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MyState Undertakes Major Capital Raising

Published: (Updated: ) in Australian News by .

Listed Tasmanian bank MyState (ASX:MYS) is this morning announcing to the stock market a capital raising of up to $80 million. The funds are to underpin a rapid-growth approach supported by an updated 2025 strategy that builds on the bank’s solid financial position to access growth opportunities via a strong digital and AI-enabled offering. MyState […]

Listed Tasmanian bank MyState (ASX:MYS) is this morning announcing to the stock market a capital raising of up to $80 million.

The funds are to underpin a rapid-growth approach supported by an updated 2025 strategy that builds on the bank’s solid financial position to access growth opportunities via a strong digital and AI-enabled offering.

MyState shares have been placed in a trading halt to enable the placement to be completed, with trading expected to recommence on 26 May 2021.

MyState Chairman, Miles Hampton, said: “The capital raising will support the business to pursue a significant acceleration of its growth strategy. Since 2016, MyState has increased its home loan book by 43%. We now see an opportunity to build on that success and substantially increase our growth trajectory. This is important as it helps us to remain competitive and provide the services that our customers expect whilst improving shareholder value.”

Key points:

• $20m fully-underwritten institutional placement
• 1 for 6.6 pro rata accelerated non-renounceable entitlement offer to raise gross proceeds of approximately $60m (underwritten to $30m)
• The offer price for the Placement and Entitlement Offer will be $4.30 per share:
• 9.6% discount to the theoretical ex-rights price (TERP) of $4.76; and
• 11.3% discount to MyState’s last closing price of $4.85 on Friday, 21 May 2021
• Approximately 18.6 million new fully paid ordinary shares (equivalent to 20.2% of current issued capital)

MyState also issued an April 2021 YTD Trading Update. Financial performance for the 10-month period is well ahead of the prior comparative period, reflecting a continued focus on driving customer acquisition and investment in digital innovation, and a disciplined approach to managing operating expenses.

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Managing Director and Chief Executive Officer, Melos Sulicich said: “Our focused and accelerated growth strategy builds on MyState’s strong financial position and leading customer NPS to access growth opportunities via a strong digital offering. We see significant opportunity in the current market to rapidly grow our business.”

The 2021 – 2025 strategy has the following objectives:

• Accelerated home loan and retail deposit growth over the medium term, while maintaining asset quality.

• Improved operating leverage (cost to income ratio) in line with business growth.

• ROE accretion as capital is deployed.

• Sustainable growth in EPS over the medium term.

Mr Sulicich said: “The results of this trading update reflect our continued focus on driving customer acquisition and investment in digital innovation, supported by our disciplined approach to managing operating expenses. The momentum we have seen is expected to continue with many of the underlying drivers to remain for the full financial year. Our digital transformation is delivering continuous improvement, further supporting our significant growth ambitions”.

Highlights for the period include:

• Net profit after tax increase of 17.1%
• Earnings per share up 16.2%
• Net interest margin of 1.96%, up 10bps
• Cost to income ratio down 360bps
• Return on average equity up 101bps to 10.47%
• FY21 guidance – MyState remains on track to deliver a pre-provision operating profit range of +11% to +14%, positive jaws and an uplift in cost growth to support accelerated growth in FY22.

The full announcement and investor presentation outlines the updated 2025 strategy underpinned by accelerated home loan and retail deposit growth over the medium term, while maintaining asset quality and improved operating leverage (cost to income ratio) in line with business growth.

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Source: Tasmanian Times https://www.tasmaniantimes.com/2021/05/mystate-undertakes-major-capital-raising/#utm_source=rss&utm_medium=rss&utm_campaign=mystate-undertakes-major-capital-raising

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Finance Advice 2021