Kina Securities' FY23 Performance Overview

Kina Securities Limited (ASX: $KSL) has reported a solid performance for the full year ending 2023. The company achieved a net profit before tax increase of almost 20% to PGK 175.3m, driven by significant loan book growth, an increase in fees and commissions, and a 200bps decline in cost to income to 54.2%. The underlying NPAT remained virtually unchanged at PGK 105.2m, despite an increased tax rate offsetting Kina's operational growth. Kina also declared a final dividend of AUD 6.0 cents/PGK 15.9 toea, bringing the full year dividend to AUD 10.0 cents/PGK 25.6 toea.

CEO, Greg Pawson's Reflection on FY23 Performance

In 2023, the business successfully negotiated a challenging year by drawing on its diversified revenue streams and its ability to decide and act quickly on operational matters across all key portfolios. This is obvious in our strong lending growth, increased market share, continued delivery of customer-led digital products, and a well-capitalized bank with a disciplined approach to capital allocation. We have been able to neutralize the impact of the increased tax rate, but this lower level of internal capital generation greatly limits our capacity for growth of the business. Regular dialogue continues with the government on reducing the high tax rate, but the discussions have not produced any commitments at this stage. Despite the high tax rate, we go into 2024 assured of our capabilities and capacity to make the best of planned and unplanned opportunities.

Summary of FY23 Results and Outlook

Kina Securities' FY23 results reflect a robust performance with notable achievements in loan book growth, increased market share, and continued delivery of customer-led digital products. The company's underlying ROE remained at 16.8%, and regulatory capital closed the year at a risk-aligned 20.1%, supporting Kina's growth focus. Despite the challenges posed by the increased tax rate, Kina's ability to maintain NPAT on par with prior year levels demonstrates its resilience. Looking ahead, Kina remains focused on executing its 2025 strategic plan, aiming to drive prosperity for the communities it serves through initiatives such as revamping branch locations, enhancing ICT infrastructure, and expanding its footprint beyond Papua New Guinea. The company's investor briefing is scheduled for Wednesday, 28th at 2.00pm (Port Moresby), 3.00pm (Sydney). For further information, contact Johnson Kalo, Chief Financial Officer, via email at Johnson.Kalo@kinabank.com.pg or phone at +675 7018 0047.