
+16.8%
From FY22
64.0%
Growth achieved
more efficiently
35.5cps
Uplift on FY22
Net Promoter Score
+35
As at June 2023
Strong customer
advocacy
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
05
MyState LimitedAnnual Report 2023
Group performance
Net profit after tax
($ million)
Earnings per share
(cents)
Dividends – fully
franked per share
(cents)
5
2
4
1
.
.
0
3
1
5
.
1
1
5
.
1
1
0
.
1
3
1
.
0
3
.
3
6
3
.
0
2
3
.
5
8
3
.
2
4
3
.
9
2
3
.
2
9
3
.
3
0
3
.
5
5
3
.
5
4
1
.
5
4
1
.
5
2
1
.
5
2
1
5
.
1
1
2019 2020 2021 2022 2023
2019 2020 2021 2022 2023
2019 2020 2021 2022 2023
Return on average
equity (%)
Cost-to-income
ratio (%)
Net interest income
($ million)
.
7
9
.
2
9
.
3
0
1
7
7
.
.
7
8
.
8
4
6
.
8
2
6
3
.
1
6
.
4
8
6
.
0
4
6
.
4
9
8
.
5
9
9
.
0
2
1
1
.
2
0
1
1
.
6
2
3
1
2019 2020 2021 2022 2023
2019 2020 2021 2022 2023
2019 2020 2021 2022 2023
06
MyState LimitedAnnual Report 2023 p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
07
MyState LimitedAnnual Report 2023
Chair’s review
Core earnings
$57.7m
Earnings per share
+16.8%
Net interest margin (NIM) eased 4bps
to 1.63% due to intense competition
for both mortgages and retail
deposits, with wholesale funding costs
also increasing significantly.
TPT Wealth’s result was more subdued
in FY23 as we refocused our energies
on Tasmania and cut costs interstate.
TPT Wealth income eased 3.5%
to $14.4m.
Dividend and capital
In the 2023 fiscal year, the Board
determined to pay a final dividend of
11.5 cps, fully franked, equivalent to
a payout ratio of 64.9% of after-tax
earnings.
This decision is in line with the current
dividend guidance range and strikes a
balance between pursuing our growth
strategy and rewarding shareholders.
During the year MyState issued a
$400m Term RMBS and established
a new committed warehouse
funding agreement.
Both transactions support MyState’s
growth strategy and provide
flexibility to MyState’s capital
management options.
Vaughn Richtor
Chair
Our growth strategy is on track, as is our
transformation into a first-choice financial
services company with a strong digital focus.
I am pleased and proud to present
the FY23 Annual Report as chair of
MyState Limited.
In a tumultuous year in financial
services our company has maintained
momentum as we deliver on our
growth strategy.
In FY23 we delivered a record profit
and increased earnings per share.
Our key portfolios of mortgages
and savings saw strong above-
industry growth.
Our strategy of deepening
relationships with independent
mortgage brokers continues to pay
dividends with robust growth in home
lending at almost three times the
industry average.
We achieved record customer
growth, attracting 25,690 new to bank
customers from within and outside
Tasmania.
I am pleased to say the growth came
while maintaining high customer
advocacy as measured by the Net
Promoter Score – a key measure
of our customer focus.
Our growth strategy is on track, as is
our transformation into a first-choice
financial services company with a
strong digital focus.
The digital transformation is improving
our cost to income ratio, making
growth in customers and balance
sheet sustainable.
I congratulate the team at MyState
for continuing to serve the Tasmanian
community and maintaining
customer focus.
Tasmania is our heartland, and we
continue to build our strong brand
in the state while increasing our
national footprint.
Operating performance
Statutory net profit after tax (NPAT)
for the fiscal year was a record
$38.5 million (m), up 20.2% on FY22.
Earnings per share increased 16.8%
to 35.5 cents per share (cps).
Core earnings (operating profit before
bad and doubtful debts expense and
income tax) increased 30.3% to $57.7m
with total operating income up 14.4%
and operating expenses up 7.1%.
Significantly operating income is
outpacing expense growth.
The cost-to-income ratio improved
by 440 basis points (bps) to 64% for
the full year.
Return on equity improved 100bps
over FY22 to 8.7%.
The total loan book grew by 13.5%
to $7.9 billion (b), while home lending
grew almost three times system growth.
Customer deposits grew at twice
system growth.
08
MyState LimitedAnnual Report 2023 Statutory net profit after
tax for the 2023 financial
year was a record $38.5m
up 20.2%.
Growth strategy
Our growth strategy remains on
track with prudent, sustainable and
profitable growth at its heart.
The current Australian banking market
is highly competitive and credit growth
is slowing. MyState’s robust growth in
mortgages over the past two years is
forecast to ease to nearer to two times
system growth for FY24.
MyState has a proud Tasmanian
heritage that gives us a competitive
advantage at home.
Our focus remains on sustainable
growth while maintaining
customer focus.
We continue to pursue the home state
advantage combined with prudent
expansion of our national footprint.
I would like to thank shareholders for
not only supporting the business, but
also being loyal customers.
Our future
FY23 has been a solid year and put
the business on track to deliver on
our growth strategy.
Our future is bright with progress
on system improvements and
cost management.
Vaughn Richtor
Chair
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
09
MyState LimitedAnnual Report 2023
Chief Executive Officer’s review
Brett Morgan
Managing Director and CEO
We delivered mortgage growth of over 14% to $7.8b,
almost three times the industry average, at a time
of intense competition.
Home loan book
$7.8b
New to bank
customers increased
33%
Delivering for customers
2023 has been a significant year for
both customers and MyState and I am
proud to say the business has ended
the year in very good shape.
The re-emergence of inflation, and
the fastest increase in interest rates
in more than 30 years, has tested
customers and the bank.
Mortgage customers have shown
resilience, having built up savings
when rates were low. One in three
of our mortgage customers are more
than six months ahead in repayments.
We proactively contact every
customer coming off low fixed interest
home loans to offer help as they
transition to higher repayments.
Our focus on the customer has seen
the rate of late loan repayments track
below the industry average.
Over the year, we also helped
customers save by substantially
increasing our award-winning bonus
saver and term deposit rates.
Our competitive rates attracted
many new customers and increased
deposit growth to double the
industry level.
Delivering on our
growth strategy
In this turbulent environment, the bank
delivered record customer growth,
33% higher than the previous year,
and strong above-system growth
in both mortgages and savings.
This growth was achieved while
maintaining prudent risk settings.
We delivered mortgage growth
of over 14% to $7.8b, almost three
times the industry average, at a time
of intense competition.
Our customer deposits grew by over
12%, double the industry average,
to $6.2b.
We welcomed a further 25,690 new
to bank customers across Australia.
We achieved this growth more
efficiently as we leveraged digital
systems and lowered the cost to
income ratio by 440bps to 64%.
Consequently, we delivered a
record NPAT of $38.5m, up 20.2%
on the previous year.
Core earnings increased 30.3%
to $57.7m.
We were able to achieve this whilst
having a high level of customer
advocacy with a Net Promotor Score
of +35.
TPT Trustee Services distributed
cash and transferred assets valued
at $83m to more than 3,000
beneficiaries.
We are refocusing the wealth
management side of the business
on our home market of Tasmania
where we have a long 135 year legacy
and competitive brand advantage.
TPT Wealth’s operating income eased
due to lower fee revenue from the
investment management business.
Delivering for the
community
Our approach to sustainability
focuses on driving positive change
in the bank and the community.
I am proud to say we started to
measure our material Scope 3
financed emissions, those greenhouse
gas (GHG) emissions associated
with residential mortgage lending.
This data will help us set relevant
emissions reduction targets.
We continue to encourage customers
to adopt e-statements with an
additional 18,540 bank customers
now on e-statements.
The MyState Foundation continued
to support the Tasmanian community
by providing grants of more than
$175,000 across 20 community
programs focused on providing
greater opportunities for youth.
The Foundation also supported
Colony47 as the first corporate
partner of its JumpStart program,
assisting young people in Tasmania
to access affordable housing.
In addition to our Foundation grants,
our team raised a further $15,000 for
youth-focused charities.
The recipients included JCP Youth,
Make a Wish, Riding for the Disabled
Association South, Anglicare
Tasmania’s Taz Kids clubs, Hobart
Women’s Shelter and Tassie Mums.
This investment in our community also
provided opportunities for our team
to connect with local initiatives.
10
MyState LimitedAnnual Report 2023 MyState Limited
Annual Report 2023
Our partnership with the Tasmania
JackJumpers exemplified our
commitment to fostering a vibrant
sports culture and inspiring future
generations of athletes in Tasmania.
The MyState Arena partnership
provided us with a platform to connect
with customers and the community
through events, concerts and sport.
Other sporting sponsorship included
support for the women’s super league
and leadership development program
through Football Tasmania.
MyState also continued to sponsor
Rise Above the Rim Shoot-a-thon,
a 12-hour basketball shooting
challenge raising much-needed funds
for Ronald McDonald House Charities
in Tasmania and Victoria.
Digital banking
Our customers continue to shift
towards digital banking with more
than 77% of customers registered
for internet and mobile banking.
We continue to invest in next-
generation digital technology,
with the development of an
improved banking experience.
We redeveloped online application
forms to make it easier for new and
existing customers to engage with us.
Our digital products are becoming
more helpful and intuitive, with timely
reminders about upcoming bills and
personal notifications about money
moving into and out of accounts.
Staff in branches are increasingly
helping customers use digital
services and tools.
Providing a great place
to work
We know that people want to work
at places where they are proud of the
organisation’s purpose.
The launch of our new purpose in
December 2022 sharpened our
focus on making it easier to deal with
customers, helping our people be their
best and investing in our communities.
Our purpose was created by our
people and has energised and united
our team.
To help our people develop and
perform to their potential, we continue
to invest in learning and leadership
programs, focusing on training and
development to support our growth
ambitions. We also created a wellbeing
program to enhance resilience and
provide more opportunities to engage
with our Foundation grant recipients.
This focus has resulted in a sharp
rise in successful internal promotions.
We improved our staff engagement
score year on year to 73%, which
places MyState well within the
high-performance band (>65%).
Protecting customers
2023 has seen a significant increase
in concern about cyber security
and scams.
Australians lost more than $3 billion
through the year to scammers.
Everyone has become a target
and the types of scams are
constantly evolving.
Protecting our customers from scams
is a top priority and we do this by
preventing, detecting and responding
to scam threats and working with
industry, government and other
sectors of the economy. It takes a
team approach, including the active
involvement of our customers to shut
down the scammers.
To support scam prevention we
educate customers on scam threats
through the website, customer updates
and social media. Customer education
includes information on protecting
passwords, double-checking new billers
and being wary of unsolicited calls
and clicking on links.
Two factor authentication and Pay-ID
are effective barriers to scammers
when passwords and codes are kept
secure and not shared.
To detect scams we invest in cyber
security including enhancing artificial
intelligence capability to monitor
unusual transactions.
To respond to scams we have
increased surveillance of unusual
transactions and message customers
whenever new billers are added.
Looking ahead
Over the first two years of our growth
strategy, we have grown our major
portfolios of mortgages and deposits
by 43% and 40% respectively.
We expect competition in financial
services to remain fierce, and while
we anticipate growth will ease next
year, we expect to maintain above-
system growth in our key portfolios
of mortgages and savings while
continuing to improve efficiency.
We remain focused on improving
customers’ digital and human
experience across both MyState Bank
and TPT Wealth and will continue to
simplify our products, processes
and systems.
Thank you
On a personal note, I would like to thank
customers and clients for choosing
MyState and TPT and shareholders
for their support.
This report marks my first full year as
CEO of MyState, and I would like to
thank everyone for the way my family
and I have been welcomed into the
Tasmanian community.
Brett Morgan
Managing Director and CEO
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
11
MyState LimitedAnnual Report 2023
MyState Limited
Annual Report 2023
Our strategy
Our strategic ambition to grow
our share in deposits, lending
and funds under management
remains unchanged.
Two years into our growth strategy,
our home lending book has grown
by 43% to $7.8 billion, with nearly two-
thirds of our home loan customers
now originating from mainland
Australia. Deposits are
up 40% over the same period.
The award-winning products and
services offered by MyState Bank
and TPT Wealth mean we can help
people across all life stages. We do
this through our core offerings of
everyday banking products, home
and investment loans, asset
management and commercial
lending, right through to estate
planning and administering trusts.
These products and services are
delivered through our key channels.
For MyState Bank this encompasses
digital, brokers to grow outside our
heartland of Tasmania, mobile lenders
in Tasmania, as well as our Tasmanian
branches and contact centre.
For TPT Wealth, our key channels
include digital, relationship managers
and our client services team.
And given the importance of a
strong and positive culture – which is
critical to the success of our strategy
– we have three key values that we live
by every day – create customer wow,
chase the better and collaborate to win.
12
Our investment into distribution capability and capacity
in particular has supported the acceleration of customer
and deposit growth and has made our business stronger
for the future.
Within this environment MyState
remains well placed to continue
to benefit from the willingness of
Australians to switch banks, and we
expect to continue to attract new
customers and grow above system
in both mortgages and deposits.
Though the external market remains
highly competitive, our goal is to
continue to execute on our growth
strategy and tell our unique story
of making managing money easy,
to help our customers and clients
achieve what matters most, so
together we can thrive.
In FY23 we delivered continued growth
in loans, deposits and customer
numbers, and improved our cost
to income ratio while maintaining a
strong balance sheet and preserving
credit quality.
Our investment into distribution
capability and capacity in particular
has supported the acceleration of
customer and deposit growth and
has made our business stronger
for the future.
While our strategy remains the same,
as we enter a new financial year
our aim is to reinforce our focus on
returns, execution, sustainable growth
and capital generation. This will drive
the business forward to better support
and enhance the experience for our
stakeholders. FY23 was a momentous
year that saw the re-emergence
of inflation and the fastest rise in
interest rates in more than 30 years.
The economy is slowing, as is credit
growth, while customers adjust to the
new normal. Competition is forecast
to remain strong.
MyState LimitedAnnual Report 2023 p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
13
Our ambition is to grow our share in deposits,
lending and funds under management
Together for the better
Core offering
Core offering
Everyday banking
Lending
Asset management
Trustee services
• Transaction accounts
• Saving accounts
• Term deposits
• Home loans
• Investment loans
• Mortgage funds
• Commercial lending
• Wills & estate planning
• Estate administration
• Charitable trusts
Key channels
Key channels
• Digital
• Branches (TAS)
• Contact centre
• Brokers
• Mobile lenders (TAS)
• Digital
• Contact centre
• Relationship managers
• Digital
• Asset consultants
• Direct
Our purpose and values underpin our strategy
Create customer ‘wow’ | Chase the better | Collaborate to win
MyState LimitedAnnual Report 2023
Approach to risk
Management of financial and non-financial risks continues to be a key focus
of our business, and an integral part of the platform upon which we have built our
growth strategy.
Throughout FY23, we continued to focus on a strong culture of risk awareness and accountability across the organisation.
The risk strategy for the past year was built on three pillars:
Promote risk
management
principles
Fit for
purpose risk
framework
Digitised and
simplified
process
Awareness and adoption
of risk management
principles and practices
that support a healthy risk
culture, making managing
money simpler and easier
for our customers.
A dynamic, iterative and
responsive to change
risk framework.
Digitisation and
simplification of risk
management processes
to support business
growth and productivity.
Our risk management frameworks
are designed to identify, mitigate
and/or manage risks on a timely
basis. We undertake regular reviews
of these frameworks so that we
continue to meet our regulatory
obligations and deliver the best
possible outcomes for our customers
and stakeholders.
During the past year, assurance
reviews focused on further enhancing
our operational risk capabilities,
including but not limited to our risk
controls for information and cyber
security. Controls related to fraud risks
were also enhanced to support and
protect our customers from scams.
We use our values to continue to build
a culture of risk accountability among
our employees. This encompasses
facilitating training programs, alerting
employees to indicators of risk,
initiating timely closure of risk
incidents, and providing recognition
for employees who champion our
risk principles.
We remained conscious of our duty
of care to customers in need of
additional assistance, and continued
to offer support to these customers
via our customer contact centre,
branches, collection teams and
customer advocate.
1414
MyState LimitedAnnual Report 2023 The award-winning products
and services offered by
MyState Bank and TPT Wealth
means we can help people
across all life stages.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
15
MyState LimitedAnnual Report 2023
MyState Limited
Annual Report 2023
ESG update
In this section we aim to provide a
clear picture of our Environmental,
Social and Governance (ESG)
performance and impact for the
period 1 July 2022 to 30 June 2023
in six key areas.
1. Supporting customers
2. Governance, conduct and culture
3. Helping our people be their best
4. Digital enablement and data security
5. Environmental sustainability
6. Community investment
We understand the importance of ESG
to create and sustain long-term value
in a rapidly changing world and
believe these six topics provide strong
foundations that will create value
for our stakeholders and protect our
business into the future.
The launch of our new purpose in
December 2022 has sharpened our
focus on supporting our customers,
helping our people be their best
and investing in our communities
so together we can thrive.
To help our people be at their best,
we have continued investment into
our learning and leadership programs,
focusing on developing our people
to support our growth ambitions and
creating a wellbeing program to
enhance resilience. Our diversity and
inclusion collective, Belong, has also
been fostering a workplace culture
where everyone feels included.
We continued to support the
Tasmanian community through
the MyState Foundation, investing
$175,000 across 20 community
programs focused on providing
greater opportunities for youth.
This investment in our community
connects our team with our
community initiatives as we pursue
being a purpose-led organisation.
In relation to digital enablement and
data security, our customers continue
to shift towards digital banking
with more than 78% of customers
registered for internet and mobile
banking. In response to an increase
in concern about cyber security and
scams, during the year we stepped
up investment in cyber security and
importantly in educating customers
on how to avoid being scammed.
Continuing our commitment to
measure and manage our greenhouse
gas (GHG) emissions, we broadened
our measurement to also include
our most material Scope 3 financed
emissions – those GHG emissions
associated with residential mortgage
lending – which accounts for over 95%
of the value of our lending portfolio.
Now that we understand our combined
operational and financed emissions,
we will begin to explore appropriate
emissions reduction targets and
initiatives. More information on our
emissions data can be found in
our Task Force on Climate Related
Financial Disclosure (TCFD) update
later in this section. TCFD is a
globally recognised standard set
of recommendations used by more
than 3,000 leading organisations
that either prepare or use financial
disclosures, with the aim of building
a more resilient financial system
through climate-related disclosure.
How we listen and engage
As in previous years, in 2023 we
continued to capture the voices
of MyState’s stakeholders through
formal and informal feedback
methods. Our stakeholder groups
include customers, shareholders,
investors, our people, communities,
regulators, government and suppliers.
Our key measure of customer
advocacy, Net Promotor Score
or ‘NPS’, finished the year at +35.
MyState is proud of this score and
that it reflects our ongoing
commitment of putting our customers
at the centre of everything we do.
We know that progress on ESG is
an evolution, and we are proud to be
taking steps to positively impact our
customers and the wider stakeholder
groups with whom we work.
16
MyState LimitedAnnual Report 2023 Our approach to ESG
How MyState approaches, governs and manages Environmental, Social and Governance
topics that impact business strategies and practices
E
Environmental
S
Social
Considers environment-related risks
and what MyState may do to reduce or
mitigate them. It encompasses carbon
emissions and climate change.
Examples include MyState’s carbon
footprint, waste management,
any pollution MyState contributes to,
and the sustainability efforts that
make up MyState’s supply chain.
It also includes the physical and
transitional risk associated with
MyState’s portfolio on account
of climate change.
Addresses the relationships
MyState maintains as well as the
reputation MyState has with its staff,
customers, suppliers and institutions
in the communities where MyState
does business.
Examples include workplace safety,
wellbeing and culture, the MyState
Foundation, diversity, equity and
inclusion, customer satisfaction,
digital enablement and data privacy.
G
Governance
Directs the internal system of
practices, controls and procedures
MyState adopts in order to make
effective decisions, comply with
the law and meet the needs of
stakeholders.
Examples include Board and leader
composition, pay and rewards,
and ethical operation.
The ESG topics that matter most to MyState
Supporting
customers
Governance,
conduct & culture
Helping our people
be their best
Digital enablement
& data security
Environmental
sustainability
Community
investment
To help customers
make good choices
and to put things
right if they go
wrong.
To continue to
conduct our
business in an
ethical, responsible
and transparent
way – driving the
right behaviours
that put the needs
of stakeholders first.
To drive a culture of
customer centricity
and execution
excellence,
MyState relies on
its people being
at their best.
To continue the
evolution of
MyState’s systems
and products to
meet its customers’
increasing
expectations, and
to keep their money
and data safe.
To help MyState
transition to a
low-carbon
economy.
To enable us to
make a difference
and support our
Tasmanian
community.
What we are doing to integrate ESG into organisational processes
Build ESG consciousness across the organisation.
Maintain ESG reporting and market disclosures.
Manage ESG risks and opportunities through Board and management committees.
Facilitated by
MyState Limited Board
Oversees the development and approval of the ESG strategy.
Managing Director & CEO
Demonstrates and communicates
commitment to ESG by ‘setting the
tone from the top’.
Executive
Responsible for recommending
ESG strategy to the Board and
considering and identifying ESG
opportunities and impacts.
ESG Committee
Proposes ESG strategy to Executives
and keeps track of ESG initiatives and
associated reporting for internal and
external stakeholders.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
17
MyState LimitedAnnual Report 2023
ESG update
continued
1. Supporting customers
To help customers make good choices and put things right if they go wrong.
How we engage
What have we been focusing on
Update at 30 June 2023
• Customer surveys
• Assist customers experiencing
financial hardship
• Customer input to help shape
the future of MyState
• Participation in the Federal
Government’s First Home Loan
Deposit Scheme (FHLDS)
• Assistance to vulnerable customers
• Educating our customers in relation
to fraud, being aware of scams and
staying safe online
• Continuing to enhance our support for
customers experiencing vulnerability
due to circumstances such as financial
hardship, family violence, elder abuse
and scams
• Promptly resolving customer
complaints and interactions with
our customer relations specialists
and MyState’s Customer Advocate
• Account-keeping fee simplification
and reduction across select MyState
Bank products
• Customer communications in
plain language
• 172,224 bank customers
• Customer NPS +35
• 78% of bank customers registered
for internet and mobile banking
• 4,861 complaints handled in FY23
• 84% of complaints resolved in under
five days
• 423 applications supported for
financial hardship over the year
• 1,113 basic transaction accounts
opened
2. Governance, conduct and culture
Our principles of governance, conduct and culture provide the foundations of conducting our business in an ethical,
responsible and transparent way including driving the right behaviours that put the needs of stakeholders first.
How we engage
What have we been focusing on
Update at 30 June 2023
• Membership and active participation
with Australian Banking Association
• Ongoing prudential reporting and
• Annual Board review and
approval of MyState Corporate
Governance Statement
engagement with regulators
• Compliance with Banking Code
• TPT Wealth membership of the
of Practice
United Nations supported Principles
for Responsible Investment (PRI)
• Key vendors screened for modern
slavery assessment over the year
• Culture survey to measure and
• Diversity ratios:
enhance organisational risk culture
– 50% of all leadership roles filled
• Clarity of Executive portfolios and
by women
single points of accountability
– 33% of Non-executive Directors
are women
– 25% of the executive team (direct
reports to the CEO) are women
– 60% of all roles filled by women
• 84% of small business suppliers
paid within 30 days
• MyState subscribes to the ASX
Corporate Governance Council’s
4th Edition Corporate Governance
Principles and Recommendations
and publishes an annual Corporate
Governance Statement and
Appendix 4G in compliance with
ASX Listing Rules
• Full and half-year reporting and
investor presentations
• Regular briefings and meetings
with investors and analysts
• Signatories to the Banking Code
of Practice
• Modern slavery statements
• Human rights statement
• Supplier code of conduct
• Risk Management Strategy and
Framework
• ESG Committee
• Measuring and evolving our
organisational culture and risk
• Diversity and inclusion program
with Board oversight
• Whistle-blower policy (StandUp
program)
• Banking Executive Accountability
Regime (BEAR): BEAR regulates
the accountability of Executives
and Directors for their behaviour
and decision-making
18
MyState LimitedAnnual Report 2023 p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
19
3. Helping our people be their best
To drive a culture of customer centricity and execution excellence we rely on our people being at their best.
How we engage
What have we been focusing on
Update at 30 June 2023
• Clear expectations for workplace
behaviour (Code of Conduct)
• Living the MyState purpose and values
• Employee experience 73%
• Connecting our people with our
• Mandatory training completion 98%
• Clear expectations of individual
strategic ambitions
performance
• Development of our people leaders
• Wellbeing program
• Leadership development
• Evolving our change maturity
• Identifying and assessing human
• Flexible and inclusive work practices
centric capabilities
are available to all staff
• Enhancing the employee experience
to provide meaningful and rewarding
opportunities to our people
• Measuring and understanding
our culture
• Reward and recognition
• Increased focus on empowering our
people to manage their wellbeing
• Employees trained to support
customers in need of extra
care 99%
• Change maturity score of 3.3
(uplift on previous assessment
of 2.2)
4. Digital enablement and data security
We continue to evolve our systems and products to meet our customers’ increasing expectations, keep their money safe
and protect their data.
How we engage
What have we been focusing on
Update at 30 June 2023
• Online deposit product origination
• Internet and mobile banking
capability
• Digital cards and payment methods
(e.g. Apple Pay, real-time payments)
• Open Banking according to the
Consumer Data Right
• Cyber security framework
• Information security policy
• Privacy policy
• Keeping customers and their data and
accounts safe through strengthening
our systems and educating our
customers in relation to data security
and being aware of scams
• Development of our next-generation
digital banking experience
• Redevelopment of our online application
forms to improve and simplify user
experience for our customers
• Making our digital products helpful
(e.g. reminding customers when bills
are due), intuitive and easy to use
• 62% of bank customers on
e-statements
• 78% of bank customers are
registered for internet and mobile
banking
• 96% of bank transactions
completed digitally
MyState LimitedAnnual Report 2023
ESG update
continued
5. Environmental sustainability
Helping us transition to a low-carbon economy.
How we engage
• e-statements
What have we been focusing on
Update at 30 June 2023
• Encouraging customers to adopt
• MyState’s FY23 GHG emissions
• Emphasis on digital communication
e-statements
with customers
• Our year 2 TCFD report.
See following section
footprint was assessed to be 4,519
tonnes of carbon dioxide equivalent
or CO2-e (Scope 1,2 and limited
Scope 3 emissions)
• Scope 3 financed emissions
51,315 tonnes of carbon dioxide
equivalent or CO2-e
• 99% of the energy used in our
Tasmanian HQ was renewable
6. Community investment
Enabling us to make a difference and support our communities.
How we engage
What have we been focusing on
Update at 30 June 2023
• Through the MyState Foundation,
we help young Tasmanians reach
their full potential
• Through our sponsorship of MyState
Bank Arena we are bringing
quality sports and entertainment
experiences to Tasmania
• Distributing our grants and refining
the grants process to make sure the
support is going where it will have
the most impact
• Working with the team at MyState
Bank Arena to make the venue the
heart of sport and entertainment
for all Tasmanians
• $175,000 in community grants
provided through the MyState
Foundation in 2022/23 and over
$2.6m since inception
• 20 community programs supported
through the MyState Foundation
• Colony47 partnership
Task Force on Climate-related Financial Disclosures
(TCFD) report
Introduction
MyState Limited (‘MyState’)
acknowledges that climate change
is a global issue which has significant
implications for the environment,
society and the economy.
MyState supports the
recommendations of the Task
Force on Climate-related Financial
Disclosures (TCFD) and we use
this framework to work towards a
climate-resilient business. MyState’s
FY23 achievements include two
key activities. Firstly, undertaking
a detailed physical and transition
climate scenario analysis across
our national home loan portfolio.
Secondly, updating our emissions
footprint by including our financed
emissions from this portfolio.
Governance
MyState’s Board is responsible for
overseeing MyState’s Environmental,
Social and Governance (ESG) risks
and opportunities, including climate
change. The Board is supported
by the ESG Committee to ensure
that MyState has appropriate risk
management strategies and internal
controls in place. MyState’s ESG
framework is reviewed and approved
by the Board annually.
In FY23, MyState announced a new
purpose with the rally cry, ‘Together
for the better’, which extends to how
we consider decisions in relation to
sustainability and climate resilience.
Across our business, we continued
to assess our environmental impact,
in particular measuring the carbon
footprint of our operational Scope 1,
2 and 3 emissions for FY22 and FY23.
Additionally, we measured our Scope
3 financed emissions for the first time,
focusing on the most significant parts
of our lending portfolio. In FY24 and
beyond we will begin exploring
available operational emissions
reduction initiatives and the potential
contribution these could make to
lowering our carbon footprint.
MyState supports the
recommendations
of the Task Force on
Climate-related Financial
Disclosures (TCFD) and
we use this framework to
work towards a climate-
resilient business.
20
MyState LimitedAnnual Report 2023 Strategy
A changing climate poses both
transition and physical risks and
opportunities. MyState assessed the
exposure of the portfolio, customers,
suppliers and employees to physical
hazards and transition drivers, now
and in the future. In FY23, MyState
identified and prioritised our risks and
opportunities in the short (0 to 5 years),
medium (10 to 15 years) and long
term (20+ years). The risks included
physical climate extremes impacting
the lending portfolio, disruption of
carbon-intensive value chains, and
more ambitious climate policies.
Our climate-related opportunities
were focused on transitioning to a
low carbon economy and enhancing
our business processes to better
capture customer climate data.
We engaged climate experts to
undertake the climate scenario
analysis (Table 1) using two widely
adopted reference climate scenarios
for physical and transition climate
assessments. We assessed the
Shared Socio-economic Pathways
(SSPs)/Representative Concentration
Pathways (RCPs) and the Australian
Energy Market Operator (AEMO)
for the transition assessment as the
energy system transition is a key
aspect that we can support our
customers with. The physical and
transition scenario analysis has
provided insights into how our risks
and opportunities evolve in the
coming decades.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
21
MyState LimitedAnnual Report 2023
ESG update
continued
Table 1: Climate scenario analysis approach
Risk/
opportunity
Climate
scenarios
Transition
Physical
Support customers to transition to the low-carbon
economy and build climate resilience through
innovative services and product offerings.
The impact on our lending portfolio from extreme
weather events including extreme rain, cyclones,
storms and bushfires.
1. Low emissions (AEMO ‘Step Change’)
1. Low emissions (SSP1-2.6 / RCP2.6)
2. Moderate emissions (AEMO ‘Slow Change’)
2. Moderate emissions (SSP2-4.5 / RCP4.5)
3. High emissions (SSP5-8.5 / RCP8.5)
Time horizons
All scenarios assessed were for 2030 and 2050 future time horizons compared to the recent past climate
(approximately over the past two decades).
Climate metrics
chosen as proxies
for hazards and
drivers
• Energy efficiency and electrification
• Extreme rain intensity (1-in-20yr rainfall)
• Evolving customer expectations of financial
service providers and green banking trends
• Extreme rain frequency of events
• Very high fire weather days per year
• Extreme heat days above 35°C per year
• Cyclone intensity and frequency
• Storm surge events and sea level rise
Where we
assessed
Transition metrics and themes were assessed
on state to national levels using climate model
outputs and supporting literature.
Physical metrics and themes were assessed on a
postcode scale using 5km climate model projections
where possible and supporting literature.
Risk management
MyState identifies and manages
risks and associated impacts within
its Risk Management Framework.
The Risk Management Framework
aims at identifying, measuring,
evaluating, monitoring, reporting and
controlling or mitigating all internal
and external sources of risk. Physical
risks impacting our assets and lending
could be managed by, for example,
reminders that mortgage holders have
appropriate insurance and reviewing
our guidance for loans in high risk-
hazard regions.
Physical scenario analysis
Transition scenario analysis
Not dissimilar to other lenders, climate
projections indicate that by 2030 our
portfolio faces heightened exposure
to extreme rain events in Tasmania,
south-east Australia, and Queensland.
Moreover, our portfolio in Western
Australia and northern Queensland
is most exposed to tropical cyclones,
which may shift further south in a
warmer climate. Rising sea levels pose
significant risks to mortgage securities,
with more frequent storm surges
projected for northern and central
Queensland, south-east Australia and
Tasmania. Inland areas of Queensland,
Victoria and New South Wales face a
substantial increase in extreme heat
exposure and heightened bushfire
risks, particularly affecting our lending
in central and northern Queensland.
These severe weather events can
lead to property damage, reducing
collateral value or even complete asset
loss. Additionally, changes in insurance
availability/affordability in the future
may impact customer repayments
and increase hardship claims.
The global shift towards a low-
carbon world necessitates a transition
to clean energy sources such as
renewables. The transition climate
scenario analysis focused on the
potential for customer lending to
support the significant growth in
the installation of rooftop solar
photovoltaic (PV) through to 2050.
In the near term, energy efficiency
and electrification present an
opportunity to support customers to
reduce their exposure to volatile energy
markets. Medium-term (2030s-2040s)
indicators suggest there will be strong
growth in residential battery storage,
with the potential for increased lending
opportunities by 2050. The scenario
analysis also highlighted the increasing
adoption of electric appliances and
improved energy efficiency in
Australian households.
22
MyState LimitedAnnual Report 2023 MyState Limited
Annual Report 2023
Metrics and targets
MyState’s base year (FY21) operational
emissions (Scope 1, 2 and limited
Scope 3 emissions) was assessed
to be 4,690 tonnes of carbon dioxide
equivalent (tCO2-e). This year MyState
completed the inaugural calculation
of its Scope 3 financed emissions for
FY22 and FY23 covering the most
material financed emissions – those
associated with residential mortgage
lending – which accounts for over 95%
of the value of our lending portfolio.
A summary of MyState’s operational
and financed greenhouse gas
emissions for FY22 and FY23 (and
base year, FY21) are presented in
Table 2. Pleasingly, MyState’s emissions
intensity fell in FY23 to 0.57 tCO2-e/$m.
This figure represents the amount of
carbon dioxide equivalent generated
in running MyState’s operations
(our Scope 1, 2 and limited Scope 3
emissions) divided by the size of our
home lending book.
The climate scenario analysis findings
have indicated parts of our business
and lending regions where we can
consider associated metrics and
targets in FY24 and beyond. We are
looking to develop targets related to
physical and transitional issues, and
reducing Scope 1, 2 and 3 emissions.
Table 2: MyState operational and financed greenhouse gas emissions
(tCO2-e) and the percent change in FY23 from FY22
Greenhouse gas emissions
(tCO2-e)
Scope 1 – direct emissions
Scope 2 – electricity-related
emissions
FY211
FY22
FY23
Change
from
FY22
54
271
40
207
41
+3.3%
137
-33.8%
Scope 3 – indirect emissions2
4,365
4,622
4,341
-6.1%
Scope 3 – financed emissions3 Not estimated
44,295
51,315
+15.8%
Total emissions
4,690
49,164
55,834
+13.6%
Emissions intensity (excluding
financed emissions) (tCO2-e/$m)
0.86
0.71
0.57
-20%
1. FY21 has been used as the base year for emissions calculations due to data availability and it being
a year which truly and fairly represents MyState’s activity data.
2. Included within the total Scope 3 emissions boundary was purchased goods and services, capital
goods, fuel, and energy-related activities (not included in Scope 1 and 2), upstream transportation
and distribution, waste generated in operations, business travel, employee computing, upstream
leased assets, and working from home.
3. Scope 3 financed emissions are those linked to MyState’s investment portfolio and lending activities.
The lending portfolio grew 13.5% in FY23.
Looking forward
We are a Tasmanian born and based
company and we are proud of the
economic credentials of our home
state, which is one of the first places
in the world to be carbon negative
and has the most ambitious legislated
emissions reduction target in Australia.
It is an example that is inspiring us to
do more to create and sustain long-
term value in a rapidly changing world.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
23
MyState LimitedAnnual Report 2023
Board of Directors
Vaughn Richtor
Independent Non-Executive
Chairman
• Group Audit Committee
• Group Risk Committee
BA (Hons) MAICD
• Group People Remuneration and Nominations Committee
Vaughn joined the Board as a Non-Executive Director in
September 2019 and was appointed Chairman on 1 April 2022.
He has held CEO roles in Asia and is the former CEO of ING
DIRECT Australia and CEO Challenger and Growth Countries
– Asia, ING Group after joining ING in London in 1991 as
Deputy General Manager UK and Ireland.
Vaughn is a Non-Executive Director of Rest Super and also a
current adviser to Rhizome, Spriggy, Wyvern Health and the
Strategy Implementation Institute in Singapore. He is a prior
Board member of TMB Bank in Thailand, ING Vysya Bank in India,
Kookmin Group in Korea, and a Non-Executive Director, and
later Chairman, of Ratesetter Australia. In addition, he writes
and speaks extensively on leadership, corporate culture,
customer centricity and digital banking.
Robert Gordon
Independent Non-Executive
Deputy Chairman
• Group Risk Committee (Chair)
BSc, MIFA, MAICD, FAMI
• Group People Remuneration and Nominations Committee
Bob has been a Non-Executive Director since February 2009
and prior, a Director of MyState Bank Limited, (previously
connectfinancial), from July 1998. He is President of Football
Federation Tasmania and Chair of the Supported Affordable
Accommodation Trust.
He is the former Managing Director of Forestry Tasmania,
President and a Director of the Institute of Foresters of
Australia and has previously served on the Board of a number
of companies in the tourism, research and development,
construction and infrastructure industries.
Sibylle Krieger
Independent Non-Executive
Director
• Group People Remuneration and Nominations
Committee (Chair)
LLB (Hons), LLM, FAICD, MBA
• Group Risk Committee
Sibylle has been a Non-Executive Director since December 2016
and has over 40 years of broad commercial experience as a
lawyer, economic regulator, company director and independent
consultant. She was a partner in two large commercial law firms
for 22 years and has over 17 years’ experience as a Non-Executive
Director and Chair across listed and unlisted companies in
multiple sectors. Her current portfolio includes financial services,
fintech, essential infrastructure services and energy.
model. She has previously served as Chair of Xenith IP Group
Limited (ASX:XIP) and as a Director of Sydney Ports Corporation,
Allconnex Water (South-East Queensland), TasWater, Vector
Limited (NZX:VCT), the Australian Energy Market Operator Ltd
(AEMO), and as a trustee of the Royal Botanic Gardens and
Domain Trust and of Sydney Grammar School. In addition, for
six years Sibylle served as a Tribunal member of the principal
NSW economic regulatory tribunal.
Sibylle is currently a Non-Executive director of Ventia Services
Group Limited (ASX:VNT), AEMO Services Limited and Openpay
Group Limited (ASX:OPY). She is also a member of the advisory
board of Law Squared, a challenger to the traditional law firm
She holds undergraduate and post-graduate degrees in law
and an MBA from Melbourne Business School. She is a Fellow
of the Australian Institute of Company Directors.
24
MyState LimitedAnnual Report 2023 Warren Lee
Independent Non-Executive
Director
BCom, CA
• Group Audit Committee
• Group Risk Committee
Warren was appointed as a Non-Executive Director in October
2017 and appointed Chairman of TPT Wealth in August 2023.
He has extensive experience in the international financial services
industry, including 15 years at AXA in senior management
positions within the company’s Australian and Asian businesses.
Warren was previously the Chief Executive Officer of the Victorian
Funds Management Corporation and Chief Executive Officer,
Australia and New Zealand for AXA Asia Pacific Holdings Limited.
He has previously served as a Director of Avenue Bank Limited
and Tower Limited.
Warren is currently a Non-Executive Director of MetLife Limited,
Warakirri Asset Management Limited and Flinders Investment.
Stephen Davy
Independent Non-Executive
Director
• Group Risk Committee
• Group Audit Committee
BSc (Hons)
• Group People Remuneration and Nominations Committee
Stephen was appointed as a Non-Executive Director in July 2021.
He was formerly Chief Executive Officer and Director of Hydro
Tasmania, a position he held from 2013 to 2020. Prior to that role
he held senior executive roles at Hydro Tasmania, Eraring Energy,
Societe General and Bankers Trust and started his banking
career at Macquarie Bank. Stephen is also a Director at
Sonic Civil Investments and at Volunteering Tasmania.
Andrea Waters
Independent Non-Executive
Director
• Group Audit Committee (Chair)
BCom, FCA, GAICD
• Group Risk Committee
Andrea was appointed as a Non-Executive Director in October
2017. She is an experienced Non-Executive Director, auditor and
accountant with over 35 years’ experience in financial services.
She is a Fellow of Chartered Accountants Australia & New Zealand,
and both a member and accredited facilitator of the Australian
Institute of Company Directors. She is a former partner with
KPMG, specialising in financial services audit.
Andrea is the Chairman of the Colonial Foundation and a
Director of Bennelong Funds Management Group, Citywide
Service Solutions Pty Ltd, Helia Group Limited (ASX:HLI)
and Grant Thornton Australia Ltd. Prior, she was a Director
of The Lord Mayor’s Charitable Foundation, Chartered
Accountants.
Brett Morgan
Managing Director and
Chief Executive Officer
BEc, MAppFin
Brett commenced with the MyState Group on 17 January 2022.
He was previously Chief Executive Officer, Banking and Wholesale
at ASX listed BNK Banking Corporation Limited (ASX:BBC) and
has extensive digital banking experience having held a number
of key executive roles over 15 years at ING DIRECT.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
25
MyState LimitedAnnual Report 2023
Key Management Personnel
Brett Morgan
Managing Director and CEO
Appointed January 2022
BEc, MAppFin
Brett commenced with the MyState Group on 17 January
2022. He was previously Chief Executive Officer, Banking
and Wholesale at ASX listed BNK Banking Corporation
Limited (ASX:BBC) and has extensive digital banking
experience having held a number of key executive roles
over 15 years at ING DIRECT.
Paul Moss
Chief Operations Officer
Appointed May 2015
BEng (Hons)
As Chief Operating Officer, Paul is responsible for the
strategic direction and delivery of MyState Limited Group’s
Technology, Data, Cyber and Banking Operations.
Paul was previously a Director of IT Advisory at KPMG,
following 11 years at Betfair in the UK and Australia as
Director of Information Systems and Operations, focusing
on strategy development, global infrastructure deployments
and customer experience. Prior, Paul occupied technical
leadership positions in UK-based investment banks.
Gary Dickson
Chief Financial Officer
Appointed October 2019
BCom, MBA (Executive), FCA
As Chief Financial Officer, Gary is responsible for managing
the finance, treasury, regulatory reporting, strategy and
property functions for MyState. Gary is also a Director
of Connect Asset Management Pty Ltd.
Gary has over 30 years of experience in a variety of
financial roles, with 15 years of CFO experience. His most
recent position was at ME Bank as CFO, where he drove
strong growth in key financial metrics during his six-year
tenure. Prior to this, Gary held the position of CFO for
AXA Australia for five years. His prior financial services
roles include senior positions with the Colonial First State
Group, the Investments & Insurance Services division at
Commonwealth Bank and Portfolio Partners Limited.
Mandakini Khanna
Chief Risk Officer
Appointed December 2015
BCom, GAICD, FGIA
Mandy is responsible for both financial and non-financial
risks at MyState. She chairs the group Enterprise Risk
Committee and the ESG Committee.
Mandy has over 25 years’ experience in banking and
financial services across sales, product management,
operations and risk management. Prior to joining MyState
in December 2015 Mandy was the Chief Credit Officer
for GE Capital, before which she held various senior risk
positions in GE Capital across Asia Pacific.
26
MyState LimitedAnnual Report 2023 Tim Newman
General Manager, Lending
Appointed June 2023
As General Manager, Lending, Tim is responsible for all
elements of MyState’s retail lending business – including
product development, distribution, operations and
service delivery.
Tim joined MyState in 2022 as Head of Business
Transformation. Prior to this Tim spent 15 years at ING
Australia in a variety of senior leadership positions across
the retail bank – including Head of Product, Head of
Strategy, Head of Customer Experience and Service,
and Executive Director for Operations.
Janelle Whittle
General Manager, People
Community and Public Relations
Appointed January 2018
BCom, MHRM
Janelle has overall responsibility for MyState Limited
Group’s human resources function, community portfolio
including the MyState Bank Community Foundation,
and Public Relations.
People and culture has a key role in developing and
fostering an organisational culture to support MyState’s
growth aspirations. Janelle has over 20 years’ experience
in human resource management across a number of
industries including aquaculture, utilities and higher
education. Her previous senior leadership positions in
human resources include General Manager People and
Culture at Aurora Energy, and Director Organisational
Design and Change at the University of Tasmania.
Claudio Mazzarella
General Manager, Everyday
Banking & Marketing
Appointed May 2023
GradDip Management
As General Manager, Everyday Banking & Marketing,
Claudio has strategic, commercial and operational
responsibility for MyState’s Everyday Banking & Marketing
business that includes product (deposits), digital,
marketing, payments, retail branches and contact centre
that is designed to drive customer and deposit growth.
Claudio has over 18 years’ experience across financial
services and digital banking in senior business and
functional leadership roles spanning product, payments,
digital, marketing, channel management, operational
support and transformation. He was previously General
Manager, Group Payments at BOQ, before which he was
General Manager for Products and Payments at ME Bank.
He has also held key functional roles at NAB and Coles
Myer Ltd (now Coles Group).
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
27
MyState LimitedAnnual Report 2023
Directors’ report
Your Directors present their report for MyState Limited and its controlled entities (the Group) for the year ended 30 June 2023.
Directors
• Vaughn Richtor BA (Hons), MAICD
Chairman and Independent Non-Executive Director.
• Robert Gordon BSc, MIFA, MAICD, FAMI
Deputy Chairman and Independent Non-Executive Director.
• Brett Morgan BEc, MAppFin
Managing Director and Chief Executive Officer – Executive Director.
• Stephen Davy BSc (Hons)
Independent Non-Executive Director.
• Sibylle Krieger LLB (Hons), LLM, FAICD, MBA
Independent Non-Executive Director.
• Warren Lee BCom, CA
Independent Non-Executive Director.
• Andrea Waters BCom, FCA, GAICD
Independent Non-Executive Director.
Company secretary
• Scott Lukianenko Ad Dip BMgmt, Grad Dip BA, GIA (Cert).
Principal activities
MyState Limited (MyState) provides banking, trustee and managed fund products and services through its wholly-owned
subsidiaries MyState Bank Limited (MyState Bank) and TPT Wealth Limited (TPT Wealth).
MyState Bank delivers home lending, savings and transactional banking solutions through digital and branch channels,
an Australian-based contact centre, mobile lenders and mortgage brokers.
TPT Wealth delivers asset management and trustee services through relationship managers, digital channels and an Australian-
based estate planning, trust administration and support team.
There have been no significant changes in the nature of the principal activities of the Group during the year.
Dividends
Dividends paid in the full year ended 30 June 2023 were as follows:
• For the year ended 30 June 2022, a fully franked dividend of 11.50 cents per share, amounting to $12.18m was paid
on 7 September 2022.
• For the half-year ended 31 December 2023, a fully franked dividend of 11.50 cents per share, amounting to $12.54m
was paid on 21 March 2023.
The Directors have declared a fully franked final dividend of 11.5 cents per share. The dividend will be payable on
19 September 2023 to shareholders on the register at the record date of 24 August 2023, taking the dividend for the
full year to 23.0 cents per share.
Operating and financial review
Financial performance
The Group delivered a record net profit after income tax for the year ended 30 June 2023 of $38.5m, an increase of 20.2%
on the prior corresponding period (pcp) to 30 June 2022 of $32.0m.
Earnings per share (EPS) was 35.5 cents per share (FY22: 30.3 cents per share), return on equity (ROE) was 8.7% (FY22: 7.7%)
and the cost to income ratio (CTI) was 64.0% (FY22: 68.4%). These key metrics speak to the business momentum generated
this financial year through the execution of the Group’s growth strategy and the resulting operating leverage, led by strong
income growth and disciplined cost management.
28
MyState LimitedAnnual Report 2023 Group net profit after tax ($m)
36.3
32.0
38.5
FY21
FY22
FY23
The total loan book (excluding capitalised acquisition costs) grew $937m or 13.5% on June 2022. The home loan book grew
$962m (14.1% or 2.9 times system growth) during the period. MyState maintains a disciplined approach to credit risk and a
sustained focus on asset quality.
Pre-provision operating profit of $57.7m increased 30.3% on pcp, largely driven by an increase in operating income of $20.2m
or 14.4%, partly offset by expense growth of 7.1%. MyState’s strategy is to accelerate growth and create scale by growing market
share in deposits, lending and funds under management (FUM), as evidenced by loan book and customer deposit growth,
and a 33% uplift in new customers joining MyState in the past 12 months.
In 2023, MyState’s award-winning Bonus Saver account featured in the Finder Banking Awards 2023, celebrating Australia’s
best transaction, savings and term deposit accounts. Using 12 months’ worth of data, Finder’s experts have analysed the rates,
fees and offer details for hundreds of everyday deposits accounts and recommended the Bonus Saver account in the ‘Best
Savings account’ category.
Despite a period of significant change and the challenges presented by the rising cost of living in recent times, MyState’s internally
measured customer net promoter score was +35 at 30 June 2023, and reflects a high level of ongoing customer advocacy.
MyState Bank
Exceptional lending growth and credit quality was maintained in FY23. MyState Bank’s loan portfolio grew 13.5% from
30 June 2022, reaching $7,876m at 30 June 2023.
Total loan book composition ($m)
6,939
6,838
7,876
7,799
5,592
5,447
Jun 21
Jun 22
Jun 23
Housing Loans
Other Loans (personal/business/overdrafts)
Impairment expense was $3.3m higher than pcp, reflecting an increase in total collective provisions, consistent with an increase
in arrears in a rising interest rate environment.
MyState’s 30 and 90-day arrears remain below industry benchmarks at 0.81% and 0.34% respectively (30 June 2022: 0.41%
and 0.20%).
Arrears are higher than 12 months ago reflecting increases of 400bps in the official cash rate since May 2022 and the rising
cost of living due to elevated levels of inflation.
Central banks globally still have a fine balancing act ahead, to manage inflation down without stalling economic activity
and pushing economies into recession.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
29
MyState LimitedAnnual Report 2023
Directors’ report
continued
The Bank remains focused on low-risk, owner-occupied lending with a loan to valuation ratio (LVR) of less than 80%.
Exposure to investor and interest-only lending remains relatively low compared to sector averages.
The increase in loans with an LVR greater than 90% since June 2021 reflects the success of the Bank’s participation in the Federal
Government’s First Home Loan Deposit Scheme (FHLDS), which is all owner-occupied lending. The FHLDS is an Australian
Government initiative to support eligible customers purchase their first home sooner with as little as a 5% deposit.
The National Housing Finance and Investment Corporation (NHFIC) provides a guarantee of up to a maximum amount of 15%
of the value of a property (as assessed by MyState) purchased under the scheme.
All non-FHLDS loans with an LVR >80% are mortgage insured.
Home loan book – LVR profile ($m)
5,447
507
23% 411
339
77%
4,190
6,838
752
467
298
5,321
7,799
940
619
395
>90%
85%-90%
80%-85%
25%
5,845
<80%
75%
Jun 21
Jun 22
Jun 23
<80% LVR
80%-85% LVR
85%-90% LVR
>90% LVR
Net interest margin (NIM) trend
Net interest income was up $22.3m or 20.3% on pcp as a result of a larger average balance sheet, partly offset by a fall in
NIM. The fall in average NIM of 4bps to 1.63% during the year reflects intense competition in the market for new home loans,
higher funding costs and above-system loan book growth.
1.96%
1.67%
1.71%
1.55%
1.63%
FY21
FY22
1H23
2H23
FY23
Customer deposits ($m)
4,462
2,965
1,497
Jun 21
5,552
3,401
2,151
Jun 22
Customer deposits at call
Customer deposits at term
6,236
3,374
2,862
Jun 23
30
MyState LimitedAnnual Report 2023 Customer deposits increased by 12.3% in the period driven by growth in term deposits with customers acquired evenly across
the branch network, digital, online and third party channels.
The Bank’s online originated deposit portfolio grew an additional $229m to $1,130m (25.5%) from 30 June 2022.
MyState welcomed a further 25,690 new to bank customers this financial year.
Securitisation funding increased during the period and remains an important source of funding in conjunction with an increase
in customer deposits.
Non-interest income from banking activities decreased by $1.6m or 10.7% on pcp, as a result of lower transaction and loan fees.
TPT Wealth
Funds under management ($m)
TPT Wealth provided $14.3m in fee revenue and income diversification for the Group.
1,105
1,062
994
Jun 21
Jun 22
Jun 23
Income from wealth management activities decreased by $0.5m or 3.5% on pcp, with TPT Trustee Services income slightly
lower over the year and Investment Services income lower due to a fall in average funds under management (FUM).
FUM decreased $68m from 30 June 2022 with the Income Funds declining by $80m, partly offset by increases in the At Call
Fund of $7m and the Growth Funds by $5m.
Capital position
The Group’s total capital ratio increased to 15.43% at 30 June 2023 and the Group’s Common Equity Tier 1 ratio increased
to 11.22%.
Further capital flexibility was provided during the period by the inaugural issue of Additional Tier 1 capital and further securitisation.
During the year MyState issued a $400m Term RMBS and established a new committed warehouse funding agreement.
Both transactions support MyState’s growth strategy and provide flexibility to MyState’s capital management strategy.
On 1 January 2023, the Group transitioned to the Australian Prudential Regulation Authority’s (APRA) new bank capital
framework and has met the new requirements at all times.
Capital
12.41%
1.88%
10.53%
0.87%
1.43%
0.34%
0.48%
0.99%
1.12%
0.47%
0.36%
2.30%
15.43%
1.89%
2.32%
11.22%
Jun 22
Other capital
initiatives
AT1
issuance
Profit
Dividends
paid
Capitalised
intangibles
Securitised
assets
Secured
mortgage
lending
Basel 3
benefits
Other asset
growth
Jun 23
CET1 capital
AT1 capital
Tier 2 capital
Increase
Decrease
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
31
MyState LimitedAnnual Report 2023
Directors’ report
continued
Community
MyState seeks to make a genuine difference to customers and the communities within which they operate.
Since 2001, the MyState Foundation has awarded more than $2.6m in grants to help not-for-profit organisations in Tasmania
with a focus on helping young Tasmanians reach their full potential. In FY23, the MyState Foundation continued to support the
Tasmanian community by providing grants of more than $175,000 to 20 recipients focused on providing greater opportunities
for youth.
Outlook
The Board-endorsed plan to accelerate growth in lending has gained momentum. In the medium term, the business is seeing
the realisation of the benefits from its investment in digital capabilities, distribution and marketing to grow the customer base,
while maintaining a strong risk culture to manage the risks associated with an uncertain economic environment.
Lead auditor’s independence declaration under section 307C
of the Corporations Act 2001
The lead auditor’s independence declaration is set out on page 34 and forms part of the Directors’ Report for the year ended
30 June 2023.
Rounding of amounts
In accordance with applicable financial reporting regulations and current industry practices, amounts in this report have
been rounded-off to the nearest one thousand dollars, unless otherwise stated. Any discrepancies between totals and sums
of components in charts contained in this report are due to rounding.
Events subsequent to balance date
In the opinion of the Directors, there has not arisen in the period between the year ended 30 June 2023 and the date of this
report, any material item, transaction or event that is likely to significantly affect the operations of the Group.
Environmental regulation
The Group is not subject to any significant environmental regulation. A Task Force on Climate-related Financial Disclosures
(TCFD) report outlining MyState’s baseline Scope 1, 2 and 3 greenhouse gas (GHG) emissions associated with the activities
and facilities that support the businesses’ everyday operations has been included in this Annual Report.
Directors’ meetings
The number of meetings of Directors (including meetings of the Committees of Directors) held during the year and the number
of meetings attended by each Director are as indicated in the following table:
MYS Directors
S Davy
R Gordon
S Krieger
W Lee
B Morgan
V Richtor
A Waters
MYS Board
Meetings
Group Audit
Committee
Group Risk
Committee
A
15
15
15
14
15
14
15
B
15
15
15
15
15
15
15
A
7
n/a
n/a
7
n/a
6
7
B
7
n/a
n/a
7
n/a
7
7
A
5
5
5
5
B
5
5
5
5
n/a
n/a
5
5
5
5
Group People,
Remuneration
and Nominations
Committee*
Group Digital
and Marketing
Committee
A
4
4
4
n/a
n/a
4
n/a
B
4
4
4
n/a
n/a
4
n/a
A
n/a
4
n/a
3
n/a
4
4
B
n/a
4
n/a
4
n/a
4
4
A = Number of meetings attended. B = Number of meetings eligible to attend.
* The Group People and Remuneration Committee merged with the Group Nominations and Corporate Governance Committee on 1 June 2022 to
become the Group People, Remuneration and Nominations Committee.
32
MyState LimitedAnnual Report 2023 Indemnification and insurance of Directors and Officers
The Company has paid, or agreed to pay, a premium in relation to a contract insuring the Directors and Officers listed in this
report against those liabilities for which insurance is permitted under Section 199B of the Corporations Act 2001.
The Company has not otherwise, during or since the relevant period, indemnified or agreed to indemnify an Officer or auditor
of the Company or of any related body corporate against a liability incurred as such an Officer or auditor.
Non-audit services
During the year, Wise Lord & Ferguson, the Company’s auditor, has performed certain other services in addition to their
statutory duties. Further details are set out in note 8.2 to the financial statements.
The Board has considered the non-audit services provided during the year by the auditor and, in accordance with written
advice provided by the Group Audit Committee, is satisfied that the provision of those non-audit services during the year by
the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001,
for the following reasons:
• all non-audit services were subject to the corporate governance procedures adopted by the Company and have been
reviewed by the Group Audit Committee to ensure that they do not impact the integrity and objectivity of the auditor; and
• the non-audit services provided do not undermine the general principles relating to auditor independence as they related
to technical disclosure issues.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
33
MyState LimitedAnnual Report 2023
Auditor’s independence declaration to the Directors
AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn ttoo tthhee DDiirreeccttoorrss ooff MMyySSttaattee LLiimmiitteedd
In relation to our audit of the financial report of MyState Limited for the financial year ended
30 June 2023, to the best of my knowledge and belief, there have been no contraventions of
the auditor independence requirements of the Corporations Act 2001 or any applicable code
of professional conduct.
WWIISSEE LLOORRDD && FFEERRGGUUSSOONN
NNIICCKK CCAARRTTEERR
Partner
Wise Lord & Ferguson
Date: 18 August 2023
34
MyState LimitedAnnual Report 2023
Remuneration report
Letter from the Chair of the Group People, Remuneration and Nominations Committee
Dear Shareholder,
The 2023 financial year (FY23) marked a significant year of change for MyState Limited, the first full year with our new Managing
Director and Chief Executive Officer Brett Morgan, a refresh of the executive team, and the second year of our growth strategy.
On behalf of the Board, I present to you the Company’s Remuneration report (Report) for FY23.
In broad terms, the purpose of MyState’s Executive remuneration framework has always been to facilitate long-term sustainable
value creation for MyState’s shareholders. This includes ensuring levels of remuneration are market competitive to attract,
motivate and retain suitably qualified individuals focused on MyState’s strategic priorities. The performance conditions and
measurement timeframes are consistent with the objective of long-term sustainable growth, and our performance targets are
designed to be challenging. The payment vehicles and ownership requirements are designed to align executive and shareholder
interests, with the deferral and vesting periods designed for appropriate long-range risk management, and to be consistent
with the regulatory frameworks in which MyState conducts business.
The Report describes the Group’s Director and Executive remuneration frameworks and how they contribute to the execution
of our business strategy and support our values and desired culture. Our financial performance for FY23 was very strong in our
banking business, while in comparison weaker performance in the wealth business resulted in gateway requirements for the
payment of short-term incentives not being met. The Board has, however, exercised the discretion which it always holds and
awarded cash bonuses to select Executives for their significant contribution to our record Group performance.
FY23 Executive remuneration framework
It may be helpful to recap the design principles that underlie the MyState executive remuneration framework, further details
of which are set out in the Report:
Executive remuneration arrangements should be fit-for-purpose for MyState’s overall business strategy and appropriate for the
size and complexity of the business. Remuneration should be competitive in the market to ensure that MyState is able to attract,
motivate and retain talented executive leaders. Remuneration, particularly MyState’s incentive arrangements, should be
aligned to the interests of MyState’s shareholders. Executive remuneration should drive appropriate behaviours and support
the desired culture. Remuneration frameworks should be simple, transparent and readily linked to MyState’s strategic objectives.
Short-term incentive: STI performance is measured over a single financial year. STI payments are subject to financial and
non-financial gateways and are also subject to overriding Board discretion. The performance measures for STI vary from
Executive to Executive to take into account their spheres of control and influence, but also to encourage teamwork and
collaboration. STI performance measures are a mixture of financial and non-financial measures including risk management.
The Group People, Remuneration and Nominations Committee meets jointly with the Group Risk Committee each year to
see that risk management is properly reflected in variable remuneration outcomes.
Long-term incentive: MyState has a long-term incentive (LTI) arrangement that has been designed to align Executives with
long-term value creation for shareholders. The LTI design aims to provide Executives with a simple, transparent and meaningful
incentive. LTI performance is measured over three years with an additional holding lock of a further two years. LTI awards
are subject to return on equity and relative total shareholder returns performance hurdles, and are also subject to overriding
Board discretion.
Minimum shareholding requirements: Consistent with ASX practice, MyState has minimum shareholding requirements for its
Non-Executive Directors and Managing Director, such that each individual is required to build and maintain a minimum level
of shareholding in MyState to align their interests with shareholders. The minimum shareholding requirement is determined
by reference to base fees or fixed reward.
External advice: From time to time we seek independent advice in respect of the structure and levels of our Executive
remuneration and Non-Executive Director fees to ensure that they remain competitive compared with the markets from which
we recruit. In the course of FY23 we sought advice from Mercer, which will be taken into account in setting Executive and
Non-Executive remuneration for FY24.
We hope that you find this brief overview helpful in understanding the context in which we think about Executive and
Non-Executive remuneration and in which the Report was prepared. We welcome your feedback. Please email any
comments to secretariat@mystatelimited.com.au.
Sibylle Krieger
Chair – Group People, Remuneration and Nominations Committee
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
35
MyState LimitedAnnual Report 2023
Remuneration report
continued
Our people and our Company
Key Management Personnel and Directors who served our Company in the year ended 30 June 2023 were:
Name
Role
Vaughn Richtor
Chairman
Stephen Davy
Non-Executive Director
Robert Gordon
Non-Executive Director
Commenced
1 September 2019
1 July 2021
12 February 2009
Group, People,
Remuneration
and Nominations
Committee
✓
✓
✓
Sibylle Krieger
Non-Executive Director
1 December 2016
Chair
Warren Lee
Non-Executive Director
Andrea Waters
Non-Executive Director
Brett Morgan
Managing Director, Chief Executive Officer
Gary Dickson
Chief Financial Officer
Mandakini Khanna
Chief Risk Officer
Paul Moss
Chief Operating Officer
Tim Newman
General Manager Lending
19 October 2017
19 October 2017
17 January 2022
19 October 2019
12 December 2015
13 May 2015
12 June 2023
Janelle Whittle
General Manager People, Community and Public Affairs
22 January 2018
Claudio Mazzarella General Manager Everyday Banking and Marketing
29 May 2023
Name
Role
Heather McGovern
General Manager Digital and Marketing
Alan Logan
Huw Bough
General Manager Wealth Management
General Manager Banking
Ceased
13 July 2022
9 June 2023
2 October 2023
Our remuneration framework
Philosophy and principles
MyState Limited’s remuneration policy is founded on a company-wide commitment to transparency, ethical practices and
the creation of long-term value. The framework is designed to encourage and reward actions by executives that deliver positive
results for both customers and shareholders through good discipline and strong financial performance, prudent risk management,
and the maintenance and enhancement of our company’s earned and valued reputation for trustworthiness in the market for
financial services. The remuneration policy is designed to support these objectives through:
• Appropriately structured performance-based pay for executives and other eligible employees, including short-term and
long-term incentive plans.
• Recognition and reward for strong performance linked to both favourable customer experiences and positive sustainable
returns to shareholders.
• A thoughtful balancing of the company’s capacity to pay and our need to attract and retain excellent staff at all levels.
• Careful structuring of remuneration for our risk and financial control managers, including performance-based payments,
to preserve their independence in carrying out their important roles.
• Board discretion over variable remuneration generally, including discretion to apply malus (reduction or forfeiture)
to Executive incentives, when appropriate, to preserve the interests of shareholders and customers and avoid unexpected
or unjust outcomes.
• Enhancement of risk management and governance by maintaining separate structures for Non-Executive Director
remuneration and Executive remuneration.
36
MyState LimitedAnnual Report 2023
Directors’ remuneration
MyState’s Non-Executive Directors (NEDs) are paid annual fixed fees, including statutory superannuation, for their services.
They are also entitled to reimbursement of reasonable expenses.
Unlike executives, Non-Executive Directors do not receive short-term or long-term incentive payments. The Board determines
the level of fees paid to Non-Executive Directors according to two main criteria:
• the level of skill and experience required to conduct their roles; and
• the level of fees needed to attract and retain talented Non-Executive Directors.
The Board has obtained independent advice from Mercer executive remuneration consultants to guide its deliberations on
Director fees. The aggregate remuneration paid to all NEDs, including statutory superannuation, may not exceed the amount
fixed by shareholders, which is currently $950,000 per year. This total amount has now remained unchanged for 11 years.
Each NED currently receives a base fee of $110,000 per annum, and the Chairman receives $236,500 per annum. Chairs of
Board Committees (other than the Board Chair) receive an additional $10,000 per annum, the TPT Wealth Limited Board Chair
receives an additional $30,000 per annum and the Deputy Chair receives an additional $10,000 per annum.
Managing Director and executive remuneration
Executive remuneration mix
MyState Limited’s remuneration packages for the Managing Director and executives who report directly to the Managing
Director are structured to support the company’s ability to attract and retain talented and experienced leaders, and to provide
incentives and rewards for high performance and achievement of the company’s goals and objectives over the short, medium
and long term. Executive remuneration packages comprise three elements: total fixed reward (TFR), cash-based short-term
incentives (STI) and executive long-term incentive plan (ELTIP).
1. Total fixed reward TFR
incentives STI
plan ELTIP
2. Cash-based short-term
3. Executive long-term incentive
Total fixed reward (TFR) for executives,
including the Managing Director,
comprises a fixed base salary,
superannuation contributions and
optional salary sacrifice. The level
of payment is set with reference to:
• the relative strategic value and
importance of the role;
• the complexity and breadth
of the role;
• experience and skills required; and
• external market considerations
for comparable positions.
Base salary rates are set with a view
to attracting and retaining talented
and culturally aligned executives,
while delivering value to shareholders.
Executive salaries are periodically
reviewed to take into account external
market conditions, the business-critical
nature of the role, and individual
performance.
Cash-based short-term incentives
(STI) provide appropriate rewards to
executives for meeting or exceeding
performance targets and achieving our
core company goals – both financial
and non-financial. To this end, STI
performance measures and associated
targets are set with reference to the
drivers of annual company performance
and the roles of individual executives in
achieving positive business outcomes.
The level of STI assigned to executives
is calculated annually using an STI
‘scorecard’, which comprises multiple
performance elements. These include
financial, growth, cultural, risk and
compliance, reputational, customer and
stakeholder measures. Financial and
non-financial gateways serve to balance
reward with MyState’s profitability and
to avoid rewarding conduct that is
inconsistent with our values and risk
framework. The STI is calculated as
a percentage of TFR for each role,
and the maximum percentage of
TFR payable as an STI is determined
by the Board.
Long-term incentive payments to
executives, in the form of company
shares or performance rights, under
the ELTIP exist to encourage and
culturally embed long-term thinking
and risk management among
our company leaders. Long-term
planning plays an indispensable role in
preparing the company to meet future
challenges in an evolving financial
services marketplace, and to take
advantage of new opportunities as
they arise. MyState’s ongoing transition
to a national, digital business model
exemplifies this approach – one designed
to meet the ever-changing needs of
customers and to sustain long-term
value for shareholders.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
37
MyState LimitedAnnual Report 2023
Remuneration report
continued
FY24 Executive remuneration breakdown
Managing Director & CEO – total target reward
Total fixed remuneration 40%
Maximum STI 28%
Maximum ELTIP 32%
Paid as cash. Performance assessed
against business performance for
the financial year
Paid as shares or performance rights
Total shareholder
return (TSR) 75%
Return on equity
(ROE) 25%
70% of total fixed reward
80% of total fixed reward
Executives – total target reward
Total fixed remuneration 59%
Maximum STI 18%
Maximum ELTIP 23%
Paid as cash. Performance assessed
against business and individual
performance for the financial year
Paid as shares or performance rights
Total shareholder
return (TSR) 75%
Return on equity
(ROE) 25%
30% of total fixed reward
40% of total fixed reward
CRO –total target reward
Total fixed remuneration 62%
Maximum STI 19%
Maximum ELTIP 19%
Paid as cash. Performance assessed
against business and individual
performance for the financial year
Paid as shares or performance rights
Total shareholder
return (TSR) 75%
Return on equity
(ROE) 25%
30% of total fixed reward
30% of total fixed reward
Remuneration governance
A Group People, Remuneration and Nominations Committee – appointed by the MyState Board and comprising four
Non-Executive Directors – assists the Board in discharging its remuneration governance responsibilities. Among a range
of functions, the Committee reviews and makes recommendations to the Board on:
• remuneration arrangements for Directors, the Managing Director and other Executives;
• Executive incentives, including setting gateways, performance measures and targets at the commencement of the performance
period, and assessing performance outcomes against these measures and targets at the conclusion of the performance
period, and making recommendations for payment or otherwise; and
• the appropriate exercise of Board discretion on variable remuneration matters.
The Committee assists the Board to meet remuneration obligations required by APRA Prudential Standards and the Banking
Executive Accountability Regime (BEAR). The Committee also aims to eliminate conflicts of interest from decisions concerning
executive remuneration. To this end, no executive is directly involved in deciding their own remuneration.
Company performance
MyState’s financial performance in recent years has helped to inform the level of incentive-based remuneration – both short
term and long term.
In May 2021, the company announced a substantial capital raise and its intention to accelerate growth. The growth strategy
has the following objectives:
• accelerated home loan and retail deposit growth over the medium term, while maintaining asset quality;
• improved operating leverage (as measured by the cost to income ratio) in line with business growth;
• ROE accretion as capital is deployed; and
• sustainable growth in EPS over the medium term.
38
MyState LimitedAnnual Report 2023 As shown below, in FY23 the company has delivered a record full-year profit and strong momentum across key metrics.
Indicator
Statutory profit after income tax ($’000)
Statutory earnings per share (EPS) (cents)
Dividends paid ($’000)
Share price (dollar)
Statutory average return on equity (%)
Statutory cost-to-income ratio (%)
Key highlights for FY23 include:
2019
30,987
34.17
26,016
4.49
9.7
64.8
2020
30,060
32.86
26,241
3.93
9.2
62.8
2021
36,341
39.18
11,508
4.68
10.3
63.1
2022
32,026
30.34
26,874
4.08
7.7
68.4
2023
38,502
35.45
24,720
3.17
8.7
64.0
• Record customer growth and strong portfolio growth across home lending and deposits.
• Improved operating leverage with the cost-to-income ratio falling 440 basis points.
• ROE and EPS accretion as the growth capital has been deployed.
The company has performed strongly across
various financial indicators in FY23.
Home loans
book – $7.8b
– up 14.1%
on the pcp
Geographical spread
with 68% of the
home loan book on
mainland Australia
Customer
deposits $6.2b
– up 12.3% on pcp
19,346 new
to bank customers
– up 33% on pcp
Strong customer
advocacy
(NPS +35)
Transformation
to a national
digital business
model with 96%
of transactions
completed digitally
pcp – previous corresponding period
NPS – Net Promoter Score
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
39
MyState LimitedAnnual Report 2023
Remuneration report
continued
Short-term incentive (STI) payments
How STI payments are calculated
Each year, the Group People, Remuneration and Nominations Committee (the Committee) recommends to the Board key
performance indicators (KPIs) for the Managing Director with reference to short-term incentive payments. The Managing Director,
in turn, recommends KPIs for executives to the Committee, which then makes a recommendation to the Board. KPIs for STI
payments include both financial and non-financial metrics that are considered consistent with the business plans of the Group
and also supportive of the desired culture of the Group.
At the end of each financial year, the Managing Director assesses the performance of the executives against their KPIs and
makes a recommendation for each executive to the Committee. Simultaneously, the Committee assesses the performance
of the Managing Director against the relevant KPIs. After consultation with the Chair of the Group Risk Committee, the Committee
recommends STI payment amounts for approval by the Board.
The Board retains complete discretion over STI payments, including the right to reduce or forfeit payments as it sees fit.
The annual STI component may be reduced or forfeited if the company, or an individual executive, does not meet the ‘gateway’
criteria approved by the Board at the start of the financial year.
Threshold performance levels for risk and compliance, executive behaviour standards and profit must be met or exceeded
for payments to be made under the STI program.
Executives are assessed as a group with reference to performance on net profit, and on risk and compliance – including
corporate reputational matters. Individual executive behaviours are assessed against the MyState values, and individual
executives’ risk and compliance accountabilities are measured via a scorecard comprising several indicators. The Board
has the discretion to reduce the STI (including to zero) if any of these gateways are not met.
The STI scorecard includes a mix of financial and non-financial metrics, with the relative weightings varying between different
executive roles.
The scorecard comprises a diverse list of both quantitative and qualitative performance measures (or criteria), which have been
chosen with a view to driving positive outcomes not just for MyState shareholders, but also for customers, employees and other
key stakeholders of the organisation.
Quantitative performance measures include earnings per share, cost to income ratio, funds under management, loan book
growth, net customer growth and employee engagement. Executives are also individually assessed with reference to their
performance as leaders in their specific roles, and to their individual contributions to the future development of the organisation.
The Board has the discretion to vary STI outcomes to reflect differing levels of performance.
The 3 Cs – MyState Values
Create customer ‘wow’
Chase the better
Collaborate to win
• We walk in our customers’ shoes
• We are bold in our ambition.
• We care for each other, our customers,
and appreciate their perspectives.
• We seek out and embrace the
partners and community.
• We think and act in the best interest
change that is required to succeed.
• We give our best, do the right thing,
of our customers.
• We have the courage to try new
and trust our colleagues to do the same.
• We are clear, concise and trustworthy
things and grow from our failures.
• We hold each other to account.
in our customer interactions.
• We design and deliver exceptional
customer experiences, with a
human touch.
• We make things simpler and easier
for our customers.
• We simplify (and digitise) to deliver.
• We openly share information so that
• We seek industry-leading productivity
and always drive for better outcomes.
everyone can make informed decisions.
• We reach out across teams to rapidly
solve problems – and celebrate our
successes and learnings!
40
MyState LimitedAnnual Report 2023 2022-2023 ‘gateway’ criteria for short-term incentive payments
If threshold performance is not met, the STI may be reduced or forfeited at the discretion of the Board. The Board retains
a residual discretion not to award or pay STIs even if the measures have been met, if in its reasonable view, the needs
of the Group require this.
Gateway
1. Group risk
Assessment measures
MyState Group meets compliance and risk management obligations; reputation is not
materially damaged; capital adequacy and liquidity are managed within Board limits.
2. Individual risk
Individual risk scorecard meets the standard required.
3. Individual accountability
An Accountable Person meets their personal accountability obligations as per the BEAR.
4. Group profit
NPAT exceeds FY23 Budget.
5. Values and behaviours
Individual meets behaviour expectations, assessed against the MyState values.
STI outcomes for 2022-2023
The following key performance measures for the STI component and the level of achievement were assessed by the Board
for the 2022-2023 financial year:
Area
Drivers
Measures
Performance
Earnings
Increasing earnings per share
Net interest margin
Managed in accordance with Board expectations
Financial
Funds under management Growing funds under management in our wealth business
Balance sheet
Growing the size of our loan book
Employee experience
Positive employee experience score
People
Leadership
Lifting the bar on leadership
Individual contribution to delivery of strategically significant projects
Culture
Evolving our customer-centric culture
Customer
Growth
New to bank customer growth
Met or exceeded target
Below target
Target partially met
While the overall result for the Group was strong, the Board sets the executive ambitious targets. Key financial targets were
partially met and were impacted by the intensity of industry competition and slowing demand for credit, in large part due
to the challenging macroeconomic environment.
It is pleasing to note our growth in home lending and new to bank customers is evidence of the company’s capability to execute
on the accelerated growth plan. Our employee experience score (which uses the results of our annual employee engagement
survey) was also higher than the previous year.
The proof points of strong growth in customer numbers and significant above-system growth in our home loan portfolio
demonstrate our growth strategy is working. We have not yet achieved all that we set out to at the time of the capital raise in
June 2021, and our decision not to pay STIs is a reflection of our commitment to align company performance with remuneration.
The Board has, however, exercised the discretion which it always holds and awarded cash bonuses to select Executives for
their significant contribution to our record Group performance. The total awarded is a small percentage of what the maximum
STI opportunity could have been had the gateways been open, as disclosed in the statutory tables.
If the results on which any STI reward was based are subsequently found by the Board to have been the subject of deliberate
management misstatement, error, misrepresentation or act or omission, which the Group People and Remuneration Committee
or the Board (acting reasonably) considers would have resulted in the KPIs not being satisfied, or there is otherwise a reward
decision incorrectly made, the Board may require repayment of the whole or part of the relevant STI, in addition to taking any
other disciplinary actions.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
41
MyState LimitedAnnual Report 2023
Remuneration report
continued
Payment offers
Details of STI payment offers for the 2022-2023 financial year and the 2021-2022 financial year are set out below.
The following key performance measures for the STI component and the level of achievement were assessed by the Board
for FY23:
Key Management Personnel
% max.
(of TFR)
Max.
payable
%
awarded
%
forfeited
$
amount
paid
% which
is not yet
assessed for
payment
2022-2023
Brett Morgan
Gary Dickson
Mandakini Khanna
Tim Newman
Huw Bough1
Alan Logan1
Paul Moss
Janelle Whittle
Claudio Mazzarella2
2021-2022
Brett Morgan1
Gary Dickson
Mandakini Khanna
Heather McGovern
Huw Bough
Alan Logan1
Paul Moss
Janelle Whittle
Melos Sulicich1
60%
30%
30%
30%
30%
30%
30%
30%
–
60%
30%
30%
30%
30%
30%
30%
30%
60%
$375,000
$120,000
$117,000
$112,500
$117,000
$111,000
$109,500
$94,500
–
$169,521
$120,000
$117,000
$99,000
$117,000
$92,130
$109,500
$94,500
$187,500
0%
0%
0%
0%
0%
0%
0%
0%
–
0%
0%
0%
0%
0%
0%
0%
0%
0%
100%
100%
100%
100%
100%
100%
100%
100%
–
100%
100%
100%
100%
100%
100%
100%
100%
100%
$0
$0
$0
$0
$0
$0
$0
$0
–
$0
$0
$0
$0
$0
$0
$0
$0
$0
0%
0%
0%
0%
0%
0%
0%
0%
–
0%
0%
0%
0%
0%
0%
0%
0%
0%
1. Pro-rata max payable based on commencement and cessation dates as applicable.
2. No STI on offer in FY23 due to commencement date.
Executive Long-Term Incentive Plan (ELTIP)
How the ELTIP works
The Executive Long-Term Incentive Plan (ELTIP) was established by the Board to encourage and motivate the Managing
Director and other eligible executives by rewarding them with company shares for helping to create long-term value for the
company’s shareholders. Until 30 June 2021, participating executives were allocated fully paid ordinary shares in the company,
without payment, if performance criteria specified by the Board were satisfied in a set period. Since 1 July 2021, the allocations
have been in the form of ‘performance rights’, which, on vesting, deliver one share for each vested performance right.
Each year, the Board has the discretion to offer executives shares/performance rights worth up to a specified percentage of
their total fixed reward (salary). The 2020-2022 offers have been equal to 70% of total fixed reward for the Managing Director,
and 30% of total fixed reward for eligible executives. The 2023 offer is equal to 80% of total fixed reward for the Managing
Director, and a range of 30%-40% for eligible executives as determined by the Board. The number of shares or performance
rights allocated is based on the volume weighted average price (VWAP) of shares calculated over the 20 trading days to
30 June immediately prior to the commencement of the performance period for the relevant offer.
42
MyState LimitedAnnual Report 2023 For the shares or performance rights to vest, certain performance criteria must be satisfied within the specified
performance period.
Both the performance criteria and the performance period are set by the Board alone. ELTIP performance measures for
the 2020-2022 offers are weighted equally between relative total shareholder return (TSR) and return on equity (ROE).
The relative TSR incorporates both dividends paid and movements in share prices, while the ROE is a measure of corporate
profitability. For the 2023 offer the TSR performance measure will have a weighting of 75% and the ROE performance measure
will have a weighting of 25%.
Currently the Board has set three financial years, commencing with the year in which an offer is made, as the performance
period. Relative TSR and statutory ROE have been set as the performance criteria for the 2020, 2021, 2022 and 2023 offers.
The Board may adjust the statutory ROE performance criteria for one-off items for the 2020 and subsequent offers.
The performance criteria are assessed following the completion of each performance period. Under the ELTIP rules,
an assessment is made against the performance criteria to determine the number of shares or performance rights awarded
to the Managing Director and each participating executive.
Shares or rights cannot be allocated for a further two years. This means a total period of five years will elapse from the
commencement of the performance period to the time when shares are vested. Any ELTIP reward is subject to reassessment
and possible reduction or forfeiture. This enables the Board to adjust share allocations (potentially to zero) to protect the financial
soundness of the company or respond to significant unforeseen or unexpected consequences. In addition, if the Managing
Director or a participating executive is an accountable person under the BEAR, allocating the shares will be subject to the
Board being satisfied that the accountable person has met their accountability obligations. The number of shares allocated
(and/or value of any associated payment) may be reduced or cancelled to the extent that the Board determines that the
accountability obligations have not been met.
Allocation of shares to the Managing Director and eligible executives is ultimately at the complete discretion of the Board.
The ELTIP rules provide that an independent trustee, acting at the direction of the company, may acquire and hold allocated
shares on behalf of executives. The participating executive cannot transfer or dispose of shares before they have been allocated
to them. Any shares or performance rights to be allocated to the Managing Director under this plan require shareholder approval
in accordance with ASX listing rules. Participating executives are required to not hedge their economic exposure to any allocated
non-vested entitlement.
Failure to comply with this directive will constitute breach of duty and may result in forfeiture of the offer and/or dismissal.
Commencement of employment during a financial year
Subject to Board approval, a pro-rata ELTIP offer can be made to an executive who commences employment during the
financial year, but before 1 April. The terms of the offer must be consistent with all other offers for that year, irrespective of the
date of employment commencement.
Cessation of employment
Executives who cease employment with the company will be eligible to receive shares only if the cessation is due to a Qualifying
Reason, as defined by the ELTIP Plan Rules. Qualifying Reasons include death, total and permanent disability, retirement at
normal retirement age, redundancy or other such reason as the Board may determine. Where an ELTIP participant ceases
employment, their ELTIP offer will be assessed by the Board at the end of the performance period along with all other participants,
subject to meeting the 12-month employment hurdle that applies to any ELTIP offer. If the separated employee is an accountable
person under BEAR, any awarded shares will not be allocated until all BEAR requirements are satisfied, including the variable
remuneration deferral period.
Entitlement to dividend income
When shares allocated to an executive are held by a trustee, the executive is entitled to receive dividend payments on
the allocated shares and to have the trustee exercise the voting rights on those shares in accordance with the executive’s
instructions. However, executives have no entitlements to dividends or voting rights for shares or performance rights during
the deferral period.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
43
MyState LimitedAnnual Report 2023
Remuneration report
continued
ELTIP outcomes 2022-2023
Payment offers
Details of offers made under the Executive Long-Term Incentive Plan (ELTIP) are detailed in the following table:
Offer
2020
2021
2022
Performance period
1 July 2020 to 30 June 2023 1 July 2021 to 30 June 2024
1 July 2022 to 30 June 2025
The comparator group
Fair value of shares on offer date1
Members of the S&P/ASX300
• Managing Director
Managing Director $3.36
Managing Director $3.10
Managing Director $3.66
• Other Executives
Other Executives $3.36
Other Executives $3.10
Other Executives $3.87
Offer date
• Managing Director3
16 November 2020
17 January 2022
19 October 2022
• Other executives3
16 November 2020
23 September 2021
19 August 2022
Value of offer2
• Managing Director
• Other executives
$312,500
$649,500
$197,774
$750,699
$333,922
$645,462
1. The fair value of offers that are assessed and awarded on market-based conditions is determined on the grant date in accordance with AASB 2. The fair
value is used to recognise an expense over the performance period for the TSR component of offers. The fair value attached to the offer to the Managing
Director was subject to valuation review following shareholder approval of the “2022” Offer at the 2022 Annual General Meeting.
2. The value of the offer is the maximum value calculated as at the date of offer at that time. As such, it may include the value of offers made to individuals
who are no longer executives of the company.
3. Pro-rata offer made in respect of the “2021” offer to Alan Logan and Brett Morgan.
Calculation of the reward TSR component
The ELTIP offers TSR components will vest on the following basis.
TSR component
For the 2020 offer:
MYS TSR relative to the ASX 300:
Percentage of the applicable reward that will vest:
Below the 25th percentile:
At the 25th percentile
0
25%
Between the 25th and 75th percentile
Straight line basis between 25% and 100%
Above the 75th percentile
100%
For the 2021 and 2022 offers:
MYS TSR relative to the ASX 300:
Percentage of the applicable reward that will vest:
Below the 50th percentile
At the 50th percentile
0%
50%
Between the 50th percentile and the 75th percentile
Straight line basis between 50% and 100%
At or above the 75th percentile
100%
For the 2023 offer:
MYS TSR relative to the ASX 300:
Percentage of the applicable reward that will vest:
Below the 50th percentile
At the 50th percentile
0%
50%
Between the 50th percentile and the 75th percentile
Straight line basis between 50% and 100%
At or above the 75th percentile
100%
44
MyState LimitedAnnual Report 2023 Calculation of the reward ROE component
The performance period for the ROE component for the ELTIP reward will be based upon the Company’s post-tax ROE
and will be payable on the following basis.
ROE component
For the 2020 offer:
MYS aggregate statutory ROE, which may be
adjusted for one-off items at the discretion
of the Board, for the performance period:
Below 27.00%
27.00%
27.00% to 30.00%
30.00% or above
For the 2021 and 2022 offers:
Statutory ROE with Board discretion
to adjust for one-off items:
Below 30.00%
30.00%
30% to 31.50%
31.50% or above
For the 2023 offer:
Percentage of the applicable reward that will vest:
0%
25%
Straight line from 25% to 100%
100%
Percentage of the applicable reward that will vest:
0%
50%
Straight line basis from 50% to 100%
100%
Statutory ROE with Board discretion
to adjust for one-off items:
Percentage of the applicable reward that will vest:
Below 30.00%
30.00%
30% to 31.50%
31.50% or above
0%
50%
Straight line basis from 50% to 100%
100%
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
45
MyState LimitedAnnual Report 2023
Remuneration report
continued
Actual and potential ELTIP share allocations
The following table details, for current and former KMP, the status of offers made under the ELTIP. The ‘2019’ offer performance
period was completed on 30 June 2022. The ‘2020’ offer performance period was completed on 30 June 2023.
2020 offer
Component Maximum offer
Key Management Personnel
Melos Sulicich1
Gary Dickson
Mandakini Khanna
Heather McGovern
Anthony MacRae
Paul Moss
Craig Mowll
Janelle Whittle
Forfeited
lapsed
Awarded in
the 2022-23
financial year
Not yet
assessed
for vesting
Number of shares
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
38,676
38,675
14,852
14,851
14,480
14,480
12,253
12,252
14,480
14,480
13,552
13,552
14,480
14,480
10,767
10,767
31,521
38,675
9,357
14,851
9,122
14,480
12,253
12,252
14,480
14,480
8,538
13,552
14,480
14,480
6,783
10,767
7,155
–
5,495
–
5,358
–
–
–
–
–
5,014
–
–
–
3,984
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2019 offer
Component Maximum offer
Forfeited
lapsed
Awarded in
the 2021-22
financial year
Not yet
assessed
for vesting
Key Management Personnel
Number of shares
Melos Sulicich1
Gary Dickson2
Mandakini Khanna
Heather McGovern
Anthony MacRae
Paul Moss
Craig Mowll
Janelle Whittle
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
34,036
34,035
9,570
9,570
12,743
12,743
10,783
10,782
12,743
12,743
11,926
11,926
12,743
12,743
9,476
9,475
17,199
34,035
3,866
9,570
5,148
12,743
10,783
10,782
12,743
12,743
4,818
11,926
12,743
12,743
3,828
9,475
16,837
–
5,704
–
7,595
–
–
–
–
–
7,108
–
–
–
5,648
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1. The awarding of the 2020 offer is subject to shareholder approval subsequent to the publishing of this report.
2. Pro-rata offer made for ‘2019’.
46
MyState LimitedAnnual Report 2023 The 2021, 2022 and 2023 offers have not been assessed for vesting. The following table shows the maximum number of shares
available under each of these offer.
Key Management Personnel
Number of shares
Component
2021 offer
2022 offer
2023 offer2
Brett Morgan1
Gary Dickson
Mandakini Khanna
Heather McGovern
Paul Moss
Janelle Whittle
Huw Bough
Alan Logan1
Tim Newman
Claudio Mazzarella
1. Pro-rata offer made for ‘2021’.
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
TSR
ROE
20,602
20,601
12,500
12,500
12,188
12,187
10,313
10,312
11,407
11,406
9,844
9,844
12,188
12,187
9,630
9,630
–
–
–
–
52,458
52,458
14,389
14,388
14,029
14,029
–
–
13,130
13,129
11,331
11,331
14,029
14,029
13,310
13,309
–
–
–
–
121,905
40,635
39,048
13,016
29,286
9,762
–
–
35,714
11,905
30,952
10,317
–
–
–
–
35,714
11,905
35,714
11,905
2. The Board has made the decision, subject to shareholder approval for the Managing Director and CEO, and acceptance of the offers by relevant
participants, to award up to 437,778 performance rights under the 2023 ELTIP and that such offer will be notified to the market if and when shareholder
approval/acceptances are received.
Review of executive remuneration
During FY23, the Committee commissioned independent advice to benchmark in the case of Non-Executive Directors,
the size of the remuneration pool and the remuneration treatment of Board Committee responsibilities, and in the case
of executives, benchmark executive remuneration. With the benefit of that advice, the Board decided to make a number
of changes. These changes have been implemented and include adjustments to the maximum opportunity available for
incentives and to fixed remuneration. Increases to fixed remuneration take effect from October 2023, The details of individual
executive terms and conditions are provided in the section titled Executive employment agreements. Our Executive remuneration
framework will be subject to further review following the introduction of the Financial Accountability Regime (FAR).
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
47
MyState LimitedAnnual Report 2023
Remuneration report
continued
Statutory tables
Financial
year
Salary
& fees
Cash
bonus1
Other
short-term
benefits
Non-
monetary
benefits2
Post-
employ-
ment
Termin-
ation
benefits
Share-
based
payment3
Total
Non-Executive Directors
Vaughn Richtor 2023
214,027
2022
130,519
Miles Hampton 2023
–
2022
157,942
Robert Gordon 2023
103,997
2022
95,903
Sibylle Krieger
2023
108,597
Warren Lee
2022
2023
2022
Stephen Davy
2023
2022
109,091
108,597
109,091
99,548
101,923
Andrea Waters
2023
116,930
Total NED
2022
2023
2022
120,000
751,696
824,469
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
22,473
13,052
–
1,191
15,794
–
–
–
–
–
–
–
–
–
–
26,003
26,750
11,403
10,909
11,403
10,909
10,452
10,183
3,070
–
84,804
1,191
87,597
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 236,500
–
–
–
143,571
–
174,927
– 130,000
–
122,653
– 120,000
–
120,000
– 120,000
–
120,000
– 110,000
–
112,106
– 120,000
–
120,000
– 836,500
–
913,257
48
MyState LimitedAnnual Report 2023 Financial
year
Salary
& fees
Cash
bonus1
Other
short-term
benefits
Non-
monetary
benefits2
Post-
employ-
ment
Termin-
ation
benefits
Share-
based
payment3
Total
–
–
–
–
–
Executives
Brett Morgan
2023
597,500
35,000
2022
282,663
Melos Sulicich
2023
–
2022
358,105
Gary Dickson
2023
362,558
Mandakini
Khanna
Heather
McGovern
Paul Moss
2022
2023
2022
2023
2022
2023
2022
374,622
362,500
40,000
362,500
40,000
11,635
302,500
–
–
335,876
40,000
337,500
–
Janelle Whittle
2023
289,636
30,000
2022
279,396
30,000
Tim Newman
2023
326,685
30,000
Claudio
Mazzarella
Huw Bough
Alan Logan
2022
2023
2022
2023
2022
2023
2022
Anthony MacRae 2023
Craig Mowll
2022
2023
2022
–
36,858
–
380,625
–
–
–
–
362,500
20,000
318,789
293,760
–
13,500
–
–
–
–
–
–
–
–
Total Executive 2023
3,022,662
175,000
Total KMP
2022
2023
2022
2,967,046
90,000
3,774,358
175,000
3,791,515
90,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,411
1,302
–
–
–
–
3,411
1,302
–
–
3,411
1,302
3,411
1,302
–
–
–
–
–
–
–
–
–
–
–
–
34,276
13,010
–
25,538
26,990
24,975
27,500
37,594
–
–
–
–
–
–
–
–
65,451
735,638
32,869
329,844
–
–
(27,811)
355,832
46,805
436,353
42,623
442,220
45,633
479,044
42,695
484,091
13,433
153,354
–
178,422
27,500
27,368
27,500
26,752
27,500
30,477
–
3,524
–
27,500
27,500
–
–
–
–
–
–
–
–
–
–
–
36,129
366,129
42,709
449,364
39,959
406,261
35,564
385,363
33,251
371,449
8,811
395,973
–
–
–
–
40,382
–
12,221
420,346
23,416
433,416
27,500
114,576
3,816
464,681
23,586
–
96
–
–
–
–
–
–
–
17,692
335,038
–
–
(24,263)
(10,667)
–
–
(8,446)
(8,446)
13,644
245,320
267,930
261,010 3,985,566
5,208
234,799
–
208,114 3,505,167
13,644
330,124
267,930
261,010 4,822,066
6,399
322,396
–
208,114 4,418,424
1. The cash bonus shown in ‘2022’ and ‘2023’ represents the gratuity amount award in respect to performance for select KMP.
2. Non-monetary benefits consist of car parking expense, travel and accommodation and entertainment.
3. Share-based payment amounts have been calculated in accordance with the relevant accounting policy and accounting standards. The fair value of the
share grant is calculated at the date of grant and is allocated to each reporting period evenly over the period from grant date to vesting date. This fair
value will generally be different to the value of shares at the time they vest. The value disclosed is the portion of the fair value of the share grant allocated
to this reporting period. These amounts represent share grants that will only vest to the KMP when certain performance and service criteria are met. In some
circumstances all, or a portion, of the shares may never vest to the KMP. As these figures are based on accrual accounting and are not a reflection of
actual cash paid or shares vested, negative figures can result in the event of accrual reversals being recorded. Amounts stated are in respect of the period
that the individual held a role of a KMP.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
49
MyState LimitedAnnual Report 2023
Remuneration report
continued
Shareholdings of Key Management Personnel (KMP)
Non-Executive Director minimum shareholding
In the absence of approval from the Board to the contrary, Non-Executive Directors are required to acquire and maintain,
directly or indirectly, shares in MyState Limited to the equivalent of one year’s pre-tax base Director’s fee or base Chair fee
as the case may be. The minimum requirement must be achieved within four years of their appointment as NED or as Chair.
The value of the shares held for the purpose of calculating the MSR will be determined by the price of the shares at time purchase.
Managing Director minimum shareholding requirement
In the absence of approval from the Board to the contrary, the Managing Director will be required to acquire and maintain
shares in MyState Limited equivalent to 50% of their total fixed reward (TFR) within four years of appointment. Any shares
subject to deferral (including shares that may be allocated in respect of awarded performance rights) will be recognised
for the purposes of the requirement. The shares in MyState Limited may include shares obtained prior to commencement
of employment and/or shares acquired through ELTIP or any other scheme. The value of the shares held for the purpose
of calculating the MSR will be determined by the price of the shares at the time of purchase, or the “issue price” in the case
of any shares acquired under the ELTIP.
Related parties of KMP shareholdings
Details of ordinary shares in the company held by KMP and their related parties are set out in the table below. Related parties
include close family members and entities under joint or several control, or significant influence, of the KMP and their close
family members. No equity transactions with the KMP, other than those arising as payment for compensation, have been
entered into with the company.
50
MyState LimitedAnnual Report 2023 Key Management
Personnel
Number of
shares at
commencement
of financial year1
1
Number of shares
awarded but not
yet vested3
2
Net change
other2
3
No. of shares
at end of
financial year
1 + 2 + 3
Of which:
No. of shares at
end of financial
year held by
ELTIP Trustee4
Non-Executive Directors
Vaughn Richtor
Robert Gordon
Sibylle Krieger
Warren Lee
Andrea Waters
Stephen Davy
Subtotal
Executives
Brett Morgan
Melos Sulicich5
Gary Dickson
Paul Moss
Janelle Whittle
Tim Newman
Mandy Khanna
Claudio Mazzarella
Heather McGovern
Huw Bough
Alan Logan
Subtotal
17,518
36,725
28,257
37,641
33,736
–
153,877
4,250
32,963
5,704
25,673
17,798
–
27,954
–
1,470
–
–
–
–
–
–
–
–
–
–
7,155
5,495
5,014
3,984
–
5,358
–
–
–
–
12,694
2,000
1,737
–
2,073
–
18,504
10,000
–
–
818
–
–
835
–
–
–
–
30,212
38,725
29,994
37,641
35,809
–
172,381
14,250
40,118
11,199
31,505
21,782
–
34,147
–
1,470
–
–
–
–
–
–
–
–
–
–
–
–
14,119
2,232
–
14,421
–
–
–
–
115,812
27,006
11,653
154,471
30,772
1. Number of shares at commencement of financial year agrees to the closing position per FY22 remuneration report and includes shares issued and awarded
under the ‘2019’ offer and shares that have vested under the ‘2018’ offer. From the ‘2018’ offer onwards, under BEAR requirements, any shares awarded
are ‘held’ in suspension pending the additional Board assessment (two years post) that there has been no subsequent forfeiture event.
2. KMP personal share purchase or participation in Dividend Reinvestment Plan (DRP).
3. These amounts are the shares awarded but not yet vested under the ‘2020’ ELTIP offer.
4. These amounts are the shares awarded under the ‘2016 and 2017 ELTIP offer’ and may also include shares subsequently received through participation
in the DRP. These shares have been issued and are held by the trustee on behalf of the executives.
5. Melos Sulicich retired on 31 December 2021. The opening balance in column 1 includes shares that have been awarded and vested under the ‘2018’
ELTIP offer and shares awarded but not yet vested under the ‘2019’ ELTIP offer.
Loans to Key Management Personnel
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
Loan transactions
Loans to KMP and their related parties (including close family members and entities over which the KMP and/or their close family
members have control, joint control or significant influence) are provided in the ordinary course of business. Normal commercial
terms and conditions are applied to all loans. Any discounts provided to KMP are the same as those available to all employees
of the Group. There have been no write-downs or amounts recorded as provisions during FY23.
r
e
p
o
r
t
i
F
n
a
n
c
a
i
Details of loans held by KMP and their related parties during FY23, where the individual’s aggregate loan balance exceeded
$100,000 at any time in this period, are as follows:
Key Management Personnel
Brett Morgan
Balance as at
1 July 2022
Interest charged
during the year
Balance as at
30 June 2023
Highest balance
during the year
$967,147
$2,727
Nil
$967,147
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
51
MyState LimitedAnnual Report 2023
Remuneration report
continued
Executive employment agreements
The Managing Director and executives are employed under individual open-ended employment contracts that set out the
terms of their employment, as detailed below.
Incumbent
Commenced
in role
Contract
term
TFR
Short-term
incentive
(maximum)
ELTIP
(maximum)
Termination provisions in the event
of termination by the Company
Brett Morgan1
17 January 2022 Ongoing
$640,000
70% of TFR
80% of TFR
Notice:
The contract may be terminated
by the Company with six months’
notice or payment in lieu of notice.
Entitlement:
• Pro-rata STI payment applied
as at the date of termination.
• Payment of STI if the performance
period is complete but not yet paid.
• Pro-rata ELTIP allocation,
in accordance with the ELTIP rules.
Notice:
Each contract can be terminated
by the Company upon provision
of three months’ notice.
Entitlement:
• Pro-rata STI payment applied
as at the date of termination.
• Payment of STI if the
performance period is complete
but not yet paid.
• Pro-rata ELTIP allocation,
in accordance with the ELTIP rules.
Notice:
Each contract can be terminated
by the Company upon provision
of three months’ notice.
Entitlement:
• Payment of the equivalent of
six months’ TFR (inclusive of the
provision of three months’ notice).
• Pro-rata STI payment applied
as at the date of termination.
• Payment of STI if the performance
period is complete but not yet paid.
• Pro-rata ELTIP allocation,
in accordance with the ELTIP rules.
40% of
TFR upon
invitation to
participate
40% of
TFR upon
invitation to
participate
30% of
TFR upon
invitation to
participate
Tim Newman2 9 August 2022
Ongoing
$375,000
30% TFR
Alan Logan
30 August 2021
Ongoing
$370,000
Claudio
Mazzarella
29 May 2023
Ongoing
$375,000
Huw Bough
1 June 2021
Ongoing
$390,000
Gary Dickson 19 October 2019 Ongoing
$410,000
30% TFR
Paul Moss
13 May 2015
Ongoing
$375,000
Janelle Whittle 22 January 2018 Ongoing
$325,000
Mandakini
Khanna
1 December 2015 Ongoing
$410,000
1. Required to hold shares to the value of 50% of TFR.
2. Initial commencement in an executive role. Appointed GM Lending 12 June 2023.
Signed in accordance with a resolution of the Directors.
Vaughn Richtor
Chairman
Brett Morgan
Managing Director and Chief Executive Officer
Hobart, dated this 18 August 2023
52
MyState LimitedAnnual Report 2023 Financial report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the consolidated financial statements
Directors’ declaration
Independent auditor’s report
54
55
56
57
58
59
97
98
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
53
MyState LimitedAnnual Report 2023
Consolidated Income Statement
for the year ended 30 June 2023
Interest income
Interest expense
Net interest income
Non-interest income from banking activities
Net banking operating income
Income from wealth management activities
Total operating income
Less: Expenses
Personnel costs
Administration costs
Technology costs
Occupancy costs
Marketing costs
Governance costs
Total operating expenses
Profit before impairment and tax expense
Impairment recovery/(expense) on loans and advances
Income from other activities
Profit before tax
Income tax expense
Profit for the year
Profit attributable to the:
Equity holders of MyState Limited
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
The accompanying notes form part of these financial statements.
Notes
30 June 2023
$‘000
30 June 2022
$‘000
2.1
2.1
2.1
2.2
2.4
2.4
2.4
4.3
2.3
6.1
2.5
2.5
352,971
(220,378)
132,593
13,477
146,070
14,308
160,378
44,326
21,428
19,084
4,392
10,233
3,188
102,651
159,749
(49,504)
110,245
15,103
125,348
14,820
140,168
42,841
17,759
17,706
4,294
10,297
2,985
95,882
57,727
44,286
(2,542)
762
–
55,185
16,683
38,502
854
45,902
13,876
32,026
38,502
32,026
35.45
30.85
30.34
30.15
54
MyState LimitedAnnual Report 2023 Consolidated Statement of Comprehensive Income
for the year ended 30 June 2023
Profit for the year
Other comprehensive income/(expense)
Items that may be reclassified subsequently to profit or loss
Cash flow hedges – Net gains/(losses) taken to equity
Income tax effect
Total other comprehensive income/(expense) for the year
30 June 2023
$‘000
30 June 2022
$‘000
38,502
32,026
(806)
242
(564)
9,966
(2,990)
6,976
Total comprehensive income for the year
37,938
39,002
Total comprehensive income for the year is attributable to:
Equity holders of MyState Limited
37,938
39,002
The accompanying notes form part of these financial statements.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
55
MyState LimitedAnnual Report 2023
Consolidated Statement of Financial Position
as at 30 June 2023
Assets
Cash and liquid assets
Due from other financial institutions
Other assets
Financial instruments
Loans and advances
Property, plant and equipment and right-of-use assets
Tax assets
Intangible assets and goodwill
Total assets
Liabilities
Due to other financial institutions
Deposits and other borrowings including subordinated notes
Employee benefits provisions
Other liabilities
Tax liabilities
Total liabilities
Net assets
Equity
Share capital
Retained earnings
Reserves
Total equity
The accompanying notes form part of these financial statements.
Notes
30 June 2023
$‘000
30 June 2022
$‘000
4.1
4.2
4.3
5.1
6.1
5.2
4.5
5.3
4.6
6.1
5.4
127,778
48,003
12,085
119,215
40,924
9,831
936,880
842,926
7,908,080
6,971,375
7,977
5,558
77,922
10,453
6,278
78,845
9,124,283
8,079,847
66,295
22,982
8,568,185
7,598,184
5,345
18,111
8,784
5,585
17,213
5,970
8,666,720
7,649,934
457,563
429,913
225,274
223,497
8,792
211,167
209,788
8,958
457,563
429,913
56
MyState LimitedAnnual Report 2023 Consolidated Statement of Changes in Equity
for the year ended 30 June 2023
Share
capital
$‘000
Retained
earnings
$‘000
Notes
General
reserve
for credit
losses
$‘000
Employee
equity
benefits
reserve
$‘000
Hedging
reserve
$‘000
Other
reserves
$‘000
Total
$‘000
208,196
201,044
6,238
1,038
(302)
(1,000)
415,214
At 1 July 2021
Profit for the year
Other comprehensive
income/(expense)
Total comprehensive
income for the year
Equity issued under
employee share scheme
Transfer of unvested
shares under executive
long term incentive plan
Equity issued under dividend
reinvestment plan
General reserve for
credit losses write-back
Derecognition of
capitalised costs under
SAAS arrangements
Share-based payment
expense recognised
Entitlement offer share
issuance costs, net of tax
Dividends paid
At 30 June 2022
At 1 July 2022
Profit for the year
Other comprehensive
income/(expense)
Total comprehensive
income for the year
Equity issued under
employee share scheme
Equity issued under
dividend reinvestment
plan underwrite
Share-based payment
expense recognised
Tax related movement
– Executive long term
incentive plan (ELTIP)
General reserve for
credit losses write-back
Dividend reinvestment plan
issuance costs net of tax
Dividends paid
At 30 June 2023
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
32,026
–
–
–
32,026
5.4
62
–
–
238
3,000
–
5.4
5.4
5.4
2.6
–
3,981
(3,981)
–
–
(91)
–
(627)
–
–
(26,874)
–
–
–
–
–
38,502
–
–
–
38,502
5.4
50
5.4
10,058
–
–
–
–
–
–
–
38
(111)
111
5.4
2.6
(147)
–
–
(24,720)
–
–
Equity issued under dividend
reinvestment plan
5.4
4,146
–
–
–
–
(238)
–
–
–
227
–
–
–
–
32,026
6,976
–
6,976
6,976
–
39,002
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
62
–
3,000
–
(627)
227
(91)
(26,874)
–
–
–
–
–
–
287
–
–
–
–
–
–
38,502
(564)
–
(564)
(564)
–
37,938
–
–
–
–
–
–
–
–
–
50
–
10,058
–
–
–
–
–
–
4,146
287
38
–
(147)
(24,720)
211,167
209,788
211,167
209,788
2,257
2,257
1,027
1,027
6,674
(1,000)
429,913
6,674
(1,000)
429,913
The accompanying notes form part of these financial statements.
225,274
223,497
2,368
1,314
6,110
(1,000)
457,563
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
57
MyState LimitedAnnual Report 2023
Consolidated Statement of Cash Flows
for the financial year ended 30 June 2023
Cash flows from operating activities
Interest received
Interest paid
Fees and commissions received
Other non-interest income received
Payments to suppliers and employees
Income tax paid
(Increase)/decrease in operating assets:
Due from other financial institutions
Financial instruments
Loans and advances
Increase/(decrease) in operating liabilities:
Due to other financial institutions
Notes
30 June 2023
$ ‘000
30 June 2022
$ ‘000
374,687
(175,287)
28,006
454
(98,173)
(13,278)
177,087
(44,119)
27,351
1,688
(90,104)
(7,220)
(5,740)
(1,864)
(91,918)
(135,256)
(963,355)
(1,381,203)
65,681
1,706
Deposits and other borrowings excluding subordinated notes and floating rate notes
805,352
1,402,550
Net cash flows from/(used in) operating activities
4.1
(73,571)
(49,384)
Cash flows from investing activities
Purchase of intangible assets
Proceeds from sale of non-current assets held for sale
Purchase of property, plant and equipment
Net cash flows from/(used in) investing activities
Cash flows from financing activities
Employee share issue
Entitlement and placement offer share issue
Payments for lease liabilities
Subordinated notes
Floating rate notes issue
Dividends paid net of dividend reinvestment plan
Net cash flows from/(used in) financing activities
Net increase/(decrease) in cash held
Cash at beginning of financial year
Closing cash carried forward
The accompanying notes form part of these financial statements.
(2,943)
–
(2,240)
(5,183)
50
–
(2,060)
66
99,871
(10,610)
87,317
8,563
119,215
127,778
(4,343)
4,765
(700)
(278)
62
–
(1,669)
15,097
99,709
(24,588)
88,611
38,949
80,266
119,215
2.6
4.1
58
MyState LimitedAnnual Report 2023 Notes to the consolidated financial statements
for the year ended 30 June 2023
1.1 Reporting entity
MyState Limited (the Company) is incorporated and domiciled in Australia and is a company limited by shares that are
publicly traded on the Australian Securities Exchange. The address of its registered office and principal place of business is
137 Harrington Street, Hobart, Tasmania 7000. The consolidated financial statements of MyState Limited and its subsidiaries
(the Group) were authorised for issue by the Directors on 18 August 2023.
1.2 Basis of accounting
These consolidated financial statements are general purpose financial statements which have been prepared in accordance
with the Corporations Act 2001, Australian Accounting Standards and Interpretations, and other requirements of the law.
The financial report complies with Australian equivalents to International Financial Reporting Standards (‘AIFRS’).
The financial statements comprise the consolidated financial statements of the Group. For the purpose of preparing the
consolidated financial statements, the Company is a for-profit entity.
Where necessary, comparative figures have been re-classified and re-positioned for consistency with current period disclosures.
The consolidated financial statements have been prepared on the basis of historical cost, except for certain properties and
financial instruments that are measured at revalued amounts or fair values at the end of each reporting period, as explained
in the accounting policies.
Rounding of amounts
The Company is a company of the kind referred to in Australian Securities and Investments Commission (ASIC) Class Order
2016/191, and, in accordance with that Class Order, amounts in the financial report are rounded off to the nearest thousand
dollars, unless otherwise indicated. All amounts are presented in Australian dollars.
1.3 Use of estimates and judgement
The preparation of the financial report in conformity with Australian Accounting Standards requires the use of certain critical
accounting estimates. It also requires management to exercise judgement in the process of applying the accounting policies.
The notes to the financial statements set out areas involving a higher degree of judgement or complexity, or areas where
assumptions are significant to the financial report such as:
• loan origination cost amortisation, refer note 2.1;
• impairment losses on loans and advances, refer note 4.3;
• fair value of financial instruments, refer note 4.7;
• impairment assessment of intangibles and goodwill, refer note 5.2;
• recoverability of deferred tax assets, refer note 6.1; and
• assessment of lease liabilities and right-of-use assets, refer notes 4.6 and 5.1.
1.4 Provisions (other than for impairment of financial assets)
Provisions are recognised when the Group has a legal, equitable or constructive obligation to make a future sacrifice of economic
benefits to other entities as a result of past transactions or other past events and it is probable that a future sacrifice of
economic benefits will be required and a reliable estimate can be made of the amount of the obligation.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
59
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
2.1 Net banking operating income
Interest income
Loans and advances
Investment securities
Swap interest1
Total interest income
Interest expense
At call deposits
Fixed term deposits
Floating rate notes
Financing cost – leases
Swap interest2
Total interest expense
Non-interest income from banking activities
Transaction fees
Loan fees
Banking commissions
Other banking operations income
Total non-interest income from banking activities
30 June 2023
$‘000
30 June 2022
$‘000
318,169
30,989
3,813
156,130
4,513
(894)
352,971
159,749
60,633
151,629
8,648
781
(1,313)
16,972
30,379
1,003
918
232
220,378
49,504
3,367
5,580
3,120
1,410
13,477
3,703
6,284
3,282
1,834
15,103
1. Swap interest relates to hedges that the Group has entered into to protect its portfolio of loans and advances from changes in interest rates.
2. Swap interest relates to hedges that the Group has entered into to protect its portfolio of term deposits from changes in interest rates.
Income accounting policy
Income is recognised to the extent that it is probable that the economic benefits will flow to the entity and the income
can be reliably measured. The following specific recognition criteria must also be met before income is recognised.
Interest
Interest income is accrued using the effective interest rate method, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial instrument. Loan origination fees are recognised as
components of the calculation of the effective interest rate method in relation to originated loans, and therefore affect
the interest recognised in relation to this portfolio of loans. The average life of loans in the relevant loan portfolios is
reviewed annually to ensure the amortisation methodology for loan origination fees is appropriate.
Interest expense is calculated on an accruals basis using the effective interest rate method. The effective interest
rate method is the rate that exactly discounts future payments through the expected life of the financial instrument.
Non-interest income from banking activities
Refer to the ”income accounting policy” in note 2.2.
60
MyState LimitedAnnual Report 2023 2.2 Income from wealth management activities
Funds management income
Other fees and commissions
Total income from wealth management activities
30 June 2023
$‘000
30 June 2022
$‘000
8,798
5,510
14,308
9,078
5,742
14,820
Funds management income and fiduciary activities
TPT Wealth Limited, a controlled entity of the Group, acts as Responsible Entity, Trustee and Funds Manager for eight managed
investment schemes. The investment schemes place monies with external wholesale fund managers, direct mortgages
and mortgaged backed securities, term deposits and other investments. The clients include individuals, superannuation funds
and corporate investors.
The assets and liabilities of these funds are not included in the consolidated financial statements. Income earned by the Group in
respect of these activities is included in the Consolidated Income Statement of the Group as “Funds management income”.
The following table shows the balance of the unconsolidated funds under management and funds under advice that gives rise
to funds management and other fees and commissions income respectively:
Funds under management
Funds under advice
30 June 2023
$m
30 June 2022
$m
994
490
1,062
434
Other fees and commissions
TPT Wealth Limited provides private client tax accounting services and acts as Trustee and executor of estates. “Other fees
and commissions income” is the income earned from these activities.
Income accounting policy
The Group earns three main types of fees and commissions under contracts with customers. The first income type is
single performance obligation contracts, such as transaction services, where the performance obligation is performed and
consideration received in quick succession. Income from these contracts is recorded as the performance obligations are
satisfied. The second income type is where contracts with the customer are for the performance of multiple obligations
over time and the customer only benefits from delivery of all those obligations together over time, for example the provision
of trustee services and services to funds under management. For these contracts, income is recognised over the service
period. The third type of income is insurance intermediary income where the performance obligations are satisfied
substantially at the time of referring the customer and economic benefits flow to the Group over time. The Group
has estimated that nil income will be brought forward as a contract asset under these contracts due to the insufficient
probability of the timing and amount of future income that will flow from these contracts. This income is therefore
recorded when received.
2.3 Income from other activities
Gain on revaluation of non-current assets held for sale
Gain on disposal of non-current assets held for sale
Total income from other activities
30 June 2023
$‘000
30 June 2022
$‘000
–
–
–
530
324
854
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
61
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
2.4 Expenses
The following items are included within each item of specified expenses:
Occupancy costs include:
Operating lease payments
Depreciation – right-of-use lease assets
Depreciation – buildings and leasehold improvements
Technology costs include:
Amortisation – computer software
Administration costs include:
30 June 2023
$‘000
30 June 2022
$‘000
453
2,662
209
185
2,728
281
3,866
5,625
Depreciation – furniture, equipment and computer hardware
336
282
The Group’s leasing activities
(i) Real estate leases
The Group leases land and buildings for its office space and branch network. The leases of office space and branches typically
run for a period of between three and 10 years. Some leases include an option to renew the lease for an additional period of
the same duration after the end of the contract term.
(ii) Other leases
The Group leases vehicles, with lease terms of three to five years. In some cases, the Group has options to purchase the assets at
the end of the contract term; in other cases, it guarantees the residual value of the leased assets at the end of the contract term.
There are no other covenants or restrictions on the Group’s leases other than those identified above.
Amount recognised in the Consolidated Income Statement
Expenses relating to short-term leases and low-value leases
70
101
30 June 2023
$‘000
30 June 2022
$‘000
Expense accounting policy
Depreciation and amortisation expense
The Group adopts the straight line method of depreciating property, plant and equipment and amortising intangible
assets over the estimated useful lives, commencing from the time the asset is held ready for use. Leasehold improvements
and right-of-use assets are depreciated over the shorter of either the unexpired expected term of the lease or the estimated
useful life of the improvements. Estimated useful lives are:
Buildings
40 years
Office furniture, fittings and equipment
4-7 years
Building fit-out
Computer hardware
Software
Right-of-use assets
4-15 years
3 years
3-10 years
2-15 years
Each year the useful life of assets are evaluated. The remaining useful life of select core banking systems was revised
and extended in the prior year as the Group has implemented significant increased functionality and, in turn, longevity
of these systems over their initial capacity. The revised remaining useful life is within the above-stated parameters;
however, the total life since original core system implementation is in excess of the above-stated lives in some instances.
62
MyState LimitedAnnual Report 2023 2.5 Earnings per share
Basic earnings per share
Diluted earnings per share
Reconciliation of earnings used in calculation of earnings per ordinary share
Net profit after tax
Total statutory earnings
30 June 2023
cents
30 June 2022
cents
35.45
30.85
$ ‘000
38,502
38,502
30.34
30.15
$ ‘000
32,026
32,026
Earnings used in calculating statutory earnings per ordinary share
38,502
32,026
Add back: distributions accrued and/or paid on dilutive loan capital instrument
Total diluted earnings
4,136
42,638
–
32,026
Earnings per share accounting policy
Basic earnings per share is calculated by dividing the Group’s profit attributable to ordinary equity holders by the
weighted average number of ordinary shares outstanding during the financial year. Diluted earnings per share is
calculated by dividing the Group’s profit attributable to ordinary equity holders by the weighted average number of
ordinary shares that would be issued on the exchange of all the dilutive potential ordinary shares into ordinary shares.
The following table details the weighted average number of shares (WANOS) used in the calculation of basic and diluted
earnings per share:
WANOS used in the calculation of basic earnings per share
Effect of dilution – executive performance rights
Effect of dilution – loan capital instrument
WANOS used in the calculation of diluted earnings per share
Potentially dilutive instruments
The following instruments are potentially dilutive during the reporting period.
Number
Number
108,615,478
105,570,983
875,663
652,267
28,697,572
–
138,188,713
106,223,250
Dilutive instruments
30 June 2023 30 June 2022
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
Loan capital instrument
Executive performance rights
Subordinated note (with non viability clause)
Yes
Yes
No
n/a
Yes
No
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
63
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
2.6 Dividends
Dividends paid
2021 Final dividend paid – 13.0 cents per share
2022 Interim dividend paid – 12.5 cents per share
2022 Final dividend paid – 11.5 cents per share
2023 Interim dividend paid – 11.5 cents per share
Total dividends paid
Date of payment
30 June 2023
$‘000
30 June 2022
$‘000
21 Sep 2021
15 Mar 2022
7 Sep 2022
21 Mar 2023
–
–
12,179
12,541
24,720
13,686
13,188
–
–
26,874
The dividends paid during the year were fully franked at the 30% corporate tax rate.
30 June 2023
$‘000
30 June 2022
$‘000
Franking credit balance
The amount of franking credits available for the subsequent financial year are:
Franking account balance as at the end of the period at 30%
92,199
82,170
Franking credits that will arise from the payment of income tax payable
at the end of the period
1,075
(638)
2.7 Segment financial information
Operations of reportable segments
The Group has identified two operating divisions and a corporate division, which are its reportable segments. These divisions
offer different products and services and are managed separately. The Group’s management committee reviews internal
management reports for each of these divisions at least monthly.
Banking division
The Banking division’s product offerings include lending; encompassing home loans, personal, overdraft, line of credit
and commercial products, transactional savings accounts and fixed term deposits and insurance products. It delivers these
products and services through its branch network, digital channels and third party channels. The Banking division comprises
the MyState Bank Limited Group.
Wealth Management division
The Wealth Management division is a provider of funds management and trustee services. It operates predominantly
within Tasmania. It holds $0.994 billion (2022: $1.062 billion) in funds under management on behalf of personal, business and
wholesale investors as the responsible entity for eight managed investment schemes. The Wealth Management division comprises
TPT Wealth Limited, which is a trustee company licensed within the meaning of Chapter 5D of the Corporations Act 2001 and
is the only private trustee company with significant operations in Tasmania.
Corporate and consolidation division
The corporate division is responsible for the governance of the Group. The corporate division charges the operating divisions
on a cost recovery basis for costs it has incurred. This division is also where eliminations are allocated between the Banking
division and the Wealth Management division.
64
MyState LimitedAnnual Report 2023 Year ended 30 June 2023
Interest income
Interest expense
Other income
Transaction fees
Loan fee income
Banking commissions
Other banking operations income
Funds management income
Other Wealth management fees and commissions
Total operating income
Expenses
Personnel costs
Administration costs
Technology costs
Occupancy costs
Marketing costs
Governance costs
Impairment expense/(recovery)
(Gain)/Loss on disposal of non-current assets
Income tax expense
Segment profit for the year
Segment balance sheet information
Segment assets
Segment liabilities
Year ended 30 June 2022
Interest income
Interest expense
Other income
Transaction fees
Loan fee income
Banking commissions
Other banking operations income
Funds management income
Other Wealth management fees and commissions
Total operating income
Expenses
Personnel costs
Administration costs
Technology costs
Occupancy costs
Marketing costs
Governance costs
Impairment expense/(recovery)
(Gain)/loss on disposal of non-current assets
Income tax expense
Segment profit for the year
Segment balance sheet information
Segment assets
Segment liabilities
Banking
$’000
Wealth
management
$’000
Corporate and
consolidation
$’000
Total
$’000
352,801
(220,365)
3,367
5,580
3,120
1,408
–
–
145,911
32,515
24,093
17,507
3,949
9,784
886
2,542
–
16,426
38,209
125
(1)
–
–
–
2
8,798
5,510
14,434
7,221
4,281
1,533
126
440
285
–
–
175
373
45
(12)
352,971
(220,378)
–
–
–
–
–
–
3,367
5,580
3,120
1,410
8,798
5,510
33
160,378
4,590
(6,946)
44
317
9
2,017
–
–
82
(80)
44,326
21,428
19,084
4,392
10,233
3,188
2,542
–
16,683
38,502
9,037,452
8,651,513
26,835
2,060
59,996
9,124,283
13,147
8,666,720
159,721
(49,495)
3,703
6,284
3,282
1,834
–
–
125,329
31,514
22,147
16,136
3,917
9,782
752
(755)
(854)
12,852
29,838
22
(2)
–
–
–
–
9,078
5,742
14,840
6,723
2,633
1,577
95
420
189
(7)
–
967
2,243
6
(7)
–
–
–
–
–
–
(1)
4,604
(7,021)
(7)
282
95
2,044
–
–
57
(55)
159,749
(49,504)
3,703
6,284
3,282
1,834
9,078
5,742
140,168
42,841
17,759
17,706
4,294
10,297
2,985
(762)
(854)
13,876
32,026
7,995,029
7,637,791
25,821
1,721
58,997
10,422
8,079,847
7,649,934
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
65
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
3.1 Capital management strategy
The Group’s capital management strategy is to adhere to regulatory requirements and maximise shareholder value through
optimising the level and use of capital resources, whilst also providing the flexibility to take advantage of opportunities as they
may arise.
The Group’s capital management objectives are to:
• comply with internal and regulatory capital requirements;
• ensure sufficient capital resource is available to support the Group’s business, operational and investment activities;
• maintain balance sheet resilience to safeguard the Group’s ability to continue as a going concern; and
• support MyState Limited’s and MyState Bank Limited’s credit rating.
The Group’s capital management policy considers each of internal, regulatory and rating agency capital requirements.
Under APS 110 Capital Adequacy, the ultimate responsibility for the prudent management of capital resides with the Board of
Directors. The Board must ensure that an appropriate level and quality of capital is maintained, commensurate with the type,
amount and concentration of risk exposures.
The Group’s regulatory capital requirements are measured on a Level 1 and Level 2 basis.
Level 1 is comprised of MyState Bank Limited (the ADI) and ConQuest 2010-1R.
Level 2 is comprised of the wider MyState Limited prudential group. This group includes MyState Limited (the non-operating
holding company), MyState Bank Limited, Connect Asset Management Limited (the Securitisation programme Manager)
and ConQuest 2010-1R.
All entities that are consolidated for accounting purposes are included within the Level 2 regulatory capital calculation
except for TPT Wealth Limited and securitisation special purposes vehicles (Conquest 2014-2 Trust (deregistered during year),
Conquest 2016-1 Trust (deregistered during year), Conquest 2016-2 Trust, Conquest 2017-1 Trust, Conquest 2018-1 Trust,
Conquest 2019-1 PP Trust, Conquest 2019-2 Trust, Conquest 2022-1 Trust and Conquest 2023-1 Warehouse Trust).
The Group has developed a detailed Internal Capital Adequacy Assessment Plan (ICAAP). This plan covers the capital
requirements of the Group on a Level 1 and Level 2 basis (as previously described) as well as TPT Wealth Limited. The Group’s
capital position is monitored on a frequent basis and is reported to the Board monthly. The ICAAP also includes a three-year
forecast of capital adequacy, which is prepared and submitted to the Board at least annually.
The ICAAP aims to ensure that adequate planning activities take place so that the Group is effectively capitalised. The ICAAP
encompasses known financial events, dividend policy, capital raisings, securitisation and stress testing.
66
MyState LimitedAnnual Report 2023 The Board has currently set a minimum total capital adequacy ratio of 14.0% for the Group (2022: 12.5%). Capital adequacy
of the Group on a Level 2 basis is detailed in the following table:
Qualifying capital
Common Equity Tier 1 capital
Paid-up ordinary share capital(i)
Retained earnings
Reserves excluding general reserve for credit losses
Total common Equity Tier 1 capital
Less: Regulatory adjustments
Deferred expenditure including deferred tax assets
Goodwill and intangibles
Other deductions
Total regulatory adjustments
Net Common Equity Tier 1 capital
Additional Tier 1 capital
Floating rate notes AT1 issuance(iii)
Tier 2 capital
Subordinated notes(ii)
Equity reserve for credit losses
Total capital
Risk weighted assets
Capital adequacy ratio
30 June 2023
$‘000
30 June 2022
$‘000
227,306
237,611
(1,134)
211,167
221,796
6,980
463,783
439,943
41,775
63,793
49,065
154,633
309,150
35,540
64,556
47,086
147,182
292,761
63,836
–
49,901
2,368
425,255
50,000
2,257
345,018
2,755,453
2,780,972
15.43%
12.41%
(i)
On 24 June 2021, the Group raised $24.2 million (5,628,573 shares at $4.30 each) under a retail entitlement offer. This followed an institutional entitlement
offer and fully underwritten institutional placement (Placement), which raised $11.3 million and $20 million respectively (7,274,502 ordinary shares at
$4.30 each) from existing and new institutional investors, on 2 June 2021.
(ii) On 10 July 2020, the Group issued $25 million of floating rate subordinated notes (“notes”). The issuer was MyState Limited. The notes have a term
of 10 years, maturing 10 July 2030, and pay interest quarterly at a floating rate equal to the three-month BBSW plus a margin of 4.35% per annum.
The issuer has the option to redeem these notes on 10 July 2025 and each quarterly interest payment date thereafter, and for certain regulatory events
(in each case subject to APRA’s prior written approval). On the same date, and with the same terms, MyState Bank Limited issued $25 million of floating
rate subordinated notes to MyState Limited with terms identical to those issued by MyState Limited.
On 3 November 2021, the Group issued $25 million of floating rate subordinated notes (“notes”). The issuer was MyState Limited. The notes have a
term of 10 years, maturing 3 November 2031, and pay interest quarterly at a floating rate equal to the three-month BBSW plus a margin of 2.75%
per annum. The issuer has the option to redeem these notes on 3 November 2026 and each quarterly interest payment date thereafter, and for certain
regulatory events (in each case subject to APRA’s prior written approval). On the same date, and with the same terms, MyState Bank Limited issued $25
million of floating rate subordinated notes to MyState Limited with terms identical to those issued by MyState Limited.
If APRA notifies the issuer that a non-viability trigger event has occurred, the notes will be converted into ordinary shares of MyState Limited, or written
off. For the notes issued on 3 November 2021, the amount included in the Group’s Level 2 Tier 2 regulatory capital is a percentage equal to that of the
external interest in the Group’s regulatory capital. The amount included in the Group’s Level 1 Tier 2 regulatory capital is 100%. For the notes issued on
10 July 2020, the amount included in the Group’s Level 1 and Level 2 Tier 2 regulatory capital is 100%.
(iii) On 30 August 2022, MyState Limited (MyState) issued $65 million of inaugural Additional Tier 1 notes to wholesale investors (Capital Notes). The Capital
Notes (‘’notes”) were fully paid, mandatorily convertible subordinated perpetual debt securities of MyState. The issuer was MyState Limited. The notes
have a term in perpetuity and pay interest quarterly at a floating rate equal to the three-month BBSW plus a margin of 5.50% per annum. The issuer has
the option to redeem these notes on 30 August 2027, 30 November 2027 and 28 February 2028 respectively, and for certain regulatory events (in each
case subject to APRA’s prior written approval). If APRA notifies the issuer that a loss-absorption event has occurred, the notes will be converted into ordinary
shares of MyState Limited, or written off.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
67
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
3.2 Financial risk management
Risk management is an integral part of the Group’s business processes. The Board sets policy to mitigate risks and ensure
the risk management framework is appropriate, to direct the way in which the Group conducts business. Promulgated Board-
approved policies ensure compliance throughout the business, which are monitored by way of a dedicated compliance system.
Risk management plans exist for all documented risks within the Group and these plans are reviewed regularly by the Executive
Management Team, the Group Risk Committee and the Board. Business units are accountable for risks in their area and are
responsible for ensuring the appropriate assessment and management of these risks.
Risk exposure profile
The Group actively monitors a range of risks, which are not limited to, but include the following:
• credit risk,
• market risk; and
• liquidity risk.
3.2.1 Credit risk
Approach to credit risk management
Credit risk arises within the Group’s lending and treasury investment activities and is the risk that a counterparty may fail
to complete its contractual obligations when they fall due.
The Group’s approach to managing this risk is to separate prudential control from operational management by assigning
responsibility for approval of credit exposures to specific individuals and management committees. The Group Risk Committee
has oversight of credit risk exposures and the Enterprise Risk Committee monitors credit-related activities through regular
reporting processes, including monitoring large exposure to single groups and counterparties. The roles of funding and
oversight of credit are separate.
Board-approved lending policies guide the processes for all loan approvals by subsidiary operations. All loans over a designated
amount, whether within delegated limits or not, are reported to the Group Risk Committee on a regular basis. Any loan outside
of delegated limits must be approved by the Board prior to funding.
Maximum exposure to credit risk
The amounts disclosed in the following table are the maximum exposure to credit risk, before taking account of any collateral
held or other credit enhancements. For financial assets recognised in the Statement of Financial Position, the exposure to credit
risk equals their carrying amount. For customer commitments, the maximum exposure to credit risk is the full amount of the
committed facility as at the reporting date.
Cash and liquid assets
Due from other financial institutions
Other assets
Financial instruments
Loans and advances
Customer commitments(i)
Maximum exposure to credit risk
(i) For further information regarding these commitments, refer to note 8.1.
30 June 2023
$‘000
30 June 2022
$‘000
127,778
48,003
12,085
119,215
40,924
9,831
936,880
842,926
1,124,746
1,012,896
7,908,080
6,971,375
147,912
268,364
9,180,738
8,252,635
68
MyState LimitedAnnual Report 2023 The credit quality of financial assets has been determined based on Standard & Poor’s credit ratings for financial assets other
than loans and advances at amortised cost. For loans and advances at amortised cost, the assets identified as being “closely
monitored” are those assets that are greater than 30 days past due. New facilities are loans that have been funded within the
financial year.
Credit quality of financial assets
Financial assets other than loans and advances at amortised cost
Equivalent S&P rating A+ and above
Equivalent S&P rating A and below
Loans and advances at amortised cost
New facilities – not closely monitored
New facilities – closely monitored
Continuing facilities – not closely monitored
Continuing facilities – closely monitored
Total on balance sheet exposure to credit risk
Loans and advances at amortised cost past due analysis
Not past due
Past due days:
31 to 60 days
61 to 90 days
More than 90 days
Total loans and advances at amortised cost
Estimate of collateral held against past due assets
30 June 2023
$‘000
30 June 2022
$‘000
914,400
210,346
622,183
390,713
2,589,507
2,860,403
7,983
1,372
5,260,343
4,085,757
50,247
23,843
9,032,826
7,984,271
7,862,948
6,942,215
16,059
11,476
17,597
8,285
7,166
13,709
7,908,080
6,971,375
51,194
39,730
Estimate of collateral held
To mitigate credit risk, MyState Bank Limited (ADI) holds collateral against select loans and advances in the form of
a mortgage charge over property. The bank can take possession of the security held against the loans and advances as
a result of customer default. The collateral shown above is an estimate of the value of collateral held, it is not practicable
to determine the fair value.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
69
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
3.2 Financial risk management continued
Credit quality is impacted by concentration risk created by the ensuing vulnerability of assets to similar conditions such
as economic or political factors. The Group monitors the geographical diversification of its loans and advances. An analysis
of this concentration of credit risk at the reporting date is shown in the following table:
Tasmania
Victoria
New South Wales
Queensland
Western Australia
Australian Capital Territory
South Australia
Northern Territory
Gross loans and advances at amortised cost
There are no loans that individually represent 10% or more of shareholders’ equity.
3.2.2 Market risk
Managing market risk
30 June 2023
$‘000
30 June 2022
$‘000
2,533,845
2,510,364
1,789,071
1,356,804
1,648,836
1,414,717
1,559,328
1,415,876
181,467
125,683
83,175
99,602
19,810
68,109
71,510
12,769
7,915,134
6,975,832
Market risk is the exposure to adverse changes in the value of the Group’s portfolio as a result of changes in market prices
or volatility. The Group is exposed primarily to interest rate risk.
Interest rate risk exposure
The operations of MyState Bank are subject to the risk of interest rate fluctuations as a result of mismatches in the timing
of the repricing of interest rates on its assets and liabilities.
Value at Risk (VaR)
The following table indicates the VaR based on historical data. The Group estimates VaR as the potential loss in earnings
from adverse market movements over a 20-day holding period to a 99% confidence level. Market risks attributable to trading
activities are primarily measured using a historical simulation Value-at-Risk (VaR) model based on historical data. VaR takes
account of all material market variables that may cause a change in the value of the loan portfolio. As an additional overlay
to VaR, the individual market risks of interest rate, foreign exchange, credit and equity are managed using a framework that
includes stress testing, scenario analysis, sensitivity analysis and stop losses. Risks are monitored and measured against limits
delegated by the Asset Liability Committee (ALCO) and approved by the Group’s Risk Committee. Although an important tool
for the measurement of market risk, the assumptions underlying the model are limited to reliance on historical data.
Value at risk (post-tax) based on historic data
Average
Minimum
Maximum
30 June 2023
$‘000
30 June 2022
$‘000
4,440
2,059
7,964
4,084
3,286
4,878
70
MyState LimitedAnnual Report 2023 p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
Derivatives
The Group is exposed to changes in interest rates. The only derivative instruments currently entered into by the Group are
interest rate swaps. The Group protects its portfolio of fixed rate loans, corporate and retail term deposits, NCDs and exposure
to variable rate debt obligations by paying fixed or variable rates to swap providers and receiving fixed or variable rates
in return, dependent on the hedged item. The hedge instruments are benchmarked to either BBSW (Bank Bill Swap rate)
or AONIA (RBA Interbank Overnight Cash Rate). The hedging strategy will assist with managing interest rate margins in an
increasing interest rate environment and reduce earnings volatility, all else equal. The hedge reduces net interest margin
volatility on MyState’s variable interest rate loans by matching the repricing frequency of assets and liabilities.
Derivatives accounting policy
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and subsequently remeasured
to their fair value. Fair values are obtained from quoted market prices in active markets. Movements in the carrying
amounts of derivatives are recognised in the Consolidated Income Statement, unless the derivative meets the requirements
for hedge accounting.
The Group documents the relationship between the hedging instruments and hedged items at inception of the transaction,
as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also
documents its assessment of whether the derivatives used in hedging transactions have been, or will continue to be,
highly effective in offsetting changes in the fair values or cash flows of hedged items. This assessment is carried out both
at inception and on a monthly basis.
Cash flow hedges
The Group has cash flow hedges that are used to hedge the variability of interest rates in relation to certain assets and
liabilities. These derivative instruments are established with terms that exactly match the terms of the asset or liability
designated as the hedged item and therefore form highly effective relationships. The portion of the asset or liability
designated in the hedging relationship is determined by reference to specific fixed rate assets or liabilities within the
deposit or loan portfolio. The Group conducts tests for ineffectiveness and sources of ineffectiveness are limited to
credit risk of parties to the relationship. The variability in fair values attributable to an item designated as a cash flow
hedge is recognised in Other Comprehensive Income to the extent of the hedge’s effectiveness. Any ineffective portion
of the change in the fair value of a derivative is recognised immediately in the Consolidated Income Statement.
Derivatives that do not qualify for hedge accounting
If a derivative expires or is sold, terminated or exercised, or no longer meets the criteria for hedge accounting, or the
designation is revoked, then hedge accounting is discontinued and the amount recognised in Other Comprehensive Income
remains in Other Comprehensive Income until the forecast transaction affects the Consolidated Income Statement.
If the forecast transaction is no longer expected to occur, it is reclassified to the Consolidated Income Statement
as a reclassification adjustment.
When a derivative is not designated in a qualifying relationship, all changes in its fair value are recognised immediately in
the Consolidated Income Statement, as a component of net income from other financial instruments carried at fair value.
The following table indicates the Group’s hedge exposures at 30 June 2023.
Description
Notional amount of hedging instrument(i)
Carrying amount of hedging instrument(i)
The following table indicates the Group’s hedge exposures at 30 June 2022.
Description
Notional amount of hedging instrument(i)
Carrying amount of hedging instrument(i)
(i) Note that derivatives are reported as financial instruments in the Statement of Financial Position.
Cash flow
hedges
$‘000
1,243,290
8,728
Fair value
hedges
$‘000
–
–
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
Cash flow
hedges
$‘000
577,129
9,534
Fair value
hedges
$‘000
–
–
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
71
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
3.2 Financial risk management continued
3.2.3 Liquidity risk
Managing liquidity risk
Liquidity risk is the risk that the Group is unable to meet its financial and statutory obligations as they fall due, which could
arise due to mismatches in cash flows.
The Group maintains a portfolio of highly marketable assets that can be liquidated in the event of an unforeseen interruption
of cash flows. The Group also has committed lines of credit that it can access to meet its liquidity needs. Liquidity scenarios
are calculated under stressed and normal operating conditions, to assist in anticipating cash requirements providing
adequate reserves.
The Group’s objective is to manage its funds in a way that will facilitate growth in core business under a wide range of market
conditions. The Group maintains, and adheres to, a Liquidity Risk Management framework (LRMF). This process includes
acknowledgement of liquidity risks within the Group and justification of the amount of liquidity that is being held based on
the liquidity risk profile of the organisation.
Group Treasury is responsible for implementing liquidity risk management strategies in accordance with the LRMF. The Group’s
Assets and Liabilities Committee (ALCO) assists the Board with oversight of asset and liability management including liquidity
risk management. The Group’s liquidity policies are approved by the Board after endorsement by the Group Risk Committee
and the Banking Group’s ALCO.
On 19 March 2020, the Reserve Bank of Australia (RBA) established a Term Funding Facility (TFF) that offered ADI’s three-year
funding at a rate of 0.25% per annum to support the Australian economy through COVID-19. MyState Bank Limited, the Group’s
ADI, was granted an allowance of $109.0m which was fully drawn ahead of the 30 September 2020 deadline.
On 1 September 2020, the RBA announced changes to the TFF, including a Supplementary Allowance that provided ADI’s
additional three-year funding at a rate of 0.10%. MyState Bank Limited was granted an allowance of $75.7m which was fully
drawn ahead of the 30 June 2021 deadline.
The combined drawn amount as at the reporting date of $154.7m is reported separately in note 4.5. At 30 June 2023, funding
under the TFF has been secured by $183.7m of eligible asset backed self-securitisation. The funding was drawn down progressively
and will therefore be able to be repaid progressively at the end of each respective three-year term, which commenced in May
2023 and will end in June 2024.
72
MyState LimitedAnnual Report 2023 p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
Liquidity risk exposure
The Group is exposed to liquidity risk primarily through its banking activities. The Group’s contractual cash flows associated
with its financial liabilities and hedging derivatives within relevant maturity groupings is as follows. These are presented on an
undiscounted basis and, therefore, will not agree to amounts presented on the Consolidated Statement of Financial Position
as they incorporate principal and associated future interest payments.
On demand
$‘000
< 3 months
$‘000
3 months
to 1 year
$‘000
1 year
to 5 years
$‘000
> 5 years
$‘000
Total
$‘000
2023
At call deposits
3,380,217
–
At call deposits
3,413,960
–
Due to other financial
institutions
Term deposits
Term funding facility
Negotiable certificates
of deposit
Subordinated notes
Floating rate notes
Securitisation liabilities
Additional Tier 1 Hybrid
capital instrument
Contractual
amounts payable
Derivative liability
2022
Due to other
financial institutions
Term deposits
Term funding facility
Negotiable certificates
of deposit
Subordinated notes
Floating rate notes
Securitisation liabilities
Additional Tier 1 Hybrid
capital instrument
Contractual
amounts payable
Derivative liability
3,380,217
695,420
2,782,998
1,882,786
57,514
8,798,935
–
259
2,405
10,898
14,621
57,514
75,790
–
–
–
–
66,295
70,225
2,378,555
432,306
79,633
75,874
377,419
914
3,275
17,325
2,741
9,826
–
–
261,647
96,538
295,315
1,099,499
1,121
3,362
74,713
–
–
22,982
789,825
1,219,829
–
30,214
342,481
174,805
664
924
1,991
2,771
92,557
277,672
–
–
183,770
155,507
–
10,619
152,163
794,187
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,380,217
–
–
–
–
66,295
2,881,086
155,507
394,744
–
–
–
274,748
1,491,352
79,196
–
–
–
–
–
–
58,148
–
–
–
13,563
3,413,960
22,982
2,193,424
185,721
517,286
71,422
155,858
1,164,416
–
3,413,960
1,249,433
1,707,282
1,296,246
58,148
7,725,069
–
186
5,096
18,009
–
23,291
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
73
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
3.2 Financial risk management continued
Contractual maturity of assets and liabilities
The contractual maturities of the Group’s financial assets and liabilities as at the reporting date are contained in the following
table. The Group expects that certain assets and liabilities will be recovered or settled at maturities which are different to their
contractual maturities.
30 June 2023
30 June 2022
< 12 months
$‘000
> 12 months
$‘000
Total
$‘000
< 12 months
$‘000
> 12 months
$‘000
Total
$‘000
Financial assets
Cash and liquid assets
127,778
Due from other financial
institutions
Other assets
48,003
12,085
–
–
–
127,778
119,215
48,003
12,085
40,924
9,831
–
–
–
119,215
40,924
9,831
Financial instruments
194,676
742,204
936,880
381,929
460,997
842,926
Loans and advances(i)
62,808
7,845,272
7,908,080
73,160
6,898,215
6,971,375
Total financial assets
445,350
8,587,476
9,032,826
625,059
7,359,212
7,984,271
Financial liabilities
Due to other financial
institutions
Other liabilities
Deposits
(66,295)
(18,111)
–
–
(66,295)
(18,111)
(22,982)
(17,213)
–
–
(22,982)
(17,213)
(5,777,052)
(876,928)
(6,653,980)
(5,982,929)
(140,918)
(6,123,847)
Term funding facility
(79,040)
(75,660)
(154,700)
(30,000)
(154,700)
(184,700)
Subordinated notes
Floating rate notes
–
–
(49,824)
(49,824)
(249,556)
(249,556)
–
–
(49,758)
(49,758)
(149,685)
(149,685)
Securitisation liabilities
(350,190)
(1,046,100)
(1,396,290)
(273,421)
(816,773)
(1,090,194)
Additional Tier 1 Hybrid
capital instrument
–
(63,835)
(63,835)
–
–
–
Total financial liabilities
(6,290,688)
(2,361,903)
(8,652,591)
(6,326,545)
(1,311,834)
(7,638,379)
Net contractual amounts
receivable/(payable)
(5,845,338)
6,225,573
380,235
(5,701,486)
6,047,378
345,892
(i) Contractual recovery is subject to evolving regulatory and industry support for counterparties requesting such support, as at the reporting date, the primary
support provided to borrowers is repayment deferral periods.
74
MyState LimitedAnnual Report 2023 3.3 Average balance sheet and sources of net interest income
The following table shows the major categories of interest-earning assets and interest-bearing liabilities, together with their
respective interest earned or paid by the Group and the average interest rates. Averages are calculated based on the balance
at each month end.
30 June 2023
30 June 2022
Average
balance
$‘000
Interest
$‘000
Average
rate
%
Average
balance
$‘000
Interest
$‘000
Average
rate
%
Average assets
and interest income
Interest-earning assets
Cash and liquid assets
140,274
312
Financial instruments
890,124
30,676
Loans and advances(i)
7,203,932
321,982
0.22%
3.45%
4.47%
109,206
739,889
26
4,487
5,933,925
155,236
Total average
interest-earning assets
8,234,330
352,970
4.29%
6,783,020
159,749
Non-interest earning assets
148,048
–
–
142,541
–
Total average assets
8,382,378
352,970
4.21%
6,925,561
159,749
Average liabilities
and interest expense
Interest-bearing liabilities
Deposits and derivatives
6,799,811
156,449
Notes and bonds on issue
1,460,606
63,927
2.30%
4.38%
5,588,647
1,146,984
31,184
16,822
Total average
interest-bearing liabilities
8,260,417
220,376
2.67%
6,735,631
48,006
Non-interest bearing liabilities
66,928
–
–
36,982
–
Total average liabilities
8,327,345
220,376
2.65%
6,772,613
48,006
Reserves
423,242
–
–
397,433
–
0.02%
0.61%
2.62%
2.36%
–
2.31%
0.56%
1.47%
0.71%
–
0.71%
–
Total average liabilities
and reserves
8,750,587
220,376
2.52%
7,170,046
48,006
0.67%
(i) The offset account average balance included in Loans and advances is $295.861 million (2022: $262.919 million).
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
75
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
4.1 Cash and liquid assets
Notes, coins and cash at bank
Other short-term liquid assets
Total cash and liquid assets
30 June 2023
$‘000
30 June 22
$‘000
123,138
4,640
127,778
114,570
4,645
119,215
Reconciliation of profit for the year to net cash provided by operating activities
Profit for the year
38,502
32,026
Add/(less) items classified as investing/financing activities or non-cash items:
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Loss/(gain) on sale of non-current assets
Bad and doubtful debts expense net of recoveries
Share-based payment
Tax movement within reserves
Changes in assets and liabilities:
Decrease/(increase) in due from other financial institutions
Decrease/(increase) in loans and advances
Decrease/(increase) in financial instruments
Decrease/(increase) in other assets
Decrease/(increase) in deferred tax assets
Increase/(decrease) in due to other financial institutions
Increase/(decrease) in deposits and other borrowings
Increase/(decrease) in employee benefits provisions
Increase/(decrease) in tax liabilities
Net cash flows used in operating activities
Cash and liquid assets accounting policies
Cash and liquid assets
545
4,980
3,866
–
2,542
287
(564)
563
2,728
5,625
(854)
(762)
227
(2,990)
(7,079)
(9,065)
(939,247)
(1,363,313)
(94,778)
(125,795)
(2,254)
(664)
46,271
(548)
3,617
2,059
870,064
1,403,585
(240)
4,198
345
3,168
(73,571)
(49,384)
Cash and liquid assets in the Consolidated Statement of Financial Position and for the purposes of the Consolidated
Statement of Cash Flows comprise cash at bank and in hand and short-term deposits with an original maturity of less
than three months, net of outstanding bank overdrafts. Cash flows arising from deposits, share capital, investments,
loans to subsidiaries and investments in associates are presented on a net basis in the Statement of Cash Flows.
Cash flow statement
Cash flows arising from the following activities are presented on a net basis in the Statement of Cash Flows:
• customer deposits and withdrawals from savings and fixed-term deposit accounts;
• movements in investments;
• amounts due to and from other financial institutions;
• customer loans and advances; and
• dividends paid.
Where operational income and expense accruals and prepayments are included in the above line items, the movements
will differ between the Statement of Financial Position and the disclosure in this note.
76
MyState LimitedAnnual Report 2023 4.2 Financial instruments
Financial instruments at amortised cost
Negotiable certificates of deposits
Term deposits
Floating rate notes
Other deposits
30 June 2023
$‘000
30 June 2022
$‘000
156,832
35,700
734,962
658
341,098
35,700
455,878
721
Total financial instruments at amortised cost
928,152
833,397
Financial instruments at fair value
Derivatives
Total financial instruments
Financial instruments accounting policies
Financial instruments at amortised cost
8,728
9,529
936,880
842,926
Financial instruments at amortised cost are those non-derivative financial assets that the Group has acquired with the
objective of holding in order to collect contractual cash flows. The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial instruments at fair value
Financial instruments other than those carried at amortised cost, are carried at their fair value at the reporting date.
Note 4.7 contains information on how the Group determines fair values. Fair value gains and losses are recognised in
comprehensive income until the derecognition date, at which point the net gains and losses are transferred to profit
or loss for that instrument.
Derecognition of financial assets and liabilities
Financial assets are derecognised when the contractual rights to receive cash flows from the assets have expired, or
where the Group has transferred its contractual rights to receive the cash flows of the financial assets and substantially
all the risks and rewards of ownership. Financial liabilities are derecognised when they are extinguished, i.e. when the
obligation is discharged, cancelled or expired.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
77
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
4.3 Loans and advances
Classification of loans and advances at amortised cost
Residential loans secured by mortgage
Personal loans and unsecured overdrafts
Overdrafts secured by mortgage
Commercial loans
Total loans and advances at amortised cost
Less:
Specific provision for impairment
Collective provision for impairment
30 June 2023
$‘000
30 June 2022
$‘000
7,838,723
6,872,096
9,249
25,401
41,761
20,238
31,846
51,652
7,915,134
6,975,832
171
6,883
–
4,457
Total loans and advances at amortised cost net of provision for impairment
7,908,080
6,971,375
Loans and advances at amortised cost accounting policy
Loans and other receivables that have fixed or determinable payments that are not quoted in an active market are
classified as ”loans and advances”. Loans and advances are recognised on trade date and are measured at amortised
cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective
interest rate, except for short-term receivables when the effect of discounting is immaterial.
Provision for impairment
Specific provision for impairment
Opening balance
Net specific provision funding
Write-off of previously provisioned facilities
Closing balance of specific provision for impairment
Collective provision for impairment
Opening balance
Net collective provision funding
Write-off of previously provisioned facilities
Closing balance of collective provision for impairment
Total balance of provision for impairment
Charge to profit for impairment on loans and advances
Increase/(decrease) in specific provision for impairment
Increase/(decrease) in collective provision for impairment
Bad debts recovered
Bad debts written off directly
Total impairment (recovery)/expense on loans and advances
78
30 June 2023
$‘000
30 June 2022
$‘000
–
171
–
171
4,457
2,426
–
6,883
7,054
171
2,426
(399)
344
2,542
50
(50)
–
–
5,368
(918)
7
4,457
4,457
(50)
(918)
(539)
745
(762)
MyState LimitedAnnual Report 2023 Movements in provisions and reserve
Stage 1
Stage 2
Stage 3
12-month
ECL
$‘000
Lifetime
ECL
$‘000
Collectively
assessed –
lifetime
ECL
$‘000
Individually
assessed –
lifetime
ECL
$‘000
Subtotal
(1)
$‘000
General
reserve
for credit
losses
(2)
$‘000
Grand total
(1) + (2)
$‘000
Balance as at 1 July 2021
2,550
807
1,888
50
5,295
2,488
7,783
Transfers during the period to:
Increase/(decrease)
in provisions
Total provision
for doubtful debts
as at 30 June 2023
Balance as at 1 July 2022
Transfers during the period to:
Increase/(decrease)
in provisions
Total provision
for doubtful debts
as at 30 June 2022
(433)
72
(427)
(50)
(838)
(231)
(1,069)
2,117
2,117
879
879
1,461
1,461
–
–
4,457
4,457
2,257
2,257
6,714
6,714
867
607
952
171
2,597
111
2,708
2,984
1,486
2,413
171
7,054
2,368
9,422
The Group has undertaken a review of the expected credit loss (ECL) of its lending portfolios against relevant specific economic
conditions under varying scenarios. The review considered the macroeconomic outlook, customer credit quality, the quality
of collateral held and exposure at default as at the reporting date. These model inputs including forward-looking information
have been revised in recognition that rising cash rates is a key driver of the estimates therein. The modelled ECL is sensitive to
the current environment of high inflation and cost of living pressures, and the longevity of any monetary and fiscal intervention,
as these influence both the probability of default and the value of collateral that may be utilised. Whilst the inputs have been
revised, the underlying methodology for calculating the ECL is consistently applied in the current and comparative period as
described in the Impairment of financial assets accounting policy presented below.
At 30 June 2023, this review includes forward looking economic assumptions using a scenario weighting of 40% base case,
50% moderate recession and 10% strong recovery. The key assumptions used to determine the forward looking economic overlay
were revised to incorporate the latest observed economic data, including a higher Official Cash Rate (OCR), increasing levels
of unemployment and lower near term house price growth, with price falls under the moderate recession scenario of -15% and
20% respectively across FY24 and FY25.
Given the uncertain economic outlook of the Australian and global economy, global geopolitical uncertainties still lingering,
rising cost of living pressures and their repercussions on financial hardships, future economic conditions that result in outcomes
that differ from the current estimate are possible and will be accounted for in future periods.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
79
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
4.3 Loans and advances continued
Impairment of financial assets accounting policy
Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are
considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after
the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.
The primary source of credit risk for the Group arises on its loan portfolio. In relation to this portfolio, the Group
maintains a specific provision and a collective provision.
Specific provisions for impairment are made against individual risk rated credit facilities where a loss is expected.
The provisions are measured as the difference between a financial asset’s carrying amount and the expected future
cash flows.
All other loans and advances that do not have an individually assessed provision are assessed collectively for impairment.
The collective provisions are calculated using an Expected Credit Loss (ECL) model. This model is forward looking
and does not require evidence of an actual loss event for impairment provisions to be recognised.
The Group applies a three-stage approach to measuring the ECL based on credit risk since origination. The Group
estimates ECL through modelling the probability of default, loss given default and exposure at default, as follows:
Stage 1 – Performing – This category includes financial assets that have not experienced a significant increase in
credit risk since their origination. For these financial assets an allowance equivalent to 12 months’ ECL is recognised,
which represents the credit losses expected to arise from defaults occurring over the next 12 months.
Stage 2 – Under-performing – This category includes financial assets that have experienced a significant increase
in credit risk since their origination and are not credit impaired. For these financial assets an allowance equivalent
to lifetime ECL is recognised. Lifetime ECL is the credit losses expected to arise from defaults occurring over the
remaining life of the financial assets.
Stage 3 – Non-performing (impaired) – This category includes financial assets that are credit impaired. The provision
is also equivalent to the lifetime ECL. The difference to the provision calculated on stage 2 loans is that the stage 3 loan
calculation is not discounted over a future period, but rather the provision is calculated at nominal value.
Financial assets in stage 1 and stage 2 are assessed for impairment collectively, whilst those assets in stage 3 are subject
to either collective or specific impairment assessment.
Significant changes in credit risk
Significant increases in credit risk for financial assets are assessed by comparing the risk of a default occurring over
the expected life of a financial asset at the reporting date compared to the corresponding risk of default at origination.
In determining what constitutes a significant increase in credit risk, the Group considers qualitative and quantitative
information. The judgement to determine this is primarily based on changes in internal customer risk grades since
origination of the facility. For all of the Group’s loan portfolios, in addition to the primary indicator, a mathematical
model has been developed to identify where a facility’s recent behaviour has deteriorated significantly from its original
behaviour.
Key judgements and estimates made by the Group include the following:
Forward looking information
The measurement of expected credit losses needs to reflect an unbiased probability-weighted range of possible
future outcomes. AASB 9 provides limited guidance on how to meet this requirement and, consequently, the Group
has developed an approach considered appropriate for its credit portfolio, informed by emerging market practices.
In applying forward looking information in its AASB 9 credit models, the Group considered three alternate economic
scenarios (base case, strong recovery and moderate recession), to ensure a sufficient unbiased representative sample
is included in estimating ECL. At 30 June 2023, the forward looking component of the collective provision for doubtful
debts is $1.6m (2022: $0.9m). The balance of the overlay at 30 June 2022 reflected the level of uncertainty of the potential
ongoing impact of COVID-19 at that time. At 30 June 2023, while there are no customers on COVID-19-related assistance,
the overlay now primarily reflects the uncertainty surrounding the impact of inflation and higher interest rates on
borrowers and the economy more broadly.
80
MyState LimitedAnnual Report 2023
4.4 Transfer of financial assets (securitisation program)
Some loans and advances to customers are sold by the Group to securitisation vehicles. The transfer takes the form of the
Group assuming an obligation to pass cash flows from the underlying assets to investors in the notes. The Group utilises its
securitisation program to provide regulatory capital relief and funding diversification.
The following table sets out the carrying values at the transaction date of financial assets transferred during the financial year in
this manner to vehicles that provide regulatory capital relief and the value of the associated liabilities issued from the vehicles.
This table does not include transfer of assets to the securitisation vehicle in which the Group is the bond holder.
Transferred financial assets:
Loans and advances
Associated financial liabilities:
Securitisation liabilities to external investors
30 June 2023
$‘000
30 June 2022
$‘000
594,305
350,389
594,305
350,389
Transfer of financial assets accounting policy
Once assets are transferred to a securitisation vehicle, the Group does not have the ability to use the transferred
assets during the term of the arrangement. The Group does not have any loans transferred to unconsolidated
securitisation vehicles.
The consolidated securitisation vehicles generally transfer all the risks and rewards of ownership of the assets to the investors
in the notes. However, derecognition of the transferred assets from the Group is prohibited because the cash flows
that the securitisation vehicles collect from the transferred assets on behalf of the investors are not passed to them
without material delay. In these cases, the consideration received from the investors in the notes in the form of cash
is recognised as a financial asset and a corresponding financial liability is recognised. The investors in the notes have
recourse only to the cash flows from the transferred financial assets.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
81
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
4.5 Deposits and other borrowings including subordinated notes
Deposits
At call deposits
Term deposits
Negotiable certificates of deposit
Total deposits
Other borrowings
Subordinated notes(i)
Floating rate notes(ii)
Securitisation liabilities
Term funding facility
Additional Tier 1 Hybrid capital instrument(iii)
Total deposits and other borrowings including subordinated notes
Concentration of deposits:
Customer deposits
Wholesale deposits
Subordinated notes(i)
Floating rate notes(ii)
Term funding facility
Securitisation liabilities
Additional Tier 1 Hybrid capital instrument(iii)
Total deposits
30 June 2023
$‘000
30 June 2022
$‘000
3,380,217
3,413,960
2,881,086
2,193,424
392,677
516,463
6,653,980
6,123,847
49,824
249,556
49,758
149,685
1,396,290
1,090,194
154,700
63,835
184,700
–
8,568,185
7,598,184
6,236,356
5,553,779
417,624
49,824
249,556
154,700
570,068
49,758
149,685
184,700
1,396,290
1,090,194
63,835
–
8,568,185
7,598,184
(i) Refer to note 3.1 (ii) for details regarding the subordinated notes issue.
(ii) On 13 October 2022, floating rate notes with a face value of $100m and term of three years were issued by MyState Limited.
(iii) On 30 August 2022, MyState Limited (MyState) issued $65 million of inaugural Additional Tier 1 notes to wholesale investors (Capital Notes).
There are no customers who individually have deposits which represent 10% or more of total liabilities.
Deposits and other borrowings accounting policy
Deposits and other borrowings are initially measured at fair value, net of transaction costs and are subsequently measured
at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.
The Group does not currently hold any financial liabilities at fair value.
82
MyState LimitedAnnual Report 2023 4.6 Other liabilities
Trade payables and related accruals
Lease liabilities
Total other liabilities
Lease liabilities
30 June 2023
$‘000
30 Jun 2022
$‘000
9,934
8,177
18,111
6,975
10,238
17,213
Lease liabilities are initially measured at the present value of the future lease payments at the commencement date,
discounted using the interest rate implicit in the lease (or if that rate cannot be readily determined, the lessee’s incremental
borrowing rate).
Lease payments are allocated between principal and interest expense. Interest expense is recognised as a financing
cost within interest expense (refer note 2.1) in the income statement over the lease period. Any variable lease payments
not included in the measurement of the lease liability are also recognised in the income statement in the period in which
the event or condition that triggers those payments occurs. Lease liabilities are remeasured when there is a change
in future lease payments arising from a change in lease term, an assessment of an option to purchase the underlying
asset, an index or rate, or a change in the estimated amount payable under a residual value guarantee. When the lease
liability is remeasured, a corresponding adjustment is made to the carrying value of the right-of-use (ROU) asset,
or, in the income statement, where the carrying value of the ROU asset has been fully written down. The ROU asset
is recorded in property, plant and equipment and right-of-use assets (refer to note 5.1).
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
83
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
4.7 Fair value of financial instruments
Classification of financial instruments
Cash and liquid assets and amounts due from financial institutions are carried at cost. As these assets are short-term assets,
their cost is considered to approximate their fair value.
The following financial assets and liabilities are also carried at amortised cost:
• financial instruments;
• loans and advances;
• deposits; and
• other borrowings.
The aggregate net fair value of financial assets and financial liabilities which are carried at amortised cost is:
Financial assets
Financial instruments
Loans and advances
Total financial assets
Financial liabilities
Deposits
30 June 2023
30 June 2022
Carrying
value
$‘000
Net fair
value
$‘000
Carrying
value
$‘000
Net fair
value
$‘000
928,152
911,377
833,397
819,283
7,908,080
7,840,782
6,971,375
6,893,600
8,836,232
8,752,159
7,804,772
7,712,883
6,653,980
6,651,540
6,123,847
6,117,002
Other borrowings including subordinated notes
1,914,205
1,912,535
1,474,337
1,473,059
Total financial liabilities
8,568,185
8,564,075
7,598,184
7,590,061
The aggregate net fair values of financial assets and financial liabilities which are carried at fair value is:
Financial assets
Derivative assets
Due from other financial institutions
Total financial assets
Financial liabilities
Due to other financial institutions
Total financial liabilities
30 June 2023
30 June 2022
Carrying
value
$‘000
8,728
48,003
56,731
66,294
66,294
Net fair
value
$‘000
8,728
48,003
56,731
66,294
66,294
Carrying
value
$‘000
Net fair
value
$‘000
9,529
40,924
50,453
22,982
22,982
9,529
40,924
50,453
22,982
22,982
Fair value hierarchy
The level in the fair value hierarchy of the inputs used in determining the fair values is shown below.
The fair value of these assets is:
Level 1 – inputs that are prices quoted for identical instruments in active markets;
Level 2 – inputs based on observable market data other than those in level 1; and
Level 3 – inputs for which there is no observable market data.
Where the expected maturity is in excess of 12 months, the fair value is discounted to its present value. During the half year,
there have been no material transfers between levels of the fair value hierarchy. Classifications are reviewed at reporting dates
and transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair
value measurement.
84
MyState LimitedAnnual Report 2023 Fair value hierarchy for items carried at amortised cost
2023
Financial assets
Financial instruments
Loans and advances
Financial liabilities
Deposits
Other borrowings including subordinated notes
2022
Financial assets
Financial instruments
Loans and advances
Financial liabilities
Deposits
Other borrowings including subordinated notes
Level 1
value
$‘000
Level 2
value
$‘000
Level 3
value
$‘000
Total
value
$‘000
–
–
–
–
–
–
–
–
911,377
–
911,377
–
7,840,782
7,840,782
6,651,540
1,912,535
–
–
6,651,540
1,912,535
819,283
–
819,283
–
6,893,600
6,893,600
6,301,702
1,288,359
–
–
6,301,702
1,288,359
There has been no impact on profit and loss of fair value movements of assets that are within Level 3 of the fair value hierarchy.
Fair value hierarchy for items carried at fair value
Level 1
value
$‘000
Level 2
value
$‘000
Level 3
value
$‘000
Total
value
$‘000
2023
Financial assets
Derivative assets
Due from other financial institutions
Financial liabilities
Due to other financial institutions
2022
Financial assets
Derivative assets
Due from other financial institutions
Financial liabilities
Due to other financial institutions
–
–
–
–
–
–
8,728
48,003
66,294
9,529
40,924
22,982
–
–
–
–
–
–
8,728
48,003
66,294
9,529
40,924
22,982
There has been no impact on profit and loss of fair value movements of assets that are within Level 3 of the fair value hierarchy.
The Group has performed a VaR analysis as detailed in note 3.2, Market risk. VaR takes account of all material market variables
that may cause a change in the value of the loan portfolio, being 100% of Level 3 inputs.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
85
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
5.1 Property, plant and equipment and right-of-use assets
Leasehold improvements
At cost
Accumulated depreciation
Plant and equipment
At cost
Accumulated depreciation
Right-of-use assets – land and buildings
At cost
Accumulated depreciation
Total property, plant and equipment
30 June 2023
$‘000
30 June 2022
$‘000
7,429
(7,030)
399
6,175
(5,375)
800
15,181
(8,403)
6,778
7,977
7,370
(6,820)
550
5,847
(5,040)
807
15,581
(6,485)
9,096
10,453
Property, plant and equipment accounting policy
Leasehold improvements
Leasehold improvements are carried at cost less any subsequent accumulated depreciation on leasehold improvements.
Plant and equipment and right-of-use (ROU) assets
Plant and equipment and right-of-use assets are measured at cost less accumulated depreciation and any impairment
in value. The cost of ROU assets correspond to the amount recognised for the lease liability on initial recognition together
with any lease payments made at or before the commencement date, net of any lease incentives received and initial
direct costs.
Impairment of property, plant and equipment and right-of-use assets
The carrying values of property, plant and equipment and right-of-use assets are reviewed for impairment when
events or changes in circumstances indicate the carrying value may not be recoverable. For an asset that does not
generate largely independent cash flows, the recoverable amount is determined for the cash-generating unit to
which the asset belongs.
Derecognition of property, plant and equipment and right-of-use assets
An item of property, plant and equipment or right-of-use asset is derecognised upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in the
Consolidated Income Statement in the year the item is derecognised.
86
MyState LimitedAnnual Report 2023
5.2 Intangible assets and goodwill
Goodwill
$‘000
Software
$‘000
Total
$‘000
Year ended 30 June 2023
At 1 July 2022, net of accumulated amortisation
Additions
Transfer out from derecognition of SAAS capitalised costs
Amortisation
65,152
–
–
–
At 30 June 2023, net of accumulated amortisation
65,152
13,693
2,943
–
(3,866)
12,770
78,845
2,943
–
(3,866)
77,922
At 30 June 2023
Cost (gross carrying amount less impairment)
65,152
40,293
105,445
Accumulated amortisation
Net carrying amount
Year ended 30 June 2022
At 1 July 2021, net of accumulated amortisation
Additions
Transfer out from derecognition of SAAS capitalised costs
Amortisation
At 30 June 2022, net of accumulated amortisation
At 30 June 2022
Cost (gross carrying amount less impairment)
Accumulated amortisation
Net carrying amount
–
(27,523)
(27,523)
65,152
12,770
77,922
65,152
–
–
–
65,152
65,152
–
65,152
18,326
4,343
(3,351)
(5,625)
13,693
83,478
4,343
(3,351)
(5,625)
78,845
40,293
(26,600)
13,693
105,445
(26,600)
78,845
Intangibles accounting policy
Intangible assets acquired separately are capitalised at cost and from a business combination are capitalised at fair
value as at the date of acquisition. Following initial recognition, the cost model is applied to the class of intangible
assets. The useful lives of these intangible assets are assessed to be either finite or infinite. Where amortisation is
charged on assets with finite lives, this expense is taken to the Consolidated Income Statement. Certain costs directly
incurred in acquiring and developing software are capitalised and amortised over the estimated useful life.
Software as a Service arrangement
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
Any capitalised costs of configuring or customising a supplier’s application Software in a Software as a service arrangement
have been derecognised in the financials in line with the IFRS Interpretation Committee’s (IFRIC) agenda decision in
April 2021. The impact has been recognised in the Group’s retained earnings.
Intangible assets are tested for impairment where an indicator of impairment exists and, in the case of indefinite life
intangibles (limited to goodwill), annually, either individually or at the cash-generating unit level. Useful lives are also
examined on an annual basis and adjustments, where applicable, are made on a prospective basis.
Goodwill is treated as an indefinite life intangible, software and other intangibles are finite life intangibles. Refer to note
2.4 Expenses for the useful life of tangible and intangible assets.
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
87
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
5.2 Intangible assets and goodwill continued
Impairment testing of goodwill
For the purpose of impairment testing, goodwill has been allocated to the Group’s two cash-generating units (CGUs) the
Banking Business and the Wealth Management Business. These CGUs represent the lowest level within the Group at which
the goodwill is monitored for internal management purposes. The aggregate carrying amounts of goodwill allocated to each
CGU for the purpose of impairment testing is as follows:
Banking Business
Wealth Management Business
Total goodwill
30 June 2023
$‘000
30 June 2022
$‘000
40,189
24,963
65,152
40,189
24,963
65,152
The Group’s assessment of goodwill value-in-use exceeds the carrying value allocated to the CGUs and included in the
financial statements.
The recoverable amounts for each CGU’s value-in-use was determined using cash flow projections from Board-approved
financial budgets for the year ending 30 June 2024. Growth rates have been applied from year two through to year 10.
Cash flows are projected by undertaking detailed calculations for each income and expense category over a three-year
period and are then extrapolated off the third year, which is the lowest point of growth. An exit value is calculated at the
end of 10 years, based on an implied terminal value earnings multiple of 10.5 and 12.7 for the Banking Business and the
Wealth Management Business respectively, and a long-term growth rate not exceeding industry. A post-tax discount rate
of 10.9% (15.6% pre-tax) and 9.9% (14.1% pre-tax) was used for the Banking Business and the Wealth Management Business
respectively. Certain income categories are modelled by projecting growth in relevant portfolio balances and the resulting
income derived there from. Other non-portfolio-related income streams and expense categories are modelled by projecting
real rates of growth (above inflation) for each category. Terminal value is determined at year 10 using the assumption that the
CGU achieves no real growth above inflation into perpetuity. The growth rates applied do not exceed the long-term average
growth rate for the business which the CGU operates. The discount rate used of 10.9% reflects the Group’s post-tax nominal
weighted average cost of capital, which has been reviewed by externally engaged advisers and approved by the Board.
Average inflation is projected to be 5.6%. The method for determining value-in-use is consistent with that adopted in the
comparative period.
The key assumptions adopted in assessing Banking’s value-in-use are the rate of growth in the balance of the housing loan
portfolio and the outlook for net interest margin (NIM). Taking into account Management’s past experiences and external evidence,
the assumptions that have been adopted for both of these components are considered to be reasonable. Management expects
that any reasonably possible change to assumptions used in Management’s assessment will not result in impairment.
The key assumption adopted in assessing Wealth Management’s value-in-use is the rate of growth in income derived from
management fee (MF) income. MF income is derived from its activities as the responsible entity for various Managed Investment
Schemes (MIS). MF income derived is directly related to the portfolio balances of the MIS. Other sources of income for the
Wealth Management Business are its Trustee Services divisions. Taking into account Management’s past experiences and
external evidence, the assumptions adopted are considered reasonable. Management’s assessment of Wealth Management’s
value-in-use exceeds its carrying value. Any reasonably possible change to assumptions used in Management’s assessment
will not result in impairment.
Goodwill accounting policy
Goodwill on the acquisition of businesses is carried at cost as established at the date of the acquisition of the business
less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups
of CGUs) that is expected to benefit from the synergies of the combination.
A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently when there is
an indication that the unit may be impaired. If the recoverable amount of the CGU is less than its carrying amount,
the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then to
the other assets of the unit pro-rata based on the carrying amount of each asset in the CGU. Any impairment loss for
goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent
periods. On disposal of the relevant CGU, the attributable amount of goodwill is included in the determination of the
profit or loss on disposal.
Impairment of subsidiaries accounting policy
Investments in subsidiaries are tested annually for impairment or more frequently if events or changes in circumstances
indicate that the carrying value may not be recoverable. An impairment loss is recognised for the amount by which
the investment’s carrying amount exceeds its recoverable amount (which is the higher of fair value less costs to sell
and value-in-use). At each balance sheet date, the investments in subsidiaries that have been impaired are reviewed
for possible reversal of the impairment.
88
MyState LimitedAnnual Report 2023 5.3 Employee benefits provisions
Balances
Provision for annual leave
Provision for long service leave
Total employee benefits provisions
Due to be settled within 12 months
Due to be settled in more than 12 months
Total employee benefits provisions
30 June 2023
$‘000
30 June 2022
$‘000
2,198
3,147
5,345
4,193
1,152
5,345
2,319
3,266
5,585
4,129
1,456
5,585
Employee benefits accounting policy
Liabilities for salaries, wages and annual leave are recognised in respect of employees’ service up to the reporting
date. Where settlement is expected to occur within 12 months of the reporting date, the liabilities are measured at their
nominal amounts based on the remuneration rates which are expected to be paid when the liability is settled. Where
settlement is expected to occur later than 12 months from reporting date, the liabilities are measured at the present
value of payments which are expected to be paid when the liability is settled.
A liability for long service leave is recognised and measured at the present value of expected future payments to be
made in respect of services provided up to the reporting date. Consideration is given to expected future wage and
salary levels, experience of employee departures and periods of service.
Contributions are made by the Group to employee superannuation funds and are charged as expenses when incurred.
5.4 Share capital
Issued and paid up ordinary shares
Movements in ordinary share capital
30 June 2023
$‘000
30 June 2022
$‘000
225,274
211,167
30 June 2023
30 June 2022
Number
of shares
Amount
$‘000
Number
of shares
Opening balance
105,904,941
211,167
105,275,092
Shares issued pursuant to the:
– Group employee share scheme
10,954
50
12,584
– Dividend reinvestment plan underwrite
2,587,858
10,058
– Dividend reinvestment plan
– Less: Share issue transaction costs, net of tax
1,090,682
–
4,146
(147)
–
617,265
–
Closing balance
109,594,435
225,274
105,904,941
Amount
$‘000
208,196
62
–
3,000
(91)
211,167
Terms and conditions
Ordinary shares have the right to receive dividends as declared from time to time and, in the event of a winding up of the
Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of shares and amounts
paid up on the shares held. Ordinary shares entitle their holder to one vote per share, either in person or by proxy at meetings
of the Company.
The Company does not have authorised capital or par value in respect of its issued shares.
The Group offers share-based remuneration; refer to the Remuneration report for further information regarding these arrangements.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
89
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
6.1 Income tax expense, current and deferred tax balances
The major components of income tax expense/(benefit) are:
Income tax expense
Current income tax charge
Adjustment in respect of current income tax of previous years
Adjustments in respect of deferred income tax of previous years
Adjustments in respect of equity/goodwill
Relating to origination and reversal of temporary differences
Total income tax expense
A reconciliation between tax expense and accounting profit before income tax
multiplied by the Group’s applicable income tax rate is as follows:
Income tax expense attributable to:
Accounting profit before income tax
The income tax expense comprises amounts set aside as:
Provision attributable to the current year at the statutory rate of 30%, being:
– Prima facie tax on accounting profit before tax
– Under/(over) provision in prior year
Expenditure not allowable for income tax purposes
Other
30 June 2023
$‘000
30 June 2022
$‘000
16,674
12,426
78
289
(358)
16,683
(34)
–
(2,789)
4,273
13,876
55,185
45,902
16,556
13,771
78
49
–
(34)
139
–
Income tax expense reported in the consolidated income statement
16,683
13,876
Total income tax expense
Weighted average effective tax rates
Deferred income tax relates to the following:
Deferred tax assets
Employee entitlements
Provisions
Doubtful debts
Other
Total deferred tax assets
Current tax receivable
Total tax assets
Deferred tax liabilities
Financial assets at fair value
Property, plant and equipment
Other
Total deferred tax liabilities
Current tax payable
Total tax liabilities
90
16,683
13,876
30.2%
30.2%
1,604
267
2,116
1,571
5,558
–
5,558
59
1,945
4,271
6,275
2,509
8,784
1,676
243
1,337
1,639
4,895
1,383
6,278
61
1,711
4,198
5,970
–
5,970
MyState LimitedAnnual Report 2023 Movements in deferred tax balances
Deferred tax assets
Deferred tax liabilities
30 June 2023
$’000
30 June 2022
$’000
30 June 2023
$’000
30 June 2022
$’000
Opening balance
Reclassification deferred tax
(Charged)/credited to income statement
Credited/(charged) to equity
Adjustments for deferred tax of prior years
4,895
5,900
5,970
71
545
47
–
(130)
(916)
41
–
71
476
(242)
–
Closing balance
5,558
4,895
6,275
2,802
(130)
468
2,830
–
5,970
Taxation accounting policy
Income tax expense is recognised in the Consolidated Income Statement, except to the extent that it relates to items
recognised directly in other comprehensive income, in which case it is recognised in the Consolidated Statement of
Comprehensive Income. Income tax expense on the profit or loss of the period comprises current tax and deferred tax.
Current tax payable
Current tax payable is the expected tax payable on the taxable income for the financial year using tax rates that have
been enacted, and any adjustment to tax payable in respect of previous years.
Deferred tax
Deferred income tax is provided on all temporary differences at reporting date. Temporary differences are calculated
at each reporting date as the difference between the carrying amount of assets and liabilities for financial reporting
purposes and their tax base.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit
nor taxable profit or loss; and
• when the taxable temporary differences associated with the investments in subsidiaries and the timing of the reversal
of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the
foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax assets
and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences and the carry forward of unused tax assets and unused tax losses can be utilised except:
• when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affect
neither the accounting profit nor the taxable profit and loss; and
• when the deductible temporary differences are associated with investments in subsidiaries, in which case a deferred
tax asset is only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable
future and taxable profit will be available against which the temporary differences can be utilised.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same
taxable authority.
The Group undertakes transactions in the ordinary course of business where the income tax treatment requires the
exercise of judgement. The Group estimates its tax liability based on its understanding of the tax law.
Tax consolidation
The Group has elected to be taxed as a single entity under the tax consolidation regime. The head company is MyState
Limited. The members of the Group have entered into a tax sharing agreement that provides for the allocation of income
tax liabilities among the entities should the head entity default on its tax payment obligations. No amounts have been
recognised in the financial statements in respect of this agreement on the basis that the possibility of default is remote.
The Company and the controlled entities in the tax consolidated group continue to account for their own current and
deferred tax amounts. The Company has applied the separate tax payer within group approach in determining the
appropriate amount of current taxes and deferred taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the Company also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in
the tax consolidated group.
Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement
are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
91
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
7.1 Parent entity information
The accounting policies of the parent entity, which have been applied in determining the financial information shown below,
are the same as those applied in the consolidated financial statements. Refer to note 1 and policy notes within the financial
statements for a summary of the significant accounting policies relating to the Group.
Statement of Financial Position
Assets
Cash and liquid assets
Other receivables
Related party receivables
Investments in subsidiaries
Current and deferred tax assets
Total assets
Liabilities
Other liabilities
Other borrowings
Related party payables
Tax liabilities
Employee benefits provisions
Total liabilities
Net assets
Equity
Share capital
Retained earnings
Reserves
Total equity
Financial performance
Profit after income tax for the year
Other comprehensive income
Total comprehensive income
30 June 2023
$‘000
30 June 2022
$‘000
4,903
833
50,000
340,469
1,024
3,963
1,131
50,000
324,392
1,200
397,229
380,686
457
820
50,000
50,000
4,188
2,557
373
57,575
5,392
(1,467)
439
55,184
339,654
325,502
331,203
317,095
7,139
1,312
7,182
1,025
339,654
325,302
24,637
26,813
–
–
24,637
26,813
The parent entity has not entered into any guarantees and does not have any contingent liabilities as at 30 June 2023
(30 June 2022: nil).
Transactions between the Company and the consolidated entities principally arise from the provision of management and
governance services. All transactions with subsidiaries are in accordance with regulatory requirements, the majority of which
are on commercial terms. All transactions undertaken during the financial year with the consolidated entities are eliminated
in the Consolidated Financial Statements. Amounts due from and due to entities are presented separately in the Statement
of Financial Position of the Company except where offsetting reflects the substance of the transaction or event.
92
MyState LimitedAnnual Report 2023 7.2 Controlled entities and principles of consolidation
Details of the Group’s material subsidiaries at the end of the reporting period are as follows.
Significant subsidiaries
Principal activities
Country of incorporation
MyState Bank Limited
Banking
TPT Wealth Limited
Wealth Management
Australia
Australia
Connect Asset Management Pty Ltd Manager of Securitisation Vehicles
Australia
Ownership
interest
100%
100%
100%
Basis of consolidation accounting policy
The consolidated financial statements incorporate the financial statements of the Company and entities (including
structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:
• has power over the investee;
• is exposed, or has rights, to variable returns from its involvement with the investee; and
• has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of these three elements of control.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when
the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally.
The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights
in an investee are sufficient to give it power, including:
• the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
• potential voting rights held by the Company, other vote holders or other parties;
• rights arising from other contractual arrangements; and
• any additional facts and circumstances that indicate that the Company has, or does not have, the current ability
to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous
shareholders’ meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company
loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the
year are included in the Consolidated Income Statement and Other Comprehensive Income from the date the Company
gains control until the date when the Company ceases to control the subsidiary.
Profit or loss and each component of Other Comprehensive Income are attributed to the owners of the Company and
to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company
and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies
in line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members
of the Group are eliminated in full on consolidation.
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
93
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
7.3 Related party disclosures
The ultimate parent entity and controlling entity is MyState Limited. Balances and transactions between the Company and its
subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this
note. Details of transactions between the Group and other related parties are disclosed in the following paragraphs.
Managed Investment Schemes
Within the Group, TPT Wealth Limited (TPT) is a Responsible Entity for Managed Investment Schemes (Funds) and, accordingly,
has significant influence over their activities. TPT receives management fees from these Funds. TPT also pays expenses of
the Funds for which it is reimbursed. TPT and the Company have also invested in these Funds and receive distributions on
these investments. These investments are made on the same terms and conditions that apply to all investors in these Funds.
Details of these transactions and balances are as follows:
Management fees received
Balance of investment held at year end
Distributions received from managed funds
The Funds have:
Consolidated
TPT
30 June 2023
$‘000
30 June 2022
$‘000
30 June 2023
$‘000
30 June 2022
$‘000
8,799
2,605
74
9,078
2,532
23
8,799
2,605
74
9,078
2,532
22
• accepted money on deposit from Directors and Executives or entities associated with Directors and Executives at prevailing
Fund rates and conditions;
• loaned money to MyState Bank, in the form of term deposits and negotiable certificates of deposit, totalling $2.61m
(2022: $2.58m); and
• invested in the ConQuest Trusts Residential Mortgage Backed Securities Program in the form of Class A and B notes
totalling $32.50m (2022: $31.29m).
These deposits are made on the same terms and conditions that apply to all similar transactions.
Key Management Personnel
(i) Loans to Directors
During 2023, secured loans advanced to the Managing Director and Chief Executive Officer were nil. At 30 June 2023,
the balance outstanding was nil (2022: $0.97m).
(ii) Individual Directors and Executive compensation disclosures
Information regarding individual Directors, Executive compensation and equity instruments disclosures, as required by the
Corporations Regulation 2M.2.03, is provided in the Remuneration Report section of the Directors’ report. Disclosure of the
compensation and other transactions with Key Management Personnel (KMP) is required pursuant to the requirements of
Australian Accounting Standard AASB 124 Related Party Disclosures. The KMP of the Group is comprised of the Non-Executive
Directors, Managing Director and Chief Executive Officer and certain Executives.
Key Management Personnel compensation
The key management personnel compensation comprised:
Short-term employee benefits
Post-employment benefits
Share-based payment(i)
Termination benefits
30 June 2023
$‘000
30 June 2022
$‘000
3,963
3,888
330
261
268
323
208
–
(i) These amounts are estimates of compensation and include a portion that will only vest to the Managing Director or Executive when certain performance
criteria are met or a ‘Capital Event’ occurs. The fair value of shares is calculated at the date of grant and is allocated to each reporting period over the
period from grant date to vesting date. The value disclosed is the portion of the fair value of the shares allocated to this reporting period.
94
MyState LimitedAnnual Report 2023
8.1 Contingent liabilities and expenditure commitments
MyState Bank Limited has provided guarantees to third parties in order to secure the obligations of customers. The maximum
exposures to these guarantees are disclosed below. The range of situations in which these guarantees are given include:
• local government authorities, to secure the obligations of property and sub-divisional developers to complete
infrastructure developments;
• local government authorities, schools and other building owners, to secure the obligations of building contractors
to complete building works;
• landlords, to secure the obligations of tenants to pay rent; and
• CUSCAL, to secure payroll and direct debit payments processed by CUSCAL on behalf of customers.
Customer commitments
Loans approved but not advanced to borrowers
Undrawn continuing lines of credit
Performance guarantees
Total customer commitments
30 June 2023
$‘000
30 June 2022
$‘000
91,849
53,591
2,472
207,176
58,269
2,919
147,912
268,364
Guarantees are issued in accordance with approved Board policy. Those guarantees over $10,000 are required to be secured.
In the event that a payment is made under a guarantee, the customer’s obligation to MyState Bank Limited is crystallised in
the form of an overdraft or loan.
Estate administration
TPT Wealth Limited acts as executor and trustee for a significant number of trusts and estates. In this capacity, this Company
has incurred liabilities for which it has a right of indemnity out of the assets of those trusts and estates. Accordingly, these
liabilities are not reflected in the financial statements.
Other contracted commitments for expenditure on plant and equipment as at the reporting date are for only minimal amounts.
8.2 Remuneration of auditors
During the financial year, the following fees which are shown exclusive of GST claimed were
paid or payable for services provided by the auditor of the Group, Wise Lord & Ferguson:
30 June 2023
$‘000
30 June 2022
$‘000
Audit services
Audit of the financial statements of the consolidated entities
Total remuneration for audit services
Audit-related services
Assurance-related services
Audit of loans and other services to the securitisation program
Total remuneration for audit-related services
Other non-external audit-related services
Other services
Total remuneration for non-audit related services
Total remuneration for services provided
448
448
60
4
64
49
49
561
418
418
51
4
55
51
51
524
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
95
MyState LimitedAnnual Report 2023
Notes to the consolidated financial statements
for the year ended 30 June 2023 continued
8.3 Events subsequent to balance date
There are no matters or circumstances that have arisen since the end of the year which significantly affected or may significantly
affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial periods.
8.4 Other significant accounting policies, new accounting standards and disclosures
The principal accounting policies, which are consistent with those applied in the comparative period unless otherwise stated,
that have been adopted in the preparation of the Financial report are set out in this section and the preceding sections.
(i) Other assets
Other assets comprise accounts receivable, accrued income and prepayments. Accounts receivable are initially recorded at
the fair value of the amounts to be received and are subsequently measured at amortised cost using the effective interest rate
method, less any provision for impairment loss.
(ii) Other liabilities
Other liabilities comprise accounts payable and accrued expenses and represent liabilities for goods and services received
by the Group that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the
amounts normally paid within 30 days of the recognition of the liability.
(iii) New and revised accounting standards
The Group has adopted the following new standards and amendments to standards:
• AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition
of Accounting Estimates.
• AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities
arising from a Single Transaction.
Adoption of these amendments has not resulted in any significant changes in how the Group currently applies
accounting standards.
The following accounting standards will become effective in future financial years:
• AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current
(effective 1 January 2024).
Adoption of these amendments is not expected to result in any significant changes to how the Group applies accounting
standards in future financial years.
96
MyState LimitedAnnual Report 2023 Directors’ declaration
for the year ended 30 June 2023
In accordance with a resolution of the Directors of MyState Limited, we state that:
1.
In the opinion of the Directors:
(a) The financial statements and notes of the Group set out on pages 54 to 96 are in accordance with the Corporations
Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its performance for the
year ended on that date; and
(ii) complying with accounting standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(b) There are reasonable grounds to believe that MyState Limited will be able to pay its debts as and when they become
due and payable.
2. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 by the Chief
Executive Officer and Chief Financial Officer for the financial year ended 30 June 2023.
3. The financial statements and notes also comply with International Financial Reporting Standards as disclosed in note 1.2.
This declaration is made in accordance with a resolution of the Directors.
On behalf of the Board
Vaughn Richtor
Chairman
Brett Morgan
Managing Director and Chief Executive Officer
Hobart, dated this 18 August 2023
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
97
MyState LimitedAnnual Report 2023
Independent auditor’s report
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee SShhaarreehhoollddeerrss ooff MMyySSttaattee LLiimmiitteedd
OOppiinniioonn
We have audited the financial report of MyState Limited (the Company) and its subsidiaries (collectively
the Group), which comprises the consolidated statement of financial position as at 30 June 2023, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity
and the consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(i) giving a true and fair view of the consolidated financial position of the Group as at 30 June
2023 and of its consolidated financial performance for the year then ended on that date;
and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
BBaassiiss ffoorr OOppiinniioonn
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report
section of our report. We are independent of the Group in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional
& Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
KKeeyy AAuuddiitt MMaatttteerrss
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial statements.
98
MyState LimitedAnnual Report 2023
The results of our audit procedures, including the procedures performed to address the matters
below, provide the basis for our audit opinion on the accompanying Financial Report.
11.. OOppeerraattiioonn ooff IITT SSyysstteemmss aanndd CCoonnttrroollss
Key audit matter
How our audit addressed the matter
This is a key audit matter because a significant part of
the Group’s financial reporting process is heavily reliant
on IT systems with automated processes and controls
for the capture, processing, storage, and extraction of
information.
There has been continued change to the Group’s IT
landscape in the 2023 financial year and it has been
essential to ensure appropriate user access and
change management protocols exist and are being
observed. These protocols are important because they
ensure that access and changes to IT systems and
related data are made and authorised
in an
appropriate manner.
These key controls mitigate potential fraud or error
because of change to an application or underlying data.
MyState has outsourced arrangements in place for a
number of key IT processes.
We focus our audit on those IT systems and controls
that are significant to the Group’s financial reporting
process.
We assessed and tested the design and operating
effectiveness of the Group’s IT controls, including those
over user access and change management as well as
data reliability and integrity.
This involved assessing:
•
•
•
•
and
control
environment
Technology
governance;
Change management processes for software
applications;
Access
segregation of duties;
the
System
appropriateness of management’s testing and
implementation controls;
controls designed
development,
reviewing
enforce
to
• We carried out direct tests of the operation of
key programs to establish the accuracy of
calculations, the correct generation of reports,
and to assess the correct operation of
automated
technology-
dependent manual controls; and
Third party reports on IT systems and controls.
controls
and
•
For outsourced providers, we obtain assurance from
third party auditors on the design and operating
effectiveness of controls.
22.. RReeccooggnniittiioonn aanndd MMeeaassuurreemmeenntt –– GGooooddwwiillll
Refer to Note 5.3 ‘Goodwill’
Key audit matter
How our audit addressed the matter
There is also a high level of judgement required in the
Group’s annual testing of impairment of goodwill with
significant forward-looking assumptions used in the
valuation models.
Details on the methodology and assumptions used in
the impairment assessment if goodwill are included in
Note 5.3 – Intangible assets and goodwill.
To address the risk of material misstatement and
obtain sufficient audit evidence, we performed the
following procedures over goodwill:
•
•
Assessed whether the models used in the
impairment testing of goodwill met the
requirements of Australian Accounting
Standards;
Assessed the appropriateness of the Cash
Generating Units (CGU) identified to which
goodwill has been allocated;
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
99
MyState LimitedAnnual Report 2023
Independent auditor’s report continued
Key audit matter
How our audit addressed the matter
•
•
•
•
forecasts based on
Agreed the forecast cash flows to the most
recent forecasts approved by management or
the Board, considered the reasonableness of
these
the current
economic environment, and assessed the
accuracy of the Group’s previous forecasts by
performing a comparison of historical
forecasts to actual results;
Assess the key assumptions used in the
impairment assessment with reference to
market rates and historical performance;
Test
the mathematical accuracy of
impairment models;
Assessed the adequacy of the disclosures
associated with the impairment assessment of
goodwill within the financial report.
the
33.. PPrroovviissiioonn ffoorr IImmppaaiirrmmeenntt oonn LLooaannss aanndd AAddvvaanncceess
Refer to Note 4.3 ‘Loans and advances’
Key audit matters
How our audit addressed the matter
The provision for impairment on loans and advances
is a key audit matter because of the Group’s significant
balance of loans and advances, the significant growth
in loan balances during the 2023 financial year, and
the significant judgement inherent in the provisioning
model. The provisioning model is determined in
accordance with the requirements of AASB 9 Financial
Instruments.
Provision for impairment of loans and advances that
exceed specific thresholds are individually assessed by
cash
reference
management with
repayments and proceeds from the realisation of
security.
future
to
Other loans that do not have an individually assessed
provision are assessed on a portfolio basis with loans
with similar risk characteristics.
Key areas of judgement included:
•
•
The design of the expected credit loss model
used;
Assumptions used in the expected credit loss
model
(for exposures assessed on an
individual or collective basis) such as the
financial condition of
the counterparty,
expected future cash flows, and forward-
looking macroeconomic factors (e.g. GDP
100
To address the risk of material misstatement and
obtain sufficient audit evidence, we performed the
following procedures over
for
impairment on loans and advances:
the provisions
•
•
•
•
•
•
•
the
the assumptions within
Assessed the governance oversight;
Reviewed and tested the calculation of the
expected credit loss model, including the
specific provision, collective provision for
impairment and management overlays;
Considered
management overlays;
Ensured the methodology for write off of debt
was consistent with prior periods;
Tested the accuracy of the data used to
calculate the provision;
Reviewed a sample of current arrears
balances and reviewed follow up procedures,
including whether specific financial assets in
arrears had been appropriately provided for;
and
Reviewed management assessments of
provision
loans that exceed specific
thresholds.
for
We also assessed the on-going impact of regulatory
changes on the provision for impairment on loans and
MyState LimitedAnnual Report 2023 Key audit matters
How our audit addressed the matter
advances, specifically
Standard APS 220 Credit Risk Management.
the
impact of Prudential
We considered the impact of the growth in loan
balances on credit risk and tested the internal control
environment that supports lending.
of
incorporation
growth, unemployment rates, central bank
interest rates);
forward-looking
The
information to reflect current or
future
external factors, specifically judgments related
to current economic uncertainty, both in the
multiple forward-looking scenarios and the
probability weighting determined for each of
these scenarios
The design of the management overlays
applied in response to significant economic
events; and
The stress test modelling undertaken to verify
provisioning levels.
•
•
•
OOtthheerr IInnffoorrmmaattiioonn
The directors are responsible for the other information. The other information comprises the
information included in the Group’s annual report for the year ended 30 June 2023, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
RReessppoonnssiibbiilliittiieess ooff tthhee DDiirreeccttoorrss ffoorr tthhee FFiinnaanncciiaall RReeppoorrtt
The directors of the Company are responsible for the preparation of the 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
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Group or to
cease operations, or has no realistic alternative but to do so.
AAuuddiittoorr’’ss RReessppoonnssiibbiilliittiieess ffoorr tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
101
MyState LimitedAnnual Report 2023
Independent auditor’s report continued
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Entity’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
•
• Conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Entity’s ability to continue
as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Entity to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
•
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all the relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
102
MyState LimitedAnnual Report 2023 p
e
r
f
o
r
m
a
n
c
e
I
n
t
r
o
d
u
c
t
i
o
n
a
n
d
r
e
v
e
w
i
C
h
a
i
r
’
s
O
f
f
i
c
e
r
’
s
r
e
v
e
w
i
i
C
h
e
f
E
x
e
c
u
t
i
v
e
a
p
p
r
o
a
c
h
t
o
r
i
s
k
O
u
r
s
t
r
a
t
e
g
y
a
n
d
E
S
G
u
p
d
a
t
e
a
n
d
K
M
P
B
o
a
r
d
o
f
D
i
r
e
c
t
o
r
s
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
r
e
p
o
r
t
a
n
d
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
OOppiinniioonn oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
We have audited the Remuneration Report included in the Directors' Report (pages 35 to 52 of this
Annual Report) for the year ended 30 June 2023.
In our opinion, the Remuneration Report of MyState Limited, for the year ended 30 June 2023
complies with section 300A of the Corporations Act 2001.
RReessppoonnssiibbiilliittiieess
The Directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
WWIISSEE LLOORRDD && FFEERRGGUUSSOONN
NNIICCKK CCAARRTTEERR
Partner
Date: 18 August 2023
r
e
p
o
r
t
i
F
n
a
n
c
a
i
l
a
n
d
c
o
r
p
o
r
a
t
e
d
i
r
e
c
t
o
r
y
S
h
a
r
e
h
o
d
e
r
l
i
n
f
o
r
m
a
t
i
o
n
103
MyState LimitedAnnual Report 2023
Shareholder information
Voting rights
In accordance with the MyState Limited Constitution, a shareholder is entitled to exercise one vote in respect of each fully paid
ordinary share held.
Range of units at 17 August 2023
The Company’s quoted securities on the ASX (ASX Code: MYS) are ordinary fully paid shares.
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Rounding
Total
Unmarketable parcels
Minimum $500.00 parcel at $3.5300 per unit
Top holders (grouped) as at 17 August 2023
Total holders
Units
% units
51,302
21,559,109
3,405
1,322
1,298
8,769,055
9,647,810
29,454,576
53
40,163,885
19.67
8.00
8.80
26.88
36.65
0.00
57,380
109,594,435
100.00
Minimum
parcel size
142
Holders
671
Units
38,489
Rank Name
Units
% Units
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NATIONAL NOMINEES LIMITED
SELECT MANAGED FUNDS LTD
MR BRIAN DAVID FAULKNER
BEECHWORTH HOLDINGS PTY LTD
Continue reading text version or see original annual report in PDF format above