MYSTATE LIMITED — AGM Information 2013

Oct 27, 2013

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ASX ANNOUNCEMENT

MyState Limited Annual General Meeting Grand Chancellor - Launceston 29 October 2013

Address by the Chairman Dr Michael Vertigan AC

Good morning

This is our fifth AGM since the merger between MyState Financial and Tasmanian Perpetual Trustees which occurred in September 2009. Since then, the group has expanded through the addition of The Rock Building Society in December 2011.

I am pleased to be able to report the continued progress of MyState Limited during 2012-2013.

The Company reported a very sound result for the year despite a challenging business environment characterised by low business and consumer confidence, and the lowest rate of housing credit growth for more than 35 years.

The group performed well in these business conditions and maintained strong earnings. Net profit after income tax was $28.5 million, an 11.8% increase over the normalized after-tax profit of $25.5 million (adjusted for The Rock acquisition costs) and 21.7% above the statutory after-tax profit of $23.4 million recorded in the financial year 2011-12.

The dividend for the year was maintained at 28 cents per share, fully franked, consistent with our policy of paying between 70% and 90% of after-tax profits as dividends, and with our objective of moving down from the upper end of that range as circumstances permit.

MyState’s ability to deliver sustained profit growth since listing on the ASX in 2009 is a testament to our robust business model and our commitment to customer service. Despite weakness in the Tasmanian economy, MyState Financial achieved a 4.1% increase in its loan portfolio and reduced its already low rate of arrears.

To achieve satisfactory results in the prevailing market conditions, companies have needed to apply strict disciplines around costs and I am pleased to report that your Company has reduced its cost to income ratio from 73.8% in 2010 to 68.3% in 2013 which is closer to industry benchmarks.

At the same time, we have preserved a strong capital position which will enable us to take full advantage of opportunities arising from an increase in economic activity.

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The acquisition of The Rock Building Society has enabled us to spread our geographic risk. This has diversified our lending and deposit-taking portfolios and we are now seeing increasing flows of business from our branches in Central Queensland. Importantly we now have an asset in one of the strongest growth regions in Australia.

At Annual General Meetings such as this the focus is on the results of the past year. However now that the Company has been in existence for a little over four years, I thought it worthwhile to briefly report on our performance over that period.

The base price for MyState shares at the time of the initial listing in September 2009 was established through the book-build and share sale process at $2.50 per share although initial trading commenced a little higher. At the close of business on Friday 24 October 2013, the share price was $4.87 – an increase of 95% over the period of a little over four years.

There have been three full financial years since the company’s inception – July 2010 until June 2013. An independent assessment of the total shareholder return over that three year period (measured as the increase in share price plus the dividends distributed) shows that MyState Limited has outperformed 82% of companies in the ASX300 for which comparable data was available. The same percentage outperformance applies when compared with data for the ASX Small Ordinaries universe.

Whilst our ambition is always to do better, we hope that these comparative results provide some overall perspective on the company’s performance to date.

We are now positioned in two geographic market areas – Central Queensland and Tasmania.

Central Queensland has more than $150 billion in projects planned or under development in the energy, coal, minerals and rail industries. Already more than $60 billion has been invested in the Gladstone liquefied natural gas projects which are projected to create 15,000 jobs in the region.

The first signs of this growth are evident with a regional population increase of 3.00% during the year as compared to the national growth rate of 1.8%.

In our home base of Tasmania, after periods of lower than average growth we are now seeing more positive signs. More than $700 million of commercial building work is under way or expected to begin this financial year at the Royal Hobart Hospital, Parliament Square, the Myer redevelopment, the Toll freight terminal, the Midlands Irrigation scheme and the University of Tasmania. We expect that this increased development activity will translate to increased business and consumer confidence in the state.

We believe that the Company is well positioned to take advantage of opportunities as they arise in both geographic areas.

One of our strengths as an organization comes from our mutual heritage. Because we focus on putting our customers first, we look after their financial interests in a local way. Our deep commitment to a superior customer experience is positioning our company as one that is easy to do business with. Market testing has provided us with evidence of the extremely high brand recognition that MyState Financial enjoys and the very high levels of satisfaction expressed by our customers.

We look forward to reporting the successful implementation of our new banking platform at MyState Financial in the near future. This new platform will further enhance our service levels in the future.

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MyState is committed to maintaining the highest standards of corporate governance. The board continues to work effectively as a group and has modified the conventional monthly meeting structure to enable additional time to be devoted to strategy development.

Outlook

The economy is showing some signs of growth and of late we have seen renewed interest in the housing market, in particular in Sydney and Melbourne.

As yet this is not showing up in credit growth but overall we do see conditions emerging which should provide opportunities for organic growth for our Group companies.

We continue to look for merger and acquisition opportunities which would provide further growth, strengthening our market position and contributing additional geographic diversity.

As this will be my final year as Chairman, I would like to reflect on what has been a thoroughly rewarding experience. The merger of MyState Financial and Tasmanian Perpetual Trustees has been very successful for the former members of both organisations. The acquisition of The Rock has brought significant synergies, helping to position MyState as a stronger interstate group and providing access to the growing economy of central Queensland.

I would like to thank John Gilbert and our staff in Tasmania and Queensland for their excellent contributions to the company’s success, and shareholders for their continued support. I would also like to express my personal gratitude to my fellow directors for their commitment and support. Finally, I wish the chairman-designate, Miles Hampton, and the company every success in the future.

Thank you.

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