Kina Securities Limited (ASX:KSL|PNGX:KSL) announced a Net Profit After Tax (NPAT) of PGK46.4m which was a 2% increase on Prior Comparing Period (PCP) of PGK45.6m.
The Group’s Profit Before Tax grew 19% to PGK77.7m compared to PCP of PGK65.6m.
Whilst the increase in pre-tax profits is commendable, it has been entirely absorbed by the increase in the corporate income tax rate for PNG’s commercial banks from 30% to 45%, leaving very little for future investment in branches, technology, credit, products and services, and skills. The results also reflected continued revenue growth, despite structural market challenges around a decline in rates on Treasury Bills and Government Securities and particularly the supply of foreign currency, where KSL has continued its commitment to serve PNG businesses and citizens with a disproportionately low share of foreign currency.
Loan book growth of 10% in the first half to PGK2.4b contributed to a Net Interest Income of PGK98.1m (+6%). Fees and Commissions increased by 19% underpinned by the expansion of Kina’s digital channel. As customer digital acquisition has been growing, KSL has continued to improve market share of loans and deposits over the period to 16% and 13% respectively. The Wealth Management arm of the business, has also continued steady growth in profitability and funds managed and administered.
The Board also declared an unfranked half year dividend for the HY23 of AUD 4.0 cents per share or PGK 9.7 toea per share.
Kina’s CEO and Managing Director, Greg Pawson said the result demonstrates the continuing execution of our digital initiatives, tightened discipline on costs, and a strong start to lending for the year.
“The NPAT outcome for the first six months of this year reflects Kina’s continued strong focus on growing revenue while prudently maintaining expenditure. The business has had to respond to some trying market conditions by continuing to strengthen our organic growth strategies in lending and digital channels. Kina is progressing well through its bank-to-market-maker roadmap, increasing market share in our targeted segments while building a robust balance sheet that ensures profitable growth. Underpinning revenue momentum is a disciplined approach to deliver customer-led digital solutions. The full market launch of Pei Beta, PNG’s first independent bill payments platform that customers of any bank can use is a notable example of disrupting the market as the challenger brand, delivering real value to customers, and activating the innovation mindset of our workforce.”
Kina remains on track to deliver its 2025 Strategic Plan to drive a market leading digital customer experience and digital product portfolio, and organic growth in the core banking business, focused on organisational sustainability and corporate responsibility.
Mr Pawson said the growth agenda remains our key focus in the second half.
“Our aspiration to be the most sustainable leader in PNG will continue to drive our agenda. Lending growth will be driven by our first half investments into leadership, customer experience, and business advisors in regional locations. Our growth targets for the Group will be delivered on an increasingly efficient expense base, and through our dynamic workforce and digital capabilities Kina remains positioned to deliver shareholder value.”
Further information on the result can be accessed online at Kina Securities Ltd – Investor Centre (kinabank.com.pg).