Kina Securities Limited (KSL) has reported a statutory profit of K23 million and an underlying profit of K30 million for 2017.
This is a 44 percent and 27 percent drop respectively from the same period in 2016.
KSL says the result is in line with mid-year analyst expectations and Kina’s market update.
Statutory profit is lower largely due to lower foreign exchange income in the first half year due to the lack of a US Dollar Correspondent Bank and the one-off lease termination payment expense.
The second half performance reflects the restoration of the USD correspondent bank relationship. However, the results were impacted by the subdued business conditions in PNG arising from a foreign currency shortage.
The underlying net profit represents the statutory profit as adjusted in order to present a figure which reflects the Directors’ assessment of the results of the ongoing business activities of the Group.
Kina chairman, Isikeli Taureka, said the full year result reflected a solid underlying performance given the challenging PNG economy and circumstances faced by the Group.
“Kina has responded appropriately and effectively to meet those challenges. 2017 was a year in which we invested in our banking and wealth management businesses, transitioned to new senior management, reinforced our technology innovation and developed new products and services,” Taureka stated.
“We plan to build on these solid foundations in the coming years.
“Our performance against our strategic priorities including ongoing delivery of profitable, quality lending growth; continued growth in the low-cost deposit base to reduce our cost of funds; and maintaining a strong prudential and conservative capital adequacy position were pleasing highlights of the result.
“This progress has put us in a good position to take advantage of market opportunities as they arise in 2018.”
Kina chief executive officer and managing director, Greg Pawson, said despite the challenges, the business remained in good shape.
“In our banking business, we have restored our USD correspondent banking relationship during the year. In addition, we have upgraded the core banking system and delivered new mobile banking applications for both corporate and retail customers.
“Our wealth business also delivered the new fund administration contract with Nasfund, which has commenced delivering revenues and customer benefits.”
Pawson said Kina would continue to focus on building a track record based on a consistent and focused strategy and disciplined execution. He said Kina has sharpened its strategic priorities for 2018 and beyond.
“As the only integrated financial services company in PNG, our strategy is based on differentiation, value for money, and targeted market segments,” Pawson said.
“Our vision is to become the best, dynamic, progressive and accessible financial services company in PNG. Aligned with this vision is our purpose to ensure our customers and communities are empowered to have financial independence and security.
“This aspiration is underpinned by technology and innovation,” he said.
Other financial highlights for 2017 include:
- Final dividend of PGK10.0 toea/AUD4.0 cents per share. (Full year dividend to PGK15.00 toea/AUD6.0 cents per share)
- Net interest margin 7.6 percent within mid-year guidance
- Restored USD correspondent banking arrangement with revenue flows of K 7.1m
- T1 and T2 capital ratio 28 percent, compared with regulatory minimum of 12 percent
- Maintained sound loan credit quality with arrears at 4.75 percent and total write-offs stood at PGK2.0m. Kina Securities Limited (KSL) has reported a statutory profit of PGK23.0m and an underlying profit of K30m
(Kina chairman, Isikeli Taureka)