MyState Limited (ASX Code: MYS) Annual General Meeting 29 October 2010

MyState Limited Annual General Meeting 29 October 2010

John Gilbert Managing Director

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Disclaimer

This presentation contains certain forward‐looking statements with respect to the financial condition, results of operations, business plans and objectives of management. All such forward‐looking statements involve known and unknown risks, significant uncertainties, assumptions, contingencies and other factors many of which are outside the control of MyState Limited (MYS), which may cause the results or actual performance to be materially different from the future results or performance expressed or implied by such forward‐looking statements. Such forward‐looking statements speak only as of the date of presentation.

No presentation or warranty is or will be made by any legal or natural persons in relation to the accuracy or completeness of all or part of this document, or any constituent or associated presentation, information or material (collectively, the Information), or the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in, or implied by, the information or any part of it. The information includes information derived from third party sources that has not been independently verified.

To the full extent permitted by law, MYS disclaims any obligation or undertaking to release any updates or revisions to the information to reflect any change in expectations or assumptions.

Nothing contained in the information constitutes investment, legal, tax or other advice. You should make your own assessment and take independent professional advice in relation to the information and any action on the basis of the information.

Programme

Merger Update
Business Update
Performance Highlights
Strategic Priorities

Merger Update

The Board believes that the recent merger of MSF and TPT has created a fully integrated financial services group with increased scale which allows us to:

deliver a greater range of products and services to existing and new customers
enhance our future growth opportunities in new markets both in Tasmania and in due course throughout Australia while still maintaining our competitiveness
deliver shareholder value by combining the balance sheet strength of both companies to grow shareholder returns
ensure our proud Tasmanian heritage is maintained

Our Group Structure

MyState Limited Non-Operating Holding Company

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100% owned
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100% owned
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Subsidiary

The Merger Proposal: One Year On

For All Shareholders:
Earnings per share (EPS) accretive in Year 1 and strongly EPS accretive thereafter.

‐ Achieved

Continued & further EPS uplift as a result of cost and revenue synergies in years 2 and 3.

‐ On Track

Anticipated enhanced and fully franked dividend payments based on profits of the merged entities.

‐ On Track

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MyState Limited: Market Position

as at 30 June 2010

Market ca italisation p

$ 211M

NPAT

$17.3M

Net Assets

$198.4M

Funds Under Management (1)

Loans Under Management (2)

$0.93B $1.71B

Funds Under Advice or Administration (1)(2)

$741M

Deposits (2)

$1.57B

(1) Relates to Tasmanian Perpetual Trustees Limited

(2) Relates to MyState Financial Limited

MyState Limited: Merger Outcomes

• Revenue synergies

Increased product and service offering delivering opportunities to create revenue growth
Cross referral process between MSF and TPT underway

• Cost synergies

Operating cost synergies realised in YEJ 10 and ongoing
A substantial number of redundancies have occurred, primarily with executive and senior management roles

• Brand

Continued brand presence for both Tasmanian Perpetual Trustees and MyState Financial

MYS Group Results for the Year ending 30 June 2010

Comprised of 12 months trading for MyState Financial (MSF) and 10 months for Tasmanian Perpetual Trustees (TPT)
Group Revenue of $155.58M
Group Profit After Tax (PAT) of $17.34M (Includes some “one‐ off” costs and gains)
Earnings Per Share (EPS) of 27.46 cents
Final Dividend declared of 12.5 cents per share paid 30 September 2010 (“Interim Dividend” of 10.0 cents per share paid on 31 March 2010)

MYS Group Results ‐ Revenues

MSF Net Interest Margin (NIM) is stable
TPT Managed Investment Scheme (MIS) management fees have stabilised after the Global Financial Crisis (GFC), but below 2008 levels
TPT capital and income commissions down 16% on 2009 levels due to effects of the GFC
TPT profit on sale of Bendigo & Adelaide Bank (BEN) shares post sale of Tasmanian Banking Services (TBS) of $1.02M

MYS Group Results ‐ Expenses

MSF salaries down on last year, despite “one‐offs” demonstrating good progress with cost savings
MSF bad debts stable in YEJ 10
All other MSF costs stable
TPT wages up in YEJ 10 due to “one‐off” redundancy costs
TPT underlying wages reduced on YEJ 09 levels.
TPT Property costs down due to merger benefits with MSF and ongoing at this new level
All other TPT costs stable

MYS Group Significant Items (pre‐tax) for Year ended 30 June 2010

	Twelve months ended 30 June 2010	($M)
	Share sale facility costs	(1.2)
	Redundancy costs	(3.2)
	Stamp duty costs on Connect/Island State merger	(0.4)
	Executive recruitment costs	(0.2)

MSF $1.83 billion in Deposits & FUA

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MSF Deposits & FUA

Total Deposits
2,000
Growth of 20%

$256 million FUA
1,500
through Financial
Planning Services.
1,000
FUA – funds under
advice
500
0
2009 2010
Deposits FUA
($ M illions)
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MSF Total Deposits

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Source: APRA : Six & Twelve Monthly growth is to Jun-10 annualised

MSF $1.71 billion in Loans

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MSF Loans
2,000
 14% 1,500
Growth
1,000
in loans for
twelve
500
months to
June 2010 0
2008 2009 2010
Loans
($ Millions)
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Home Lending ‐ MSF Vs System

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Source: RBA : Six & Twelve Monthly growth is to Jun‐10 annualised

MSF Provision for Doubtful Debts

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4.0 0.30%
0.25%
3.8
0.20%
3.6
$m 0.15%
3.4
0.10%
3.2
0.05%
3.0 0.00%
2008 2009 2010
Provision for Doubtful Debts (LHS) Provision % (RHS)
%age of Total Loan Book
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MSF Net Interest Margin

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Net Interest Margin
4.00%
3.80%
3.60%
3.40%
3.20%
3.00%
2.80%
2.60%
2.40%
2.20%
2.00%
Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun-
09 09 09 09 09 09 09 10 10 10 10 10 10
Net Interest Margin
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MyState Financial Leads Customer Satisfaction

88% 85% 81% 80% 67%

Customer that are Satisfied to Extremely Satisfied

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Results taken from a representative sample of 800 adults aged 18-70 who are users of financial services products. Sample is equal to gender, age and other national demographics.

MYS Group Capital Adequacy

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Capital Adequacy Group Basis
15.50
15.00
14.50
14.00
13.50
13.00
12.50
12.00
Mth
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Note: Estimated ratio at finalisation of $250.25 million RMBS transaction is 14.62%

TPT $0.93 billion Funds Under Management

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TPT Funds Under Management
Fund levels
impacted by GFC, 1,600
unfavourable 1,379
1,400 1,305 1,307
interest rate
1,247
1,211
environment, 1,170
1,200
intense competition 1,045 1,006
for retail funds and 934
1,000
adverse
movements in 800
market linked
600
funds.
400
200
0
2002 2003 2004 2005 2006 2007 2008 2009 2010
($ Millions)
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TPT $0.48 billion Funds Under Advice

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TPT Funds Under Advice
700
600 567 576
$485 million FUA
547
501
through Financial 485
500
Planning Services.
400
FUA – funds under advice 300
200
100
0
2006 2007 2008 2009 2010
($ Millions)
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Returns to Shareholders

The Board of MyState Limited has established a policy of generally paying ordinary dividends each year within the range of 70% to 90% of net profit after tax. This reflects;

 confidence in the prospects of the business

 strong cash flow generation

 high level of franking credits available

 reward to shareholders in difficult economic times

Final 2010 12.5 cps fully franked dividend paid 30 September 2010 Interim 10.0 cps fully franked dividend paid 31 March 2010

MyState Limited Twelve Month Relative Stock Performance to September 2010

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Relative Performance (%)
130
125
120
115
110
105
100
95
90
85
80
Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10
ASX:MYS - Share Pricing S&P/ASX All Ordinaries Index - Share Pricing
S&P/ASX 200 Financials Sector Index (^XFJ) - Share Pricing S&P/ASX 200 Banks (Industry Group) - Share Pricing
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MyState Limited Twelve Month Stock Performance to September 2010

Share Pricing in AUD

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3.90 1,200,000
3.70
1,000,000
3.50
800,000
3.30
600,000
3.10
400,000
2.90
200,000
2.70
2.50 0
Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10
ASX:MYS - Share Pricing -Volume ASX:MYS - Share Pricing
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Strategic Priorities

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