Sir Kostas Constantinou, chairman, Board of Directors, Bank of South Pacific Limited (BSP)
Bank of South Pacific Limited (BSP) Group recorded a consolidated operating profit after tax of FJ$475 million (K757 million) for the 2017 financial year.
This was an increase of 17.65 per cent from the consolidated 2016 operating profit after tax of FJ$404 million (K643.5 million).
Sir Kostas Constantinou, OBE, chairman, Board of Directors, Bank of South Pacific Limited (BSP) yesterday released the Group results for the full-year to December 31, 2017.
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While global growth has strengthened during 2017, business conditions were somewhat challenging given the modest growth in the countries in which BSP operates and notwithstanding these macroeconomic challenges, the BSP Group again recorded positive profit increases for 2017.
Sir Kostas congratulated staff and management in all of BSP’s operations and businesses across Papua New Guinea, Fiji, Solomon Islands, Samoa, Tonga, Cook Islands, Vanuatu and Cambodia on the results achieved in 2017.
He remains confident the Bank will continue to adapt to challenging market conditions in all of the countries in which BSP operates.
Highlights of the Group performance are:
- Total assets of the Group increased by 7.4 per cent or approximately K1.538 billion to FJ$14.06billion (K22.370 billion) driven by strong growth in the loan book across all countries.
Loan book growth amounted to FJ$0.695 (K1.107 billion) from increased lending in PNG (corporate, SME and housing loans), strong growth in Fiji and uplift across most other countries.
Again there has also been a “currency translation effect” on the movement of the Kina that has had an impact on the level of total assets.
- Group revenues have increased 11.5 per cent during the year.
This revenue growth has come from interest income streams, in particular from loans and advances, with BSP growing its loan book by 11 per cent as well as the additional income from the BSP Finance businesses in PNG, Fiji, Solomon Islands and Cambodia.
- The bank’s profit growth was positive with after tax profits increasing 18.8 per cent to FJ453.11m (K720.9m) with net interest income up 13.9 per cent due to the increase in the loan portfolio.
Total assets of the bank at the end of 2017 are at FJ$12.800 billion (K20.364 billion). Loans and advances to customers has seen net growth of FJ$527.653 (K839.4 million) to
FJ 6.34 billion (K10.1 billion).
Customer deposits continue to grow steadily (up 4.3 per cent to (FJ$ 527.653 billion)K16.844 billion), with contributions across all segments of the Bank.
- The Group’s operating expenses show an increase of FJ$ 51.86 m (K82.5m) (or 10.7 per cent) mainly due to expenses relating to our core banking system upgrade and costs associated with delays in moving to the new Head Office at Waigani.
Despite these cost increases the “cost to income ratio” for the Group reduced to 42.6 per cent from 42.95 per cent in 2016.
The Bank’s operating expenses increased by K68.8m and cost to income ratio had also similarly reduced to 41.73 per cent versus 42.24 per cent in 2016.
- The Group’s Capital base remains sound. Total capital adequacy at the end of• 2017 is 24.5 per cent (2016 = 23.1 per cent) notwithstanding the impact of continued growth in balance sheet assets as well as total dividend payments of FJ$ 328.04 (K521.86m) (2016 = 2 (K413.97m (FJ$ 260.22).
The capital adequacy ratio exceeds the minimum Bank of Papua New Guinea prudential requirement of 12.00 per cent.
- Notwithstanding somewhat difficult trading conditions in PNG, the 2017 result is notable for the continuation of positive performances for the bank and most of its subsidiaries, as well as additional growth in the group’s balance sheet.
BSP achieved a number of significant milestones in 2017.
“Our group net profit before tax exceeded FJ$0.62 billion (K1 billion) for the first time, BSP extended its business operations outside of the Pacific region with completion of participation in the BSP Finance Cambodia Plc joint venture with our partners RMA Group.
“BSP obtained provisional approval from the Bank of Papua New Guinea to commence a life insurance business in PNG, BSP Life PNG Limited.”
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