BANK South Pacific (BSP) Financial Group Ltd recorded a net profit of K671.5 million for the 3rd quarter (Q3) this year, compared to K698.8 million recorded for the corresponding period last year, chief executive officer Robin Fleming says. Fleming said that this was despite BSP expending an additional K190 million in company taxes due to the introduction of the additional company tax. He said the BSP’s underlying profit growth reflected the improved economic conditions in the region, resulting in a loan growth of +5.6 per cent and increased transactional activities, which had contributed to non-lending fee income increase of +14.3 per cent, despite BSP continuing to reduce its fees. “Overall Group expenditure increased by 15.1 per cent in Q3-2022, compared to Q3-2021,” he said. “This higher level of expenditure was driven by additional roles being created in retail, operations and compliance teams to support customer growth, more effective compliance, higher channel related costs (contributing to the higher channel revenue raised above) and property maintenance costs. “With the support of its shareholders, BSP is pursuing a judicial review to challenge the constitutional validity of the Act, given its material impact on shareholder returns. “Nevertheless, the K190 million tax was paid on Sept 30, 2022, into an escrow account held with BPNG (Bank of PNG), pending the outcome of BSP’s legal challenge to the Act. The full K190 million was taken up in BSP’s first quarter accounts.” Fleming said BSP’s key performance ratios remained strong, with cost-to-income improving to 37.7 per cent. He added that BSP’s capital base remained robust, with a total capital adequacy last month of 23.3 per cent, in line with September 2021 levels, well above the minimum BPNG prudential requirement of 12 per cent. “Group return on equity (ROE) was 27.1 per cent in Q3-22, impacted by the Act.” Fleming added that irrespective of the K190 million additional company tax, BSP had expanded its branch network, with Eriku branch opening in the first week of November 2022, NCD lending centre in December, Telefomin hybrid sub-branch in the first quarter of 2023, and Dobel branch in Western Highlands in the first half of 2023. Fleming concluded that BSP remained the largest and most profitable bank in the South Pacific. “BSP also continues to deliver sustainable growth, as evidenced by its strong year to date profit results.” “This higher level of expenditure was driven by additional roles being created in retail, operations and compliance teams to support customer growth, more effective compliance, higher channel related costs (contributing to the higher channel revenue raised above) and property maintenance costs.
“With the support of its shareholders, BSP is pursuing a judicial review to challenge the constitutional validity of the Act, given its material impact on shareholder returns. “Nevertheless, the K190 million tax was paid on Sept 30, 2022, into an escrow account held with BPNG (Bank of PNG), pending the outcome of BSP’s legal challenge to the Act. The full K190 million was taken up in BSP’s first quarter accounts.” Fleming said BSP’s key performance ratios remained strong, with cost-to-income improving to 37.7 per cent. He added that BSP’s capital base remained robust, with a total capital adequacy last month of 23.3 per cent, in line with September 2021 levels, well above the minimum BPNG prudential requirement of 12 per cent. “Group return on equity (ROE) was 27.1 per cent in Q3-22, impacted by the Act.” Fleming added that irrespective of the K190 million additional company tax, BSP had expanded its branch network, with Eriku branch opening in the first week of November 2022, NCD lending centre in December, Telefomin hybrid sub-branch in the first quarter of 2023, and Dobel branch in Western Highlands in the first half of 2023. Fleming concluded that BSP remained the largest and most profitable bank in the South Pacific. “BSP also continues to deliver sustainable growth, as evidenced by its strong year to date profit results.” The National / PNG Business News' Next : Australia Invests Over K1 Billion In PNG's Morobe Comments are closed.
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