kinabank.com.pg•Cost to income ratio improved by ~200bps to 54.2%, while accommodating further
investments in our API layer, cyber security features, core technology and enabling
infrastructure.
•Underlying ROE was 16.8%, creditably ahead of plan, despite the dampening effect
of the first year of the higher income tax rate.
•Loan impairment cost rose to PGK 9.8m [FY22: K4.8m], but the ratio of provisions
to gross loans improved from 2.3% to 2.2%. The higher impairment expense in 2023
arises from the strong 20% loan growth, coupled with increases arising from
improvements in our loss model, but the increase was mitigated by a strong focus
and good results in our asset recovery program.
•Kina Investment Superannuation Services recorded an increase of 50% in NPAT
associated with an increase in total funds under administration to PGK 18.0b and a
5% increase in total membership.
•FX volumes were lower than expected, and at K52.7m, also fell below prior year
levels, however there was a noticeable lift in the final quarter of the year, as
central bank foreign currency interventions aligned more with KSL’s bank customer
demand flows.
DETAIL
Kina Securities Limited (ASX:KSL | PNGX:KSL) (Kina) announced today an underlying
NPAT of PGK 105.2m, a decrease of 0.8% by comparison to prior corresponding period
(PCP) with almost 20% growth in pre-tax profit offset by the tax increase from 1 January
2023.
Kina’s FY23 results were underpinned by solid revenue growth in core banking products,
notably business lending, and digital services, contributing towards the progress of the
2025 strategic plan.
Kina’s underlying ROE remained at 16.8%, and regulatory capital closed the year at a risk-
aligned 20.1%, inside our target operating range and above the minimum requirement.
This supports and justifies Kina’s growth focus.
In addition to the strong performance of loan interest income in 2023, the results also
demonstrate Kina’s ability to execute a revenue diversification strategy, with close to
50% of income derived from non-interest products.
The Board declared an unfranked final dividend for 2H23 of AUD 6.0 cents per share/PGK
15.9 toea per share. The total dividend per share for the year is 10 cents, with a yield
still in excess of 10%. The higher tax on profit has been an important consideration, but
the ability to maintain NPAT on par with prior year levels helped to keep the dividend at
this level and within the range of the Board’s payout ratio.
Kina’s CEO and Managing Director, Greg Pawson said that “the result continues to
demonstrate Kina’s operational and execution alignment with our Strategic plan,
successfully delivering diversified income streams, increased revenues in digital channels
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