Kina Securities (KSL) H2 2025 earnings summary

Executive summary

• Underlying NPAT rose 15% to PGK 126 million, with statutory NPAT up 20% to PGK 121 million, aided by a lower tax rate and broad-based revenue growth of 13% year-on-year.

• Revenue grew 13% to PGK 546 million, with operating costs rising 4% to PGK 298 million.

• Lending market share increased, with gross loans up 17.8% year-on-year, mainly driven by commercial lending.

• Return on equity improved by 200bps to 17.4%; final dividend per share increased 22%.

• Customer deposits grew from PGK 4.3 billion to PGK 4.6 billion, despite a system-wide deposit spike due to government activity.

Financial highlights

• Net interest income up 20% year-on-year to PGK 268 million, now 49% of total revenues.

• Non-interest revenue grew 6% to PGK 278 million, with FX revenue up 17% to PGK 100 million.

• Earnings per share increased 20% to 41.8 toea.

• Cost-to-income ratio improved to 54.7% from 59.1%.

• Final dividend: 19.3 toea; full year: 31.9 toea, up 22%.

Outlook and guidance

• Anticipates further earnings growth in 2026, driven by revenue uplift, market share gains, and a lower corporate tax rate (35%).

• Expects headwinds from lower yields on government securities, tighter FX margins, and further PGK depreciation.

• Focus remains on organic growth, capital optimization, and customer experience improvements.

• Selective investments planned for long-term growth and resilience; Tier 2 capital bond issuance scheduled.

• Statutory corporate tax rate for banking to decrease from 40% in 2025 to 35% in 2026.