BANKING COMPETITION PART 1 - Post Courier
Welcome everyone to this month’s column of Robin’s Take.
By way of introduction I have worked for more than 40 years in the banking sector in Papua New Guinea retiring as CEO and managing firector of Bank South Pacific at the end of 2022.
As a citizen of Papua New Guinea I continue to live in Port Moresby following my retirement.
I was most fortunate and blessed to receive recognition for the work of all the staff of BSP in 2015 when I was awarded the Companion of the Star of Melanesia by the PNG Government and recently a knighthood from King Charles III on the recommendation of the Government of PNG.
The University of Papua New Guinea also appointed me as an Honorary Professor in the school business and public policy.
Over the last decade PNG has experienced a significant increase in its population but somewhat incongruously this growth in population has been accompanied by a lessening in active competition in a number of sectors.
Banking is one of those sectors where the number of fully licensed commercial banks operating in the retail sector, which is the sector that affects most people in PNG, has reduced.
With only three fully licensed commercial banks in PNG the burden of delivering banking services to more people in more regions of PNG generally falls on only one or two banks in PNG, with BSP providing banking services and service options to the broad majority of people across the country.
Fortunately, a number of other financial institutions have indicated that their strategic intent to progress to a full banking licence in PNG.
TISA and Credit Corporation have both stated publicly that they are applying for a full commercial banking licence which is positive news from a competition perspective for the banked and unbanked population in PNG.
Competition brings innovation in the manner in which banking services are delivered, it stimulates often untapped lending opportunities for customers in all segments and it should lead to more competitive fees for services provided by banks.
Expectations of each of these benefits of increased competition being delivered immediately does need to be managed. Over the past 40 years PNG has seen the entry, and exit of many large international banks.
Indosuez operated in PNG, as did Bank of Hawaii, and Maybank amongst others. The regulator imposed license conditions on each of these banks in relation to having a minimum number of branches across the country.
Generally when such branches were opened they were located in Port Moresby and Lae and rarely did the physical branch representation move outside of the larger urban centres of the country.
In part this would have been due to the banks wanting to operate profitably first, build up scale and capital before moving to other centres that may not deliver as much profit to shareholders as the branches in the large centres would, and which would often have higher operational costs per customer than Port Moresby or Lae.
As a consequence though choice for consumers was only really available in Port Moresby or Lae, and competition did not always result in a lower cost of retail products.
That is not to say that the cost of banking products has not reduced, it is just that competition has not always been the driver of a lower product cost.
Read part two tomorrow
- Forums
- ASX - By Stock
- KSL
- Ann: Results of 2023 AGM
Ann: Results of 2023 AGM, page-33
-
- There are more pages in this discussion • 29 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add KSL (ASX) to my watchlist
|
|||||
Last
$1.03 |
Change
0.010(0.99%) |
Mkt cap ! $294.6M |
Open | High | Low | Value | Volume |
$1.02 | $1.03 | $1.02 | $83.69K | 81.55K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
2 | 42542 | $1.03 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$1.04 | 7500 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
2 | 42542 | 1.025 |
4 | 69658 | 1.020 |
1 | 14503 | 1.010 |
1 | 9692 | 1.005 |
7 | 23943 | 1.000 |
Price($) | Vol. | No. |
---|---|---|
1.035 | 7500 | 1 |
1.040 | 100000 | 1 |
1.050 | 91385 | 6 |
1.055 | 56000 | 2 |
1.060 | 58700 | 3 |
Last trade - 16.10pm 30/08/2024 (20 minute delay) ? |
Featured News
KSL (ASX) Chart |
The Watchlist
1CG
ONE CLICK GROUP LIMITED
Mark Waller, MD
Mark Waller
MD
Previous Video
Next Video
SPONSORED BY The Market Online