BSP delivers a record K1.136b underlying profit for FY2022
BSP delivers a record K1.136 billion underlying profit, with BSP’s statutory profit reducing to K1.081 billion once the impacts of the new PNG government taxes are applied. Consequently, BSP’s shareholders K1.74 full year dividend was only marginally higher (0.6%) than the prior year’s K1.73.
According to BSP’s Acting Group CEO Ronesh Dayal, the result was impacted by the K190 million Additional Company Tax (ACT) and a one-off tax credit of K135 million. The tax credit comes after PNG Bank’s closing deferred tax assets and liabilities for 2022 were re-measured at 45%, in accordance with international accounting standards, given the PNG commercial bank tax rate increase from 30% to 45% in 2023.
“Despite these challenges, BSP has posted a record K1.081 billion statutory net profit after tax (NPAT), up 0.5% from the prior year NPAT of K1.075 billion,” Mr. Dayal stated. He also noted that the Group’s underlying NPAT was K1.136 billion, excluding one-off tax impacts and represents a 5.7% increase on 2021 profits.
“Improved economic conditions in the Pacific with the reopening of borders and resumption of business activities were the key drivers of the underlying result. Consequently, net interest income increased by 8.8%, foreign exchange income increased by 11.2%, and total loans increased by 4.6% to K15 billion,” stated Mr. Dayal when commenting on the key Group highlights.
Maintaining a dividend payout ratio of 75%, BSP has declared K813.5 million in dividends to shareholders for FY2022. A final dividend of K1.40 per share, payable on 21 April 2023, combined with the K0.34 per share interim dividend paid on 14 October 2022, brings the dividend per share for FY2022 to K1.74.
Mr. Dayal added that BSP continues to be an attractive prospect for investment, “BSP’s dividend yield is 14.0% and 14.6% on the PNGX and ASX respectively, which is a high-yielding asset compared to other stocks on both markets.”
Mr. Dayal stated that a key focus in 2023 will be adapting to the tax rate increase to 45% on PNG commercial banks.
“The tax rate increase to 45% on PNG commercial banks from January 2023 has the potential to impede investment and growth in PNG’s financial sector. Further, the sector targeted tax is counterproductive for the long-term economic growth ambitions of PNG,” he added.
Mr. Dayal concluded by saying, “Despite the regulatory and operational challenges, BSP remains committed to the prosperity of PNG and countries in the Pacific. BSP currently has no plans to scale back its existing network or reduce its services in PNG as a result of the tax rate increase.”
“We understand that banking is a vital service for all communities where we operate, many of which have no other accessible banking alternatives. Providing services to our customers is a core philosophy and remains an essential part of what we do here at BSP,” he concluded.