BSP records K672M profit in third quarter

BANK SOUTH Pacific says its strong business performance across the group was maintained in the third quarter of 2022, with Gronet profit after tax of K672 million, compared to K699 million for corresponding 2021 period.
 BSP records K672M profit in third quarter  BSP records K672M profit in third quarter  BSP records K672M profit in third quarter  BSP records K672M profit in third quarter  BSP records K672M profit in third quarter

BSP chief financial officer Ronesh Dayal with chief executive Robin Fleming

Staff Reporter

This was achieved despite BSP the Additional Company Tax (ACT) payment of K190m, which was introduced this year.
Chief executive Robin Fleming said the company's underlying profit growth reflected the improved economic conditions in the region, resulting in loan growth of  more than 5.6% and increased transactional activities, which had contributed to non-lending fee income increase of more than 14.3%, despite BSP continuing to reduce its fees.
Overall, group expenditure increased by 15.1% in Q3-22, compared to Q3-21.  This higher level of expenditure was driven by additional roles being created in retail, operations and compliance teams to support customer growth, more effective compliance, higher channel related costs (contributing to the higher channel revenue raised above) and property maintenance costs.
"With the support of its shareholders, BSP is pursuing a judicial review to challenge the constitutional validity of the ACT, given its material impact on shareholder returns.  Nevertheless, the K190 million tax was paid on 30 September 2022 into an escrow account held with BPNG, pending the outcome of BSP's legal challenge to the ACT.  The full K190m was taken up in BSP's first quarter accounts," BSP said.
Despite the above, Fleming said BSP Group's key performance ratios remained strong, with cost-to-income improving to 37.7%.  He added that BSP's capital base remains robust, with total capital adequacy as at September 2022 at 23.3%, in line with September 2021 levels, well above the minimum Bank of Papua New Guinea prudential requirement of 12.0%.  Group return on equity was 27.1% in Q3-22, impacted by the ACT.
Fleming also said that irrespective of the K190m Additional Company Tax, BSP has expanded its branch network, with Eriku branch opening in the first week of November 2022, NCD Lending Centre in Port Moresby in December 22, Telefomin hybrid sub-branch in the first quarter of 2023, and Dobel branch in Western Highlands in the first half of 2023.
Fleming said BSP remained the largest and most profitable bank in the South Pacific.  BSP also continues to deliver sustainable growth, as evidenced by its strong year to date profit results.



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