Kina Securities (KSL) H1 2024 Follow Up earnings summary

Executive summary

• NPAT growth of 7% for the half year, excluding a one-off fraud incident, continuing a strong growth trend since listing.

• Revenue up 17% half-on-half, marking the strongest result in recent years, driven by diversification beyond lending.

• Non-interest revenue now contributes around 50% of total revenue, up from 10% five years ago.

• Lending, digital, FX, and investment businesses all performed at or above budget.

Financial highlights

• Underlying NPAT up 7% to nearly PGK 50 million; statutory NPAT down 9% to PGK 42.2 million due to a PGK 7.4 million after-tax fraud loss.

• ROE at 15.6% underlying, 13.2% statutory; EPS at PGK 0.055; dividend per share at PGK 0.04.

• Interest on loans up 16%, digital revenue up 35%, FX up 71% half-on-half.

• Deposits up 8% half-on-half; deposit to loan ratio at 150%.

Outlook and guidance

• Double-digit loan growth forecast for the full year, with strong July and August activity.

• Cost to income ratio targeted at 52%-54% for the full year, with normalization expected in H2.

• Anticipated earnings boost from rolling PGK 350 million into higher-yielding government securities.

• Continued focus on digital product launches and technology enhancements in H2.