Content – Highlights from the FY25 Performance

• Interest Income: Interest‑earning assets generated PGK2.14 billion in net interest income (NII), an increase of 9.1% year‑on‑year, resulting in a net interest margin of 7.1% (vs 2024: 7.0%). The increase in NII was largely driven by higher returns from Treasury bills (T‑bills), Central Bank bills (C‑bills), and Government Inscribed Stocks (GIS), reflecting relatively improved yields in 2025 compared to 2024. The bank’s increased investment in debt securities also supported income growth, particularly in T‑bills and C‑bills, which grew by 108.9% year‑on‑year, while lending increased by 7.6% over the same period. This shift toward debt securities suggests that the bank prioritized liquidity and lower‑risk assets to strengthen its balance sheet and reduce exposure to credit risk. Interest income from loans grew slightly by 0.3% year-on-year. In addition, lending book generated 72.6% of the total interest income, while income from investment accounted for nearly 36% of the total interest income.
• Non-Interest Income: Totalled PGK1.2 million. FX‑related income rose nearly 29% year‑on‑year to PGK722 million, supported by strong export inflows and BPNG FX intervention. Net fees and commissions totalled PGK442 million, an increase of 14.5% year‑on‑year. Of the total income, FX accounted for 60.2%, while the fees and commissions accounted for 36.8%, and 3% comes from other income sources.
• Operating Expenses: PGK1.5 billion, representing a 15% year‑on‑year increase. The rise reflects the Group’s strategic investments in technology enhancements and additional staffing, aligned with its commitment to the ‘Modernising for Growth’ program.
• Loan Provisions: PGK602 million, up from PGK562 million in 2024. The increase was attributable to expected credit loss (ECL) charges on newly issued loans, as well as changes in the transfer of loans between IFRS 9 stages within the loan credit risk profile. Movements in loans arising from changes in the bank’s ECL loan model also contributed to the increase. The provision-to-loans ratio remained unchanged year-on-year at 3.3%, reflecting a stable credit risk management. Compared to 2023, this was 100 basis points lower and 30 basis points lower than the 3-year average.
• Strong Balance Sheet: The capital adequacy ratio (CAR) was reported at 26.4%, an increase of 20 basis points year‑on‑year. This remains well above BPNG’s regulatory requirement of 12%. The Risk‑Weighted Assets‑to‑Asset’s ratio (RWAA) stands at 42.6%, indicating a moderate risk profile for the bank’s balance sheet. The 3-year average for the CAR and RWAA were 25.7% and 43.26%, respectively.
• Total Dividend: The Board paid a total dividend of ~PGK878.4 million, or PGK1.88 per share, compared to ~PGK775.6 million, or PGK1.66 per share, in the previous period. The payout represents 75% of the net profit achieved this year.