Bank South Pacific records K218 million third quarter profit

PORT MORESBY, 26 OCTOBER 2018 (POST COURIER) – The Bank South Pacific Group presented its third quarter performance for 2018, citing a K218 million (US$66 million) profit after tax from its total K538 million (US$165 million) revenue for the quarter alone.

The profit was a reduction from it preceding quarter of K221 million (US$67 million).

Local market contribution to the quarter performance still is dominated by the PNG market with around 70 per cent of the K218 million, over K150 million representing PNG’s share to the overall quarter.

Fleming made mention of the reduced comparison to the send quarter, highlighting a one off transaction of K19 million (US$5.8 million) that occurred during the second quarter of 2018 which is in relation to the loss of one of the aircraft a Dash 8 aircraft from Air Niugini that the bank had on an operating lease before it was burnt in the Southern Highlands.

“We have received insurance proceeds from the loss of that particular aircraft, hence had a higher non-interest income.

“Non-interest revenue loan around about K19 million that is also being offset by our write-off of the asset of K13.6 million (US$4.1 million).

The bank reported continued growth in its lending up by about K28 million (US$8.5 million) and also some losses in deposits in the country.

“Again good balance sheet growth for the quarter, all of our key ratios cost to income 40.1 per cent they are all positive.

“Positive return on equity tracking at around 32 per cent, return on assets 3.8 per cent and loan to deposit ratio reflects increasing utilisation of our deposits with 68.3 per cent.”

Fleming maintained PNG continues market share dominance 61 per cent, also deposit market share is very strong in PNG at 61 per cent.

“In most countries we have very strong market share and we are number one in PNG Solomon islands, Tonga and Cook islands, now number two in Fiji, and two Samoa, and Vanuatu is our smallest market presence.”

He summarised a very strong result for the quarter, continuing with the growth trajectory for the first half of the year and on track to achieve our budget objectives.

“Contributions are still coming from each country and all the businesses as we have read during the last three months, the PNG government successful in launching its sovereign bond and that has been a positive message both from international financial markets and in respect of the government’s capability to go fund its ongoing budget deficit.”

“In the past two weeks we have seen Bank of PNG using some of the sovereign bond interventions to provide access to foreign currency for our customers and a number of customers have had some of their orders filled and we have seen the total number of orders reducing as a result of that intervention,” Fleming said.

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