Kina Securities (KSL) H1 2026 earnings summary

Executive summary

• Statutory NPAT grew 4% year-over-year to PGK 59.7 million for 1H26, with revenue up 2% to PGK 254.8 million and EPS up 1% to 20.3 toea.

• Interim dividend increased 13% to 14.2 toea per share, marking the third consecutive half of dividend growth in PGK terms.

• Capital adequacy ratio strengthened to 26.0% following a successful PGK 235 million Tier 2 bond issuance.

• Lending market share held steady at 16.9% year-on-year, while deposit market share declined to 10.9% due to strategic runoff of high-cost deposits.

• Strategic initiatives included digital ecosystem expansion, new business banking platform, and continued investment in risk, leadership, and digitization capabilities.

Financial highlights

• Net interest margin declined by 10 basis points to 5.8% compared to June 2025; interest spread on loans increased to 6.5%.

• Operating costs rose 7% to PGK 159.6 million, mainly due to inflation, FX impacts, and investment in digitization.

• Provision coverage for impaired loans strengthened to 2.6% of gross loans; NPL ratio at 8.9%, up slightly due to technical reporting changes.

• Loan book grew 2% year-on-year, with underlying growth of 7% excluding strategic de-risking actions.

• Funds under administration grew 15% to PGK 25.1 billion, and funds under management rose up to 16% to PGK 14.4 billion.

Outlook and guidance

• Guidance reaffirmed for stronger FX activity and loan growth in the second half of 2026, with card interoperability issues expected to be resolved by year-end.

• Full revenue recovery in payments acquiring may extend into 2027 due to competitive changes.

• Positive momentum anticipated for the second half, with a solid lending pipeline and improved market conditions.

• Focus remains on long-term shareholder value and execution of the 2030 Strategy.