1 February 2023, Hilton Hotel, Port Moresby
Good Morning Everyone
Welcome to Prime Ministers Breakfast for 2023 and thank you for joining us. A New Year, and a New Venue. An especially warm welcome to the Prime Minister of Papua New Guinea James Marape, the Ministers of Parliament that are with us this morning, our distinguished guests, and of course all the members of our business community who have joined us here in record numbers at the Hilton today.
Kina Bank is proud to continue as the sponsor for this breakfast and I’d like to thank the Business Council of PNG for the opportunity to partner with them over the past 7 events. We see this event as a fundamental part of our role in the broader nation-building agenda, and enhancing our connectivity with the business community that is the back-bone and engine room of the PNG economy. Before hearing from the Prime Minister this morning, I’d like to take this opportunity to provide a brief outline of Kina’s strategic plans for 2023 that connect but dare I say also potentially conflict with key recent economic and policy announcements by the Government.
At the last breakfast in August 2022, our Chairman Isikeli Taureka, touched on what he considered to be an important guide and consideration for Government decision making – The three C’s – Maintaining Consistency; instilling Confidence; and a steadfast Commitment to policy which encourages and allows the business community to invest and expand, and therefore the nation to prosper and grow. We especially encourage the Treasurer, the Finance and National Planning Departments along with the Prime Minister’s office to continue their efforts to more effectively engage and collaborate with the business community to achieve a better aligned fiscal approach that is coherently fit for purpose and enhances the Nation’s wealth. Policies that leverage the contribution of subsistence; significantly move the dial on financial inclusion in line with other similar emerging markets; encourage more SME’s into the formal sector; and realise an enormous regional competitive advantage that PNG could have with a much more progressive, broader and cooperative Agri-sector.
However, all this of course becomes rhetoric unless it is supported and underpinned by aligned Government policy settings, an efficient public services sector and a progressive tax regime that is fair and addresses the inequity and quantum of businesses and citizens not paying or contributing their fair share. To not achieve the right balance will simply serve to stifle businesses, reduce competition, stall economic growth, and discourage foreign investment which PNG as an emerging market must ‘encourage.’
At Kina Bank we have been continuing on our path to attempt to drastically improve the financial services landscape in PNG by making banking more dynamic, progressive, accessible and easier to understand. This has always been and continues to be the corner stone of our vision.
Despite some of the market constraints and challenges we faced, 2022 was a big year for us. Some brief highlights I’d like to take this opportunity to quickly share with you:-
- We introduced our own sponsored SME concessional loan program without Government support. An initial tranche of PGK 50m was set aside for this purpose and has been tremendously successful with 4% loans both secured and unsecured from PGK 100 – 500,000.
- The introduction of Xero bank feed in partnership with Business Link Pacific. This platform provides are SME customers with the ability to stay on top of their business transactions and manage their business more efficiently.
- We continued to support merchants across PNG and to facilitate fee free banking. Our Kina EFTPOS machines charge no fees and provide a genuine benefit to both our merchants and our customer base.
- We were proud to be one of the main sponsors of the national SME awards supporting by showcasing the digital capabilities of many PNG owned businesses.
- We established a corporate business advisory services unit for provide a range of services and expertise to better assist larger SME, commercial and corporate enterprises in PNG.
- We established a new brand and customer segment ‘Kina Private’ for the provision of better integrated banking and wealth management services.
Our Digital first approach saw us launch WhatsApp banking, and our Single View Online Platform that enables our customers to view their bank and superannuation balances via Kina online banking. We enhanced our personal and corporate mobile and online banking services, expanded the reach of Kina Konnect, and facilitated the first phase of our ecommerce ‘Know Your Customer’ program enabling new to Kina customers to on-board themselves via their mobile or our revamped and world class website – kinabank.com.pg.
As we move into 2023, expansion and growth of our services remains as the key focus. Our digital mindset and driving growth in our core businesses of banking and wealth management will hopefully see Kina Bank make a valuable contribution to supporting the Government’s nation building agenda. We welcome the PGK5.2 billion investment to the provinces for vital capital and operational expansion.
Our course it goes without saying that Kina is planning to be at the forefront of this investment and we are planning for almost PGK 30million of our own investment to expand our services. But – and it’s a BIG BUT (and it would be remiss of me not to mention it) – the only risk to this investment and a rather dark shadow on the horizon for us is the Government’s recent budget announcement of a plan to increase the tax rate for the commercial banks by 50% which will regretfully have a profound impact not only the extent of our planned investment but also financial inclusion, innovation and of course of competition. It will also unintentionally act to discourage our investors to support our growth aspirations and therefore access to much needed to capital to continue to expand our services.
In saying that, our 2023 business plan currently provides for 10 additional Business Advisors in regional areas. In five new commercial banking centres for Lae, Mt Hagan, Kokopo, Goroka, and Madang. We opened our first co-branded branch with MiBank in Alotau late in 2022, and have plans this year for similar co-branded branches in five new locations including Popondetta and Maprik. Our new look Kina Private customer segment is also to open new serviced offices at Harbour City here in Port Moresby, and Lae City.
On the digital front, our ‘Always First’ approach has us rapidly moving forward with our eCommerce ‘Know Your Customer’ program with further digital onboarding solutions for home loan and SME customers, reducing the necessity for our customers to visit a branch, whilst still maintaining strong customer service values.
ESG has become increasingly important for companies to adhere to as it provides us with a sense of purpose and direction for their operations. By taking into account environmental, social and governance issues, we ensure that we are making decisions in line with our values and goals. Bottom line, this helps us to stay competitive by increasing our sensitivity and being more responsible towards the environment, the communities that we serve and our stakeholders.
Kina Bank aspires to be the industry standard for Environmental and Social Management systems, gender diversity and digital banking inclusion. For example, we have achieved an even 50% for both gender split and national representation for our executive management team. At the next level of management this is now 60% women in leadership and 90% national staff. ESG is fast becoming an important part of our DNA and we want to continue to build greater financial inclusion, fairer banking products for our customers in ways that respect the physical environment we operate in.
In 2023, we hope to start embedding our ESG principles will have greater benefits for all our stakeholders:-
- For our customers a digital on boarding and dual MiBank/Kina locations will greatly improve access to financial services.
- For our business customers, improved website capabilities, and adjacent services to help our business customers grow. Additionally, we are finalising the design of purpose driven SME and Agri- business products that aim to better service the entire value chain in these critically important sectors.
- For our people, an organisation that values innovation, a growth mindset and place where people are proud to work evident by our recently launched “Strongim Komuniti” Program, a staff led initiative that funds projects within the communities our staff live in. To date we have helped 9 different communities and in the areas of education, sanitation, inclusion, health, inclusion, and disaster relief across all four regions of PNG, expending close to 30K in 2022.
- And of course for our shareholders both in PNG and Offshore, continuing to provide consistent growth and returns to enable us to access much needed capital for our continued expansion to continue to be a formidable competitor
So in conclusion, 2023 is expected to be a year of growth in PNG which we can and should be right behind by providing and developing quality products, a strong customer service ethic and qualified staff with the right expertise to help. We want to continue to be a challenger brand committed to playing our part in consistently improving the prosperity of the people, communities and markets we serve. With the collective support and encouragement from the Government, public and private sectors, hopefully “together it really is possible”.
Thank you for being with us today.