KINA RECORDS STRONG PERFORMANCE IN 2024

Picture Caption: Kina Incoming CEO, Ivan Vidovich. Picture Supplied

KINA Securities Limited (Kina) has announced a statutory Net Profit After Tax (NPAT) of PGK102.5million for 2024 after a one-off tax adjustment of PGK9.4million was effected to its underlying NPAT of PGK 111.9million.

Kina’s 2024 results were driven by increased interest income due to loan book growth and significant expansion in non-lending operations, particularly in digital and foreign exchange income streams.

While funds administration and management fees remained stable, the Cost/Income ratio and a one-off payments fraud incident affected NPAT growth.

Kina’s Board has also declared an unfranked final dividend for 2H23 of AUD 6.0 cents per share/PGK 15.5 toea per share, bringing the total dividend per share for the year to AUD 10 cents/PGK26.1 toea, with a yield of 8.7%. It’s also important to note that the KSL share price rose 42% over the year for a total shareholder return of 54%.

Kina Incoming CEO, Ivan Vidovich acknowledged the positive aspects of the FY24 result, stating: “Revenue growth was solid in FY24 across Kina’s diversified portfolio – namely loan growth, healthy loan margins, resurgent FX income, and ongoing improvements in digital channels performance.

Costs relative to income can be reduced as the business matures, processes become more efficient and revenue growth is sustained. As in prior years, Kina continued to perform strongly as PNG’s challenger bank. Revenue streams are building a strong base to drive the business forward. However, there is still work to be done, particularly in refining business processes, managing risks and controlling costs. As the digitally oriented strategy gathers momentum, I am confident we will continue to deliver NPAT growth and shareholder value.”

Kina is committed to cost efficient growth, focusing on budgetary measures this year and enhancing efficiency with risk-aligned processes over the next 2-3 years. The company has maintained a 52% cost-to-income ratio over the past three months, meeting its targets.

Kina Departing CEO, Greg Pawson said: “This is my last result as CEO/MD. I thank the staff, customers and board of KSL for having coordinated the delivery of strong balance sheet and NPAT growth, and indeed a strong business in my time here at KSL. The bank is in the hands of a very well qualified board, an experienced and determined management team to be led by incoming CEO Ivan Vidovich, and capable, passionate staff, and will continue to perform well in the coming years.”

Kina expects further earnings growth in 2025 to be underpinned by expected growth in the PNG economy combined with the company’s financial capacity and management capability to execute Kina Bank’s strategic plan.

The key outlook areas in the next few years for which there is some reasonable level of resolution, include the lowering of the Corporate Tax rate for banks to 35%, some US$30.1b worth of natural resource mega projects to commence between 2026 and 2030, and gradual downward crawl of the PGK/USD exchange rate.

Mr Vidovich, stated: “KSL will continue to build on organic revenue growth opportunities in PNG, – both net interest and non-interest – as well as efficiency and customer experience improvements enabled by a combination of short-term process improvements and digitization in the medium term.

Whilst we see opportunities for continued, sustainable growth, we recognize the country’s macro challenges, and there is also growing competition in the banking sector. Success in the market will continue to be marked, to a large extent, by a focus on delivering the right products to meet customer needs, building the right partnerships and programs with people, technology and other resources, and ensuring all are deployed efficiently”.