Kina Securities Reports 37% NPAT Rise to PGK 57.7 Million, Dividend Up 13%
Kina Securities Limited reported a robust 37% jump in statutory net profit after tax for the half year ended June 2025, driven by solid revenue growth and expanding loan portfolios. The bank also declared a higher interim dividend, reflecting confidence in its financial strength.
- Statutory net profit after tax rises 37% to PGK 57.7 million
- Revenue grows 10%, led by 37% increase in foreign exchange income
- Loan book expands 16%, net interest margin improves to 5.9%
- Operating costs rise marginally by 1%, excluding prior fraud loss
- Interim dividend increased by 13% to AUD 4.5 cents per share
Strong Half-Year Performance
Kina Securities Limited (ASX, KSL) has delivered a compelling financial performance for the half year ended 30 June 2025, reporting a statutory net profit after tax (NPAT) of PGK 57.7 million. This represents a significant 37% increase compared to the prior corresponding period (PCP) in 2024. The result underscores Kina’s steady progress against its 2025 strategic goals, with revenue climbing 10% to PGK 251 million.
Key drivers of this growth include a remarkable 37% surge in foreign exchange income, buoyed by strong customer inflows and robust commodity prices, particularly in the resources sector. Digital channels and strategic partnerships also contributed, with a 15% increase in digital revenue supporting a 12% rise in total banking fees and commissions.
Loan Book Expansion and Margin Improvement
The bank’s loan portfolio expanded by 16% to PGK 3.1 billion, reflecting disciplined credit management and active engagement with SME and regional customers. Business loans, asset financing, and home loans all showed solid growth, with wholesale and retail sectors maintaining the largest share of lending.
Net interest margin (NIM) improved by 30 basis points to 5.9%, supported by higher yields on government securities and effective pricing strategies. Despite a slight increase in funding costs, Kina maintained a healthy spread, demonstrating resilience in margin management amid evolving market conditions.
Cost Control and Capital Strength
Operating expenses rose marginally by 1% compared to PCP, excluding a one-off fraud loss of PGK 13.5 million in 2024. The cost-to-income ratio improved to 59.2% on a statutory basis, down from 64.8% previously, reflecting ongoing operational efficiencies. The bank also invested strategically in technology, cybersecurity, and leadership transitions to support future growth.
Kina’s capital adequacy remains robust, with a combined Tier 1 and Tier 2 capital ratio of 17.3%, well above the regulatory minimum of 12%. This strong capital base positions the bank to seize growth opportunities, particularly as major LNG projects in Papua New Guinea approach key investment decisions.
Dividend and Outlook
The Board declared an interim unfranked dividend of AUD 4.5 cents per share, a 13% increase from the prior period, reflecting confidence in sustained earnings growth. Looking ahead, Kina expects continued pre-tax earnings growth in the second half of 2025, driven by lending and non-lending revenue expansion alongside prudent cost management.
However, the medium-term outlook carries some uncertainties, including the potential impact of an impending Financial Action Taskforce (FATF) grey-listing in early 2026 and the timing of major LNG projects, notably the Total-led Papua LNG project. These factors will be critical to monitor as they could influence economic sentiment and banking sector dynamics.
Bottom Line?
Kina Securities’ strong half-year results and dividend boost signal resilience and growth potential, but upcoming regulatory and project milestones warrant close investor attention.
Questions in the middle?
- How will the impending FATF grey-listing affect Kina’s operations and risk profile?
- What is the timeline and expected impact of the Total-led Papua LNG project on Kina’s loan growth?
- Will foreign exchange income growth sustain as Bank of PNG shifts intervention strategies?
