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Edited Transcript of MYS.AX earnings conference call or presentation 18-Feb-21 11:00pm GMT

·27 min read

Half Year 2021 MyState Ltd Earnings Call Feb 23, 2021 (Thomson StreetEvents) -- Edited Transcript of MyState Ltd earnings conference call or presentation Thursday, February 18, 2021 at 11:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Gary Dickson MyState Limited - CFO * Melos Anthony Sulicich MyState Limited - MD, CEO & Director ================================================================================ Conference Call Participants ================================================================================ * Nathan Zaia Morningstar Inc., Research Division - Senior Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Thank you for standing by, and welcome to the MyState Limited FY '21 Half Year Results Conference Call. (Operator Instructions) I would now like to turn the conference over to Mr. Melos Sulicich, CEO and Managing Director. Please go ahead. -------------------------------------------------------------------------------- Melos Anthony Sulicich, MyState Limited - MD, CEO & Director [2] -------------------------------------------------------------------------------- Good morning, everybody. Thank you, and thanks for joining us to discuss MyState results for the first half of 2021. I'm Melos Sulicich, Managing Director and CEO; and joining me in a state of unlocked down in Melbourne is Gary Dickson, our CFO. We'll speak to the investor presentation lodged with the ASX earlier this morning, which is also available on the MyState Limited website. I'll provide a brief business update before handing over to Gary, who will take you to the financials in more detail. And then I'll come back and outline our strategic priorities before finishing with our growth outlook. And as usual, we welcome any questions at the end. So first to the highlights. And on Slide 4, you can see that MyState delivered an outstanding result for the first half of the 2021 financial year. Our results underline the effectiveness of our strategic focus. Firstly, driving strong customer acquisition; secondly, increasing investment in digital innovation; thirdly, managing our operating expenses. And fourthly and most particularly whilst maintaining a culture based on simply delivering great customer experiences. We'll provide evidence of these in the presentation this morning. As you can see on Slide 4, our headline KPIs are all strongly heading in the right direction. Core earnings, it's earnings before tax, provisions and restructuring costs, were up nearly 19% to $26.4 billion in the half, accelerating our rate of growth over the year before. Statutory net profit after tax increased 12.6% to $17 million, and earnings per share increased 11.6% to $0.1848 per share. This is despite incurring one-off restructuring costs of $2.5 million in the period. Operating expenses were again managed carefully leading to the cost-to-income ratio, excluding restructuring costs, decreasing by 340 basis points to 61.5%. Customer deposits were up 5.1% in the last 6 months alone, helped by our award-winning MyState Bank Bonus Saver account, with deposits here up 210% since June last year. All of these initiatives saw us achieve a peer-leading return on equity of 9.94%, up 65 basis points on the prior year. All of these figures show our multiyear transformation journey really starting to bear fruit. And we're well placed to harness this increased momentum because we now have fundamental structures in place that allow us to take advantage of evolving market conditions and customer needs. As a result, the Board decided to pay an interim dividend of $0.125 per share fully franked, equivalent to a payout ratio of 67.6%, which is within the new 60% to 80% ratio we announced in August last year. Gary will take you through these numbers in more detail shortly, but it's important to note that these good figures were possible due to the trust our customers place in us because we're focused on their evolving needs, and we're focused on those better than most of our competitors. We've also got an increased ability to attract new customers as a result. Last year, we welcomed 14,500 new customers as we continue to be one of the customer satisfaction leaders in the sector with a Net Promoter Score of plus 40. With the customer funding ratio now of a healthy 71%, we can comfortably support growth, managing our cost of funds in the most efficient way. Several initiatives during the period contributed to the results. They included introducing an artificial intelligence-driven home loan retention tool to limit refinance and discharge requests. We enhanced our wealth business's distribution by adding business development managers into Sydney and launched a new administration platform. Other savings also allowed us to increase marketing of our services along the eastern seaboards, particularly in Melbourne. However, it's our digitization strategy, which has transformed MyState into a digital, scalable business and positions us so well for the future. It's changed the way our customers interact for us, interact with our services and the continuing growth in online banking has enabled us to expand our online services, offer more intuitive and innovative products and reduce the number of branches we operate as we continue to digitize our services. Savings related to these initiatives will allow us to spend more time and more money on marketing and the ongoing digitation of the business continuing to drive further savings, and I'll touch more on this later. But for now, I'll hand over to Gary. -------------------------------------------------------------------------------- Gary Dickson, MyState Limited - CFO [3] -------------------------------------------------------------------------------- Thanks, Melos, and good morning, everyone. Moving to the results summary on Slide 6. Nearly all key financial metrics have moved positively compared to the previous corresponding half, and we remain pleased with the underlying momentum of the business in what has been a challenging, albeit more positive than expected external environment. As Melos has mentioned, pre-provision operating profit or core earnings was up 18.8% on the prior comparative period. Total operating income was $68.6 million, up 8.5% on the prior comparative period, with net interest income up 15% to $55.4 million, benefiting from balance sheet growth, disciplined margin management, a significant increase in retail deposits and lower wholesale funding costs. Net interest margin for the half of 1.94% was up 6 basis points on the second half of FY '20 and was 12 basis points higher than the prior comparative period. Exit NIM in the month of December was 2.01%. That's despite a challenging environment with increased competition in the low-risk owner-occupied lending market, with a loan-to-valuation ratio of less than 80%, which we target. Operating expenses, excluding restructuring costs, increased 2.7%, resulting in a significant widening of the positive jaws experienced in FY '20. The cost-to-income ratio improved by 340 basis points to 61.5%, with the benefits of process reengineering and automation, driving improved operating leverage. Net profit after tax was up 12.6%, benefiting from a higher average balance sheet relative to the previous corresponding half and the improvement in net interest margin. Earnings per share, as Melos mentioned, increased to $0.1849 per share, and the company has resumed paying dividends with an interim dividend of $0.125 per share. MyState remains comfortably capitalized above regulatory minimums with a total capital ratio at 31 December, 2020 of 13.24%. Slide 7 shows the key drivers of the increase in core earnings of 18.8% and the 12.6% increase in statutory net profit after tax after allowing for restructure costs incurred in closing 4 branches in Central Queensland and a reorganization of the TPT Wealth business. As noted earlier, net interest income benefited from balance sheet growth, focused management of margin and reduced funding costs. Wealth Management income declined due to lower average funds under management, partly reflecting the impact of COVID-19 on investment markets in the second quarter of calendar year 2020 and lower trustee fees. Operating expenditure includes growth in technology and marketing spend and the uplifting capability required to expand our distribution footprint on the mainland of Australia. Net bad and doubtful debts benefited in the current period from a $0.4 million after tax write-back of the forward-looking economic overlay due to the improved outlook for the Australian economy, including assumptions related to unemployment and house prices. The expense in the prior comparative period reflected the uptick in total and 90-day arrears balances in the home loan portfolio towards the end of calendar year 2019. Importantly, impairments overall remain at historic lows and arrears remain well below relevant 30-day and 90-day benchmarks. Slide 8 highlights that while we continue to operate in a highly competitive market, focused management of deposit rates and lending rates and lower wholesale funding costs have driven improvement in net interest margin of 6 basis points on the second half of FY '20 and 12 basis points on the prior corresponding period. The RBA has reduced the cash rate by 140 basis points since early June 2019, with flow on effects to both the earning rate on assets and the cost of funding. While home loan margins remain under pressure, MyState Bank has benefited from the tailwinds of a continued fall in wholesale funding costs and the narrowing of the cash bills spread during the current half. Term deposit margins have continued to reduce as the book rolled to lower rates following the RBA cash rate changes and our Bonus Saver account, as Melos mentioned, generated strong inflow in the half. Retail deposit pricing continues to benefit from the heightened level of liquidity being held across the system as a consequence of COVID-19 and the broad package of initiatives implemented by the federal government to support the economy. As noted earlier, exit NIM in the month of December was 2.01%. And looking forward, we expect net interest margin to remain under pressure with competition in the home loan market intensifying, but with lower funding costs to provide some margin support. On the next slide, Slide 9, the chart on the top right-hand side highlights that approximately 71% of our funding is sourced from customer deposits. During the half, we have seen, as the market broadly has a switching customer preference from term to at-call products, balances in our award-winning Bonus Saver account have increased by 210% since 30 June. This fee-free savings account has been awarded a 5-star rating by Canstar and received Mozo's Experts Choice award. Following the branch closures in Central Queensland, we did see some customer attrition, predominantly in term deposits, with the majority of accounts lost immediately after the announcement was made in August. Securitization remains an important component of the funding mix and is expected to contribute 20% to 25% of the bank's funding for the foreseeable future. The Conquest program has attracted strong and broad investor support over a number of years. In September 2020, Moody's downgraded MyState Bank's investment-grade rating from Baa1 to Baa2, following a change in their outlook for the Australian banking system, reflecting their view that COVID-19 will increase the strain on Australian Bank's operating environment and loan performance. The downgrade has had no subsequent impact on the bank's access to and cost of funding. Turning to Slide 10. Operating costs continue to be well managed. Underlying cost growth of 2.7% reflects ongoing investment in technology to build our digital capability and a significant increase in marketing to build awareness of our brand. Marketing spend during the period has also contributed to customer acquisition, particularly retail deposits as we build the bank's franchise on Australia's Eastern seaboard. Digital marketing is enabling us to reach a broader population with new online and mobile products. Personnel costs in the second half of FY '20 benefited from the forfeiture of short-term incentives due to the impacts of COVID-19. We have also selectively grown distribution capability across Tasmania, Victoria and New South Wales and invested in leadership programs for the senior management team. In early August 2020, we announced MyState Bank's 4 Central Queensland branches and 2 branches in Tasmania would close along with TPT Wealth Devonport branch and some rationalization of corporate office locations in Tasmania. These changes were all implemented by 30 November and resulted in a one-off restructuring cost of $2.5 million, comprising redundancy payments for impacted staff and the acceleration of depreciation of the right-of-use assets under Australian accounting standard AASB 16, due to the early termination of leases in those areas. The expected annualized ongoing benefits of approximately $2.1 million will be realized from the 1st of January and will be reinvested in growth-related initiatives across MyState Bank and TPT Wealth. There are now 7 branches continuing to service Tasmania with the broader Australian customer base serviced entirely via digital platforms and supported by the Tasmanian-based customer care center and third-party services, such as those provided by Australia Post. Operating leverage within the business continues to improve with administration, governance and occupancy costs relatively flat since the first half of 2019. Turning to Slide 11. We've maintained our focus on low-risk owner-occupied lending with a loan-to-valuation ratio of less than 80%, while also being a strong supporter of the first time loan deposit scheme. In the first half, the majority of reserve scheme places were funded, equating to approximately $280 million of new home loan settlements. Total loan book growth was 5.5% in the 12 months to 31 December, 2020, with the home loan book growing 6.2% or 1.7x system over that period. The chart on the bottom left-hand side shows that both applications and settlements were up strongly on the prior corresponding period. The total lending book grew 1.7% during the half to approximately $5.4 billion at 31 December, 2020. We anticipate stronger bank balance sheet growth in the second half. The appendix shows the geographic distribution of our loan book continue to broaden, with 38% of our loan book in Tasmania and 59% in the eastern states of Queensland, New South Wales and Victoria. As our loan book becomes more nationally representative, it reduces concentration risk and we expect this trend to continue. Turning to capital on Slide 12. MyState remains well capitalized with all capital ratios comfortably above regulatory minimums. The group's total capital ratio at 31 December, 2020 was 13.24%. Our common equity Tier 1 ratio and Tier 1 ratio were 11.24%, well positioned to meet the expected changes to APRA's capital standards. On 14 August, 2020, $25 million of Tier 2 qualifying subordinated notes issued by MyState Bank in 2015 were redeemed on the first available call date. These notes were replaced by $25 million of Tier 2 qualifying subordinated notes issued by MyState Limited on 10 July, 2020, improving the group's overall regulatory capital efficiency by eliminating the minority interest haircut of approximately 20 basis points at a group level. As Melos mentioned earlier, the Board has determined to pay an interim dividend of $0.125 per share, with the DRP activated at a 1.5% discount. Given the expected level of loan book growth in the second half, we continue to explore a range of alternatives to further improve balance sheet efficiency. Moving to Wealth Management on Slide 13. You can see that funds under management grew 3.2% during the half and closed at just over $1.1 billion. Revenue decreased by 15.9%, with average funds under management approximately 8% lower than the prior comparative period, impacted by the COVID-19 induced fall in equity markets from their high point in mid- to late February 2020 and investors who withdrew their money from both our income and growth funds to provide themselves with liquidity and certainty in uncertain economic times. Pleasingly, investors commenced reinvesting as confidence returned with strong net inflows into our income funds during the latest half. In addition, lower interest rates impacted returns and directors elected to reduce the management fee on the at-call fund in order to preserve investor returns. This had the impact of reducing the management fee earned by TPT. The transformation of TPT Wealth continued in the half, with investment management for the growth funds outsourced to Mercer. The business expanded the digitization of its services by implementing a cloud-lending platform through which its lending capability can be broadened and the project to replace the legacy trustee system went live earlier this week. The significant change agenda is now broadly complete and will enable efficiency benefits as the business gains scale through the investment in distribution capability to drive growth on the Eastern seaboard, while remaining focused on the strong competitive position, TPT Wealth commands in Tasmania. I'll now provide some further detail on our COVID-19-affected portfolio and the flow-on impact to credit loss provisions. The extent of COVID-19-related assistance provided to customers is summarized on Slide 15. MyState Bank has supported over 1,900 customers through a range of measures, including loan deferrals, moving customers to interest-only loans or by reducing minimum monthly repayments. At 15 February, 2021, 199 customers remain on some form of assistance with the majority being home loan customers, representing 0.8% of home loans by number and 1.6% of total home loan balances, down from a peak of 10.9% in June 2020. The majority of these systems provided related to customers who opted to defer repayments, while a smaller number of customers move to interest-only payments or reduce their monthly repayment amount. Approximately 90% of customers who received assistance are now making some form of payment. 38% of home loans with COVID-19 assistance are in Victoria, and this represents 3.4% of the Victorian home loan portfolio, 2.4% of the New South Wales portfolio and 1.2% of the Queensland portfolio are receiving some form of assistance. In Tasmania, where the virus has been very effectively managed, only 0.5% of the portfolio is receiving assistance. We have reviewed each customer's situation every 3 months, and we continue to work with our customers individually to arrive at the best outcome for each of them through this period. Turning to Slide 16. At 30 June, 2020, we assumed a slow and bumpy economic recovery and increased our collective provision and general reserve for credit losses by $4 million at the end of the financial year. These changes were predominantly reflected in a forward-looking economic overlay of $2.5 million and were based on our view of the potential impacts of COVID-19 at that time. The increase did not reflect any deterioration in our underlying credit quality or lending standards. At 31 December, 2020, the outlook for the Australian economy is far more positive. GDP rebounded from 2 quarters of negative growth and was up 3.3% in the September 2020 quarter. The national unemployment rate peaked at 7.5% in July 2020, was 6.6% at 31 December, 2020, and as we saw yesterday, had dropped to 6.4% in January 2021. Finally, house prices nationally rose 2.3% in the December quarter and finished up 3% for the calendar year, recognizing some divergence across different states. However, we also recognize that most federal government stimulus measures such as job keeper are currently due to end on 31 March, 2021. The the reduction in the COVID-19 overlay at 31 December of $0.9 million predominantly reflects the improved outlook for both employment -- sorry, for unemployment and house prices and the reweighting of probabilities to the upside relative to our views in June 2020. The appendix summarizes these key assumptions and the scenario weightings used at 31 December. Of the $0.9 million reduction, $0.5 million pretax was released to profit and $0.4 million was reallocated to the core collective provision to recognize that some customers that had come off COVID-19-related assistance have now been transitioned to a restructured loan. Provision coverage ratios are shown in the chart on the right-hand side as a percentage of both credit risk-weighted assets and gross loans. It's worth reiterating that MyState Bank's loan book predominantly consists of high-quality housing loans, the vast majority of which are owner-occupied with a loan-to-valuation ratio of less than 80%. And as a consequence, we remain comfortable with the level of provisioning. I'll now return you to Melos to talk about our strategy and future outlook. -------------------------------------------------------------------------------- Melos Anthony Sulicich, MyState Limited - MD, CEO & Director [4] -------------------------------------------------------------------------------- Thanks very much, Gary. So just turning to Slide 18. We can see some of the dynamics of the industry and the regulatory environment. The economy and consumer and business confidence are recovering more quickly and strongly than initially anticipated. As Gary indicated, unemployment rate, national unemployment rate, 6.4% for January and the Tasmanian unemployment rate, the lowest in the country. Competition for new lending remained intense, although at the end of the government's assistance program at the end of March is creating some uncertainty. Pressure on margins, and therefore, operating costs will likely continue requiring a need to balance cost efficiency and customer service. It's also clear that the industry dynamics changing, as evidenced by the rapid exit of some new-to-industry banks in recent months. We know customers are expecting more functionality from online and mobile banking, which we are well placed to provide with our online banking system and our artificial intelligence-driven insights hub, which has been extraordinarily well received by our customers. We expect some society changes we've seen in the last year will remain as the pandemic may have instilled a different set of values and austerity in our customers. Last year, we focused on supporting customers to help them through the financial impact of COVID-19, and we'll continue to do so as things play out further. On the regulatory front, APRA and ASIC both have reactivated change agendas, which were paused during the pandemic. This is causing a wall of regulatory change to hit the industry. And we expect both regulators to continue their focus on culture, particularly risk culture and balancing the interest of different groups of stakeholders. Page 19 summarizes our strategy, which remains unchanged, aside from us looking at how we might accelerate our growth ambitions. This is led by increased investment in marketing and continuous improvement through digitization, automation and robotics and is underpinned by greater organizational capability or whilst ensuring we maintain a very strong risk culture. MyState Bank is focused on growing its balance sheet and increasing its digital capabilities and use of automation. We also intend to invest significantly and further build MyState Bank's brand to attract new customers and then deepen and nurture customer relationships to meet their evolving needs. TPT Wealth will continue to deliver contemporary, scalable Wealth Management and custody products and services and grow through expanded Tasmanian and mainland distribution, 4 enablers will help us do that. I've already mentioned marketing, but there's also increased process automation through our My Excellence program, ensuring we match culture and capability across all staff and maintaining a strong capital position. The heavy lifting restructuring of our banking and wealth businesses is now largely complete, and we can focus on realizing the benefits and reinvesting in growth. On Page 20, we can see we've been moving over the past few years. As you can see, our customers are moving away from branch-based transactions to digital transactions at a pace. We've managed to move with our customer base quickly and have the right focus at the right time to help them with digital transactions and the migration to the online -- to online banking. Having moved from a very, very low base a few years ago to a situation where most of our customers are in their banking with us digitally and now half of our customers are receiving their statements digitally as well. Whilst we clearly have more work to do in this space, we believe we are very well placed. We've developed award-winning products and our digital banking that suits our customers, including a world-class artificial intelligence-driven insights package that allows customers to understand how they're spending their money and helps them to save more by the use of simple but sustainable techniques. It's much more sustainable for customers than rounding up copy money. We'll continue to focus on our customers' evolving interest and needs with ongoing investment in our digital capabilities. No matter what challenges life throws at our customers, we want to continue to earn their trust so we can continue to help them with their financial needs. And finally, on Slide 21. On the revenue side, we expect MyState Bank's balance sheet will continue to grow. We're in the process of doubling the number of our bank business development managers in order to accelerate the growth of our balance sheet. We anticipate TPT Wealth funds under management will begin to benefit from our increased distribution on the mainland. And while this will take time, we're already seeing some encouraging early signs. We'll continue to reengineer our cost base, improving productivity and investing in further growth, particularly marketing. As mentioned earlier, we've done some recent significant reorganization in TPT Wealth and 6 bank branches were closed during the half. All of this is providing significant cost benefits and optionality going forward, and thus more headroom to grow the business by selective and focused marketing spend. Our higher marketing spend will enable us to increase MyState Bank's retail funding, supporting our net interest margin and growing TPT Wealth funds under management. As I said, TPT Wealth legacy trustee system has now been replaced, and progress is being made on further product differentiation. Six years ago, we adopted a strategy to transform MyState into a highly scalable digital banking and funds management business. The operational efficiencies and the improvements we've made since then are now flowing through to the bottom line and setting us up for a very bright future. We're well positioned and primed to now really accelerate our growth and see a huge opportunity for us to drive the business at a much faster pace. Thank you for your time. And I'll now hand back to the operator, who will introduce any questions that you may have. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Our first question is from Nathan Zaia of Morningstar. -------------------------------------------------------------------------------- Nathan Zaia, Morningstar Inc., Research Division - Senior Analyst [2] -------------------------------------------------------------------------------- The first one I had was on the growth in the above 90% LVR bucket. I know the first time loan deposit scheme is driving that. But loan balances with the LVR below 80% have actually fallen in dollar terms as well. Is that just reflective of competition? Or is there anything else to note, like the branch closures have any impact? -------------------------------------------------------------------------------- Melos Anthony Sulicich, MyState Limited - MD, CEO & Director [3] -------------------------------------------------------------------------------- I don't think branch closures had an impact there, Nathan. It's really the influence of accelerated repayment. So as interest rates came down through the back end of last calendar year, customers have just taken the opportunity to pay down balances quickly. And so as a proportion of the loan book, we've just had that change. We're expecting that to change in the period going forward as we originate more into that bucket in the near term. -------------------------------------------------------------------------------- Nathan Zaia, Morningstar Inc., Research Division - Senior Analyst [4] -------------------------------------------------------------------------------- Okay. Fair enough. And can I just check, Gary, did you say over the last 12 months, $280 million of loans was in the first home loan scheme? -------------------------------------------------------------------------------- Gary Dickson, MyState Limited - CFO [5] -------------------------------------------------------------------------------- Yes, that's right, Nathan. Out of -- yes, and you've got the settlements and applications data in that chart on Slide 11. -------------------------------------------------------------------------------- Nathan Zaia, Morningstar Inc., Research Division - Senior Analyst [6] -------------------------------------------------------------------------------- Yes. Okay. So it is a big chunk of the growth. I was just also curious, does that have much of an impact on NIM? Or is that price materially higher? -------------------------------------------------------------------------------- Melos Anthony Sulicich, MyState Limited - MD, CEO & Director [7] -------------------------------------------------------------------------------- It is priced higher than the sort of average equivalent product. So it does have a positive impact on NIM. -------------------------------------------------------------------------------- Nathan Zaia, Morningstar Inc., Research Division - Senior Analyst [8] -------------------------------------------------------------------------------- Not a number you can call out though or... -------------------------------------------------------------------------------- Melos Anthony Sulicich, MyState Limited - MD, CEO & Director [9] -------------------------------------------------------------------------------- It's a -- it's about 10 basis points, I think, from memory? -------------------------------------------------------------------------------- Nathan Zaia, Morningstar Inc., Research Division - Senior Analyst [10] -------------------------------------------------------------------------------- Okay. -------------------------------------------------------------------------------- Gary Dickson, MyState Limited - CFO [11] -------------------------------------------------------------------------------- Yes. It's priced 10 basis points higher than effectively the basic product that we have, Nathan. -------------------------------------------------------------------------------- Nathan Zaia, Morningstar Inc., Research Division - Senior Analyst [12] -------------------------------------------------------------------------------- Okay. And so that's the basic product. So what about the average that you're actually getting? Like that's 10 basis points on an advertised rate? I'm just -- want to understand the impact on actual -- your average NIM on your book? -------------------------------------------------------------------------------- Gary Dickson, MyState Limited - CFO [13] -------------------------------------------------------------------------------- I mean the impact of the first time loan deposit schemes on NIM is not going to be material. -------------------------------------------------------------------------------- Nathan Zaia, Morningstar Inc., Research Division - Senior Analyst [14] -------------------------------------------------------------------------------- Okay. All right. And the only other thing like loan growth, obviously, is still growing strongly and above system. But that rate above system slowed and Bendigo noted competition in the broker channel. Are you still seeing opportunities to continue to take share? Or does it feel like some of the majors have got their house in order a little bit now. -------------------------------------------------------------------------------- Melos Anthony Sulicich, MyState Limited - MD, CEO & Director [15] -------------------------------------------------------------------------------- We see quite significant opportunities to take share. Hence, the reason for doubling our number of business development managers. So rather than try and compete on -- just on price, we're competing more on service as well. Our average time to -- from application to conditional approval, still running at 2 days or less. That's a huge focus of ours. So we see opportunities in the market for us to re-kick our growth to the rates that we're seeing in previous years as well, despite the fact that it is a -- it's a competitive market, but it is what it is. We're not competing at the sharp end of price, but we have to be there in order to get new customers. But we just -- we do see, with some of the dislocation in the market, quite large opportunities for someone like us to make some -- make a real difference in the market in the period ahead. -------------------------------------------------------------------------------- Nathan Zaia, Morningstar Inc., Research Division - Senior Analyst [16] -------------------------------------------------------------------------------- Okay. And if I can just squeeze one more in. I don't know if it's in the presentation, excuse me, if I've missed it. But in the deferred loans, can you give us an idea of how much of those balances have been held above 90%? -------------------------------------------------------------------------------- Gary Dickson, MyState Limited - CFO [17] -------------------------------------------------------------------------------- Yes. It's in the presentation, Nathan. So if you have a look at slide -- that's okay, if you have a look at Slide 15, we've got the data there at June and Feb. So at the 15th of Feb, it was around 13%. -------------------------------------------------------------------------------- Nathan Zaia, Morningstar Inc., Research Division - Senior Analyst [18] -------------------------------------------------------------------------------- Okay. Congrats on the great result guys. -------------------------------------------------------------------------------- Operator [19] -------------------------------------------------------------------------------- (Operator Instructions) We have no further questions at this time. -------------------------------------------------------------------------------- Melos Anthony Sulicich, MyState Limited - MD, CEO & Director [20] -------------------------------------------------------------------------------- Yes. Thanks very much, Ari. Well, I'd just like to thank everybody for your time and attention today and for your interest in MyState. Look forward to catching up with a few more of you over coming days and the weeks to talk through the results in more detail. Thank you. Have a great day and a great weekend. -------------------------------------------------------------------------------- Operator [21] -------------------------------------------------------------------------------- Thank you. That concludes today's call. You may now disconnect your lines.