BSP giving more loans, citesrise in capacityM February 28,2024S...

BSP giving more loans, cites

rise in capacity

M February 28,2024

S The National

Business

By ZARA KANU LEBO

THE lending capacity of the Bank South Pacific Financial

Group Limited (BSP) has increased due to the strong growth

of all its key loan products in 2023, according to group chief

financial officer Ronesh Dayal.

"The provisions to loans ratio remains steady at 4.3 per cent

- well above most Australian banks, again reflecting the skill

of our asset mix," Dayal said.

"Only around 15 per cent of the loan book is invested in

residential mortgages and reflective of the size of the

residential property market in PNG thus provides significant

opportunity for growth.'

He said the balance sheet showed a high level of deposits

which was predominantly domestic funding, thus reflecting

the capacity to increase lending.

In its 2023 financial results, the balance sheet showed that

total assets grew by 9.5 per cent to K37 billion in a strong

23 per cent growth in lending, consistent with an increase in

deposits made to the bank.

According to the bank's loan book composition, all its key

loan product categories experienced strong growth in 2023

where the business loan segment represents 66 percent of

the loan portfolio, retail mortgages make about 15 percent

and the unsecured personal loans constitute 13 per cent of

the loan book and so a strong growth of 23 percent during

the year.

There was some impact of the lifting of the bank's

unsecured personal loan write-offs. Actions were taken

including restructuring the collections team and putting in

more resources to bring back the level that the bank

expects.

He said the bank had seen an improvement in stage-two

loans moving back to stage one, offsetting the impact of the

increase in internal expenses

"Combined with that was the fact that we have a strong 12

percent growth in on our loan portfolio, and the quality of

growth was quite strong," he added.