| 2024 Annual Report
Kina Securities Limited Annual Report | Brand Statement
Kina Bank is a leader in
digital innovation offering
many PNG firsts in digital
products and services.
2
As Papua New Guinea’s challenger bank, everyone on the
Kina Bank team is deeply committed to delivering outstanding
service to our customers. We continuously seek new ideas and
technologies to achieve this.
In close collaboration with our key technology partners, Kina Bank has
developed a market-leading portfolio of digital banking propositions
over the past five years. These advancements have improved accessibility,
enhanced customer experience, and reduced the cost of financial services.
Kina Bank has positioned Papua New Guinea as a hub for digital innovation,
earning awards and critical acclaim for its pioneering efforts in the sector.
As a key pillar of our five-year Strategic Plan, this focus has driven digital
portfolio revenues upwards. Non-interest income now accounts for 54%
of the Group’s total revenues.
With a strong digital development pipeline for 2025, Kina Bank is set to
remain at the forefront of digital innovation—not only in Papua New Guinea
but across the Pacific region.
Finding a
better way
together.
3
Employees
736
Branches & Digital Hubs
23
Customers
281,099
Up 13%
FY24 222.2
9%
Net Interest Income
(PGK m)
FY23 203.3
FY24 180.1
5%
Net Profit Before Tax
(PGK m)
FY23 175.5
FY24 109.5
4%
Underlying NPAT
(PGK m)
FY23 105.0
4
Kina Bank’s story over the last 40 years
transcends financial reports. It’s a story
of growth, connection, and ambition—
creating opportunity with a challenger
spirit that drives freedom and progress
for businesses and everyday people.
The 2024 Kina Securities Limited Annual Report
is being published in our bank’s 40th year of
operations and the country’s milestone 50th year
of independence.
We’ve come a long way since 1985 when we
opened our doors as a diversified financial
services institution. Today, we operate as the
nation’s second-largest bank. This milestone year
is a time for celebration and the perfect moment
to sharpen our vision for the future.
Ideas shape nations—independence itself
began as an idea. From the ambitious farmer
or young business woman in our provinces, to
multinational corporations seeking to grow and
invest in our country—Kina Bank has a vital role
to play. Increasingly, our digital banking products
empower them.
We’re embedding financial inclusion into our
business and the lives of Papua New Guineans.
These principles can drive greater access to
banking, prosperity, and security. It’s a big
idea—but one worth championing as we turn 40
and our nation celebrates 50 years of progress.
Together, it’s possible.
Revenue
PGK484.9 million
Up 20%
Number of
Market Share
Lending
17%
Deposits
14%
Digital Revenue
Growth YoY
27%
FX Revenue
Growth YoY
67%
Locations
5
FINANCIAL INCLUSION
01
Growing security & prosperity
07
Financial Inclusion
08
ABOUT KINA
SECURITIES LIMITED
05
About Kina Securities Limited
26
REMUNERATION REPORT 11
1 Introduction and overview to shareholders
53
2 Kina’s Key Management Personnel (KMP)
53
3 Executive remuneration
54
4 Non-executive director arrangements
65
5 Related party transactions
67
6 Directors’ interests in shares
67
VISION & STRATEGY
08
Our Segments
37
2024 Strategic Pillars
38
STRONGIM
KOMUNITI GRANTS
02
Strongim Komuniti Grants
11
BOARD OF DIRECTORS
09
Board of Directors
42
SHAREHOLDER
INFORMATION
14
Shareholder Information
158
CORPORATE
GOVERNANCE
12
Corporate Governance Statement
69
SENIOR EXECUTIVE TEAM 10
Senior Executive Team
49
CORPORATE DIRECTORY
15
Corporate Directory
160
CEO & MD'S MESSAGE
07
CEO & Managing Director’s Message
33
FINANCIALS
13
Directors’ Report
85
Independent Auditors’ Report
89
Statements of Comprehensive Income
94
Statements of Financial Position
95
Statements of Changes in Equity
96
Statements of Cash Flows
97
Notes to the Financial Statements
98
CHAIRMAN'S MESSAGE
06
Chairman’s Message
29
CUSTOMER STORIES
04
Customer Stories
23
LONG-TERM MEMBERS
03
Kina Bank long-term team members
17
Our defining purpose is to
constantly improve the
prosperity of the people,
communities, and markets
that we serve.
6
Kina Securities Limited Annual Report | Financial Inclusion
Financial inclusion is an ambitious, nation-changing concept
that will make a real difference to the people and businesses of
Papua New Guinea.
Financially inclusive initiatives will ensure Papua New Guineans
from all walks of life gain access to affordable financial
services—payment platforms, savings, credit, and insurance—
fostering economic growth, reducing poverty and promoting
gender equality.
At Kina Bank, we believe financial inclusion practises are important to the
future of Papua New Guinea. And we’re in the unique position of being able
to realise these principles and make a real, long-term difference to the lives
of our fellow citizens.
For everyday people, financial inclusion will be delivered through easy
access to digital payment systems and mobile banking, alongside reduced
reliance on cash. Our vision is to make these services available through
technology innovation. Digital systems make transactions safer, faster, and
more efficient; especially in regions with limited banking infrastructure.
For businesses, this includes online tools, and access to our branch network,
as digital banking is the gateway to savings, transactional tools, loans and
increased financial security.
Our team has been working to improve financial services in PNG by making
banking more progressive, accessible and convenient. This has been the
cornerstone of our vision for the last five years.
Our digital-first mindset will see us continue to make a valuable contribution
to supporting Papua New Guinea’s national development.
Growing
security &
prosperity.01
7
For people in remote locations.
Mobile banking technologies and online
account applications enable financial inclusion
in PNG’s remote islands and mountainous
regions. This reduces locals’ need to travel to
transfer their money or pay bills, allowing them
to save for future security.
For entrepreneurs.
Financial inclusion practises ensure individuals
and businesses can access affordable financial
services—such as payment gateways, savings,
credit, and insurance—fostering economic
growth, reducing poverty, and promoting
gender equality.
Financial Inclusion.
8
For women.
Financial inclusion empowers women
in many ways. It enables them to start
businesses, manage finances, gain economic
independence and financial security.
It’s digitally driven.
Globally, digital transformation presents
increasing opportunities for financial inclusion.
The cost of banking is reduced. And the
availability of banking services is increasing.
Uptake needs to be encouraged.
9
“Kina Bank is helping
local communities improve
their livelihoods through
the SKG program.”
10
Kina Securities Limited Annual Report | Strongim Komuniti Grants
Strongim Komuniti
Grants.
The Kina Bank Strongim Komuniti Grants
program, launched in 2023, provides grants
of up to K5,000 for small-scale community
projects.
The program allows Kina Bank staff to apply for
funding for projects in their communities.
In 2024, 14 projects across 11 provinces,
including Bougainville, have been completed
or are nearing completion, supporting
initiatives like water tanks, school supplies,
and medical equipment.
By empowering Kina Bank staff to drive these
projects, the program is directly impacting
the lives of ordinary Papua New Guineans,
improving access to essential services,
enhancing educational opportunities, and
promoting sustainable development, all in line
with Kina’s commitment to sustainability and
community support.
Mackhenly Kaiok
Chief of Staff
Strongim Komuniti Grants Chairperson
In 2024, 14 projects across 11 provinces, including Bougainville, have been
completed or are nearing completion, supporting initiatives like water tanks,
school supplies, and medical equipment.
“The program allows
Kina Bank staff to
apply for funding
for projects in
their communities.”
11
02
“Thank you very much for
your support; there’s positive
results in our community.
I can see change and
relief in my patients.”
12
Kina Securities Limited Annual Report | Strongim Komuniti Grants
A remote community in Central Province, the
Tauruba Village received medical supplies for
its aid post that serves 18 surrounding villages.
The supplies were handed over to Village
Councillor Mr Tau Wari and Community Health
Worker Mr Graham Vagi by LAN Support Officer
Modu Moyokeda.
“We thank Kina Bank
for its generosity as
this is the first time
we are receiving such
assistance.”
“We thank Kina Bank for its generosity as this is
the first time we are receiving such assistance.
These medical supplies will greatly assist
us. Since we are located far from the Kwikila
Health Centre, our aid post is the main facility
that serves up to 3,000 people, not only from
Tauruba but from 12 other smaller villages,”
said Village Councillor Tau Wari.
Mr Vagi, an aid post team member, added that
pain killers, like Dictophanic, and antibiotics are
much-needed at his health centre. “We do not
receive these from Kwikila Hospital like we used
to. I now get from Kina Bank. This helps me treat
more patients. Even the ones who are severe,”
he said.
Mr Vagi was also thankful to Kina Bank Strongim
Komuniti Grants. “Thank you very much for
your support; there’s positive results in our
community. I can see change and relief in
my patients.”
Graham Vagi
Community Health Worker
Tauruba Aid Post
Medical supplies, Tauruba Village
TAURUBA HEALTH CENTRE, CENTRAL PROVINCE
13
“On behalf of the Board of
Management of Tubusereia
Primary School, our students
and teachers, I would like to
thank Kina Bank for choosing
our primary school.”
14
Kina Securities Limited Annual Report | Strongim Komuniti Grants
Tubusereia Primary School in Central Province
received a Strongim Komuniti Grant allowing
17 desks and chairs to be delivered. Kina Bank
Senior International Operations Officer, Susanna
Guru, successfully applied for this grant for this
important community school.
“I thank my employer, Kina Bank, for providing
this grant that will assist in the learning and
development of the children of Tubusereia,”
Ms Guru said.
In addition to the desks, Ms. Guru and her
colleagues from her International Operations
team also donated school supplies as part of
their community initiative.
“This grant will
assist in the learning
and development
of the children of
Tubusereia.”
School Principal, Kwara Kwara, thanked Kina
Bank saying “Our school does not have enough
desks and chairs to cater for the 937 students.
Most of the classrooms were built in the 1970s
and 1980s. When we received the new desks
and chairs, the students were very excited. The
parents were also eager to visit their children,
seeing them in a well-equipped and welcoming
classroom environment. Everyone was thrilled
by the positive change.”
He added “After the desks were donated,
students returned home excitedly telling their
parents about the new desks and tables in
their classrooms. Their enthusiasm has proven
infectious, energizing both the students and
the wider community.”
School Principal Mr Kwara added “On behalf
of the Board of Management of Tubusereia
Primary School, our students and teachers,
I would like to thank Kina Bank for assisting
our primary school.”
Kwara Kwara
School Principal
Tubusereia Primary School
School desks & chairs,
Tubusereia Primary School
TUBUSEREIA PRIMARY SCHOOL, CENTRAL PROVINCE
15
“Kina Bank plays a vital
role in the economic and social
development of PNG.”
16
Kina Securities Limited Annual Report | Long-term Team Members
03
Q
How did you first join Kina Bank?
What was your role at the time?
A
When Kina acquired ANZ’s retail and commercial/
SME banking businesses in 2019, I transitioned
into the role of Customer Service Officer at the Habour
City Branch. My career has been a continuous journey of
growth and learning and I am proud to have been part of
such an esteemed institution.
Q
How has your role changed over
the years?
A
My role has evolved over the years, from front-
office positions, such as Teller and Customer
Service Officer, to back-office roles, including
International and Foreign Exchange Customer
Service Officer. Each role has provided me with
unique experiences and opportunities to grow both
professionally and personally. Mr Allan Wilson, a
specialist lending consultant with ANZ Bank, and Mr
Vishnu Mohan were exceptional mentors who guided
me, shared their knowledge, and inspired me.
Q
Can you recall a time at Kina Bank that made
you especially proud to be part of the team?
A
One of the proudest moments in my career
was when I was recognised by Kina Bank for
my 40 years continued service. It was a humbling
experience, and I felt immense pride in being part of
such a supportive and dynamic organisation.
Q
What role do you think Kina Bank plays in the
broader PNG community?
A
Kina Bank plays a vital role in the broader
PNG community by providing essential
financial services that support economic growth
and development. We empower individuals and
businesses by offering accessible banking solutions,
fostering financial inclusion, and contributing to the
overall wellbeing of the community.
Q
What is one lesson you’ve learned from
working at Kina Bank?
A
One of the most important lessons I’ve learned
is to embrace change. The banking industry is
constantly evolving, and being adaptable and open
to new ideas has been key to my success. Change
brings opportunities for growth, and I have always
tried to approach it with a positive mindset.
Kina Bank long-term
team members.
Giwa Tauye
HEAD TELLER, PORT MORESBY | 40 YEARS
17
Q
Can you share your story of how you first joined
Kina Bank? What was your role at the time?
A
I joined ANZ in 2009 and moved over to Kina
Bank in 2019 when Kina acquired ANZ’s retail
and commercial/SME banking businesses. I joined
as a teller and moved over to the Cash Distribution
Centre (CDC) as the Chief Cashier at Harbour City.
Q
How has your role changed
over the years?
A
The most rewarding part of my journey at Kina
Bank was in 2021, when CDC was awarded for
Service Excellence through Kina’s NOVA Awards.
Q
Have you had a mentor who has made a
difference to your career?
A
Manteo Uwefa, my former Manager and
colleague, has been a significant part of my
career as I learned so much from her.
Q
What was Kina Bank like when you first
started? How does it compare to today?
A
Digital banking technology has changed the
way we work. Kina Bank is now playing a major
role in bringing banking and financial services close
to the communities through its branch network and
digital banking services which are located in most
parts of PNG.
Q
How has Kina Bank’s culture and values
influenced the way you work?
A
I have worked at Kina Bank for 16 years and
one of the most important lessons I learnt is
that integrity is an organisation-wide quality. It’s part
of everything we do here at work and outside
of work.
Lapu Aemak
TELLER | 16 YEARS
“Kina Bank is now
playing a major role
in bringing banking
and financial services
close to the
communities through
its branch network
and digital banking
services.”
18
Q
How did you first join Kina Bank?
What was your role at the time?
A
I started my career in 1987 straight from the
college as a Typist/Receptionist with a strong
desire to build a career in the financial sector. My
early responsibilities involved typing letters, diary
notes, security documents, registered mortgages, bill
of sale, and making appointments for the managers,
accountants and others which gave me a strong
foundation in banking operations.
Q
How has your role changed over
the years?
A
Over the years, my role evolved as I took on
more responsibilities and adapted to the
changes in the Industry. I moved through various
roles, including promotions and department
transitions which allowed me to develop my expertise
in retail branch network, customer service and
operational efficiency.
Q
What has been the most rewarding part of
your journey with Kina Bank?
A
The most rewarding part has been the ability
to mentor and develop younger professionals,
contribute to key banking Innovations and play a role
in safeguarding the bank’s interests. Throughout my
career, I have been fortunate to work with mentors
and colleagues who have greatly influenced my
growth – notably, Mr Alan Wilson.
Q
What was Kina Bank like when you first
started? How does it compare to today?
A
In 1987, Kina Bank was very different from what
it is today. Banking processes were mostly
manual, with limited technology to support daily
operations. Transactions were recorded on physical
ledgers and customer service was conducted entirely
over the counter.
Q
Can you share a story of Kina Bank making
a difference in a customer’s life?
A
During the COVID-19 pandemic, customer’s
businesses and individuals were struggling
financially. At the time, there was a major cash supply
shortage across the country, and many banks were
unable to meet their customers’ withdrawal needs.
I helped ensure Kina Bank branches and ATMs
remained stocked with cash, while other commercial
banks struggled.
Q
What role do you think Kina Bank plays in the
broader PNG community?
A
Kina Bank plays a vital role in the economic and
social development of PNG. Key contributions
include financial inclusion – expanding banking access
to rural communities through digital banking and
supporting SME by empowering them to grow and
contribute to the economy.
Q
How has Kina Bank’s culture and values
influenced the way you work?
A
Kina Bank’s core values (F.I.R.S.T.) have shaped
my approach to work. These values guide my
professional journey and continue to inspire me to
contribute to the growth and success of Kina Bank.
Manteo Uwefa
QUALITY ASSURANCE OFFICER | 38 YEARS
19
This is where you take out all your hostilities and frustrations. Just take out whatever you
don’t want. It’ll change your entire perspective.
Q
Can you share your story of how you
first joined Kina Bank?
A
I was part of the group that helped to
transition from ANZ Bank to Kina Bank
when Kina Bank acquired ANZ’s retail and
commercial/SME banking businesses in
September 2019.
Q
How has your role changed
over the years?
A
Since I joined Kina Bank in 2010, I was
appointed as the Occupational Health,
Safety and Wellbeing Senior Officer.
Q
What are some of the biggest changes
you’ve seen?
A
The bank is moving towards digital to
deliver new products.
Q
What role do you think Kina Bank plays in
the broader PNG community?
A
I think Kina Bank is very positive with its
community obligations, especially when staff
take time to raise funds to support charity groups.
Q
If you could give advice to someone just
starting their career at Kina Bank,
what would it be?
A
If you are building a career at Kina Bank for
five to 15 years or longer, you need to embrace
the culture, live and breathe the values and have a
growth mindset.
Q
What do you hope to see Kina Bank achieve
in the future?
A
I hope to see the bank embrace more digitally
driven business solutions, expanding its
services and strengthening its position as the
leading and most trusted bank in PNG.
Desmond Alesana
EMPLOYEE WELLBEING & OHS ADVISOR | 15 YEARS
“The bank’s
move towards
digital to deliver
new products is
bringing awesome
changes.”
20
Q
How has your role changed
over the years?
A
In 2005, I joined Kina as a Client Services
Officer and I’m now General Manager for
Kina Investment and Superannuation Services.
Q
Have there been any mentors or colleagues
who had a significant impact on your career?
A
I would like to acknowledge the following
persons for their contribution to my journey -
Mr Deepak Gupta, Mr Ivan Vidovich, Mr Greg Pawson,
Mr Warwick Vele, Mr Chetan Chopra, Mr Adam
Fenech, Mr Syd Yates and Mr Oala-John Rarua. I’m
forever grateful for their support and trust.
Ultimately, I appreciate the impact of my parents.
My mother made the selfless decision to become a
full-time caregiver upon my birth, while my father
continued to work to provide for our immediate
family, as well as his younger siblings and their
children, resulting in a household supporting over
twenty individuals in modest circumstances.
Despite limited financial resources, my father, a PNG
Kumul Legend himself, consistently persevered
without complaining. We witnessed his passion
towards everything he did that kept us together as a
family. He was elected to the Motu-Koita Assembly,
serving three terms as the Member for the Laurabada
Constituency from 2007 until his passing in 2019.
Last but not the least is my young family, including
my wife and kids.
Q
Can you share a memorable story
about how Kina Bank made a difference
in a customer’s life?
A
I think Kina has helped a lot of customers
achieve personal or family goals. I want to
share my story in brief as a motivation for my fellow
Papua New Guineans. Commencing my career as
a Client Service Officer, I have progressed to my
current role as General Manager of the largest fund
administration service provider in PNG.
The opportunities and support provided by Kina have
enabled me to achieve significant personal and family
milestones, including building my home, buying a car,
being able to travel overseas and providing for my
children’s education. I am deeply appreciative of the
support and opportunities Kina has afforded to me
and my family.
Q
What role do you think Kina Bank plays
in the broader PNG community?
A
Kina Bank provides essential financial services,
driving economic growth through lending and
investment, funds management and contributes to
social wellbeing through financial inclusion.
Community support programs such as the staff
driven Strongim Komuniti Grant program, where
I was honoured to have led the program as the
Chairman when it was first launched in 2023. Its role
extends beyond traditional banking, encompassing
a commitment to the prosperity of the people,
communities, and markets it serves.
Boge Dikana
GENERAL MANAGER KINA INVESTMENT
AND SUPERANNUATION SERVICES | 19 YEARS
21
“Kina Bank is not just a bank to us
– they’re a partner. They’ve helped
us grow and supported us through
different stages of our journey.”
22
Kina Securities Limited Annual Report | Customer Stories
04
Q
Describe your relationship
with Kina Bank.
A
Kina Bank is not just a bank to us – they’re
a partner. They’ve helped us grow and
supported us through different stages of our journey.
Q
How long have you been in business
partnership with Kina Bank?
A
We’ve worked with Kina Bank for about
five years now. It’s been a steady, reliable
partnership all the way through.
Q
What do you like about
working with Kina Bank?
A
They understand how business works here in
PNG, and they always come up with solutions
that fit what we need – not just offering us products
but really listening and adjusting to our situation.
Q
How has working with Kina Bank helped your
business to grow or succeed?
A
Kina Bank has played a big role in our growth.
They have financed our shopping malls and
helped us on the foreign exchange. Their support has
made a real difference.
Q
What does the future look
like for your business?
A
Our goal is to open 14 shopping malls across
Port Moresby. Right now, we’re already
operating eight, and we’re pushing forward with plans
to grow even more. We’re also continuing to build
our community programs such as the ‘Mama Store’
initiative to help women and young people set up
their own small businesses.
Q
Give us some key numbers
for your business.
A
Eliseo has grown very quickly. Right now, we
operate eight shopping malls in Port Moresby
and support over 1,800 local jobs – 95% of our staff
are Papua New Guineans. We also have over 70,000
members in our loyalty program and work with more
than 20 Mt Hagen farmers and gardeners here in
Port Moresby.
Customer Stories.
Jacky Zhou
GROUP EXECUTIVE CHAIRMAN
ELISEO GROUP OF COMPANIES
The Eliseo Group of Companies is a growing retailer with a reputation built on rapid
expansion and community engagement. Its operations span supermarkets, wholesale
stores and specialised freezer outlets.
23
“With the right financial partner
like Kina Bank, we are confident
in achieving our long-term goals.”
24
Kina Securities Limited Annual Report | Customer Stories
Q
Tell us about your relationship with
Kina Bank.
A
The bank has consistently provided efficient
support, timely responses to inquiries,
and tailored financial solutions that align with our
operational needs. Over time, this relationship has
strengthened through ongoing communication and
mutual understanding of expectations, and we look
forward to continuing this partnership in the future.
Q
How long have you been in business
partnership with Kina Bank?
A
We have been in partnership with Kina Bank
for more than 15 years. Over this time, our
collaboration has grown stronger through shared
goals and reliable financial support.
Q
What do you like about working with
Kina Bank?
A
We value their proactive approach and their
willingness to understand and support our
operational needs.
Q
How has working with Kina Bank helped your
business to grow/succeed?
A
Kina Bank has played a key role in supporting
our growth, particularly through timely
processing of payments, access to credit facilities,
and strategic financial advice. Their services have
enabled us to manage cash flow effectively and seize
new business opportunities with confidence.
Q
What does the future look like for
your business?
A
The future looks promising. We are focused
on expanding our operations, investing in
technology, and strengthening our presence across the
country. With the right financial partner like Kina Bank,
we are confident in achieving our long-term goals.
Q
Are there any key statistics you would like to
call out in your story?
A
We’ve seen a 35% increase in operational
efficiency since switching to Kina’s payroll
system. We’ve also experienced 22% revenue growth
over the past 12 months, supported by Kina Bank’s
financial solutions.
Q
Anything else you’d like to share with us that
you think is important to your story.
A
We appreciate Kina Bank’s commitment to
local businesses and the economy. Their team
is approachable and responsive, which makes a big
difference in the fast-paced environment we operate in.
Belinda Beim
SALES MANAGER
ISLAND MOBILE HIRE CARS LIMITED
Island Mobile Hire Cars is one of Papua New Guinea’s leading vehicle rental operators
headquartered in Taurama, Port Moresby. With a fleet of over 1000 vehicles and 400
dedicated staff members, the business is growing in partnership with Kina Bank.
25
Kina Securities Limited and its related entities (KSL, Kina, the Kina Group, the Group,
or the Company) was established in 1985 as a diversified financial services company
offering banking products, funds administration and wealth advice across Papua New
Guinea (PNG).
Kina offers customers end-to-end financial
solutions from savings accounts to business
loans, investments to mortgages, financial
advice and investment management. We are
committed to delivering exceptional service
and this is what sets us apart in the market.
As the Licensed Fund Administrator for the
three main super funds in PNG, Kina administers
over 957,725 superannuation members
accounts, with over K19.7 billion in funds
under administration as at 31 December 2024.
Kina Securities Limited has two key divisions.
Kina Bank and Kina Wealth.
Kina Bank delivers home, business and
corporate loans, everyday banking transactions,
credit cards, merchant and payment facilities
and banking services to smaller institutions.
Kina Wealth encompasses Kina Investment
and Superannuation Services, Kina Funds
Management and Kina Nominees servicing
funds administration, wealth advice,
stockbroking, funds management and nominee
custodial services.
Scan to see Kina’s Corporate Governance
Statement on the Company’s website.
About Kina
Securities Limited.
26
Kina Securities Limited Annual Report | About Kina Securities Limited
27
05
Kina Securities Limited Annual Report | Chairman’s Message
“In 2024, our lending market share
increased from 15% to 17%, and
deposit market share improved
from 13% to 14%.”
28
Chairman’s
Message.
Dear Shareholders,
I am delighted to present Kina’s Annual
Report for the financial year ending
31 December 2024.
Kina Group reported a statutory Net Profit
After Tax (NPAT) of PGK 100.3 million for
2024, following a one-off tax adjustment of
PGK 9.2 million, resulting in an underlying
NPAT of PGK 109.5 million.
Our 2024 results were driven by a significant
increase in interest income, propelled by robust
loan book growth and substantial expansion in
non-lending operations, particularly within our
digital and foreign exchange income streams.
While funds administration and management
fees remained stable, the Cost/Income ratio
and a one-off payment fraud incident impacted
NPAT growth.
Our performance in funds administration
and management improved due to value-
added services for superannuation clients and
an increase in total funds, allowing Kina to
maintain its market share in the sector. Despite
intensifying competition in the banking sector,
we saw significant opportunities for growth
in both deposit and lending market shares in
Papua New Guinea.
In 2024, our lending market share increased
from 15% to 17%, and deposit market share
improved from 13% to 14%. Overall lending
expanded by 13% compared to the previous
year, reaching PGK 2.9 billion. This growth
was primarily driven by a PGK 322.0 million
increase in the Business Loans and Home
Loan portfolios. Our Net Interest Margin
(NIM) reached 5.8%, reflecting a 20-basis
point increase over the year, fuelled by strong
lending rates and a gradual uplift in yields from
non-loan investments.
Our successful partnerships with Nambawan
Super, the National Superannuation Fund
and Comrade Trustee Services Ltd continue
to grow, with funds under administration and
management steadily increasing. Our wealth
management teams also continue to engage
clients with insightful bulletins and updates
on the PNG economy.
The Board has declared an unfranked final
dividend of AUD 6.0 cents per share (PGK
15.5 toea per share) for the second half of
2024, bringing the total dividend per share
for the year to AUD 10 cents (PGK 26.1 toea),
with a yield of 8.7%. The KSL share price rose
by 42.5% over the year, resulting in a total
shareholder return of 55%. Kina’s Return on
Equity (ROE) was 15.4%, and we maintained
a strong capital adequacy ratio of 18.3%, well
within both regulatory requirements and our
Board’s moderate-to-conservative target range.
These results reflect the Board’s commitment
to returning a healthy flow of earnings to our
shareholders, demonstrating our ability to
achieve growth while delivering value.
I am immensely proud of our accomplishments,
particularly given the challenging economic
conditions in 2024, coupled with civil unrest in
January, which disrupted many businesses in
Port Moresby and other centers. Additionally,
we experienced an isolated fraud incident,
which we have duly provisioned for in our 2024
financial results.
The Board remains fully supportive of Kina’s
growth trajectory, building on our progress
in core banking and digital partnerships.
Looking ahead, we will continue to chart a
prudent course for growth opportunities while
safeguarding our strong balance sheet.
29
06
The KSL share price rose by 42.5% over
the year, resulting in a total shareholder
return of 55%.
We emphasize that any growth must be
value-accretive for all stakeholders. As Kina
has firmly established itself as the primary
challenger brand, our market share and
digital footprint are expanding. Our mission
to deliver prosperity to the communities
we serve remains at the core of our purpose.
The Board commends all of our employees
for their adaptability and passion, and for
bringing to life Kina’s vision of becoming the
most dynamic and forward-thinking financial
services company in the Pan Pacific. We are
fortunate to have a highly skilled leadership
team, and the Board is pleased with the
progress we have made over the years.
Before I conclude, I would like to extend my
sincere thanks to former Chairman Isikeli
Taureka and former CEO Greg Pawson, for
their outstanding contributions to Kina over
many years. Mr Taureka served as Chairman
of Kina since 2017 after first joining the Board
in 2016 as a Non-Executive Director where he
provided invaluable leadership and strategic
direction throughout his tenure. Under his
guidance, the Board and Management team
have successfully driven Kina Securities’
growth, making it the second-largest bank in
Papua New Guinea. A key milestone during his
chairmanship was the notable acquisition of
ANZ’s retail banking network in PNG in 2019.
Mr Pawson also has made a tremendous
contribution to Kina. Under his stewardship,
Kina has become the leading digital bank
while significantly expanding our customer
base and strengthening our value proposition
across key segments—including homeowners,
SMEs, private banking clients, and through
Kina Wealth, which now stands as the country’s
leading wealth management provider.
The Board is excited to work with our new
CEO and Managing Director, Ivan Vidovich.
Mr Vidovich, who has been with Kina for over
five years as Chief Transformation Officer,
brings a wealth of experience and knowledge
of our business and stakeholders. He has
been a driving force behind Kina’s recent
growth, and we are confident he will lead us
to continued innovation and success.
On behalf of the Board, I would like to thank
my fellow Directors for their ongoing support
and exemplary leadership. Their dedication,
knowledge, and guidance are instrumental
in fostering a strong, customer-focused
organisation that is poised for innovation
and a brighter future for PNG.
Ian Clough
Non-Executive Director
and Chairman of the Board
30
31
“As PNG’s challenger bank,
we are building a solid
foundation for
sustained growth.”
Kina Securities Limited Annual Report | Managing Director & CEO’s Message
32
07
CEO & Managing
Director’s Message.
It is an honour to present the
performance of Kina Securities Limited
(KSL) for the year 2024, marking my first
annual report as Chief Executive Officer
and Managing Director since assuming
the role in January 2025.
In 2024, Kina continued its mission to transform
the financial services landscape in Papua
New Guinea (PNG) by delivering banking
solutions that are dynamic, progressive, and
accessible. We achieved strong underlying
financial results, underscoring the success of
our strategic initiatives and our commitment
to driving growth and innovation.
Kina achieved robust financial performance in
2024, with a 4% increase in underlying NPAT,
a 13% expansion of our loan book, and further
growth across our diversified non-lending
portfolio, particularly in digital services,
foreign exchange, and wealth management.
Non-interest income now accounts for 54% of
the Group’s total revenues - an endorsement of
our successful strategy to diversify Kina Bank’s
income streams.
Despite revenue growth of 20%, challenges
such as a one-off customer fraud incident
and a higher cost-to-income ratio of 59%
impacted NPAT growth. Kina remains
committed to addressing these challenges
and strengthening operational resilience in
the years ahead.
As PNG’s challenger bank, we are building
a solid foundation for sustained growth. We
recognise the need to refine and digitise
business processes, enhance risk practices,
and control costs relative to revenue growth
- key priorities for improving operational
efficiency over the medium to long term.
Looking ahead, Kina is focused on delivering
efficient growth and increasing the value
we create for our stakeholders.
We anticipate further earnings growth in 2025,
driven by continued execution of our strategy
and supported by the continued growth in
the PNG economy, the lowering corporate tax
rates for commercial banks, and the gradual
adjustments in the PGK/USD exchange rate.
In 2024, Kina made further strides in enhancing
digital operations, achieving a 27% increase
in revenue from digital services. Strategic
fintech partnerships continue to strengthen our
payments and banking capabilities, ensuring
we remain at the forefront of PNG’s competitive
financial services market. A key highlight
was the rollout of our digital hub concept,
expanding from one hub in 2023 to four
hubs by the end of 2024. These hubs provide
customers with access to cashless, digital-first
banking services, including account opening,
Visa Debit cards, and our full suite of online
and mobile banking and payments services.
The year ahead will be a landmark for
Kina as we celebrate our 40th anniversary
alongside Papua New Guinea’s 50th year of
Independence. These milestones reaffirm
our commitment to advancing innovation in
the banking sector, to financial inclusion and
supporting economic growth in PNG. Our
digital-first ethos and challenger bank strategy
will continue to drive our contribution to the
nation’s development.
I would like to thank former Chairman Isikeli
Taureka for his leadership and support to the
Board and Management since joining the
Board as a Non-Executive Director in 2016
and later taking over as the Chairman in 2017.
As a well-regarded and reputable senior
Papua New Guinean, Mr Taureka’s exemplary
vision and guidance ensured Kina’s growth
over the years into one of the largest banks
in the country.
33
I also look forward to working with our new
Chairman Ian Clough to guide the organisation
through its next stage of strategic growth
for the benefit of our customers and
all stakeholders.
I also extend my deepest gratitude to our
former CEO, Greg Pawson, whose visionary
leadership over seven years has been
instrumental in Kina’s growth. His contributions
have positioned Kina as a market leader in
retail, commercial, and SME banking, as well as
wealth management. On behalf of the Board
and the entire Kina team, I thank Greg for his
tremendous impact.
As we look ahead, Kina’s strategy remains
centered on sustainable growth from our
diversified portfolio - managing costs,
adopting a prudent approach to risk,
and maintaining our growth aspirations.
Our ability to deliver products that meet
evolving customer needs, build strong
partnerships, and efficiently deploy resources
will be critical to our success.
While we remain optimistic, we are mindful of
the macroeconomic challenges facing PNG.
Nonetheless, with the unwavering commitment
of our staff, the leadership of my Executive
team, and the support of the Board, Kina is
well-positioned to navigate these challenges
and deliver sustained value to all stakeholders.
Kina remains PNG’s leading digital bank and
PNG’s challenger bank, dedicated to offering
accessible and convenient banking solutions.
I am confident that we are on the right path
to fulfilling our vision and long-term strategy,
ensuring continued growth and resilience.
Ivan Vidovich
CEO & Managing Director
“Non-interest income now accounts for 54% of
the Group’s total revenues – an endorsement of
our successful strategy to diversify Kina Bank’s
income streams.”
34
35
36
Kina Securities Limited Annual Report | Our Segments
Our Segments.
Kina Bank
Kina Bank provides a comprehensive range of
financial services, including home, business,
and corporate loans, everyday banking
transactions, credit cards, merchant and
payment facilities, and banking services to
smaller institutions. Additionally, Kina offers
partner products and independently branded
financial services for customers of any bank.
In 2024, we continued to enhance our Digital
Banking platforms to increase accessibility to
banking services for all Papua New Guineans.
Our efforts were focused on customer
acquisition, corporate and home lending,
and SME growth.
Growing Digital Portfolio Revenues
We achieved significant progress in our
digital and channel operations, with revenues
increasing by 27%. Kina Bank has established
strategic fintech partnerships to enhance our
payments and lending capabilities. This focus
on digital innovation is crucial for future growth
and customer experience, ensuring we remain
at the forefront of the competitive financial
services landscape in PNG.
Stable Deposits
Deposits experienced a marginal growth of
0.2%, reaching K4.4 billion. This nominal growth
was primarily driven by an increase in low-
cost transaction accounts, such as Current and
Savings Accounts. The bank’s balance sheet
funding is bolstered by a strategic blend of
on call and term deposits, ensuring stability
and capacity for continuing loan growth with
financial efficiency.
Growth in Loan Book
Overall lending increased by 13% compared
to the previous corresponding period (PCP),
reaching K2.9 billion. This growth includes a
notable combined increase of K322 million in
the Business Loans and Home Loan portfolios.
Additionally, the expansion of our business
customer base, supported by enhancements
in the operating model across transactional,
lending, and digital banking services for
businesses and SMEs, significantly contributed
to this strong performance.
37
08
Our Vision is to be the most dynamic, progressive
and accessible financial services organisation in the
Pan Pacific region.
Vision.
Purpose.
Our defining purpose is to constantly improve the
prosperity of the people, communities, and markets
that we serve.
Priorities.
Our
Strategy.
Prosperity for our communities is Kina’s DNA. Serving our
communities, supporting the growth of Papua New Guinea
and continually developing innovative customer-led
solutions is at the core of our organisation.
GROWTH &
PROSPERITY
SUSTAINABLE
COMMUNITIES
SERVICE
EXCELLENCE
DYNAMIC
PEOPLE
BUILDING
RESILIENCE
2024 Strategic Pillars.
38
Guides equity
and justice,
ensuring
opportunities
for all to thrive.
Sparks
creativity, fuels
perseverance,
drives change
and touches
hearts.
Fosters trust
and satisfaction
by addressing
peoples’ needs
promptly and
effectively.
Embodies
empathy,
compassion,
kindness and
enriching our
customers’ lives.
Is a team who
entrust each
other.
Our Values.
Fairness.
Inspire.
Responsive.
Serve.
Together.
39
Growth & Prosperity
Our loan book grew by 13%, reaching K2.9
billion. This reflects not only a strong expansion
in the market but also a strategic increase in
our market share. Despite these gains, we
have maintained a prudent approach to risk
management, with non-performing loans at 8%
and a stable provisions ratio of 2.3%. Our Home
Lending segment remains a cornerstone of our
business as we remain committed to helping
more people achieve homeownership.
Looking ahead to 2025, we’ll continue
strengthening our position by enhancing
SME and specialised lending, while exploring
opportunities in sustainable finance and the
agricultural sector.
Our digital revenues have continued to grow
year-on-year, with a 27% increase in 2024. In
addition to Kina’s core digital and payment
product offerings, this growth is supported
by our strategic partnerships with fintech
companies, which have expanded our market
reach and enhanced our capabilities. Looking
ahead to 2025, we are continuing to enhance
our core digital banking platforms while also
introducing new products into market.
Kina Investment Superannuation Services
recorded a strong increase in net profit after
tax, driven by growth in total funds under
administration and a rise in total membership.
Meanwhile, funds under management within our
Wealth division continue to grow steadily.
Foreign exchange revenues surged by 67%,
driven by a significant increase in customer
inflows, the successful onboarding of major
accounts, and strategic interventions by BPNG.
While conditions are expected to remain positive
for foreign exchange supply in 2025, we expect
revenue growth to moderate from the levels
seen in 2024.
Resilience
Kina’s total regulatory capital adequacy of 18.4%
remains above the regulatory minimum of 12%.
With a cost to income of 59% in 2024, Kina
recognises the need to improve business
efficiency, which will be delivered over
the medium to long term through process
improvement and digitisation. We expect these
efficiency enhancements to also deliver benefits
in customer experience.
We are committed to enhancing resilience
and continue to strengthen our capabilities in
governance, risk and compliance, enabling Kina
to respond effectively to risks in the emerging
markets context in which we operate.
Our Strategic Intelligence capability was further
matured in 2024, enabling Kina Group to
identify strategic disruption risks and emerging
growth opportunities.
In line with Kina’s commitment to operational
excellence and security, we have made
significant investments to strengthen our
IT resilience. This includes advancing our
cybersecurity maturity, enhancing the stability
of our network infrastructure, and modernising
our data centre to support scalable and
secure operations. These initiatives are critical
to ensuring business continuity, protecting
customer data, and delivering trusted,
uninterrupted banking services. Looking ahead,
we’re also positioning ourselves to leverage
emerging technologies.
Service Excellence
Further to interventions based on our Employee
Engagement Survey to foster a cohesive
workplace culture, we introduced livestream
opportunities to allow staff in regional areas to
connect with events occurring in Port Moresby.
By leveraging technology, we have been able to
showcase expertise through thought leadership,
facilitate knowledge sharing and offer real-time
interaction with our Senior Leadership Team. This
has enhanced engagement beyond geographical
limitations enhancing their perception of the
bank’s FIRST values.
The majority of new-to-bank retail customers
now commence their onboarding through
our digital platforms, including through Kina’s
market leading eKYC capability. As technologies
continue to advance, we are committed to
enhancing these capabilities to balance risk,
efficiency and customer experience.
Our regional business advisor network is proving
successful in supporting the growing SME and
commercial sectors in regional Papua New
Guinea. This integrated approach enables us to
deliver a full suite of services through our regional
40
branches, including transactional and payment
services, lending, and digital banking.
Looking ahead to 2025, we have commenced
a review of our customer onboarding processes
to make Kina easier to do business with.
Despite Kina’s “digital first” bias our branch
network remains a critical part of delivering
services to our customers. In 2025 we will
commence a program to uplift the role that our
branch network and branch staff play in serving
our customers and underpinning Kina’s growth.
Dynamic People
At Kina, we believe that our people are the
cornerstone of our success, enabling them
to thrive in a fast paced and competitive
environment.
The launch of the Emerging Leaders Programme,
in conjunction with the University of Tasmania,
was a highlight of the year. We had a total of 13
graduates with two graduates eventually being
included in the Honours Roll for the university – a
strong testament to the calibre of participants on
the programme.
In 2024, our Executive Team People Day
centred on succession planning for senior and
business-critical roles, which we see as vital for
talent retention in the context of an increasingly
competitive financial services environment.
To support our broader investments into
leadership and culture, and our ambitions of
being an employer of choice, an externally-
benchmarked remuneration review was
conducted for non-senior management
team members.
An inaugural People Leaders Conference was
attended by over 100 team members, focussing
on a broad dimension of leadership disciplines,
from core skills in coaching and communication,
to growth mindsets and the habits of
transformational leaders.
As we continue to drive a risk and compliance
culture that is actively advocated at executive
level, we have continued to improve our risk and
compliance training approach, including uplifting
our focus on cyber security risks.
In 2025 we are planning to upgrade our HR and
Finance technology platforms, including the use
of cloud infrastructure, to improve the usability
of leave management systems and other people-
leader tools.
Sustainability
Kina Bank demonstrates a strong commitment
to community service, guided by its core
values of “Serve” and “Together.” Throughout
2024, the bank has supported underprivileged
communities by providing donations of food,
toiletries, and essential items to organizations
like Life PNG Care, hospitals, and schools. The
bank’s community initiatives focus on improving
the lives of vulnerable individuals, with special
attention given to healthcare and maternal
support, including donations to mothers and
babies in hospitals and providing essential items
to those facing hardships after childbirth.
In addition to its focus on social welfare,
Kina Bank is committed to environmental
sustainability and education. Their donations
to St John’s Ambulance have helped provide
vital medical services, and they have partnered
with Eda Davara Marine Sanctuary to plant
mangrove seedlings to combat climate change
and protect marine life. The bank also supports
education by contributing to local schools, such
as donating desks and chairs to Coronation
Primary School. These initiatives reflect Kina
Bank’s comprehensive approach to community
service, addressing immediate needs while
fostering long-term environmental protection
and educational growth in local communities.
The Strongim Komuniti Grant program, with
the support of Kina staff, successfully assisted
14 small-scale projects across 11 provinces
and the Autonomous Region of Bougainville,
demonstrating a significant commitment
to community development. Through its
partnership with Litehaus International, Kina
played a crucial role in funding computer labs
for several schools across Papua New Guinea,
providing essential resources for education.
Additionally, Kina’s dedication to youth
empowerment was evident in its support of the
Archer Leadership Program and the Motu Koita
FODE Program, where twelve young individuals
completed the programs and graduated, paving
the way for future leaders in the region. These
initiatives collectively highlight Kina’s unwavering
focus on enhancing educational opportunities
and fostering community growth across PNG.
41
Board of
Directors.
42
Kina Securities Limited Annual Report | Board of Directors
09
Ian Clough
Non-Executive Director
and Chairman of the Board
Ian Clough was appointed Chairman in
April 2025 after joining the Board as a
Non-Executive Director in July 2024
Mr Clough brings to Kina Bank over 30 years
of experience in retail having worked with
retail giants such as Target Australia,
Coles Supermarkets, Coles Liquor and
Kmart Australia holding senior management
roles in those organisations.
He also previously held various senior
leadership roles with the Port Moresby
Chamber of Commerce and Industry.
He is currently the Chairman of Papua
New Guinea’s leading retail, wholesale
and distribution firm, the Brian Bell Group,
a director of the Sir Brian Bell Foundation,
Vice President of the American Chamber
of Commerce Coral Sea (AmCham) and a
Council Co-Vice Chair of St Johns’ Ambulance.
Mr Clough is also the Honorary Consul
General for Sweden, and Norway in PNG.
Ivan Vidovich
CEO & Managing Director
Ivan Vidovich joined Kina Bank in 2019 as the
Chief Transformation Officer (CTO), a role
he held until his appointment as CEO and
Managing Director of Kina on January 1st 2025.
Ivan brings over 25 years of senior leadership
and executive experience across Australia, Asia,
Europe, and the Pacific. His career spans both
the financial services and logistics industries,
with leadership roles at organisations such as
Suncorp, TNT N.V., DBS Bank, and Kina Bank.
Throughout his career, Ivan has successfully
grown diverse P&L lines in mature and
emerging markets, led multi-country
transformation programs, and overseen large
scale international sales, service operations,
and cost structures. He also has deep expertise
in group strategy, digital innovation, mergers
and acquisitions, and strategic risk mitigation.
Ivan holds a Bachelor of Arts from La Trobe
University and is a member of the Australian
Institute of Company Directors.
43
Andrew Carriline
Non-Executive Director
Member of the audit and Risk Committee, Remuneration and
Nomination Committee, and the Disclosure Committee
Mr Andrew Carriline was appointed as a
Director of Kina on 16 August 2018.
Andrew is an experienced business executive,
highly skilled at operating successfully in
regulated environments. He was an executive
at a major Australian bank, where until 2017
he was the Chief Risk Officer in the Institutional
Bank, as well as Chairman of the bank’s
business in PNG. Since 2017, Andrew has
accepted several non-executive roles in the
‘for profit’ and ‘not-for-profit’ sectors.
Before his focus on purely risk roles, Andrew
practised corporate law in the public and
private sectors and has held several senior
legal and operational roles.
Andrew holds bachelor’s degrees in law and
commerce from UNSW and is a graduate
member of the Australian Institute of
Company Directors.
Jane Thomason
Non-Executive Director
Chair of the Remuneration and Nomination Committee and
Member of Transformation & Strategy Committee
Dr Jane Thomason was appointed as a Director
of Kina on 27 April 2018.
An entrepreneur and innovator, Jane has
worked in international development
implementation in the Asia Pacific region for
30 years. Her international career has included
work for governments and donors including the
Asian Development Bank, WHO, World Bank,
USAID and AusAID.
Since 2017, she has focused on Fintech and
Blockchain and is a thought leader in the
applications of blockchain technology to solve
social problems. She is the Co-Founder of the
British Blockchain and Frontier Technology
Association, Chair, Kasei Holdings Blockchain
Securities, Aquis Stock Exchange, London, and
is on the Editorial Board of both Frontiers in
Blockchain and Journal of Metaverse.
Dr Thomason co-authored the books
Blockchain Technologies for Global Social
Change and Applied Ethics in a Digital Age.
She is a Thinkers 360 in the Top 50 Global
Thought Leaders and Influencers on
Blockchain and Sustainability.
44
Karen Smith-Pomeroy
Non-Executive Director
Chair of the Audit Committee, Member of the Risk Committee,
and the Disclosure Committee
Ms. Karen Smith-Pomeroy was appointed as a
Director of Kina on 12 September 2016.
Karen is an experienced non-executive director,
with involvement across numerous industry
sectors. Karen has many years of experience in
the financial services sector, including a period of
five years as Chief Risk Officer for Suncorp Bank.
Karen has specific expertise in risk and
governance, deep expertise in credit risk and
specialist knowledge of several industry sectors,
including energy, property and agribusiness.
Karen is currently a Non Executive director of
Queensland Treasury Corporation and National
Reconstruction Fund, and Chair of Regional
Investment Corporation.
Karen holds accounting qualifications and is a
Fellow of the Institute of Public Accountants, a
Senior Fellow of the Financial Services Institute
of Australasia (FINSIA), a certificate member
of the Governance Institute of Australia and a
graduate member of the Australian Institute of
Company Directors.
Paul Hutchinson
Non-Executive Director
Chair of the Risk Committee and Member of the Audit Committee
Mr Paul Hutchinson was appointed as a Director
of Kina on 16 August 2018.
Paul is currently employed by the University of
Adelaide in the capacity of Program Director,
responsible for large scale organisation
restructuring and major projects.
Previously, Paul was the Managing Director
and Chief Executive Officer of Rural Bank
(specialising in the provision of financial
services to the agribusiness sector), Chief
Operating Officer of New Zealand Post and
held various other senior appointments with
Westpac , National Australia Bank and Bank of
New Zealand.
Paul’s extensive background in strategy, finance,
sales and distribution, commercial operations
and risk management has been honed over 30
years in the financial services sector.
He is a Fellow of the Institute of Financial
Services and is a member of the Australian
Institute of Company Directors, having attended
both the Company Directors Course and
International Company Directors Course.
45
Richard Kimber
Non-Executive Director
Chairman of Transformation & Strategy Committee and
Member of the Remuneration and Nomination Committee
Richard is a seasoned international financial
services and technology executive and director
with over 30 years of experience having
worked in HK, USA and the UK. His other board
positions currently include ING Bank Australia,
(where he is Chairman of the Technology &
Transformation Committee), Chairman of Stone
& Chalk, Chairman of AustCyber and a Non-
Executive Director of Daisee, an AI software
company he founded in 2017.
Richard’s prior executive roles include being
CEO of ASX-listed OFX Group, a leading
international payment company; Managing
Director of Google in Southeast Asia (which
included Australia and NZ); CEO of FirstDirect
Bank plc in the UK; and several international
roles with the HSBC Group, including as Global
Head of Internet Marketing based in New York
and the APAC leader for eCommerce based in
Hong Kong.
46
47
48
Kina Securities Limited Annual Report | Senior Executive Team
Rayeleene Elston joined Kina in February
2023 as Executive General Manager for
Business Banking and Prime. In her role, she
is responsible for the distribution of retail and
business lending.
Prior to joining Kina Bank, Rayeleene had a
30-year career in Banking in Australia. Her
career began in Retail Banking, and she spent
over 20 years as an Executive across Business
Banking at National Australia Bank {NAB). Her
last role at NAB was leading the Queensland
central region Business Banking team that
covered Commercial, Corporate, SME and
Agribusiness. Her previous role was General
Manager for Community Branches at Heritage.
Rayeleene brings a deep knowledge of
Business and Corporate Banking across
multiple products, credit, and customer
experience. She will be leading a key strategic
project for Business Banking expansion into
regional PNG over the next three years.
Johnson Kalo was appointed Chief Financial
Officer and Company Secretary in March
2023. He previously held the role of Chief
Information Officer. Johnson has substantial
industry experience in Papua New Guinea
having previously held the positions of Deputy
Chief Executive Officer and Chief Financial
Officer for BSP. His previous roles also include
independent Director of the Board of Credit
Corporation and Executive Director of the
Port Moresby Stock Exchange {PNGX). He
is a fellow of the Financial Services Institute
of Australasia and an associate member of
Certified Practising Accountants PNG. He
holds a Bachelor of Arts in Commerce from
the University of Papua New Guinea and a
Post Graduate Diploma in Applied Financial
Investment from the Financial Services Institute
of Australasia.
Rayeleene Elston
Executive General Manager Business
and Retail Banking
Johnson Kalo
Chief Financial Officer and
Company Secretary
Senior Executive
Team.
49
10
Philip joined Kina Securities Ltd in February
2024 as the Chief Risk Officer. He brings to
Kina a wealth of experience in the banking
and financial services sector, having worked
across risk management, strategy, and finance.
Philip has worked in Australia, Hong Kong,
Switzerland, the UK, and USA with UBS and
Capco, providing consulting services for HSBC
on a global scale. Most recently, Philip held
senior management roles at Westpac, based
in Sydney, including Director, Wealth Strategy
and Head of Customer Outcomes and Risk
Excellence (CORE) Development.
Aman joined Kina Bank in December 2023
as General Manager Technology. Prior to
joining Kina, he held several senior technology
leadership roles in Australia’s financial services,
retail and construction sectors such as Head of
Portfolio Delivery, General Manager Application
Delivery, and IT Service Management.
Aman has over 25 years in the IT industry with
qualifications in Industrial Engineering obtained
from the Sydney Institute of Technology. Aman,
a Fijian by birth now calls Australia home and
is an avid follower of rugby league supporting
the Canterbury Bulldogs. He is also a coach of
junior cricket teams.
Philip Keller
Chief Risk Officer
Aman Shandil
Chief Information Officer
Nathan joined Kina in February 2016 as GM
Treasury and Financial Markets. Prior to joining
Kina, he spent 15 years at ANZ Bank where
his last role was Head of Global Markets PNG
and Balance Sheet Manager for ANZ across
the Pacific. Nathan has 20 years’ experience in
foreign exchange, money markets and balance
sheet management across the Pacific region
having worked in PNG, Fiji and Australia.
Nathan holds a Bachelor of Business from the
Queensland University of Technology. He has
also completed the AFMA Dealer Accreditation
Program and the PNG Institute of Directors
Program.
Nathaniel Wingti
Executive General Manager Treasury
& Financial Markets
50
Deepak Gupta is Executive General Manager
Business Partners and Wealth and is responsible
for Wealth management and Corporate
banking at Kina. He has held a variety of senior
positions with Westpac, AMP and domestic
New Zealand institutions.
In addition, Deepak has strong governance
experience having held non-executive director
roles on the boards of NZX and ASX-listed
companies. He brings substantial experience
and a track record of success and innovation
across various areas in financial services
including successful development of New
Zealand’s first institutional private equity fund
for retail investors.
Deepak holds a Bachelor of Commerce and
Administration from Victoria University, New
Zealand, and an MBA from Massey University,
New Zealand. He has a Certificate of Investment
Analysis from the University of Otago, New
Zealand and is a Fellow of the Institute of
Finance Professionals New Zealand.
Ann Steele joined Kina in March 2024 as
the Executive General Manager People &
Culture. With more than 30 years of work
experience as a governance and strategic
human resources executive, Ann has a diverse
background in numerous sectors including
finance, banking, investment, education,
travel & tourism, manufacturing, properties,
information technology, and most recently
telecommunication.
Ann holds a Master’s in Management, plus
tertiary qualifications in Political Science
and Education. She is a member of various
professional institutions and has completed
the Australian Institute of Company Director’s
Program and currently sits on the Gaunavou
Investments Board in Fiji, she has completed
the Australian General Managers Program with
the Australian Institute of Management and is
a professionally trained mediator.
Apart from her professional life she is
heavily engaged in community groups and
initiatives that help alleviate poverty and is
keen in supporting organisations that restore
culture, arts and tradition and is currently the
Chairperson for Friends of the Fiji Museum.
She also provides professional coaching and
mentoring for upcoming HR professionals.
Deepak Gupta
Executive General Manager Business
Partners and Wealth
Ann Steele
Executive General Manager People
& Culture
51
52
Kina Securities Limited Annual Report | Remuneration Report
1.
Introduction and overview
to shareholders
The Remuneration Report is focused on providing
information to Kina Securities Limited shareholders
about the Company’s remuneration framework which is
designed to support the delivery of targeted operating
financial and non-financial results. Although Kina is not
required to have the Remuneration Report audited
and prepared in accordance with section 300A of the
Australian Corporations Act 2001 (Cth), the level of
disclosure meets the requirements of an Australian-
incorporated company.
In 2024, Kina reviewed its incentive plans to ensure that
they align with market best practice and continue to
attract, motivate and retain high calibre management and
employees. No material amendments have been made to
the Company’s incentive plan for the 2024 financial year.
2.
Kina’s Key Management
Personnel (KMP)
This report covers the remuneration arrangements of
Kina’s Key Management Personnel (KMP) who are the
people with the authority and responsibility for planning,
directing and controlling the activities of the Kina Group
directly or indirectly. Kina’s KMP comprise the non-
executive directors, the Managing Director and Chief
Executive Officer (MD&CEO) and the direct reports to the
MD&CEO, who are collectively called the Senior Executive
Team. For the purposes of this report, ‘executive’ refers to
the MD&CEO and the members of the Senior Executive
Team (Senior Executives). The KMP disclosed in this
Remuneration Report for 2024 were:
Remuneration
Report.
Non-executive directors (refer to section 4 of this
Remuneration Report)
Name
Position held during the financial
year ended 31 December 2024*
Isikeli Taureka
Non-executive Chairman
Andrew Carriline
Non-executive director
Paul Hutchinson
Non-executive director
Karen Smith-Pomeroy
Non-executive director
Jane Thomason
Non-executive director
Richard Kimber
Non-executive director
Ian Clough1
Non-executive director
MD&CEO and Senior Executive Team (direct reports to
the MD&CEO)
Name
Position held during the financial
year ended 31 December 2024*
Greg Pawson
MD&CEO
Johnson Kalo
Chief Financial Officer (CFO) and
Company Secretary
Deepak Gupta
EGM Wealth Management &
Corporate Advisory
Karen Mathers2
Chief Risk Officer
Charlie Sukkar3
Chief Information Officer
Ivan Vidovich
CEO & Managing Director
Nathan Wingti
EGM Treasury & Financial Markets
Rayeleene Elston
EGM Business and Retail Banking
Roppe Uyassi
Chief Operating Officer (COO)
Philip Keller4
Chief Risk Officer
Ann Steele5
EGM People & Culture
Aman Shandil6
Acting Chief Information Officer
* The term as KMP was for the full year unless otherwise indicated.
1 appointed 30 July 2024
2 resigned 2 August 2024
3 resigned 10 May 2024
4 appointed 1 January 2024
5 appointed 22 March 2024
6 appointed 22 May 2024
53
11
Remuneration and Nomination Committee
The Board has established the Remuneration and
Nomination Committee (RNC) to ensure the Company:
• has a Board with an effective composition, size
and commitment to adequately discharge its
responsibilities and duties and to bring transparency,
focus and independent judgment to decisions
regarding its composition
• has coherent remuneration policies and practices to
attract and retain directors and Senior Executives who
will create value for shareholders
• observes those remuneration policies and practices;
and
• rewards executives fairly and responsibly having
regard to the performance of both the Kina Group
and its executives and the general external pay
environment (including the level of fees for non-
executive directors).
The RNC assists the Board in the performance of its
constitutional and regulatory duties by:
• advising the Board on the remuneration of the
MD&CEO, Senior Executive Team and employees
holding Responsible Person positions (as defined
in accordance with Banking Prudential Standard
BPS310 Corporate Governance – Fit and Proper
Requirements (BPS310), issued by the Bank of
Papua New Guinea (BPNG)
• providing an objective, non-executive review of the
effectiveness of Kina’s remuneration policies and
practices
• recommending to the Board for approval by
shareholders, the amount and structure of non-
executive directors’ fees
• overseeing aspects of the ’Fit and Proper’
requirements of BPNG BPS310; and
• identifying the mix of skills and individuals required
to allow the Board to contribute to the successful
oversight and stewardship of the Company.
To align remuneration, performance and strategy, the RNC
regularly reviews:
• remuneration policy
• the structure and quantum of the remuneration of
the MD&CEO, members of the Senior Executive
Team, staff holding Responsible Person positions and
selected risk and compliance staff; and
• the structure and level of non-executive directors’
board fees and committee fees.
For more information on the RNC, refer to Kina’s
Corporate Governance Statement (available on
Kina’s website at http://investors.kinabank.com.pg/
investors/?page=corporate-governance).
3.
Executive remuneration
Remuneration policy and governance
framework
The RNC reviews and determines Kina’s remuneration
policy and structure annually, for approval by the Board,
to ensure it remains aligned to the Company’s business
needs and meets its remuneration principles. The RNC
also engages external remuneration consultants to assist
with this review as required. In particular, the RNC aims to
ensure Kina’s remuneration practices are:
• transparent, competitive and reasonable, enabling
the Company to attract and retain key talent
• aligned to the Company’s strategic and business
objectives and values, and the creation of shareholder
value; and
• acceptable to shareholders.
Remuneration Policy
The key tenets of Kina’s Remuneration Policy include that:
Remuneration should be set at levels that reflect the
relative size of the position, the remuneration ranges for
positions of equivalent ‘size’ in the relevant market, the
performance of the person holding the position and any
position-specific factors such as location or the strategic
importance of the role.
Remuneration levels must reflect what the Group can afford.
The Board through the RNC will provide the MD&CEO
with advice on affordability and this must be factored
into the MD&CEO’s annual review of remuneration.
54
The levels of every role in the organisation shall be
identified through a professional job evaluation exercise
and endorsed by the selected Job Evaluation Panel.
Pay structures and levels may be reviewed based on the
organisational growth and maturity over a period; and
from time to time benchmarked against identified market
participants. This survey cycle period shall typically be not
more than once in any two years.
Remuneration packages may comprise a mix of base pay,
performance-related pay and other benefits where this is
consistent in the market with the structure of packages for
similar sized roles, and must take into account the value of
all such elements.
Remuneration packages, including any performance-
based component, must not compromise the
independence of any risk and financial control officers
of the Group.
Where a remuneration package includes a variable
performance-based component the package must be
structured to:
• motivate the employee to achieve personal goals
that demonstrably contribute to the Group’s overall
strategic direction and medium to long-term financial
performance objectives
• encourage the employee to work within the Group’s
risk management framework and to comply with the
Group’s prudential policies
• specify measurable, objective, verifiable performance
targets which have to be met or exceeded before any
additional payment is due
• specify a measurement period that takes into
account the time to observe the real outcomes of the
employee’s business activities and efforts
• discourage the employee from taking extreme risks
to achieve short-term performance targets that could
jeopardise the financial stability and viability of the
Group in the medium to long term
• provide for the Board to set aside part or all of the
performance-based payments due if in the Board’s
judgment this is necessary to protect the financial
soundness of the Group or address unintended and
unforeseen consequences when the performance-
based measures were originally formulated.
Where a package includes equity or equity-linked
deferred remuneration the package must be structured
to prohibit the employee leveraging the equity in any way
until it is fully vested. The Group will cancel the vested
equity and rights to future equity of any employees found
to be in breach of this provision of their employment
agreement. The Board maintains complete discretion
to award equity rights to employees, including the
determination of vesting conditions and whether the
equity rights vest and/or are awarded.
On an overall basis, Kina Group would like to position
itself between the 50th and 75th percentile of the defined
market, with flexibility to adjust based on market dynamics
and organisational strategy.
Under the Company’s Securities Trading Policy, Relevant
Persons (which includes all directors and officers of Kina
(MD&CEO, CFO and Company Secretary) and all direct
reports of the MD&CEO), are prohibited from entering
into any hedging arrangements that limit the economic
risk of holding Kina securities under Kina equity plans.
This helps align the interests of directors, the Senior
Executive Team and shareholders.
55
56
Fixed Remuneration
(FR)
Total fixed remuneration comprises base salary, other non-cash benefits and
includes superannuation. The Senior Executive Team members may receive
their fixed remuneration as cash, or cash with non-monetary benefits such as
insurance, allowances and tax advisory services. FR is reviewed annually, or
on promotion. It is benchmarked against market data for comparable roles in
companies in a similar industry and with similar market capitalisation. The RNC
aims to recommend to the Board a remuneration package that would position
the respective member of the Senior Executive Team at or near the median for
a corresponding role, with flexibility to take into account capability, experience,
and value to the organisation and performance of the individual.
Short-term incentive award
(STI Award)
The short-term incentive award (STI Award) provides participants with an
opportunity to earn an incentive calculated as a percentage of their salary each
year, conditional upon achievement of group and individual key performance
indicators (KPIs) which may consist of financial and, if applicable non-financial
performance measures.
For all participants, except the MD & CEO, the incentive earned will be paid
100% in cash.
– MD & CEO 65% in cash and 35% in an offer of performance rights.
– The cash portion of the incentive will be paid in the next pay cycle
following confirmation of the performance outcomes being achieved.
For the MD & CEO, the performance rights portion (STI Performance
Rights) will be issued under Kina’s Performance Rights Plan (Plan) in
one tranche and will lapse upon resignation or termination, subject to
the absolute discretion of the Board.
The Board has the right to vary the STI Award.
Long-term incentive award
(LTI Award)
The long-term incentive award (LTI Award) provides an opportunity for
employees to receive an equity interest in Kina through the granting of
Performance Rights (LTI Performance Rights) under the Plan.
Under the LTI Award, LTI participants may be offered LTI Performance Rights
that are subject to vesting conditions set by the Board.
The Board has the absolute discretion to vary the LTI Award.
Remuneration components, approach and mix
To align the interests of Kina’s Senior Executive Team with Kina’s strategic goals and to assist in the attraction, motivation
and retention of management and employees of Kina, the Board has determined that the remuneration packages of the
MD& CEO and the Senior Executive Team should comprise the following components:
57
STI Award
Structure of STI Award
Features
Description
Eligibility
The MD&CEO and Senior Executive Team are eligible to participate in the STI Award
(STI Participants).
STI Award components
Cash bonus: 100% of the STI Participant’s STI Award, except for MD & CEO with 65%
of STI Award.
STI Performance Rights: 35% of MD & CEO’s STI Award.
Performance measures
Individual KPIs specific to each STI Participant are agreed at the start of each year. These
KPIs consist of both financial and non-financial performance measures.
No STI Award is payable unless a minimum Group Net Profit After Tax (NPAT) is
achieved. The Board has the absolute discretion to vary this requirement.
The Board allocates an annual pool to the STI Award each year. There are levels of
targeted performance for allocation of the pool for 2023:
Minimum (85% of budget)
Threshold (85% - 100% budget):
50%
Target (Budget 100%)
90%
Stretch (100+ to 110%+)
100%
Stretch (120%+)
up to 120%
The pool is then allocated in accordance with the maximum and target STI Award for
each STI participant (which is detailed later) as a percentage of gross pay.
The Board has the absolute discretion to vary the STI Award.
Calculation of STI
Performance Rights
The number of STI Performance Rights granted is determined by dividing the award
value by the 10-day volume weighted average price per share prior to 31 December of
the year of award (VWAP).
Vesting of STI
Performance Rights
STI Performance Rights are restricted from exercise until the second anniversary after the
grant date and will vest on the second anniversary. These are not subject to any further
measurement after award and allotment.
Period
Date granted
Vesting date
Financial Year (FY) ended 31 December 2021
01/04/2022
01/04/2024
FY ended 31 December 2022
01/04/2023
01/04/2025
FY ended 31 December 2023
01/04/2024
01/04/2026
FY ended 31 December 2023
01/04/2025
01/04/2027
Forfeiture of STI
Performance Rights
STI Performance Rights are subject to Kina’s clawback policy. Under the clawback policy,
unvested STI Performance Rights may be forfeited if the Board determines that adverse
events or outcomes arise that should impact on the grant of STI Performance Rights to a
STI Participant.
Payments and grants
Payment of the cash component under the STI Award will be made in April of each year
after the release of the full year financial results to the ASX and PNGX.
Target STI and maximum
STI that can be awarded
Target
Maximum
MD&CEO
100% of base salary
150% of base salary
CFO
40% of base salary
50% of base salary
Other Senior Executives
30% of base salary
45% of base salary
58
Long-term incentive Award (LTI Award)
The MD&CEO and the Senior Executive Team participate, at the Board’s discretion, in the LTI Award comprising annual
grants of Performance Rights. Further details are shown in the table below:
Structure of LTI
Features
Description
Eligibility
Participants must be a permanent full-time or part-time employee or executive director of Kina or any of
its subsidiaries (LTI Participants).
LTI components
The LTI Award will be delivered as performance rights (LTI Performance Rights) with each right
conferring on its owner the right to be issued or transferred one (1) fully paid ordinary share in the
Company.
Performance
measures
Since 2016, the LTI Performance Rights will only vest subject to Board assessed satisfaction of the
following conditions:
• Meeting the required Total Shareholder Return (TSR) performance level based on peer group
-50% weighting
• Over a three-year period, whereby:
Peer group relative TSR performance
Vesting outcome
Below 50th percentile of peer group
Nil
At 50th percentile
50% vesting
Between 50th – 75% percentile
Pro rata between 50% to 100%
75% and above
100% vesting
• Meeting Earnings Per Share (EPS) target level based on peer group – 50% weighting
• Compound Annual Growth rate over a three-year period, whereby:
EPS performance
Vesting Outcome
< 5% compound annual growth
Nil
5%
50% vesting
>5% and < 10%
Pro rata between 50% – 100%
10%
100% vesting
In 2021, the Board worked with an independent advisor to identify the comparator group companies and
the advisor calculates the vesting schedule.
Calculation of
LTI Performance
Rights
Grants are approved annually. The number of LTI Performance Rights for each year will be determined by
dividing the LTI Awards by the 10-day volume weighted average price per share prior to 31 December in
the year of grant (VWAP).
59
Structure of LTI
Features
Description
Vesting and
exercise of LTI
Performance
Rights
While the grants are approved annually, they will vest no earlier than the third anniversary of the
commencement of the performance period and subject to satisfaction of the vesting conditions and
performance measures.
The performance periods for the outstanding awards are as follows:
Financial
Year
Date
granted
Performance
Period
Measures
Vesting date
(subject to
performance
testing)
2021
01/04/2022
01/04/2022
to
31/03/2025
EPS assessment compound till FY 2024 – 50%
01/04/2025
Relative TSR assessment compounded to FY
2024 – 50%
2022
01/04/2023
01/04/2023
to
31/03/2026
EPS assessment compound till FY 2025 – 50%
01/04/2026
Relative TSR assessment compounded to FY
2025 – 50%
2023
01/04/2024
01/04/2024
to
31/03/2027
EPS assessment compound till FY 2026 – 50%
01/04/2027
Relative TSR assessment compounded to FY
2026 – 50%
2024
01/04/2025
01/04/2025
to
31/03/2028
EPS assessment compound till FY 2027 – 50%
01/04/2028
Relative TSR assessment compounded to FY
2027 – 50%
Forfeiture of LTI
Performance
Rights
Unvested LTI Performance Rights may be forfeited:
• if the Board determines that any vesting condition applicable to the LTI Performance Right
has not been satisfied in accordance with its terms or is not capable of being satisfied
• in certain circumstances if the LTI Participant’s employment is terminated; or
• in other circumstances specified in the LTI Award under the Plan (for example, if the Board
determines that the LTI Participant has committed an act of fraud or gross misconduct in
relation to the affairs of Kina).
Lapse of LTI
Performance
Rights
Unless otherwise specified in the vesting conditions or otherwise determined by the Board, a LTI
Performance Right lapses on the earliest of:
• if the Board determines that any vesting condition applicable to the LTI Performance Right
has not been satisfied in accordance with its terms or is not capable of being satisfied
• the expiry of the exercise period (if any)
• in circumstances of cessation of employment, i.e. either resignation or termination
• in other circumstances specified in the LTI Award under the Plan (for example, if the Board
determines that the LTI Participant has committed an act of fraud or gross misconduct in
relation to the affairs of Kina); or
• if the LTI participant purports to deal in the LTI Performance Right in breach of any disposal
or hedging restrictions in respect of the Performance Right.
60
Structure of LTI
Features
Description
Target LTI and
maximum LTI that
can be awarded*
Target
Maximum
MD&CEO
50%
50%
CFO
40%
40%
Other Senior Executive
Team members
30%
30%
Calculation of
Fair Value of LTI
Performance
Rights
Fair value of the LTI performance rights subject to TSR and EPS vesting conditions for financial reporting
purposes is generally estimated based on Kina’s ASX market share price at grant date and using a
simulation pricing model applying the assumptions of price volatility, risk-free interest rates and dividend
yields. Kina engages an independent valuation expert who performs the fair value calculations on the
grants based on the valuation methodologies referenced above and below.
TSR
A Monte Carlo simulation approach is used to value the LTI Awards subject to the relative TSR
performance condition as it incorporates an appropriate amount of flexibility with respect to different
features of the award. This approach is assumed to follow Geometric Brownian motion under a risk-
neutral measure as follows:
• simulates correlations between Kina’s proxy and other peer companies as well as correlations
between other companies in the peer group
• ranks simulated performances and the proportion of relative TSR award vested as calculated
based on vesting schedule; and
• records present value of TSR-hurdle award vested.
The above process is repeated multiple times and the estimated fair value is the average of the results.
EPS
Fair value of awards subject to EPS is calculated using a risk-neutral assumption. The fair value is the
difference between the share prices of the underlying asset, minus the expected present value of future
dividends over the expected life if holders of the underlying asset are not entitled to receive future
dividends. The fair value of the awards subject to EPS performance conditions will be equal to the share
price of the underlying asset if holders are entitled to receive future dividends.
* The board in its discretion to vary awards under the LTI Awards scheme to facilitate more differentiation in performance has made grants in the range of 0%-35% of salary.
The board will update the target and maximum percentages in the LTI Awards scheme, to better reflect individual contracts, overall and relative performance for the next
Annual Report
Performance-based and non-performance based components
All STI and LTI elements of the remuneration of the KMP who are executives are performance-based.
61
Participant
Cash salary/fees/short-term
compensated absences AUD
Non-monetary benefits
AUD
Total AUD
Greg Pawson1
2024
750,000
189,809
939,809
2023
750,000
185,441
935,441
Ivan Vidovich
2024
400,000
96,492
496,492
2023
400,000
50,057
450,057
Deepak Gupta
2024
375,000
159,771
534,771
2023
375,000
156,095
531,095
Johnson Kalo
2024
362,253
46,624
410,737
2023
328,482
45,551
374,034
Nathan Wingti
2024
338,450
138,526
476,976
2023
330,663
135,339
466,002
Karen Mathers2*
2024
107,692
1,934
109,626
2023
400,000
16,424
416,424
Rayeleene Elston
2024
325,000
117,684
442,684
2023
287,500
92,869
380,369
Charlie Sukkar3*
2024
76,923
1,934
78,857
2023
76,923
1,890
78,813
Roppe Uyassi
2024
328,780
13,151
341,931
2023
37,063
1,827
38,890
Philip Keller4*
2024
400,000
61,888
461,888
2023
-
-
-
Ann Steele5*
2024
265,385
50,574
315,959
2023
-
-
-
Aman Shandil6
2024
296,154
103,662
399,816
2023
-
-
-
* pro-rata based on start/exit date
1 resigned 31 December 2024
2 resigned 2 August 2024
3 resigned 10 May 2024
4 appointed 1 January 2024
5 appointed 1 April 2024
6 appointed 22 May 2024
Performance Rights holdings
The table below sets out the current holdings of Performance Rights (PR) by KMP.
First
Name
Last
Name
Award
Year
Grant Date
Vesting
date
Value
of PR
granted
(AUD)
VWAP
period
VWAP $
applied
PR
31/12/2024
Gregory
Pawson
STI
STI
LTI
LTI
LTI
2022
2023
2021
2022
2023
01/04/2023
01/04/2024
01/04/2022
01/04/2023
01/04/2024
01/04/2025
01/04/2026
01/04/2025
01/04/2026
01/04/2027
265,072
368,847
264,595
252,450
526,925
31/12/2023
31/12/2024
31/12/2022
31/12/2023
31/12/2024
0.7832
1.1005
0.7756
0.7832
1.1005
338,448
335,163
341,149
322,331
478,805
Deepak
Gupta
LTI
LTI
LTI
2021
2022
2023
01/04/2022
01/04/2023
01/04/2024
01/04/2025
01/04/2026
01/04/2027
93,971
95,931
145,431
31/12/2022
31/12/2023
31/12/2024
0.7756
0.7832
1.1005
121,159
122,486
132,150
Nathan
Wingti
LTI
LTI
LTI
2021
2022
2023
01/04/2022
01/04/2023
01/04/2024
01/04/2025
01/04/2026
01/04/2027
80,546
90,882
126,462
31/12/2022
31/12/2023
31/12/2024
0.7756
0.7832
1.1005
103,850
116,039
114,913
Ivan
Vidovich
LTI
LTI
LTI
2021
2022
2023
01/04/2022
01/04/2023
01/04/2024
01/04/2025
01/04/2026
01/04/2027
134,244
136,323
231,847
31/12/2022
31/12/2023
31/12/2024
0.7756
0.7832
1.1005
173,084
174,059
210,674
Johnson
Kalo
LTI
LTI
LTI
2021
2022
2023
01/04/2022
01/04/2023
01/04/2024
01/04/2025
01/04/2026
01/04/2027
85,916
82,400
213,581
31/12/2022
31/12/2023
31/12/2024
0.7756
0.7832
1.1005
110,774
105,209
194,076
Karen
Mathers
LTI
LTI
2022
2023
01/04/2023
01/04/2024
01/04/2026
01/04/2027
106,029
224,821
31/12/2023
31/12/2024
0.7832
1.1005
135,379
204,290
Rayeleene
Elston
LTI
2023
01/04/2024
01/04/2027
182,668
31/12/2024
1.1005
165,986
62
External Advisor Services
The Kina Performance Rights Plan is administered
independently by Link Market Services Pty Ltd. Orient
Capital Pty Limited is engaged to provide the assessment
of EPS Growth and Relative TSR Performance in relation
to the LTI Awards and valuation of the VWAP.
Holdings in Company Shares
The table below sets out the current holdings of
Company Shares by KMP.
KMP Shareholding
Current Balance
Greg Pawson1
1,521,841
Deepak Gupta
423,265
Nathan Wingti
198,864
Ivan Vidovich
250,510
Johnson Kalo
107,394
1 resigned 31 December 2024
Subsequent to, and in relation to, the year ended 31 December 2024 (FY2024 Awards), the Board approved the
following LTI Awards for eligible participants.
First
Name
Last
Name
Award
Year
Grant Date
Vesting
date
Value of
PR granted
(AUD)
VWAP
period
VWAP $
applied
FY2024 PR
Johnson
Kalo
LTI
2024
01/04/2025
01/04/2028
$127,885
31/12/2024
1.1005
116,206
Nathan
Wingti
LTI
2024
01/04/2025
01/04/2028
$100,961
31/12/2024
1.1005
91,741
Ivan
Vidovich
LTI
2024
01/04/2025
01/04/2028
$140,000
31/12/2024
1.1005
127,215
Rayeleene
Elston
LTI
2024
01/04/2025
01/04/2028
$127,750
31/12/2024
1.1005
116,084
Philip
Keller
LTI
2024
01/04/2025
01/04/2028
$140,000
31/12/2024
1.1005
127,215
Ann
Steele
LTI
2024
01/04/2025
01/04/2028
$90,000
31/12/2024
1.1005
81,781
Aman
Shandil
LTI
2024
01/04/2025
01/04/2028
$112,500
31/12/2024
1.1005
102,226
Employment agreements
KMP employment contracts
• All Senior Executive Team members’ employment contracts are over a period of three years with a notice period of
three months.
MD&CEO employment agreement
The MD&CEO’s employment agreement is for a term of five years with a notice period of six months. Kina may terminate
the MD&CEO’s employment without notice or payment in lieu of notice in circumstances where the MD&CEO:
• is bankrupt or has made any arrangement or composition with his creditors or taken advantage of any legislation for
relief of an insolvent debtor; or
• is convicted of any criminal offence, other than an offence which in the reasonable opinion of the Board does not affect
his position as MD&CEO of Kina.
On termination of the MD&CEO’s employment agreement, the MD&CEO will be subject to a restraint of trade period of
12 months. The enforceability of the restraint clause is subject to all usual legal requirements.
63
Remuneration of employees
During the year, the number of employees or former employees (not being directors of the Company), receiving
remuneration in excess of PGK100,000 per annum from the Group, stated in bands of PGK10,000, were as follows:
In PGK
2024
2023
1,940,001 - 1,950,000
1*
1,820,001 - 1,830,000
1*
-
1,030,001 - 1,040,000
-
2
1,010,001 - 1,020,000
1
-
970,001 - 980,000
-
1
950,001 - 960,000
1
-
940,001 - 950,000
1
-
920,001 - 930,000
1
-
890,001 - 900,000
1
870,001 - 880,000
1
1
850,001 - 860,000
1
840,001 - 850,000
1
1
810,001 - 820,000
1
800,001 - 810,000
1
790,001 – 800,000
1
-
780,001 - 790,000
1
-
730,001 - 740,000
1
720,001 - 730,000
1
-
710,001 - 720,000
-
1
690,001 - 700,000
1
-
640,001 - 650,000
1
-
610,001 - 620,000
1
590,001 - 600,000
2
570,001 - 580,000
1
-
550,001 - 560,000
1
540,001 - 550,000
1
520,001 - 530,000
1
-
500,001 - 510,000
2
-
470,001 - 480,000
1
In PGK
2024
2023
450,001 - 460,000
1
1
400,001 - 410,000
-
-
390,001 - 400,000
4
1
380,001 - 390,000
4
1
350,001 - 360,000
1
3
340,001 - 350,000
1
330,001 - 340,000
1
2
320,001 - 330,000
1
-
310,001 - 320,000
2
1
300,001 - 310,000
1
2
290,001 - 300,000
1
270,001 - 280,000
3
250,001 - 260,000
3
4
240,001 - 250,000
1
1
230,001 - 240,000
2
-
220,001 - 230,000
5
3
210,001 - 220,000
1
-
200,001 - 210,000
6
6
190,001 - 200,000
7
8
180,001 - 190,000
4
5
170,001 - 180,000
4
3
160,001 - 170,000
4
7
150,001 - 160,000
6
3
140,001 - 150,000
8
5
130,001 - 140,000
7
10
120,001 - 130,000
13
11
110,001 - 120,000
18
12
100,000 - 110,000
11
11
* Impact of foreign exchange conversion.
64
4.
Non-executive director arrangements
Remuneration policy
Non-executive directors receive a Board fee and fees for chairing or participating on Board Committees as shown in the
table below. They do not receive performance-based awards or retirement allowances.
The fees are exclusive of superannuation.
Directors’ fees are reviewed annually by the Board, taking into account comparable roles and market data provided by
the Board’s independent remuneration advisor.
Remuneration components
Kina’s Board and Committee fee structure as at 31 December 2024 was:
Board fees
Chairman
Non-executive director/committee member
Board
Board
$180,000
(excluding superannuation entitlements)
$90,000
(excluding any superannuation entitlements)
Committee fees
Audit Committee
Committee Chair: $22,500
(excluding any superannuation entitlements)
Members: $11,250
(excluding any superannuation entitlements)
Risk Committee
Committee Chair: $22,500
(excluding any superannuation entitlements)
Members: $11,250
(excluding any superannuation entitlements)
Remuneration and
Nomination Committee
Committee Chair: $22,500
(excluding any superannuation entitlements)
Members: $11,250
(excluding any superannuation entitlements)
Transformation & Strategy
Committee
Committee Chair: $22,500
(excluding any superannuation entitlements)
Members: $11,250
(excluding any superannuation entitlements)
Disclosure Committee
No additional fees are paid
No additional fees are paid
Fee pool
Under the Company’s Constitution, the Board decides the total amount paid to each non-executive director as
remuneration for their services as a director of the Company. However, the total amount of fees (including statutory
superannuation entitlements, if any) paid to the directors for their services (excluding, for these purposes, the
remuneration of any executive director) must not exceed in aggregate in any financial year the amount fixed by
the Company in a general meeting of shareholders.
For the financial year ended 31 December 2024, this has been fixed at $1.28 million per annum (no change from the
prior year, and the amount set out in the Company’s Listing Prospectus). Any increase in the total amount payable
by the Company to the non-executive directors as remuneration for services must be approved by shareholders in
a general meeting.
The aggregate sum includes any special and additional remuneration for special exertions and additional services
performed by a director as determined appropriate by the Board.
65
Committee fees
The Committee Chair fees are not duplicated for those directors who are appointed to Chair of more than one
Committee or the Board.
Non-executive director remuneration details
The following payments were made to non-executive directors in the 2024 and 2023 financial years.
Director
Year
Short-term benefits
Post-employment benefits
Total
Fees $
Non-monetary benefits $
Superannuation contributions $
$
Isikeli Taureka
2024
2023
180,000
180,000
-
-
15,120
15,120
195,120
195,120
Andrew Carriline
2024
2023
123,756
119,063
-
-
7,560
7,560
131,316
126,623
Paul Hutchinson
2024
2023
123,756
114,375
-
-
7,560
7,560
131,316
121,935
Karen Smith-Pomeroy
2024
2023
123,756
123,750
-
-
7,560
7,560
131,316
131,310
Jane Thomason
2024
2023
120,938
112,500
-
-
33,180*
-
154,118
112,500
Richard Kimber
2024
2023
118,131
33,750
-
-
7,560
2,520
125,691
36,270
Ian Clough1
2024
2023
37,500
-
-
-
-
-
37,500
-
* includes backdated super since appointment in 2020
1 appointed 30 July 2024
66
Variable remuneration
Special remuneration
Directors may be paid such special or additional
remuneration as the Board determines for performing
extra services or making any special exertions for the
benefit of Kina which, in the Board’s opinion, are outside
of the scope of ordinary duties of a director.
Reimbursement for out-of-pocket expenses
Directors may be reimbursed for travel and other
expenses incurred in attending and returning from
any Board, Board Committee or general meetings of
Kina shareholders, or otherwise in connection with the
business or affairs of the Kina Group.
Retirement benefits
There are no retirement benefit schemes for directors,
other than statutory superannuation contributions.
Participation in incentive schemes
The non-executive directors are not entitled to participate
in any Kina Group employee incentive scheme.
5.
Related party transactions
Please refer to Note 30 to the financial statements,
for further comments on related party transactions.
6.
Directors’ interests in shares
Directors are not required under the Constitution to
hold any shares in the Company. As at the date of this
Remuneration Report, the Directors have the following
interests in the shares in Kina (either directly or through
beneficial interests or entities associated with the director).
Director
Number of
Shares
Shareholding as
at the date of this
Remuneration
Report (%)
Greg Pawson1
1,521,841
0.53%
Andrew Carriline
125,000
0.04%
Paul Hutchinson
80,299
0.03%
Karen Smith-
Pomeroy
90,000
0.03%
Jane Thomason
35,000
0.01%
Richard Kimber
-
0.00%
Ian Clough
0.00%
1 resigned 31 December 2024
67
Kina Securities Limited Annual Report | Corporate Governance Statement
68
Corporate Governance
Statement.
69
Introduction
Kina Securities Limited and its related entities (Kina,
the Kina Group, the Group, or the Company) places
great emphasis on the continued development of a
strong corporate governance, risk management and
compliance culture. In an emerging marketplace,
Kina seeks to be innovative as well as provide a safe
and secure environment for its customers and clients,
which in turn brings value to shareholders.
The Board of Directors of Kina Securities Limited (the
Board) is responsible for the overall corporate governance
of the Kina Group, including adopting appropriate
policies and procedures designed to ensure that
Kina is properly managed to protect and enhance
shareholder interests.
The Board monitors the operational and financial position
and performance of Kina and oversees its business
strategy, including approving the Company’s strategic
goals and considering and approving business plans,
key governance, risk and operational policies and the
annual budget.
Kina has a well-developed corporate governance
framework and practices, for the operation and
management of Kina, which incorporates resilient
internal controls, risk management processes and
governance policies and practices. The Board monitors
adherence to this framework which enables the Group
to comply with relevant laws, regulations and standards
set down by the Bank of Papua New Guinea (BPNG),
the Australian Securities Exchange (ASX), PNG’s National
Stock Exchange (PNGX), the PNG Companies Act 1997
(Companies Act), PNG Securities Act, Capital Markets
Act 2015, and the Australian Corporations Act 2001 (Cth)
(Corporations Act).
This Corporate Governance Statement (Statement)
sets out the key features of Kina’s current corporate
governance framework and reports against the ASX
Corporate Governance Council’s Corporate Governance
Principles and Recommendations (4th Edition) (ASX
Principles and Recommendations). The Statement is
current as at 30 April 2025 and has been Board approved.
The Board considers and applies the ASX Principles and
Recommendations, considering the circumstances of
Kina. Unless otherwise noted, the Company has followed
during the reporting period, all of the best practice
recommendations set out in the ASX Principles and
Recommendations. Where Kina’s practices depart from
a Recommendation, this Statement identifies the area of
divergence and reasons for it, or any alternative practices
adopted by Kina.
Governance framework
The core of Kina’s corporate governance framework
is the Company’s Constitution and the Charters and
Policies (Governance Documents), which are referenced
in this Statement, and copies which are available on the
Company’s website at: https://investors.kinabank.com.pg/
Investors/?page=corporate-governance.
The Governance Documents are reviewed regularly by
the Board to ensure they comply with any updated laws or
regulations, that they meet high governance standards and
that they remain relevant to the Group and its operations.
Principle 1: Lay solid foundations
for management and oversight
A listed entity should clearly delineate the respective
roles and responsibilities of its board and management
and regularly review their performance.
Board of Directors
The Role of the Board
The Board is committed to maximising performance,
generating shareholder value and financial returns, and
sustaining the growth and success of Kina. In conducting
Kina’s business in accordance with these objectives, the
Board seeks to ensure that Kina is properly managed to
protect and enhance shareholders’ interests, and that
Kina, its directors, officers and employees operate in a
well-governed environment.
The Board has adopted a Board Charter. The Board
Charter sets out, amongst other things, the:
• role and responsibilities of the Board, including those
matters specifically reserved to the Board;
• role and responsibilities of the Managing Director and
Chief Executive Officer (MD&CEO), who is primarily
responsible for the day-to-day management of Kina;
• procedures for management of potential and actual
conflicts of interest; and
• guidance on Board performance evaluation,
ethical standards and taking independent
professional advice.
12
70
Board Responsibilities
The Board’s first responsibility is to govern the Company
in the interest of its shareholders; to protect and grow
the value of its stakeholders’ interests. The Board Charter
establishes that the primary goal of the Board is to add
value to the Company by:
• ensuring the long-term viability and sustainability of
the Company;
• protecting the interests of shareholders by exercising
effective control over the Company;
• providing strategic direction and leadership;
• bringing independent and informed judgment to bear
on material decisions of the Company;
• setting the standards of behaviour and ethical values
for the Company;
• establishing strong internal control and compliance
systems;
• monitoring the effectiveness of the Company’s overall
risk management and control framework; and
• accounting to shareholders for the overall
performance of the Company.
Under the terms of its Charter, the Board will:
• approve the Company’s strategy, business plans
and policy;
• establish the risk appetite within which management
will implement the strategic direction;
• monitor the implementation of strategic plans against
pre-determined performance indicators;
• identify key business risks and ensure measures are
taken to mitigate those risks;
• ensure that effective internal control systems are in
place to safeguard the Company’s assets;
• establish and monitor terms of reference and
procedures of all Board Committees;
• ensure compliance with all relevant laws, regulations
and standards;
• approve the external auditor’s fees;
• approve and monitor the progress of material
capital investment decisions, including new products
and services;
• appoint the MD&CEO, set executive remuneration
and establish performance objectives;
• appoint the Company Secretary;
• review the compensation of directors and recommend
changes to the non-executive directors’ fee pool
to shareholders;
• ensure succession plans are in place for all key
positions in the Company;
• adopt a comprehensive suite of prudential and
administrative policies;
• verify independently that the prudential and
administrative policies are operating effectively;
• maintain effective and timely communications with
shareholders;
• ensure the annual financial statements of the
Company and other published reports and
announcements are prepared according to the
relevant standard;
• resolve that the financial statements and other
published reports and announcements (where
relevant) accurately represent the financial position
of the Company;
• approve the annual report including the financial
statements, dividend proposals and notices to
shareholders for consideration at the Annual General
Meeting; and
• assess applications for new and increased loan
exposures where the amount or nature of the
lending requires referral to the Board as set out in
the Group’s Credit Risk Management Framework
and the Delegated Lending Authority Framework.
Delegations to Management
Day-to-day management and operations of the Company
are delegated to Management. The MD&CEO has the
authority to exercise all necessary powers, discretions and
delegations authorised from time to time by the Board.
The Board has delegated to the MD&CEO responsibility
for the following matters:
• selecting the senior management team;
• setting the terms and conditions of employment
within Remuneration Policy parameters;
• evaluating the performance of management;
• implementing the strategic direction established by
the Board;
• drafting the annual budget in consultation with the
Audit and Risk Committee;
• managing the Group’s day-to-day operations on time
and within budget;
• maintaining effective internal risk controls; and
• managing the daily operations of the business in
accordance with social, ethical and environmental
policies set by the Board.
71
The MD&CEO’s responsibilities are set out in the Board
Charter. The MD&CEO is supported by the Group
Executives, all of whom are listed on the Company’s
website at: https://investors.kinabank.com.pg/
Investors/?page=board-management.
The Board Charter, Charters of each Board Committee,
and the Constitution are available on the Company’s
website at https://investors.kinabank.com.pg/
Investors/?page=corporate-governance.
Director Appointment
As required by BPNG’s Prudential Standards (Standards),
Kina undertakes ‘Fit and Proper’ testing for candidates
who will hold ‘Responsible Person’ positions on initial
appointment, which includes directors and the Senior
Executive Team.
This rigorous testing, in accordance with the Standards,
is also carried out on an annual basis for all Responsible
Persons including thorough background checks. When
directors are proposed for election, or re-election at
General Meetings of shareholders, the Notice of Meeting
provides the following information about a candidate
standing for election or re-election:
• biographical details;
• details of other directorships held by the candidate;
• a statement as to the independence of the candidate;
• details of any adverse information revealed as part of
the checks performed about the director;
• details of any interest, position association or
relationship that might impact on the ability of the
director to be independent;
• the term of office currently served by the director; and
• a statement by the Board as to whether it supports the
election or re-election of the candidate.
Prior to appointing a director, the Remuneration and
Nomination Committee ensures the appropriate
background checks on their qualifications, experience,
education, character, bankruptcy history and
criminal record have been conducted and documents
provided to the Committee.
Prior to appointment, candidates are required to provide
the Chairman with details of other commitments and an
indication of time involved, and to acknowledge that they
will have adequate time to fulfil his or her responsibilities
as a non-executive director of Kina.
Each non-executive director is provided with a Letter of
Appointment, which sets out:
• the term of appointment;
• the time commitment envisaged, including any
expectations regarding involvement with Committee
work and any other special duties attaching to
the position;
• remuneration, including superannuation entitlements;
• the requirement to disclose the director’s interests
and any matters which may affect the director’s
independence;
• the requirement to comply with key corporate policies,
including Kina’s Code of Ethics and Business Conduct
and its Securities Trading Policy;
• the Company’s policy on when directors may seek
independent professional advice at the expense of
the Company (which generally should be whenever
directors, especially non-executive directors, judge
such advice necessary for them to discharge their
responsibilities as directors);
• the circumstances in which the director’s office
becomes vacant;
• indemnity and insurance arrangements;
• ongoing rights of access to corporate information;
and
• ongoing confidentiality obligations.
The MD&CEO and each Senior Executive Team member
are also provided with a Letter of Appointment which sets
out the information above (to the extent applicable), as
well as:
• a description of their position, duties and
responsibilities;
• the person or body to whom they report;
• the circumstances in which their service may be
terminated (with or without notice);
• any entitlements on termination; and
• any circumstances in which their remuneration
may be clawed back.
72
Company Secretary
The Company Secretary is accountable directly to the
Board, through the Chairman, on all matters to do with the
proper functioning of the Board.
Mr Johnson Kalo was appointed Company Secretary and
Chief Financial Officer on 1 April 2023. Mr Kalo holds a
Bachelor of Arts in Commerce from University of Papua
New Guinea and a Post Grad Diploma in Applied Financial
Investment from FINSIA. Mr Kalo is a member of Certified
Practising Accountants PNG.
Diversity
The Company’s Diversity Policy emphasises Kina’s
commitment to the maintenance and promotion of
a workplace that ensures equity and fairness and is
free from discrimination, harassment, bullying and
victimisation. Kina recognises the importance of
embracing diversity, specifically in valuing the unique
qualities, attributes, skills and experiences each employee
brings to the workplace.
The Company’s vision for diversity incorporates a number
of different factors, including but not limited to gender,
ethnicity and cultural background, disability, age and
educational experience.
The Diversity Policy provides a framework to help Kina
achieve its diversity goals, while creating a commitment to
a diverse work environment where staff are treated fairly
and with respect and have equal access to workplace
opportunities.
The Board has been focused on the improvement of
diversity reporting which is regularly provided to the
Board, and through the Remuneration and Nomination
Committee, plans to set measurable objectives for
achieving gender diversity in the composition of its
Board, Senior Executive Team and workforce generally.
The Remuneration and Nomination Committee reviews
and oversees the implementation of the Diversity Policy
and regularly considers the need to set relevant diversity
objectives.
The numbers of females within Kina’s workforce as at
31 December 2024 and 31 December 2023, including
the Board and Senior Executive Team is set out below:
31 December 2023
31 December 2024
Females
Males
Total
Females
Males
Total
Board
2
5
7
2
5
7
Senior Executive Team
4
6
10
2
7
9
Team Leaders
63
41
104
73
47
120
Other employees
336
269
605
328
288
616
Total employees
405
320
725
405
347
752
The Senior Executive Team are those individuals who
report directly to the MD&CEO. Team Leaders are those
individuals who have been appointed as Supervisors
and Managers.
Kina was an inaugural member of the PNG Business
Coalition for Women and, through the year, has provided
specialist training to female team leaders to assist with
their career development. Kina is a strong advocate for
gender smart policies in the workplace and provides both
maternity and paternity leave for its employees. This is
complemented by the opportunity of flexible working
arrangement when returning to work. Also, within the
first six months of a child’s life, new parents are provided
with paid leave to enable time out of the workplace to
feed babies.
In 2024, Kina renewed its subscription to the Bel isi
PNG program, which provides safe housing and case
management services for employees and family members
who are survivors of domestic violence. Kina also trained
21 employees as family and sexual violence Contact
Persons, providing more opportunities for survivors
of violence to safely and confidentially reach out for
assistance. The management has incorporated and
launched FSVU on the common learning platform to allow
for an extended participation by the entire Kina employees.
The ratio of women to men at Kina is 54% female to 46%
male (2023: 56% to 44%).
The Group will continue to promote awareness and
understanding of workplace diversity principles and
develop policies to help employees balance work, family
and cultural responsibilities while at the same time
removing barriers to career development.
In accordance with the Standards, and as set out in
the Board Charter, the performance of the Board, the
directors and its Committees are assessed each year.
The Board commenced an independent performance
evaluation in 2023 conducted by an external firm,
ProPerformance Strategic Leadership. The findings were
released in May 2024 and will be used to further refine
the ongoing Board processes, succession and renewal
plan. The Board will continue to review individual,
Committee and collective Board performance and
ensure that composition, skills and experience of the
directors is appropriate.
Performance evaluations, overseen by the Chairman
and the Chair of the Remuneration and Nomination
Committee in the case of the MD&CEO, and the
Remuneration and Nomination Committee in the case
of the Senior Executive Team, are carried out on an
annual basis and were completed in 2024.
73
74
Principle 2: Structure the board to
be effective and add value
The board of a listed entity should be of an
appropriate size and collectively have the skills,
commitment and knowledge of the entity and
the industry in which it operates, to enable it to
discharge its duties effectively and to add value.
Board Composition
The Board currently comprises seven non-executive
directors (NEDs) and one executive director. The
Company’s Constitution provides for a minimum of three
and a maximum of ten directors. The Board members have
a diverse range of skills and experience, which ensure they
are able to add value to the Board’s decisions, contribute
effectively and act in the best interests of its shareholders.
In the year 2024, the Company’s Executive Director was
Mr Greg Pawson, the MD & CEO of the company, who
resigned on 31 December 2024. He was succeeded
by Mr Ivan Vidovich who currently holds the position
of CEO & Managing Director as of 1 January 2025.
Board Committees
The Board has the power to establish and delegate
powers to Committees that are formed to facilitate
effective decision-making. The Board, however, ultimately
has full accountability for matters delegated by it to those
Committees.
The Board has established an Audit Committee, a Risk
Committee, a Remuneration and Nomination Committee
and a Disclosure Committee. Each Committee has a
separate Charter which sets out, in detail, the membership
and powers of the Committee including its roles and
responsibilities.
The Charters are reviewed at least annually, and copies
are available on the Company’s website at: https://
investors.kinabank.com.pg/Investors/?page=corporate-
governance.
Other Committees may be established by the Board as
and when required. Membership of Board Committees
is based on the needs of Kina, relevant legislative and
other requirements and the skills and experience of
individual directors.
Audit Committee
The Board established the Audit Committee to assist the
Board:
• To fulfil its responsibilities with respect to its statutory
and prudential duties and obligations to shareholders;
• With its obligations as a finance institution, as
documented in all of the Bank of PNG (BPNG)
Prudential Standards and other regulators in the
jurisdictions we operate;
• In ensuring the Reliability of Financial Information;
• With the oversight of management of material
financial risks;
• Reviewing and overseeing the systems in place
to ensure compliance with financial reporting
requirements and external reporting agencies
requirements, including ASX and PNGX;
• Reviewing and overseeing the systems in place to
ensure compliance with accounting standards in all
relevant jurisdictions;
• Liaison with External and Internal Auditors as
appropriate
• Monitor and assess the performance of the internal
and external audit functions; and
• Requesting and reviewing relevant external financial,
taxation and insurance advice so the Board can be
appropriately advised.
The Audit Committee is responsible for the financial
reporting and internal control, internal and external audit.
The Committee is to ensure that the Company complies
with its Risk Management Strategy and Framework; It’s
Corporate Strategy; It’s Code of Conduct; It’s policies and
procedures; and All other relevant laws, regulations, codes,
regulations, and industry and organizational standards.
As set out in its Charter, the Audit Committee must
comprise at least three directors and all non-executive
directors. The Chair of the Audit Committee is appointed
by the Board and must be an independent director. In
accordance with the Standards.
Audit Committee met four (4) times during the year
ending 31 December 2024.
75
Risk Committee
The Board established the Risk Committee to assist
the Board:
• To fulfil its responsibilities with respect to its statutory
and prudential duties and obligations to shareholders;
• Its obligations as a finance institution, as documented
in all of the Bank of PNG (BPNG) Prudential Standards
and other regulators in the jurisdictions we operate;
• Review and oversee systems of risk management,
internal control and legal and regulatory compliance;
• Review the Kina Group’s risk appetite and tolerance
levels and ensuring they are consistent with and
appropriately aligned to the approved Kina Group
strategy; and
• Monitor and assess new technologies, and
systems of cyber security, data governance
and modelling integrity.
The Risk Committee is responsible for risk oversight,
risk management, compliance, anti-money laundering
and counter terrorist financing (AML/CTF), monitor
Group Insurance Program, monitor Group Litigation
and Informational Communication and technology.
The Committee is to ensure that the Company
complies with its Risk Management Strategy and
Framework; It’s Corporate Strategy; It’s Code of Conduct;
It’s policies and procedures; and All other relevant
laws, regulations, codes, regulations, and industry
and organizational standards.
As set out in its Charter, the Risk Committee must
comprise at least three directors and all non-executive
directors. The Chair of the Risk Committee is appointed
by the Board and must be an independent director. In
accordance with the Standards.
Risk Committee met five (5) times during the year ending
31 December 2024.
Remuneration and Nomination Committee
The Board has established a Remuneration and
Nomination Committee to ensure that the Company:
• has a Board of an effective composition, size
and commitment to adequately discharge its
responsibilities and duties and to bring transparency,
focus and independent judgment to decisions
regarding the composition of the Board;
• has coherent remuneration policies and practices
to attract and retain directors and senior executives
who will create value for shareholders;
• observes those remuneration policies and practices;
and
• fairly and responsibly rewards Group Executives
having regard to the performance of the Group,
the performance of the Group Executives and the
general external pay environment.
In its function as a Nominations Committee, the
Remuneration and Nomination Committee assists the
Board in fulfilling its corporate governance responsibilities
in regard to:
• Board appointments, re-elections and performance;
• Board and Committee membership;
• Directors’ Induction and continuing development;
• Succession Planning; and
• Strategies to address Board diversity.
As set out in its Charter, the Remuneration and
Nomination Committee comprises of at least three
directors and all non-executive directors.
The Remuneration and Nomination Committee may
obtain information from, and consult with, Management
and external advisers, as it considers appropriate.
The Committee met five (5) times during the year ended
31 December 2024.
Transformation & Strategy Committee
The Board has established a Transformation & Strategy
Committee on the 29 of April 2024 to provide focused
oversight, guidance, and strategic insight into KSL’s long-
term strategy and its execution, with a special emphasis
on business models, capabilities, technology platforms,
key applications, geographies, mergers and acquisitions
(M&A), and other critical strategic or transformative
projects. The Committee aims to ensure that Kina
Securities Ltd progresses to the forefront of innovation
and efficiency in the financial services sector in Papua New
Guinea (PNG) and elsewhere, enhancing its competitive
position and ensuring sustainable growth and resilience.
As set out in its Charter, the Transformation & Strategy
Committee must comprise at least three directors and
all non-executive directors.
The Committee met once (1) during the year ended 31
December 2024.
76
Disclosure Committee
The Board has established a Disclosure Committee, the
purpose of which is to assist the Board in the performance
of its statutory and regulatory obligations by:
• ensuring market sensitive and/or Company
information is disclosed through the appropriate
channel promptly and without delay; and
• providing assurance to the Board that all potentially
market sensitive information has been considered
for compliance with the Company’s continuous
disclosure obligations.
The duties and responsibilities of the Disclosure
Committee include to:
• assess whether information concerning the Company
should be disclosed to the market;
• determine the substance of the market disclosure
and when it must be made;
• where necessary, review market disclosures for
accuracy and completeness and approve or
recommend to the Board for approval;
• determine whether a trading halt or voluntary
suspension of trading is required;
• respond to any request from ASX or PNGX to disclose
market sensitive information to correct or prevent a
false market;
• ensure that breaches of BPNG’s Standards are
communicated, where appropriate, to BPNG or other
regulators in compliance with the relevant listing rules
and/or continuous disclosure requirements; and
• oversee the Disclosure Officer’s administration of the
Continuous Disclosure Policy.
The Disclosure Committee has the power to:
• determine whether information should be disclosed
to the market or any public forum; and
• authorise the disclosure of any information to the
market or any public forum.
The Disclosure Committee has absolute right of access
to any information held by the Kina Group. The Disclosure
Committee shall comprise at least three members
appointed by the Board. Members shall include the
Chairman of the Board, the MD&CEO and the Chairs
of the Audit and Risk Committee. The Disclosure
Committee Chair shall be appointed by the Chair of
the Board. The Committee met twice during the year
ended 31 December 2024.
Membership of and attendance at Board and Committee meetings
Membership of the Committees during the reporting period, the number of Board and Committee meetings held and
the attendance at those meetings are set out in the table below. All directors are invited to and regularly attend all
Committee meetings.
Director
Board
Meetings
Transformation
& Strategy
Committee
Meetings
Audit
Committee
Risk
Committee
Remuneration
and
Nomination
Committee
Meetings
Disclosure
Committee
Meetings
A
B
A
B
A
B
A
B
A
B
A
B
Isikeli Taureka
82
8
22
2
Greg Pawson
8
71
2
2
Andrew Carriline
8
8
1
1
4
4
5
5
5
5
Paul Hutchinson
8
8
4
4
52
5
2
2
Karen Smith-Pomeroy
8
71
42
4
5
41
2
2
Jane Thomason
8
71
1
1
52
5
Ian Clough*
4
31
Richard Kimber
8
8
12
1
5
41
A meetings held that the director was eligible to attend
B meetings attended
1 these absences were known and approved prior to the meeting
2 Chair
* Transformation & Strategy Committee effective 29 April 2024
* Ian Clough appointed to the Board effective of 30 July 2024.
77
Board Skills Matrix
The Board seeks to have an appropriate mix of skills, experience, expertise and diversity to enable it to discharge its
responsibilities and add value to the Company.
As of 30 April 2025, the directors collectively contribute the following key skills and experience:
Skills and experience
Explanation
Banking and/
or financial
services
experience
Experience outside Kina in, with global business perspectives of, significant components of
the financial services industry, including retail and commercial banking services and adjacent
sectors, equity and debt capital markets, with strong knowledge of their economic drivers and the
regulatory environment.
Customer
focus and
outcomes
Experience in developing and overseeing the embedding of a strong customer focused culture in
large complex organisations, and a demonstrable commitment to achieving customer outcomes.
Environment,
social and
sustainability
Understanding the potential risks and opportunities from an environmental and social
perspective, and experience in developing and monitoring sustainability frameworks and related
practices.
Financial
acumen
Good understanding of financial statements and drivers of financial performance for a business
of significant size, including ability to assess the effectiveness of financial controls.
Governance
Publicly listed company experience, extensive experience in and commitment to the highest
standards of governance, experience in the establishment and oversight of governance
frameworks, policies and processes.
International
experience
Senior leadership experience involving responsibility for operations across borders, and exposure
to a range of political, cultural, regulatory and business environments in that position.
Leadership
and
commercial
acumen
Skills gained whilst performing at a senior executive level for a considerable length of time.
Includes delivering superior results, running complex businesses, leading complex projects and
issues, and leading workplace culture.
People, culture
and conduct
Experience at a senior executive level in people matters including building workforce capability,
workplace cultures, management development, succession and setting a remuneration
framework that attracts and retains a high calibre of executives, and promotion of diversity
and inclusion.
Risk and
compliance
An understanding of compliance and experience in anticipating and evaluating macro, strategic,
operational, financial, social, technological including digital disruption and cybersecurity) risks
that could impact the business. Recognising and managing these risks by developing sound risk
management frameworks and providing oversight. Includes experience in managing compliance
risks and regulatory relationships.
Stakeholder
engagement
Demonstrated ability to build and maintain key relationships with industry, government
or regulators.
Strategy
Experience in leading, developing, setting and executing strategic direction. Experience in driving
growth and transformation, executing against a clear strategy.
Technology
and digital
Experience in businesses of a significant size with major technology focus, including adaptation to
digital change and innovation, with knowledge of developments in Decentralised Finance (DeFi).
78
Composition of the Board and details
of directors
In 2024, the Kina Board comprised of eight directors,
one of whom is the MD&CEO, Greg Pawson who resigned
from office on the 31 of December 2024. The remaining
seven directors are considered by the Board to be
independent non-executive directors, comprising
Isikeli Taureka (Chairman of the Board), Karen Smith-
Pomeroy (Chair, Audit Committee), Jane Thomason
(Chair, Remuneration and Nomination Committee),
Paul Hutchinson (Chair, Risk Committee), Andrew
Carriline, Richard Kimber and Ian Clough. Ian Clough
was appointed to the Board on the 30 of July 2024.
The Board considers that each of the non-executive
directors are ‘independent’ of the Company.
Throughout the year, the Board therefore had
a majority of independent non-executive directors.
Directors’ Details
Name
Appointment date
Length of service as
of 30 April 2025
Non-executive
Independent
Isikeli Taureka
19 April 2016
9 years, 0 months
Yes
Yes
Karen Smith-Pomeroy
12 September 2016
8 years, 7 months
Yes
Yes
Greg Pawson*
1 January 2018
6 years, 11 months
No
No
Ivan Vidovich**
1 January 2025
4 months
No
No
Jane Thomason
27 April 2018
7 years, 0 months
Yes
Yes
Andrew Carriline
16 August 2018
6 years, 8 months
Yes
Yes
Paul Hutchinson
16 August 2018
6 years, 8 months
Yes
Yes
Richard Kimber
1 September 2023
1 year, 7 months
Yes
Yes
Ian Clough
30 July 2024
8 months
Yes
Yes
*Greg Pawson resigned on 31 December 2024
** Ivan Vidovich appointed on 1 January 2025
The Board considers an independent director to be a
non-executive director who is not a member of Kina’s
Senior Executive Team and who is free of any business or
other relationship that could materially interfere with, or
reasonably be perceived to materially interfere with, the
independent exercise of their judgment.
At least annually, the Board reviews the independence
of each director in light of their interests disclosed to the
Board at each Board meeting and considers examples
of interests, positions, associations and relationships that
might cause doubts about the independence of a director
including if the director:
• is, or has been, employed in an executive capacity by
the entity or any of its child entities and there has not
been a period of at least three years between ceasing
such employment and serving on the Board;
• receives performance-based remuneration (including
options or performance rights) from, or participates in
an employee incentive scheme of, the entity;
• is, or has been within the last three years, in a material
business relationship (e.g. as a supplier, professional
adviser, consultant or customer) with the entity or any
of its child entities, or is an officer of, or otherwise
associated with, someone with such a relationship;
• is, represents, or has been within the last three years
an officer or employee of, or professional adviser to,
a substantial shareholder of the Company’s securities;
• has close personal ties with any person who falls
within any of the categories described above; or
• has been a director of the entity for such a period
that their independence from management
and substantial shareholders may have been
compromised.
The Board considers that each of the non-executive
directors brings objective and independent judgment to
Board deliberations and makes a valuable contribution to
Kina through the skills and experience they bring to the
Board and their understanding of Kina’s business.
Board Chair
In accordance with the Board Charter, the Board Chair is
an independent director. The roles and responsibilities of
the Board Chair are contained within the Board Charter
and the role of the Board Chair and MD&CEO may not be
exercised by the same individual.
79
Director induction and education
Kina’s induction program is designed to provide all new
directors with a comprehensive view of the business.
As part of the induction, new directors are given a
detailed overview of Kina’s operations, copies of
governance and internal policies and procedures and
instruction on the roles and responsibilities of the Board,
its Committees and Senior Management.
The electronic Board portal utilised by the Board provides
directors access to relevant Governance Documents,
educational information, Board and Committee papers
and provides a secure means of communication between
directors and Senior Management. There is a strong
emphasis on continued education and directors are
expected to keep themselves updated on changes
and trends within the business, in the financial sector,
market environment and any changes and trends in the
economic, political, social, global, environmental and
legal climate generally.
Consistent with guidance on best-practice, all directors
seek to complete a minimum of 20 hours during the
year in ongoing professional development. Directors
are encouraged to attend recognised courses, seminars
and conferences and internal education sessions are
scheduled at Board meetings throughout the year.
Principle 3: Instil a culture of acting
lawfully, ethically and responsibly
A listed entity should instil and continually reinforce
a culture across the organisation of acting lawfully,
ethically and responsibly.
Kina Group Purpose Statement
Kina’s purpose is ‘to constantly improve the prosperity of
the people, communities, and markets that we serve’.
Kina Group Vision Statement
Our Vision is ‘to be the most dynamic, progressive
and accessible financial services organisation in the
Pan Pacific region’.
This Vision is supported by our Strategic Priorities:
• Growth and Prosperity: multiple business lines
providing customers with a full range of services,
strong organic growth, value added services, and
synergistic acquisitions;
• Building Resilience: strong company, well capitalised,
well governed, managing risk versus rewards, and
insulated against economic or market shocks;
• Service Excellence: digital from the inside and out,
simple processes, great customer service, always first
when it matters;
• Dynamic People: we love people, our culture is
everything, our people are well trained, adaptable and
care; and
• Sustainable Communities: we are in the business of
doing good, building trust, and creating long-term
value for all our stakeholders.
Kina’s Culture
Our People are here to make a difference, not just for
their day job. They are passionate about empowering
customers to effect life change.
Kina’s culture is underpinned by our Group Values, FIRST:
• Fairness – Guides equity and justice, ensuring
opportunities for all to thrive.
• Inspire – Sparks creativity, fuels perseverance, drives
change and touches hearts.
• Responsive – Fosters trust and satisfaction by
addressing peoples’ needs promptly and effectively.
• Serve – Embodies empathy, compassion, kindness
and enriching our customers’ lives.
• Together – Is a team who entrust each other.
Since the introduction of the FIRST values in 2023, Kina
has seen an increase in employee participation in FIRST
value moments which has helped them gain renewed
perspective in our values and how they can be applied
through the business. Our Learning Managements System
was updated to include self-assessment and leader
assessment of employee contribution to our Values and
defined behaviours.
Kina has articulated its Group Vision Statement, its
Defining Purpose and its Culture in its Board Charter,
a copy of which is available on the Company’s
website at https://investors.kinabank.com.pg/
Investors/?page=corporate- governance.
80
Acting Ethically and Responsibly
The Board is committed to ensuring that Kina maintains
the highest standards of integrity, honesty and fairness in
its dealings with all stakeholders, and that Kina complies
with all legal and other obligations.
Kina’s Code of Ethics and Business Conduct (Code)
applies to all directors, employees of Kina and its
subsidiaries (including subcontractors and consultants).
The Code sets out certain minimum standards of conduct
that Kina expects of its employees and directors including
integrity, diligence, impartiality, equality and fairness.
The Code sets out how employees and directors are to
conduct themselves in order to meet these minimum
standards. It is a requirement for all directors and officers
to acknowledge the Code annually.
Whistleblower Policy
The Board has adopted a Protected Disclosure
(Whistle-Blower) Policy. The Board wishes to promote
an organisational culture that values open, transparent,
ethical, legal, compliant behaviour and does not tolerate
behaviour that departs from the high standards expected
of Kina directors and employees.
This Policy is intended to reinforce that culture and to
provide a safe, secure, confidential means whereby
persons with concerns over any breaches including any
unlawful conduct, misconduct, malpractices, violation
of any legal or regulatory provisions that has, or may
have occurred, can report it without fear of reprisal,
discrimination or harassment of any kind. It is expected
that the protected disclosures will be made in confidence
and in the knowledge that it will be properly investigated
and escalated to the appropriate level for it to be
properly addressed.
Anti-Bribery and Corruption Policy
The Board has adopted an Anti-Bribery and Corruption
Policy. The purpose of the Policy is to provide clarity of
expectations, which helps to reinforce and strengthen
the understanding of our responsibilities as well as those
with whom we engage and also provide guidance in
dealing with incidents or suspected incidents of bribery
and corruption, should they occur.
The Policy complements Kina’s other related policies,
in particular, the Code of Ethics and Business
Conduct, Conflicts of Interests Policy, and the Gift
and Entertainment Policy. The Policy harmonises with
Kina’s Core Values that emphasise principles of fairness,
imagination, reflection, togetherness and honesty
in our relationships and business dealings with both
our internal and external stakeholders.
The Policy complements Kina’s other related policies,
in particular, the Code of Ethics and Business Conduct,
Conflicts of Interests Policy, and the Gift and Entertainment
Policy. The Policy harmonises with Kina’s Core Values that
emphasise principles of fairness, imagination, reflection,
togetherness and honesty in our relationships and business
dealings with both our internal and external stakeholders.
Principle 4: Safeguard the integrity
of corporate reports
A listed entity should have appropriate processes
to verify the integrity of its corporate reports.
Audit Committee
Details of the Audit Committee are set out on page 74
above.
Written Declarations
When the Board considers the statutory half-year
and annual financial statements, the Board obtains a
declaration, from the MD&CEO and CFO concerning
the integrity of the financial statements and assurance
as to the effective operation of the risk management
and internal compliance and control systems.
Kina’s financial reports for the half-year ended 30 June and
the full year ended 31 December are respectively reviewed
and audited by Deloitte, the Company’s external auditor.
Principle 5: Make timely and
balanced disclosure
A listed entity should make timely and balanced
disclosure of all matters concerning it that a
reasonable person would expect to have a material
effect on the price or value of its securities.
Timely and Balanced disclosure
Kina is committed to observing its disclosure obligations
under the ASX Listing Rules, the PNGX Listing Rules,
the (PNG) Companies Act 1997, (PNG) Securities Act 1997,
the (PNG) Capital Markets Act 2015 and the Australian
Corporations Act, 2001 (Cth). The Board has adopted
a Continuous Disclosure Policy and a Shareholder
Communications Policy that implement
Kina’s commitment to providing timely, complete and
accurate disclosure of information.
The Continuous Disclosure Policy sets out the roles and
responsibilities of officers and employees in complying
with Kina’s continuous disclosure obligations and nominates
those individuals who are responsible for determining
whether or not information is required to be disclosed.
81
Shareholder Communications
The Shareholder Communications Policy promotes
effective communication with shareholders and seeks to
ensure that shareholders have equal and timely access to
material information concerning Kina. The Policy sets out
the investor relations program, a key tenet of which is to
encourage effective shareholder participation.
In accordance with the Shareholder Communications
Policy, Shareholders are encouraged to attend General
Meetings of shareholders and shareholder information
sessions and to submit written questions prior to those
meetings. If they are unable to attend General Meetings
of shareholders, shareholders are encouraged to vote by
proxy or other means included in the Notice of Meeting.
Kina’s website www.kinabank.com.pg contains
information regarding the Company, the Board and Senior
Executive Team, corporate governance, media coverage,
ASX and PNGX Announcements, investor presentations
and reports.
Kina’s Investor Relations Program includes a number
of scheduled and ad hoc interactions with institutional
investors, private investors, sell-side and buy-side analysts
and the financial media. At a minimum, so as to ensure
that shareholders and other stakeholders have a full
understanding of Kina’s performance and strategies,
Kina will convene analyst briefings twice a year on
Kina’s financial performance and objectives, following
release of the half- year and full year financial results.
Shareholders may receive and send information
electronically to and from both Kina and Kina’s Share
Registry. Other methods of communication are also
available to shareholders and other stakeholders,
including telephone and mail. Kina may consider the
use of other reliable technologies as they become
widely available.
Each director automatically receives a copy of each ASX
and PNGX Announcement directly from the ASX Market
Announcements Platform as soon as it has been released
by ASX and PNGX.
In accordance with Kina’s Continuous Disclosure Policy
and Shareholder Communications Policy, any presentation
to a new and substantive investor or analyst presentation,
is released on the ASX Market Announcements Platform
ahead of the presentation.
Principle 6: Respect the right of
security holders
A listed entity should provide its security holders with
appropriate information and facilities to allow them
to exercise their rights as security holders effectively.
Kina values engagement with its shareholders, providing
an understanding to the market of the Company’s business,
performance and governance. The Company uses the
following procedures for engaging with its shareholders:
• Periodic Reporting: The Company produces financial
statements for its shareholders and other interested
parties twice per year and allows shareholders to
receive these documents by mail or access them
electronically (https://investors.kinabank.com.pg/
Investors/?page=Reports-and-Presentations).
• Annual General Meeting: Shareholders are
encouraged to attend the Annual General Meeting
each year and are provided with an explanatory
memorandum on the resolutions proposed through
the Notice of Meeting. If unavailable to attend,
shareholders are encouraged to appoint a proxy to
vote/attend on their behalf. The Company requires
its external auditor to attend each Annual General
Meeting and be available to answer questions from
shareholders about the conduct of the audit and the
preparation and contents of the auditor’s report.
• Website: The Kina website provides information on the
Company’s products and services as well as information
useful to shareholders and market participants
(https://www.kinabank.com.pg). In particular:
– the Investor section (https://investors.kinabank.com.
pg/investors); and
– Corporate Governance section (https://investors.
kinabank.com.pg/Investors/?page=corporate-
governance) directs shareholders to information
likely to be of greatest interest to them.
• Investor Relations: On its website at https://
investors.kinabank.com.pg/Investors/?page=asx-
announcements, the Company posts prompt and
relevant communications for shareholders and the
market generally to access, such as ASX and PNGX
Announcements and financial results. Investors
and shareholders can also contact the Company or
its share registry, Link Market Services, directly by
email or by mail and can in turn choose to receive
communications electronically at https://investors.
kinabank.com.pg/Investors/?page=my-shareholding.
The Notice of Meeting for any general or annual
meetings of Kina shareholders includes the statement
that in accordance with Article 55.3 of the Constitution,
the Chairman intends to demand a poll on each of the
resolutions proposed at the Meeting.
82
Principle 7: Recognise & manage risk
A listed entity should establish a sound risk
management framework and periodically review
the effectiveness of that framework.
Risk Committee
Details of the Risk Committee are set out on page 75 above.
Risk Management and Internal Controls
Risk is managed structurally through clearly defined risk
management policies specific to certain parts of the
business. These are interlinked and feed into a Group
Risk Management Framework, which is overseen by the
Audit Committee and the Risk Committee. The Board has
approved and regularly reviews and updates the Group’s
Risk Appetite Statement and tolerance limits, as part of
the Group Risk Management Framework, to ensure that
all major areas of risk and risk management systems are
appropriately monitored and accurately documented.
Kina has a dedicated Group Chief Risk Officer (CRO) who
is responsible for the Governance, Risk and Compliance
attributes of the businesses. The CRO reports to the
MD&CEO and the Chairs of the Audit Committee and
Risk Committee respectively to ensure all material risks
remain well managed.
The Audit Committee and Risk Committee are supported
by a number of approved risk management committees,
including the Credit Committee, Asset and Liability
Committee, Operational Risk and Compliance Committee
and Executive Committee. The management committees
have been established to nurture a strong and robust risk
culture within the Group through the application of the
three lines of defence risk model, and the implementation
of key policies and frameworks.
Communication and education throughout the Group
on the three lines of defence model emphasises each
individual’s role in the management of risk. During 2024,
the Group’s Risk Management Framework, including
underlying policies, was reviewed by the Risk Committee
and, where relevant, by the Board.
A dedicated Compliance department is in place to ensure
that Kina personnel are aware of the Group’s prudential
and legislative obligations and that these are maintained
at all times. Risk within the Group is managed according
to the appropriate risk parameters whilst promoting
compliance of the limits set in the Board Approved Risk
Appetite Statement. People risk is monitored including
via an Occupational Health, Safety and Wellbeing
regime, which is designed to maintain the safety of Kina’s
Employees and Customers. The Group’s risk management
activities comply with all relevant regulation including
that of the BPNG Standards, relevant legislation and the
Investment Promotion Authority (IPA), and the ASX and
PNGX Listing Rules.
Kina also employs skilled credit managers who
understand the PNG economic environment to ensure
that the growing loan portfolio is maintained within an
acceptable level of risk and within Kina’s Board-approved
risk appetite. All lending proposals are considered based
on credit policy and within the risk appetite of the Group.
Debt servicing assessment criteria is maintained to ensure
Kina understands its level of credit risk while managing its
impairment exposure.
Kina’s risk management framework and internal control
functions incorporate an Internal Audit function, which
reports directly to the Audit Committee.
In 2023, the Board ensured the Internal Audit function
was brought internally to provide independent
and objective assurance to the Board, via the Audit
Committee. The annual Internal Audit Plan is formulated
by the Group Chief Risk Officer (CRO) using a risk- based
approach. Progress against the Internal Audit Plan is
reported to the Audit Committee on a quarterly basis.
The internal audit function determines an independent
assessment of the effectiveness of Kina’s Risk
Management and internal control environment which
is utilised in continual improvement measures of Kina’s
business processes.
Kina is exposed to the economic conditions of PNG
through its normal course of business in lending monies
to commercial businesses operating in PNG. Kina does
not believe it currently has any material exposure to
environmental or social (ESG) sustainability risks and
the Company is currently working to develop further
our ESG framework and processes.
83
Principle 8: Remunerate fairly
and responsibly
A listed entity should pay director remuneration
sufficient to attract and retain high quality directors
and design its executive remuneration to attract,
retain and motivate high quality senior executives
and to align their interests with the creation of value
for security holders and with the entity’s values and
risk appetite.
Remuneration and Nomination Committee
Details of the Remuneration and Nomination Committee
are set out on page 75.
Remuneration
Kina is committed to a fair and responsible system of
remuneration throughout the Group. Members of Senior
Management are remunerated in a way that aims to attract
and retain an appropriate level of talent and reflects
their performance in relation to the delivery of corporate
strategy and operational performance.
Remuneration for non-executive directors is set using
advice from independent consultants and considers the
level of fees paid to non-executive directors of similar
corporations and the responsibilities and work/time
requirements of the non-executive directors.
The Remuneration Report and further details about
the remuneration policy of Kina are set out in the 2024
Annual Report.
Dealings in Company Securities
The Board has adopted a Securities Trading Policy that
applies to Kina’s equity-based remuneration scheme and
explains the conduct that is prohibited under the PNG
Securities Act, Capital Markets Act, and the Corporations Act.
The Securities Trading Policy:
• provides for certain Trading Windows when ‘Relevant
Persons’ may trade provided the appropriate process
has been adhered to;
• prohibits any Relevant Person from entering into a
hedge transaction involving unvested equity held
pursuant to an Employee, Senior Management or
Director Equity Plan operated by Kina;
• prohibits any Relevant Person from entering into a
hedge transaction involving unvested equity held
pursuant to an Employee, Senior Management or
Director Equity Plan operated by Kina;
• sets out the prohibitions against insider trading and
prescribes certain requirements for dealing in Kina
securities; and
• prohibits Relevant Persons from trading in Kina
securities while in possession of material non-public
information, which is information a reasonable person
would expect to have a material effect on the price or
value of Kina securities.
Principle 9: Additional
Recommendations
Kina is registered in Papua New Guinea and is in the
same time zone as Eastern Australia. All meetings of
Kina’s Board and its Committees are held at a reasonable
time. The company utilizes facilities to hold secure, virtual
meetings where necessary, to enhance meeting logistics
and efficiency.
84
Kina Securities Limited Annual Report | Directors' Report
85
85
Directors’
Report.
The directors of Kina Securities Limited (“Company”)
submit herewith the annual financial report of the
Company and the Group, comprising the Company and its
controlled entities, for the year ended 31 December 2024.
Principal activities
The principal continuing activities of the Group during
the year were the provision of commercial banking and
financial services (including asset financing, provision of
commercial and personal loans, money market operations
and corporate advice), fund administration, investment
management services and share brokerage.
The directors acknowledge the non-lending loss due to
a non-incident involving a small number of customers.
The Group recorded a provision of K137.0 million to cover
payments to MiBank.
Operating results and review
of operations
The net profit attributable to equity holders for the
year for the Group was K100.3 million compared with
K105.0 million in 2023.
The profit includes the following items:
• Net interest income of K222.2 million, compared with
K203.3 million in the prior year to 31 December 2023.
• Net fee and commission income of K161.7 million
compared with K137.0 million in the prior year.
• Operating income before impairment losses and
other operating income of K484.9 million, up from
K404.2 million in the prior year.
• Expected credit losses on financial instruments at
amortised cost of K18.2 million, compared with
K9.9 million in the prior year.
• Other operating expenses of K286.6 million,
compared with K218.7 million in the prior period.
Dividends
The Company paid a dividend of K15.9 toea (AUD 6.0
cents) per share – (K45.5 million) in April 2024 in relation
to the profit for the half year ended 31 December 2023.
In October 2024, the Company also paid dividend of
K10.6 toea (AUD 4.0 cents) per share (K30.6 million) in
relation to the profit for the half year ended 30 June 2024.
Events after the reporting period
Subsequent to reporting period date, the directors
declared a final dividend of K15.5 toea (AUD 6.0 cents)
per share (K44.7 million) on underlying NPAT declared for
the second half of financial year 2024.
See also note 38 for other subsequent events.
Donations
During the year the Group made donations totalling
K555,535 (2023: K659,415)
Auditor’s fees
Fees paid to the auditor during the year for professional
services are shown in note 36 to the financial statements.
The external auditor is Deloitte Touche Tohmatsu.
13
86
Remuneration Report
Remuneration of employees
During the year, the number of employees or former employees (not being directors of the Company), receiving
remuneration in excess of K100,000 per annum from the Group stated in bands of K10,000 was as follows:
In PGK
2024
2023
1,940,001 - 1,950,000
-
1
1,900,001 - 1,910,000
1
-
1,030,001 - 1,040,000
-
2
1,010,001 - 1,020,000
1
-
970,001 - 980,000
-
1
950,001 - 960,000
1
-
940,001 - 950,000
1
-
920,001 - 930,000
1
-
890,001 - 900,000
-
1
870,001 - 880,000
1
1
850,001 - 860,000
-
1
840,001 - 850,000
1
1
810,001 - 820,000
-
1
800,001 - 810,000
-
1
790,001 - 800,000
1
-
780,001 - 790,000
1
-
730,001 - 740,000
-
1
720,001 - 730,000
1
-
710,001 - 720,000
-
1
690,001 - 700,000
1
-
640,001 - 650,000
1
-
610,001 - 620,000
1
-
590,001 - 600,000
-
2
570,001 - 580,000
1
-
550,001 - 560,000
-
1
540,001 - 550,000
-
1
520,001 - 530,000
1
-
500,001 - 510,000
2
-
In PGK
2024
2023
470,001 - 480,000
-
1
450,001 - 460,000
1
1
390,001 - 400,000
4
1
380,001 - 390,000
4
1
350,001 - 360,000
1
3
340,001 - 350,000
-
1
330,001 - 340,000
1
2
320,001 - 330,000
1
-
310,001 - 320,000
2
1
300,001 - 310,000
1
2
290,001 - 300,000
-
1
270,001 - 280,000
-
3
250,001 - 260,000
3
4
240,001 - 250,000
1
1
230,001 - 240,000
2
-
220,001 - 230,000
5
3
210,001 - 220,000
1
-
200,001 - 210,000
6
6
190,001 - 200,000
7
8
180,001 - 190,000
4
5
170,001 - 180,000
4
3
160,001 - 170,000
4
7
150,001 - 160,000
6
3
140,001 - 150,000
8
5
130,001 - 140,000
7
10
120,001 - 130,000
13
11
110,001 - 120,000
18
12
100,000 - 110,000
11
11
* Increase in fixed base salary and impact of foreign exchange conversion.
87
Directors’ remuneration
Directors’ fees paid during the year was as follows:
Mr Isikeli Taureka
Director and Chairman
Ivan Vidovich
CEO & Managing Director
*Ila Temu exited on 09 May 2023 and Ian Clough started on 30 July 2024
**Greg Pawson ceased to be the CEO and Managing Director on 31 December 2024 and Ivan Vidovich was appointed as his successor on 01 January 2025
Signed at Port Moresby on behalf of the board on 31 March 2025.
In PGK
2024
2023
K‘000
K‘000
Directors
Isikeli Taureka
476
446
Karen Smith- Pomeroy
349
325
Jane Thomason
320
277
Paul Hutchinson
328
281
Andrew Carriline
328
293
Ila Temu
-
104*
Richard Kimber
314
83
Ian Clough
102*
-
2,217
1,809
Managing Director
Gregory Pawson
– Salaries
1,902**
1,946
– Other benefits including leave entitlements
454
454
2,356
2,400
4,573
4,209
88
Mr Isikeli Taureka
Director and Chairman
Port Moresby, 31 March 2025
Mr Ivan Vidovich
CEO & Managing Director
Port Moresby, 31 March 2025
Directors’ Report
The directors declare that:
• in the directors’ opinion, there are reasonable grounds to believe that the Company and the Subsidiaries
(together the Group) will be able to pay their debts as and when they become due and payable
• in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the
PNG Companies Act 1997, including compliance with International Financial Reporting Standards (IFRS)
and giving a true and fair view of the financial position and performance of the Company and the Group
as at and for the year ended 31 December 2024
Signed in accordance with a resolution of the Board of Directors.
On behalf of the directors
>ŝĂďŝůŝƚLJůŝŵŝƚĞĚďLJĂƐĐŚĞŵĞĂƉƉƌŽǀĞĚƵŶĚĞƌWƌŽĨĞƐƐŝŽŶĂů^ƚĂŶĚĂƌĚƐ>ĞŐŝƐůĂƚŝŽŶ͘
DĞŵďĞƌŽĨĞůŽŝƚƚĞƐŝĂWĂĐŝĨŝĐ>ŝŵŝƚĞĚĂŶĚƚŚĞĞůŽŝƚƚĞŽƌŐĂŶŝƐĂƚŝŽŶ͘
Deloitte Touche Tohmatsu
Level 9, Deloitte Haus
MacGregor Street
Port Moresby
PO Box 1275 Port Moresby
National Capital District
Papua New Guinea
Tel: +675 308 7000
Fax: +675 308 7001
www.deloitte.com.pg
Deloitte Touche Tohmatsu
ABN 74 490 121 060
477 Collins Street
Melbourne VIC 3000
GPO Box 78B
Melbourne VIC 3001,
Australia
Tel: +61 (0)3 9671 7000
Fax: +61 (0)3 9671 7001
www.deloitte.com.au
Independent Auditor’s Report to the ƐŚĂƌĞŚŽůĚĞƌƐŽĨ<ŝŶĂ
^ĞĐƵƌŝƚŝĞƐ>ŝŵŝƚĞĚ
ZĞƉŽƌƚŽŶƚŚĞƵĚŝƚŽĨƚŚĞ&ŝŶĂŶĐŝĂů^ƚĂƚĞŵĞŶƚƐ
KƉŝŶŝŽŶ
We have audited the accompanying financial statements of Kina Securities Limited (the “Company”) and its
subsidiaries (the “Group”) which comprise the Group and the Company’s statements of financial position as at
ϯϭĞĐĞŵďĞƌϮϬϮϰ͕ƚŚĞƐƚĂƚĞŵĞŶƚƐŽĨĐŽŵƉƌĞŚĞŶƐŝǀĞŝŶĐŽŵĞ͕ƚŚĞƐƚĂƚĞŵĞŶƚƐŽĨĐŚĂŶŐĞƐŝŶĞƋƵŝƚLJĂŶĚƚŚĞ
ƐƚĂƚĞŵĞŶƚƐŽĨĐĂƐŚĨůŽǁƐĨŽƌƚŚĞLJĞĂƌƚŚĞŶĞŶĚĞĚ͕ĂŶĚŶŽƚĞƐƚŽƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͕ŝŶĐůƵĚŝŶŐŵĂƚĞƌŝĂů
ĂĐĐŽƵŶƚŝŶŐƉŽůŝĐLJŝŶĨŽƌŵĂƚŝŽŶĂŶĚŽƚŚĞƌĞdžƉůĂŶĂƚŽƌLJŝŶĨŽƌŵĂƚŝŽŶ͘
/ŶŽƵƌŽƉŝŶŝŽŶ͕ƚŚĞĂĐĐŽŵƉĂŶLJŝŶŐĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐŽĨƚŚĞ'ƌŽƵƉĂŶĚƚŚĞŽŵƉĂŶLJ͕ŐŝǀĞĂƚƌƵĞĂŶĚĨĂŝƌǀŝĞǁŽĨ
the Group’s and the Company’s financial position as at 31 December 2024 and of their financial performance and
ĐĂƐŚ ĨůŽǁƐ ĨŽƌ ƚŚĞ LJĞĂƌ ƚŚĞŶ ĞŶĚĞĚ ŝŶ ĂĐĐŽƌĚĂŶĐĞ ǁŝƚŚ /ŶƚĞƌŶĂƚŝŽŶĂů &ŝŶĂŶĐŝĂů ZĞƉŽƌƚŝŶŐ ^ƚĂŶĚĂƌĚƐ ĂŶĚ ƚŚĞ
ƌĞƋƵŝƌĞŵĞŶƚƐŽĨƚŚĞŽŵƉĂŶŝĞƐĐƚϭϵϵϳ;ĂŵĞŶĚĞĚϮϬϮϮͿ͘
ĂƐŝƐĨŽƌKƉŝŶŝŽŶ
tĞĐŽŶĚƵĐƚĞĚŽƵƌĂƵĚŝƚŝŶĂĐĐŽƌĚĂŶĐĞǁŝƚŚ/ŶƚĞƌŶĂƚŝŽŶĂů^ƚĂŶĚĂƌĚƐŽŶƵĚŝƚŝŶŐ;/^ƐͿ͘KƵƌƌĞƐƉŽŶƐŝďŝůŝƚŝĞƐƵŶĚĞƌ
ƚŚŽƐĞƐƚĂŶĚĂƌĚƐĂƌĞĨƵƌƚŚĞƌĚĞƐĐƌŝďĞĚŝŶƚŚĞAuditor’s Responsibilities for the Audit of the Financial Statements
ƐĞĐƚŝŽŶŽĨŽƵƌƌĞƉŽƌƚ͘tĞĂƌĞŝŶĚĞƉĞŶĚĞŶƚŽĨƚŚĞ'ƌŽƵƉŝŶĂĐĐŽƌĚĂŶĐĞǁŝƚŚƚŚĞ/ŶƚĞƌŶĂƚŝŽŶĂů ƚŚŝĐƐ^ƚĂŶĚĂƌĚƐ
Board for Accountants’ International Code of Ethics for Professional Accountants ;ŝŶĐůƵĚŝŶŐ /ŶƚĞƌŶĂƚŝŽŶĂů
/ŶĚĞƉĞŶĚĞŶĐĞ^ƚĂŶĚĂƌĚƐͿ;/ ^ŽĚĞͿƚŽŐĞƚŚĞƌǁŝƚŚƚŚĞĞƚŚŝĐĂůƌĞƋƵŝƌĞŵĞŶƚƐƚŚĂƚĂƌĞƌĞůĞǀĂŶƚƚŽŽƵƌĂƵĚŝƚŽĨ
ƚŚĞ ĨŝŶĂŶĐŝĂů ƐƚĂƚĞŵĞŶƚƐ ŝŶ WĂƉƵĂ EĞǁ 'ƵŝŶĞĂ͕ ĂŶĚ ǁĞ ŚĂǀĞ ĨƵůĨŝůůĞĚ ŽƵƌ ŽƚŚĞƌ ĞƚŚŝĐĂů ƌĞƐƉŽŶƐŝďŝůŝƚŝĞƐ ŝŶ
ĂĐĐŽƌĚĂŶĐĞǁŝƚŚƚŚĞƐĞƌĞƋƵŝƌĞŵĞŶƚƐĂŶĚƚŚĞ/ ^ŽĚĞ͘
tĞďĞůŝĞǀĞƚŚĂƚƚŚĞĂƵĚŝƚĞǀŝĚĞŶĐĞǁĞŚĂǀĞŽďƚĂŝŶĞĚŝƐƐƵĨĨŝĐŝĞŶƚĂŶĚĂƉƉƌŽƉƌŝĂƚĞƚŽƉƌŽǀŝĚĞĂďĂƐŝƐĨŽƌŽƵƌ
ŽƉŝŶŝŽŶ͘
<ĞLJƵĚŝƚDĂƚƚĞƌƐ
<ĞLJĂƵĚŝƚŵĂƚƚĞƌƐĂƌĞƚŚŽƐĞŵĂƚƚĞƌƐƚŚĂƚ͕ŝŶŽƵƌƉƌŽĨĞƐƐŝŽŶĂůũƵĚŐĞŵĞŶƚ͕ǁĞƌĞŽĨŵŽƐƚƐŝŐŶŝĨŝĐĂŶĐĞŝŶŽƵƌĂƵĚŝƚŽĨ
ƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐŽĨƚŚĞ'ƌŽƵƉĨŽƌƚŚĞĐƵƌƌĞŶƚƉĞƌŝŽĚ͘dŚĞƐĞŵĂƚƚĞƌƐǁĞƌĞĂĚĚƌĞƐƐĞĚŝŶƚŚĞĐŽŶƚĞdžƚŽĨŽƵƌ
ĂƵĚŝƚŽĨƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐĂƐĂǁŚŽůĞ͕ĂŶĚŝŶĨŽƌŵŝŶŐŽƵƌŽƉŝŶŝŽŶƚŚĞƌĞŽŶ͕ĂŶĚǁĞĚŽŶŽƚƉƌŽǀŝĚĞĂƐĞƉĂƌĂƚĞ
ŽƉŝŶŝŽŶŽŶƚŚĞƐĞŵĂƚƚĞƌƐ͘
<ĞLJƵĚŝƚDĂƚƚĞƌ
,ŽǁƚŚĞƐĐŽƉĞŽĨŽƵƌĂƵĚŝƚƌĞƐƉŽŶĚĞĚƚŽƚŚĞ<ĞLJƵĚŝƚ
DĂƚƚĞƌ
džƉĞĐƚĞĚĐƌĞĚŝƚůŽƐƐŽŶůŽĂŶƐĂŶĚĂĚǀĂŶĐĞƐ
Ɛ Ăƚ ϯϭ ĞĐĞŵďĞƌ ϮϬϮϰ͕ ƚŚĞ 'ƌŽƵƉ ŚĂƐ
ƌĞĐŽŐŶŝƐĞĚ Ă ůŽƐƐ ĂůůŽǁĂŶĐĞ ĨŽƌ ĞdžƉĞĐƚĞĚ ĐƌĞĚŝƚ
ůŽƐƐĞƐ ; >Ϳ ĂŵŽƵŶƚŝŶŐ ƚŽ <ϲϳ͘ϯŵ ŽŶ ůŽĂŶƐ ĂŶĚ
ĂĚǀĂŶĐĞƐ ŚĞůĚ Ăƚ ĂŵŽƌƚŝƐĞĚ ĐŽƐƚ ŝŶ ĂĐĐŽƌĚĂŶĐĞ
ǁŝƚŚ /&Z^ ϵ &ŝŶĂŶĐŝĂů /ŶƐƚƌƵŵĞŶƚƐ ;/&Z^ ϵͿ ĂƐ
ĚŝƐĐůŽƐĞĚŝŶEŽƚĞϯ;ďͿ͘
Loans and advances subject to IFRS 9’s impairment
ƌĞƋƵŝƌĞŵĞŶƚƐ ŝŶĐůƵĚĞ ƚŚĞ ƌĞƐŝĚĞŶƚŝĂů ůĞŶĚŝŶŐ
KƵƌĂƵĚŝƚƉƌŽĐĞĚƵƌĞƐ͕ŝŶĐŽŶũƵŶĐƚŝŽŶǁŝƚŚŽƵƌƐƉĞĐŝĂůŝƐƚƐ͕
ŝŶĐůƵĚĞĚ͕ďƵƚǁĞƌĞŶŽƚůŝŵŝƚĞĚƚŽ͗
ŽŶƚƌŽůĚĞƐŝŐŶĂŶĚŝŵƉůĞŵĞŶƚĂƚŝŽŶ͗
tĞ ƚĞƐƚĞĚ ƚŚĞ ĚĞƐŝŐŶ ĂŶĚ ŝŵƉůĞŵĞŶƚĂƚŝŽŶ ŽĨ ĐŽŶƚƌŽůƐ
ŽǀĞƌƚŚĞůŽƐƐĂůůŽǁĂŶĐĞŝŶĐůƵĚŝŶŐĐŽŶƚƌŽůƐŽǀĞƌ͗
• dŚĞĂĐĐƵƌĂĐLJŽĨĚĂƚĂŝŶƉƵƚŝŶƚŽƚŚĞƐLJƐƚĞŵƵƐĞĚĨŽƌ
ĚĞƚĞƌŵŝŶŝŶŐƚŚĞƉĂƐƚĚƵĞƐƚĂƚƵƐĂŶĚĂƉƉƌŽǀĂůŽĨĐƌĞĚŝƚ
ĨĂĐŝůŝƚŝĞƐ͖ĂŶĚ
89
<ĞLJƵĚŝƚDĂƚƚĞƌ
,ŽǁƚŚĞƐĐŽƉĞŽĨŽƵƌĂƵĚŝƚƌĞƐƉŽŶĚĞĚƚŽƚŚĞ<ĞLJƵĚŝƚ
DĂƚƚĞƌ
ƉŽƌƚĨŽůŝŽ͕ ƉĞƌƐŽŶĂů ůŽĂŶ ƉŽƌƚĨŽůŝŽ ĂŶĚ ůŽĂŶ
ĐŽŵŵŝƚŵĞŶƚƐ͘
ĞƚĞƌŵŝŶĂƚŝŽŶ ŽĨ ƚŚĞ ůŽƐƐ ĂůůŽǁĂŶĐĞ ĨŽƌ > ŝƐ
ĐŽŶƐŝĚĞƌĞĚĂŬĞLJĂƵĚŝƚŵĂƚƚĞƌĚƵĞƚŽƐŝŐŶŝĨŝĐĂŶĐĞ
ŽĨ ƚŚĞ ůŽĂŶƐ ĂŶĚ ĂĚǀĂŶĐĞƐ ƚŽ ƚŚĞ ĨŝŶĂŶĐŝĂů
ƐƚĂƚĞŵĞŶƚƐ
ĂŶĚ
ƐŝŐŶŝĨŝĐĂŶƚ
ŵĂŶĂŐĞŵĞŶƚ
ũƵĚŐĞŵĞŶƚ ŝŶ ĞƐƚŝŵĂƚŝŶŐ ƚŚĞ ůŽƐƐ ĂůůŽǁĂŶĐĞ͕
ŝŶĐůƵĚŝŶŐ͗
• dŚĞĂƉƉůŝĐĂƚŝŽŶŽĨƚŚĞƌĞƋƵŝƌĞŵĞŶƚƐŽĨ/&Z^ϵ
as reflected in the Group’s ECL model
ƉĂƌƚŝĐƵůĂƌůLJ ŝŶ ůŝŐŚƚ ŽĨ ƚŚĞ ĐƵƌƌĞŶƚ ĞĐŽŶŽŵŝĐ
ĞŶǀŝƌŽŶŵĞŶƚ͖
• /ĚĞŶƚŝĨŝĐĂƚŝŽŶ ŽĨ ĞdžƉŽƐƵƌĞƐ ǁŝƚŚ Ă ƐŝŐŶŝĨŝĐĂŶƚ
ŵŽǀĞŵĞŶƚ ŝŶ ĐƌĞĚŝƚ ƋƵĂůŝƚLJ ƚŽ ĚĞƚĞƌŵŝŶĞ
ǁŚĞƚŚĞƌϭϮͲŵŽŶƚŚŽƌůŝĨĞƚŝŵĞĞdžƉĞĐƚĞĚĐƌĞĚŝƚ
ůŽƐƐƐŚŽƵůĚďĞƌĞĐŽŐŶŝƐĞĚ͖ĂŶĚ
• ƐƐƵŵƉƚŝŽŶƐƵƐĞĚŝŶƚŚĞ >ŵŽĚĞůƐƵĐŚĂƐƚŚĞ
ĨŝŶĂŶĐŝĂů ĐŽŶĚŝƚŝŽŶ ŽĨ ƚŚĞ ĐŽƵŶƚĞƌƉĂƌƚLJ͕
ƌĞƉĂLJŵĞŶƚ
ĐĂƉĂĐŝƚLJ
ĂŶĚ
ĨŽƌǁĂƌĚͲůŽŽŬŝŶŐ
ŵĂĐƌŽĞĐŽŶŽŵŝĐ ĨĂĐƚŽƌƐ ĂƐ ĚŝƐĐůŽƐĞĚ ŝŶ EŽƚĞ
ϯ;ďͿ͘
• dŚĞ ŽŶŐŽŝŶŐ ŵŽŶŝƚŽƌŝŶŐ ĂŶĚ ŝĚĞŶƚŝĨŝĐĂƚŝŽŶ ŽĨ ůŽĂŶƐ
ĚŝƐƉůĂLJŝŶŐ ŝŶĚŝĐĂƚŽƌƐ ŽĨ ŝŵƉĂŝƌŵĞŶƚ ĂŶĚ ƚŽ ĞŶƐƵƌĞ
ǁŚĞƚŚĞƌ ƚŚĞLJ ĂƌĞ ŵŝŐƌĂƚŝŶŐ ŽŶ Ă ƚŝŵĞůLJ ďĂƐŝƐ ƚŽ
ĂƉƉƌŽƉƌŝĂƚĞĚĞĨĂƵůƚƐƚĂŐĞƐŝŶĐůƵĚŝŶŐƚŚĞŐĞŶĞƌĂƚŝŽŶŽĨ
“ĚĂLJƐƉĂƐƚĚƵĞ”ƌĞƉŽƌƚƐ͘
ƐƐĞƐƐŝŶŐŝŵƉĂŝƌŵĞŶƚŵŽĚĞůĂƉƉƌŽƉƌŝĂƚĞŶĞƐƐ͗
We assessed the appropriateness of management’s
ŝŶƚĞƌŶĂůůLJ ĚĞǀĞůŽƉĞĚ ŵŽĚĞů ŝŶ ĚĞƚĞƌŵŝŶŝŶŐ ƚŚĞ ůŽƐƐ
ĂůůŽǁĂŶĐĞĨŽƌ >͘KƵƌƉƌŽĐĞĚƵƌĞƐŝŶĐůƵĚĞĚ͕ďƵƚǁĞƌĞŶŽƚ
ůŝŵŝƚĞĚƚŽ͗
• ƐƐĞƐƐŝŶŐ ǁŚĞƚŚĞƌ ƚŚĞ > ŵŽĚĞů ĂĚĞƋƵĂƚĞůLJ
ĂĚĚƌĞƐƐĞƐƚŚĞƌĞƋƵŝƌĞŵĞŶƚƐŽĨ/&Z^ϵ͖
• ƐƐĞƐƐŝŶŐ͕ ďĂƐĞĚ ŽŶ ƐĂŵƉůĞ ƚĞƐƚŝŶŐ͕ ǁŚĞƚŚĞƌ
ŝŶĚŝǀŝĚƵĂů ĞdžƉŽƐƵƌĞƐ ĂƌĞ ĐůĂƐƐŝĨŝĞĚ ŝŶƚŽ ĂƉƉƌŽƉƌŝĂƚĞ
ĚĞĨĂƵůƚƐƚĂŐĞƐĂŶĚĂŐŝŶŐĐĂƚĞŐŽƌŝĞƐĨŽƌƚŚĞƉƵƌƉŽƐĞŽĨ
ĚĞƚĞƌŵŝŶŝŶŐƚŚĞůŽƐƐĂůůŽǁĂŶĐĞĨŽƌ >͖
• ƐƐĞƐƐŝŶŐ ƚŚĞ ƌĞĂƐŽŶĂďůĞŶĞƐƐ ŽĨ ƚŚĞ ĂƐƐƵŵƉƚŝŽŶƐ
ĚƌŝǀŝŶŐWƌŽďĂďŝůŝƚŝĞƐŽĨĞĨĂƵůƚ;WͿ͕>ŽƐƐ'ŝǀĞŶĞĨĂƵůƚ
;>'ͿĂŶĚ džƉŽƐƵƌĞĂƚĞĨĂƵůƚ; Ϳ͖ĂŶĚ
• ƐƐĞƐƐŝŶŐƚŚĞĂĚĞƋƵĂĐLJŽĨŵĂŶĂŐĞŵĞŶƚŽǀĞƌůĂLJƐ ƚŽ
ƚŚĞŵŽĚĞůůĞĚůŽƐƐĂůůŽǁĂŶĐĞĨŽƌ >ďLJƌĞĐĂůĐƵůĂƚŝŶŐ
ƚŚĞĐŽǀĞƌĂŐĞƉƌŽǀŝĚĞĚďLJƚŚĞůŽƐƐĂůůŽǁĂŶĐĞ;ŝŶĐůƵĚŝŶŐ
ŽǀĞƌůĂLJƐͿƚŽƚŚĞůŽĂŶŬ͕ƚĂŬŝŶŐŝŶƚŽĂĐĐŽƵŶƚƌĞĐĞŶƚ
ŚŝƐƚŽƌLJ͕ ƉĞƌĨŽƌŵĂŶĐĞ ĂŶĚ ĚĞͲƌŝƐŬŝŶŐ ŽĨ ƚŚĞ ƌĞůĞǀĂŶƚ
ƉŽƌƚĨŽůŝŽƐ͘
tĞĂůƐŽĞǀĂůƵĂƚĞĚƚŚĞĂĚĞƋƵĂĐLJŽĨƚŚĞĚŝƐĐůŽƐƵƌĞƐŝŶEŽƚĞ
ϯ;ďͿƚŽƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͘
/ŵƉĂŝƌŵĞŶƚ ŽĨ ŶŽŶͲĐƵƌƌĞŶƚ ĂƐƐĞƚƐ ŝŶĐůƵĚŝŶŐ
ŐŽŽĚǁŝůů
ƐĂƚϯϭĞĐĞŵďĞƌϮϬϮϰ͕ƚŚĞĐĂƌƌLJŝŶŐǀĂůƵĞŽĨƚŚĞ
'ƌŽƵƉΖƐ ŐŽŽĚǁŝůů ǁĂƐ <ϵϮ͘ϳŵ͕ ĂƌŝƐŝŶŐ ĨƌŽŵ ƚŚĞ
ĂĐƋƵŝƐŝƚŝŽŶƐ ŽĨ DĂLJďĂŶŬ ;WE'Ϳ >ŝŵŝƚĞĚ ĂŶĚ
DĂLJďĂŶŬWƌŽƉĞƌƚLJ;WE'Ϳ>ŝŵŝƚĞĚ͕ĂƐĚŝƐĐůŽƐĞĚŝŶ
EŽƚĞϯϲ͘
/ŶĂĐĐŽƌĚĂŶĐĞǁŝƚŚ/^ϯϲ/ŵƉĂŝƌŵĞŶƚŽĨƐƐĞƚƐ͕
ĂƐŚ 'ĞŶĞƌĂƚŝŶŐhŶŝƚƐ;'hƐͿŝŶĐůƵĚŝŶŐŐŽŽĚǁŝůů
ĂƌĞƌĞƋƵŝƌĞĚƚŽďĞƚĞƐƚĞĚĨŽƌŝŵƉĂŝƌŵĞŶƚĂƚůĞĂƐƚ
ĂŶŶƵĂůůLJ͘
dŚŝƐŝƐĐŽŶƐŝĚĞƌĞĚĂŬĞLJĂƵĚŝƚŵĂƚƚĞƌĚƵĞƚŽƚŚĞ
ƐŝŐŶŝĨŝĐĂŶĐĞŽĨũƵĚŐĞŵĞŶƚƌĞƋƵŝƌĞĚŝŶƉƌĞƉĂƌŝŶŐĂ
ĚŝƐĐŽƵŶƚĞĚĐĂƐŚĨůŽǁŵŽĚĞů;ǀĂůƵĞŝŶƵƐĞͿ͘dŚĞƐĞ
ũƵĚŐĞŵĞŶƚƐŝŶĐůƵĚĞĞƐƚŝŵĂƚŝŶŐ͗
• &ƵƚƵƌĞĐĂƐŚĨůŽǁƐĨŽƌƚŚĞĂƐŚ'ĞŶĞƌĂƚŝŶŐhŶŝƚ
(“'h”)ƚĂŬŝŶŐŝŶƚŽĂĐĐŽƵŶƚŝŶŐƌĞŐƵůĂƚŽƌLJĂŶĚ
ŵĂĐƌŽĞĐŽŶŽŵŝĐĨĂĐƚŽƌƐ͖
/Ŷ ĐŽŶũƵŶĐƚŝŽŶ ǁŝƚŚ ŽƵƌ ǀĂůƵĂƚŝŽŶ ƐƉĞĐŝĂůŝƐƚƐ͕ ŽƵƌ
ƉƌŽĐĞĚƵƌĞƐŝŶĐůƵĚĞĚ͕ďƵƚǁĞƌĞŶŽƚůŝŵŝƚĞĚƚŽ͗
• Evaluating the appropriateness of management’s key
ĐŽŶƚƌŽůƐ ŽǀĞƌ ƚŚĞ ŝŵƉĂŝƌŵĞŶƚ ĂƐƐĞƐƐŵĞŶƚ ƉƌŽĐĞƐƐ͕
ŝŶĐůƵĚŝŶŐƚŚĞŝĚĞŶƚŝĨŝĐĂƚŝŽŶŽĨƉŽƚĞŶƚŝĂůŝŶĚŝĐĂƚŽƌƐŽĨ
impairment such as the carrying value of the Group’s
ŶĞƚĂƐƐĞƚƐĞdžĐĞĞĚŝŶŐƚŚĞŵĂƌŬĞƚĐĂƉŝƚĂůŝƐĂƚŝŽŶ͖
• ƐƐĞƐƐŝŶŐƚŚĞƌĞĂƐŽŶĂďůĞŶĞƐƐŽĨĐĂƐŚĨůŽǁƉƌŽũĞĐƚŝŽŶƐ
ĂŶĚ ŐƌŽǁƚŚ ƌĂƚĞƐ ĂŐĂŝŶƐƚ ĞdžƚĞƌŶĂů ĞĐŽŶŽŵŝĐ ĂŶĚ
financial data and the Group’s own historical
ƉĞƌĨŽƌŵĂŶĐĞ͖
• Comparing historical performance against prior years’
budgets and forecasts to assess management’s
ŚŝƐƚŽƌŝĐĂůĨŽƌĞĐĂƐƚŝŶŐĂĐĐƵƌĂĐLJ͖
• ƐƐĞƐƐŝŶŐƚŚĞŬĞLJĂƐƐƵŵƉƚŝŽŶƐĂŶĚŵĞƚŚŽĚŽůŽŐLJƵƐĞĚ
ďLJ ŵĂŶĂŐĞŵĞŶƚ ŝŶ ƚŚĞ ŝŵƉĂŝƌŵĞŶƚ ŵŽĚĞů͕ ŝŶ
ƉĂƌƚŝĐƵůĂƌƚŚĞĚŝƐĐŽƵŶƚƌĂƚĞĂŶĚƚŚĞƚĞƌŵŝŶĂůŐƌŽǁƚŚ
ƌĂƚĞ͖ĂŶĚ
90
<ĞLJƵĚŝƚDĂƚƚĞƌ
,ŽǁƚŚĞƐĐŽƉĞŽĨŽƵƌĂƵĚŝƚƌĞƐƉŽŶĚĞĚƚŽƚŚĞ<ĞLJƵĚŝƚ
DĂƚƚĞƌ
• ŝƐĐŽƵŶƚƌĂƚĞƐ͖ĂŶĚ
• dĞƌŵŝŶĂůǀĂůƵĞŐƌŽǁƚŚƌĂƚĞƐ͘
• dĞƐƚŝŶŐƚŚĞŵĂƚŚĞŵĂƚŝĐĂůĂĐĐƵƌĂĐLJŽĨƚŚĞŝŵƉĂŝƌŵĞŶƚ
ŵŽĚĞů͘
tĞĂůƐŽĞǀĂůƵĂƚĞĚƚŚĞĂĚĞƋƵĂĐLJŽĨƚŚĞĚŝƐĐůŽƐƵƌĞƐŝŶEŽƚĞ
ϯϲƚŽƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͘
/ŶĨŽƌŵĂƚŝŽŶƚĞĐŚŶŽůŽŐLJ
The Group’s business operations are heavily reliant
ŽŶ /d ƐLJƐƚĞŵƐ ĨŽƌ ƉƌŽĐĞƐƐŝŶŐ ůĂƌŐĞ ǀŽůƵŵĞƐ ŽĨ
ƚƌĂŶƐĂĐƚŝŽŶƐ ĂƐ ǁĞůů ĂƐ ĂƵƚŽŵĂƚĞĚ ĐĂůĐƵůĂƚŝŽŶƐ
ƐƵƉƉŽƌƚŝŶŐ ďŽƚŚ ŝŶƚĞƌŶĂů ĂŶĚ ĞdžƚĞƌŶĂů ĨŝŶĂŶĐŝĂů
ƌĞƉŽƌƚŝŶŐ͘dŚĞƐĞƐLJƐƚĞŵƐĂƌĞǀŝƚĂůƚŽƚŚĞŽŶŐŽŝŶŐ
ŽƉĞƌĂƚŝŽŶƐŽĨƚŚĞďƵƐŝŶĞƐƐĂŶĚƚŽƚŚĞŝŶƚĞŐƌŝƚLJŽĨ
ƚŚĞĨŝŶĂŶĐŝĂůƌĞƉŽƌƚŝŶŐƉƌŽĐĞƐƐĂŶĚĂƐĂƌĞƐƵůƚ͕ƚŚĞ
ĂƐƐĞƐƐŵĞŶƚŽĨ/dƐLJƐƚĞŵƐĨŽƌŵƐĂŬĞLJĐŽŵƉŽŶĞŶƚ
ŽĨŽƵƌĂƵĚŝƚĂŶĚŝƐĐŽŶƐŝĚĞƌĞĚĂŬĞLJĂƵĚŝƚŵĂƚƚĞƌ͘
/Ŷ ĐŽŶũƵŶĐƚŝŽŶ ǁŝƚŚ ŽƵƌ /d ƐƉĞĐŝĂůŝƐƚƐ͕ ŽƵƌ ƉƌŽĐĞĚƵƌĞƐ
ŝŶĐůƵĚĞĚďƵƚǁĞƌĞŶŽƚůŝŵŝƚĞĚƚŽ͗
• KďƚĂŝŶŝŶŐĂŶƵŶĚĞƌƐƚĂŶĚŝŶŐŽĨƚŚĞ/dĞŶǀŝƌŽŶŵĞŶƚĂŶĚ
ŝĚĞŶƚŝĨŝĐĂƚŝŽŶŽĨƚŚĞŬĞLJƐLJƐƚĞŵƐƌĞůĞǀĂŶƚƚŽĨŝŶĂŶĐŝĂů
ƌĞƉŽƌƚŝŶŐ͖
• dĞƐƚŝŶŐƚŚĞĚĞƐŝŐŶĂŶĚŝŵƉůĞŵĞŶƚĂƚŝŽŶŽĨ/dĐŽŶƚƌŽůƐ
ŝŶĐůƵĚŝŶŐ͕ ďƵƚ ŶŽƚ ůŝŵŝƚĞĚ ƚŽ͕ ĂĐĐĞƐƐ ĂĚŵŝŶŝƐƚƌĂƚŝŽŶ͕
ĐŚĂŶŐĞŵĂŶĂŐĞŵĞŶƚĂŶĚƐĞŐƌĞŐĂƚŝŽŶŽĨĚƵƚŝĞƐ͖ĂŶĚ
• ZĞƐƉŽŶĚŝŶŐƚŽĚĞĨŝĐŝĞŶĐŝĞƐŝĚĞŶƚŝĨŝĞĚďLJĚĞƐŝŐŶŝŶŐĂŶĚ
ƉĞƌĨŽƌŵŝŶŐĂĚĚŝƚŝŽŶĂůƉƌŽĐĞĚƵƌĞƐǁŚŝĐŚŝŶĐůƵĚĞĚƚŚĞ
ŝĚĞŶƚŝĨŝĐĂƚŝŽŶ ĂŶĚ ƚĞƐƚŝŶŐ ŽĨ ĐŽŵƉĞŶƐĂƚŝŶŐ ŵĂŶƵĂů
ĐŽŶƚƌŽůƐĂŶĚǀĂƌLJŝŶŐƚŚĞŶĂƚƵƌĞ͕ƚŝŵŝŶŐĂŶĚĞdžƚĞŶƚŽĨ
ƚŚĞƐƵďƐƚĂŶƚŝǀĞƉƌŽĐĞĚƵƌĞƐƉĞƌĨŽƌŵĞĚ͘
KƚŚĞƌ/ŶĨŽƌŵĂƚŝŽŶ
The directors are responsible for the other information. The other information comprises the Directors’ Report
ĂŶĚDirectors’ Declaration,which we obtained prior to the date of this auditor’s report, and annual report (but
does not include the financial statements and our auditor’s report thereon), which is expected to be made
ĂǀĂŝůĂďůĞƚŽƵƐĂĨƚĞƌƚŚĂƚĚĂƚĞ͘
KƵƌŽƉŝŶŝŽŶŽŶƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐĚŽĞƐŶŽƚĐŽǀĞƌƚŚĞŽƚŚĞƌŝŶĨŽƌŵĂƚŝŽŶĂŶĚǁĞĚŽŶŽƚĂŶĚǁŝůůŶŽƚĞdžƉƌĞƐƐ
ĂŶLJĨŽƌŵŽĨĂƐƐƵƌĂŶĐĞĐŽŶĐůƵƐŝŽŶƚŚĞƌĞŽŶ͘
/Ŷ ĐŽŶŶĞĐƚŝŽŶ ǁŝƚŚ ŽƵƌ ĂƵĚŝƚ ŽĨ ƚŚĞ ĨŝŶĂŶĐŝĂů ƐƚĂƚĞŵĞŶƚƐ͕ ŽƵƌ ƌĞƐƉŽŶƐŝďŝůŝƚLJ ŝƐ ƚŽ ƌĞĂĚ ƚŚĞ ŽƚŚĞƌ ŝŶĨŽƌŵĂƚŝŽŶ
ŝĚĞŶƚŝĨŝĞĚĂďŽǀĞĂŶĚ͕ŝŶĚŽŝŶŐƐŽ͕ĐŽŶƐŝĚĞƌǁŚĞƚŚĞƌƚŚĞŽƚŚĞƌŝŶĨŽƌŵĂƚŝŽŶŝƐŵĂƚĞƌŝĂůůLJŝŶĐŽŶƐŝƐƚĞŶƚǁŝƚŚƚŚĞ
ĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐŽƌŽƵƌŬŶŽǁůĞĚŐĞŽďƚĂŝŶĞĚŝŶƚŚĞĂƵĚŝƚ͕ŽƌŽƚŚĞƌǁŝƐĞĂƉƉĞĂƌƐƚŽďĞŵĂƚĞƌŝĂůůLJŵŝƐƐƚĂƚĞĚ͘/Ĩ͕
based on the work we have performed on the other information that we obtained prior to the date of this auditor’s
ƌĞƉŽƌƚ͕ǁĞĐŽŶĐůƵĚĞƚŚĂƚƚŚĞƌĞŝƐĂŵĂƚĞƌŝĂůŵŝƐƐƚĂƚĞŵĞŶƚŽĨƚŚŝƐŽƚŚĞƌŝŶĨŽƌŵĂƚŝŽŶ͕ǁĞĂƌĞƌĞƋƵŝƌĞĚƚŽƌĞƉŽƌƚƚŚĂƚ
ĨĂĐƚ͘tĞŚĂǀĞŶŽƚŚŝŶŐƚŽƌĞƉŽƌƚŝŶƚŚŝƐƌĞŐĂƌĚ͘
tŚĞŶǁĞƌĞĂĚƚŚĞĂŶŶƵĂůƌĞƉŽƌƚ͕ŝĨǁĞĐŽŶĐůƵĚĞƚŚĂƚƚŚĞƌĞŝƐĂŵĂƚĞƌŝĂůŵŝƐƐƚĂƚĞŵĞŶƚƚŚĞƌĞŝŶ͕ǁĞĂƌĞƌĞƋƵŝƌĞĚƚŽ
ĐŽŵŵƵŶŝĐĂƚĞ ƚŚĞŵĂƚƚĞƌ ƚŽ ƚŚĞĚŝƌĞĐƚŽƌƐĂŶĚƵƐĞ ŽƵƌƉƌŽĨĞƐƐŝŽŶĂůũƵĚŐĞŵĞŶƚƚŽĚĞƚĞƌŵŝŶĞƚŚĞĂƉƉƌŽƉƌŝĂƚĞ
ĂĐƚŝŽŶ͘
ZĞƐƉŽŶƐŝďŝůŝƚŝĞƐŽĨƚŚĞŝƌĞĐƚŽƌƐĨŽƌƚŚĞ&ŝŶĂŶĐŝĂů^ƚĂƚĞŵĞŶƚƐ
dŚĞĚŝƌĞĐƚŽƌƐĂƌĞƌĞƐƉŽŶƐŝďůĞĨŽƌƚŚĞƉƌĞƉĂƌĂƚŝŽŶŽĨƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐƚŚĂƚŐŝǀĞĂƚƌƵĞĂŶĚĨĂŝƌǀŝĞǁŝŶ
ĂĐĐŽƌĚĂŶĐĞǁŝƚŚ/ŶƚĞƌŶĂƚŝŽŶĂů&ŝŶĂŶĐŝĂůZĞƉŽƌƚŝŶŐ^ƚĂŶĚĂƌĚƐĂŶĚƚŚĞŽŵƉĂŶŝĞƐĐƚϭϵϵϳ;ĂŵĞŶĚĞĚϮϬϮϮͿĂŶĚ
ĨŽƌ ƐƵĐŚ ŝŶƚĞƌŶĂů ĐŽŶƚƌŽů ĂƐ ƚŚĞ ĚŝƌĞĐƚŽƌƐ ĚĞƚĞƌŵŝŶĞ ŝƐ ŶĞĐĞƐƐĂƌLJ ƚŽ ĞŶĂďůĞ ƚŚĞ ƉƌĞƉĂƌĂƚŝŽŶ ŽĨ ƚŚĞ ĨŝŶĂŶĐŝĂů
ƐƚĂƚĞŵĞŶƚƐƚŚĂƚŐŝǀĞĂƚƌƵĞĂŶĚĨĂŝƌǀŝĞǁĂŶĚĂƌĞĨƌĞĞĨƌŽŵŵĂƚĞƌŝĂůŵŝƐƐƚĂƚĞŵĞŶƚ͕ǁŚĞƚŚĞƌĚƵĞƚŽĨƌĂƵĚŽƌĞƌƌŽƌ͘
/ŶƉƌĞƉĂƌŝŶŐƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͕ƚŚĞĚŝƌĞĐƚŽƌƐĂƌĞƌĞƐƉŽŶƐŝďůĞĨŽƌĂƐƐĞƐƐŝŶŐƚŚĞĂďŝůŝƚLJŽĨƚŚĞ'ƌŽƵƉĂŶĚƚŚĞ
ŽŵƉĂŶLJƚŽĐŽŶƚŝŶƵĞĂƐĂŐŽŝŶŐĐŽŶĐĞƌŶ͕ĚŝƐĐůŽƐŝŶŐ͕ĂƐĂƉƉůŝĐĂďůĞ͕ŵĂƚƚĞƌƐƌĞůĂƚĞĚƚŽŐŽŝŶŐĐŽŶĐĞƌŶĂŶĚƵƐŝŶŐƚŚĞ
ŐŽŝŶŐĐŽŶĐĞƌŶďĂƐŝƐŽĨĂĐĐŽƵŶƚŝŶŐƵŶůĞƐƐƚŚĞĚŝƌĞĐƚŽƌƐĞŝƚŚĞƌŝŶƚĞŶĚƚŽůŝƋƵŝĚĂƚĞƚŚĞ'ƌŽƵƉŽƌƚŚĞŽŵƉĂŶLJŽƌƚŽ
ĐĞĂƐĞŽƉĞƌĂƚŝŽŶƐ͕ŽƌŚĂƐŶŽƌĞĂůŝƐƚŝĐĂůƚĞƌŶĂƚŝǀĞďƵƚƚŽĚŽƐŽ͘
91
Auditor’s Responsibilities for the Audit of the Financial Statements
KƵƌŽďũĞĐƚŝǀĞƐĂƌĞƚŽŽďƚĂŝŶƌĞĂƐŽŶĂďůĞĂƐƐƵƌĂŶĐĞĂďŽƵƚǁŚĞƚŚĞƌƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐĂƐĂǁŚŽůĞĂƌĞĨƌĞĞ
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
ŽƉŝŶŝŽŶ͘ZĞĂƐŽŶĂďůĞĂƐƐƵƌĂŶĐĞŝƐĂŚŝŐŚůĞǀĞůŽĨĂƐƐƵƌĂŶĐĞ͕ďƵƚŝƐŶŽƚĂŐƵĂƌĂŶƚĞĞƚŚĂƚĂŶĂƵĚŝƚĐŽŶĚƵĐƚĞĚŝŶ
ĂĐĐŽƌĚĂŶĐĞǁŝƚŚƚŚĞ/ŶƚĞƌŶĂƚŝŽŶĂů^ƚĂŶĚĂƌĚƐŽŶƵĚŝƚŝŶŐǁŝůůĂůǁĂLJƐĚĞƚĞĐƚĂŵĂƚĞƌŝĂůŵŝƐƐƚĂƚĞŵĞŶƚǁŚĞŶŝƚĞdžŝƐƚƐ͘
DŝƐƐƚĂƚĞŵĞŶƚƐĐĂŶĂƌŝƐĞĨƌŽŵĨƌĂƵĚŽƌĞƌƌŽƌĂŶĚĂƌĞĐŽŶƐŝĚĞƌĞĚŵĂƚĞƌŝĂůŝĨ͕ŝŶĚŝǀŝĚƵĂůůLJŽƌŝŶƚŚĞĂŐŐƌĞŐĂƚĞ͕ƚŚĞLJ
ĐŽƵůĚƌĞĂƐŽŶĂďůLJďĞĞdžƉĞĐƚĞĚƚŽŝŶĨůƵĞŶĐĞƚŚĞĞĐŽŶŽŵŝĐĚĞĐŝƐŝŽŶƐŽĨƵƐĞƌƐƚĂŬĞŶŽŶƚŚĞďĂƐŝƐŽĨƚŚĞĨŝŶĂŶĐŝĂů
ƐƚĂƚĞŵĞŶƚƐ͘
ƐƉĂƌƚŽĨĂŶĂƵĚŝƚŝŶĂĐĐŽƌĚĂŶĐĞǁŝƚŚƚŚĞ/ŶƚĞƌŶĂƚŝŽŶĂů^ƚĂŶĚĂƌĚƐŽŶƵĚŝƚŝŶŐ͕ǁĞĞdžĞƌĐŝƐĞƉƌŽĨĞƐƐŝŽŶĂůũƵĚŐĞŵĞŶƚ
ĂŶĚŵĂŝŶƚĂŝŶƉƌŽĨĞƐƐŝŽŶĂůƐĐĞƉƚŝĐŝƐŵƚŚƌŽƵŐŚŽƵƚƚŚĞĂƵĚŝƚ͘tĞĂůƐŽ͗
• /ĚĞŶƚŝĨLJĂŶĚĂƐƐĞƐƐƚŚĞƌŝƐŬƐŽĨŵĂƚĞƌŝĂůŵŝƐƐƚĂƚĞŵĞŶƚŽĨƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͕ǁŚĞƚŚĞƌĚƵĞƚŽĨƌĂƵĚŽƌ
ĞƌƌŽƌ͕ ĚĞƐŝŐŶ ĂŶĚ ƉĞƌĨŽƌŵ ĂƵĚŝƚ ƉƌŽĐĞĚƵƌĞƐ ƌĞƐƉŽŶƐŝǀĞ ƚŽ ƚŚŽƐĞ ƌŝƐŬƐ͕ ĂŶĚ ŽďƚĂŝŶ ĂƵĚŝƚ ĞǀŝĚĞŶĐĞ ƚŚĂƚ ŝƐ
ƐƵĨĨŝĐŝĞŶƚĂŶĚĂƉƉƌŽƉƌŝĂƚĞƚŽƉƌŽǀŝĚĞĂďĂƐŝƐĨŽƌŽƵƌŽƉŝŶŝŽŶ͘dŚĞƌŝƐŬŽĨŶŽƚĚĞƚĞĐƚŝŶŐĂŵĂƚĞƌŝĂůŵŝƐƐƚĂƚĞŵĞŶƚ
ƌĞƐƵůƚŝŶŐ ĨƌŽŵ ĨƌĂƵĚ ŝƐ ŚŝŐŚĞƌ ƚŚĂŶ ĨŽƌ ŽŶĞ ƌĞƐƵůƚŝŶŐ ĨƌŽŵ ĞƌƌŽƌ͕ ĂƐ ĨƌĂƵĚ ŵĂLJ ŝŶǀŽůǀĞ ĐŽůůƵƐŝŽŶ͕ ĨŽƌŐĞƌLJ͕
ŝŶƚĞŶƚŝŽŶĂůŽŵŝƐƐŝŽŶƐ͕ŵŝƐƌĞƉƌĞƐĞŶƚĂƚŝŽŶƐ͕ŽƌƚŚĞŽǀĞƌƌŝĚĞŽĨŝŶƚĞƌŶĂůĐŽŶƚƌŽů͘
• KďƚĂŝŶĂŶƵŶĚĞƌƐƚĂŶĚŝŶŐŽĨŝŶƚĞƌŶĂůĐŽŶƚƌŽůƌĞůĞǀĂŶƚƚŽƚŚĞĂƵĚŝƚŝŶŽƌĚĞƌƚŽĚĞƐŝŐŶĂƵĚŝƚƉƌŽĐĞĚƵƌĞƐƚŚĂƚĂƌĞ
ĂƉƉƌŽƉƌŝĂƚĞŝŶƚŚĞĐŝƌĐƵŵƐƚĂŶĐĞƐ͕ďƵƚŶŽƚĨŽƌƚŚĞƉƵƌƉŽƐĞŽĨĞdžƉƌĞƐƐŝŶŐĂŶŽƉŝŶŝŽŶŽŶƚŚĞĞĨĨĞĐƚŝǀĞŶĞƐƐŽĨƚŚĞ
'ƌŽƵƉor the Company’sŝŶƚĞƌŶĂůĐŽŶƚƌŽů͘
• ǀĂůƵĂƚĞƚŚĞĂƉƉƌŽƉƌŝĂƚĞŶĞƐƐŽĨĂĐĐŽƵŶƚŝŶŐƉŽůŝĐŝĞƐƵƐĞĚĂŶĚƚŚĞƌĞĂƐŽŶĂďůĞŶĞƐƐŽĨĂĐĐŽƵŶƚŝŶŐĞƐƚŝŵĂƚĞƐĂŶĚ
ƌĞůĂƚĞĚĚŝƐĐůŽƐƵƌĞƐŵĂĚĞďLJƚŚĞĚŝƌĞĐƚŽƌƐ͘
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
ƚŚĞĂƵĚŝƚĞǀŝĚĞŶĐĞŽďƚĂŝŶĞĚ͕ǁŚĞƚŚĞƌĂŵĂƚĞƌŝĂůƵŶĐĞƌƚĂŝŶƚLJĞdžŝƐƚƐƌĞůĂƚĞĚƚŽĞǀĞŶƚƐŽƌĐŽŶĚŝƚŝŽŶƐƚŚĂƚŵĂLJ
ĐĂƐƚƐŝŐŶŝĨŝĐĂŶƚĚŽƵďƚŽŶƚŚĞ'ƌŽƵƉor the Company’sĂďŝůŝƚLJƚŽĐŽŶƚŝŶƵĞĂƐĂŐŽŝŶŐĐŽŶĐĞƌŶ͘/ĨǁĞĐŽŶĐůƵĚĞ
that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related
ĚŝƐĐůŽƐƵƌĞƐ ŝŶ ƚŚĞ ĨŝŶĂŶĐŝĂů ƐƚĂƚĞŵĞŶƚƐ Žƌ͕ ŝĨ ƐƵĐŚ ĚŝƐĐůŽƐƵƌĞƐ ĂƌĞ ŝŶĂĚĞƋƵĂƚĞ͕ ƚŽ ŵŽĚŝĨLJ ŽƵƌ ŽƉŝŶŝŽŶ͘ KƵƌ
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
ĞǀĞŶƚƐŽƌĐŽŶĚŝƚŝŽŶƐŵĂLJĐĂƵƐĞƚŚĞ'ƌŽƵƉŽƌƚŚĞŽŵƉĂŶLJƚŽĐĞĂƐĞƚŽĐŽŶƚŝŶƵĞĂƐĂŐŽŝŶŐĐŽŶĐĞƌŶ͘
• ǀĂůƵĂƚĞƚŚĞŽǀĞƌĂůůƉƌĞƐĞŶƚĂƚŝŽŶ͕ƐƚƌƵĐƚƵƌĞĂŶĚĐŽŶƚĞŶƚŽĨƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͕ŝŶĐůƵĚŝŶŐƚŚĞĚŝƐĐůŽƐƵƌĞƐ͕
ĂŶĚǁŚĞƚŚĞƌƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐƌĞƉƌĞƐĞŶƚ ƚŚĞƵŶĚĞƌůLJŝŶŐƚƌĂŶƐĂĐƚŝŽŶƐĂŶĚĞǀĞŶƚƐŝŶĂŵĂŶŶĞƌƚŚĂƚ
ĂĐŚŝĞǀĞƐĨĂŝƌƉƌĞƐĞŶƚĂƚŝŽŶ͘
• KďƚĂŝŶƐƵĨĨŝĐŝĞŶƚĂƉƉƌŽƉƌŝĂƚĞĂƵĚŝƚĞǀŝĚĞŶĐĞƌĞŐĂƌĚŝŶŐƚŚĞĨŝŶĂŶĐŝĂůŝŶĨŽƌŵĂƚŝŽŶŽĨƚŚĞĞŶƚŝƚŝĞƐŽƌďƵƐŝŶĞƐƐ
ĂĐƚŝǀŝƚŝĞƐǁŝƚŚŝŶƚŚĞ'ƌŽƵƉƚŽĞdžƉƌĞƐƐĂŶŽƉŝŶŝŽŶŽŶƚŚĞ'ƌŽƵƉĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͘tĞĂƌĞƌĞƐƉŽŶƐŝďůĞĨŽƌ
the direction, supervision and performance of the Group’s audit. We remain solely responsible for our audit
ŽƉŝŶŝŽŶ͘
tĞĐŽŵŵƵŶŝĐĂƚĞǁŝƚŚƚŚĞĚŝƌĞĐƚŽƌƐƌĞŐĂƌĚŝŶŐ͕ĂŵŽŶŐŽƚŚĞƌŵĂƚƚĞƌƐ͕ƚŚĞƉůĂŶŶĞĚƐĐŽƉĞĂŶĚƚŝŵŝŶŐŽĨƚŚĞĂƵĚŝƚ
ĂŶĚƐŝŐŶŝĨŝĐĂŶƚĂƵĚŝƚĨŝŶĚŝŶŐƐ͕ŝŶĐůƵĚŝŶŐĂŶLJƐŝŐŶŝĨŝĐĂŶƚĚĞĨŝĐŝĞŶĐŝĞƐŝŶŝŶƚĞƌŶĂůĐŽŶƚƌŽůƚŚĂƚǁĞŝĚĞŶƚŝĨLJĚƵƌŝŶŐŽƵƌ
ĂƵĚŝƚ͘
tĞ ĂůƐŽ ƉƌŽǀŝĚĞ ƚŚĞ ĚŝƌĞĐƚŽƌƐ ǁŝƚŚ Ă ƐƚĂƚĞŵĞŶƚ ƚŚĂƚ ǁĞ ŚĂǀĞ ĐŽŵƉůŝĞĚ ǁŝƚŚ ƌĞůĞǀĂŶƚ ĞƚŚŝĐĂů ƌĞƋƵŝƌĞŵĞŶƚƐ
ƌĞŐĂƌĚŝŶŐŝŶĚĞƉĞŶĚĞŶĐĞ͕ĂŶĚƚŽĐŽŵŵƵŶŝĐĂƚĞǁŝƚŚƚŚĞŵĂůůƌĞůĂƚŝŽŶƐŚŝƉƐĂŶĚŽƚŚĞƌŵĂƚƚĞƌƐƚŚĂƚŵĂLJƌĞĂƐŽŶĂďůLJ
ďĞƚŚŽƵŐŚƚƚŽďĞĂƌŽŶŽƵƌŝŶĚĞƉĞŶĚĞŶĐĞ͕ĂŶĚǁŚĞƌĞĂƉƉůŝĐĂďůĞ͕ĂĐƚŝŽŶƐƚĂŬĞŶƚŽĞůŝŵŝŶĂƚĞƚŚƌĞĂƚƐŽƌƐĂĨĞŐƵĂƌĚƐ
ĂƉƉůŝĞĚ͘
&ƌŽŵƚŚĞŵĂƚƚĞƌƐĐŽŵŵƵŶŝĐĂƚĞĚǁŝƚŚƚŚĞĚŝƌĞĐƚŽƌƐ͕ǁĞĚĞƚĞƌŵŝŶĞƚŚŽƐĞŵĂƚƚĞƌƐƚŚĂƚǁĞƌĞŽĨŵŽƐƚƐŝŐŶŝĨŝĐĂŶĐĞ
ŝŶƚŚĞĂƵĚŝƚŽĨƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐŽĨƚŚĞĐƵƌƌĞŶƚƉĞƌŝŽĚĂŶĚĂƌĞƚŚĞƌĞĨŽƌĞƚŚĞŬĞLJĂƵĚŝƚŵĂƚƚĞƌƐ͘tĞĚĞƐĐƌŝďĞ
these matters in our auditor’s rĞƉŽƌƚƵŶůĞƐƐůĂǁŽƌƌĞŐƵůĂƚŝŽŶƉƌĞĐůƵĚĞƐƉƵďůŝĐĚŝƐĐůŽƐƵƌĞĂďŽƵƚƚŚĞŵĂƚƚĞƌŽƌ
ǁŚĞŶ͕ŝŶĞdžƚƌĞŵĞůLJƌĂƌĞĐŝƌĐƵŵƐƚĂŶĐĞƐ͕ǁĞĚĞƚĞƌŵŝŶĞƚŚĂƚĂŵĂƚƚĞƌƐŚŽƵůĚŶŽƚďĞĐŽŵŵƵŶŝĐĂƚĞĚŝŶŽƵƌƌĞƉŽƌƚ
ďĞĐĂƵƐĞƚŚĞĂĚǀĞƌƐĞĐŽŶƐĞƋƵĞŶĐĞƐŽĨĚŽŝŶŐƐŽǁŽƵůĚƌĞĂƐŽŶĂďůLJďĞĞdžƉĞĐƚĞĚƚŽŽƵƚǁĞŝŐŚƚŚĞƉƵďůŝĐŝŶƚĞƌĞƐƚ
ďĞŶĞĨŝƚƐŽĨƐƵĐŚĐŽŵŵƵŶŝĐĂƚŝŽŶ͘
92
ZĞƉŽƌƚŽŶKƚŚĞƌ>ĞŐĂůĂŶĚZĞŐƵůĂƚŽƌLJZĞƋƵŝƌĞŵĞŶƚƐ
/ŶĂĐĐŽƌĚĂŶĐĞǁŝƚŚƐĞĐƚŝŽŶϮϬϬŽĨƚŚĞŽŵƉĂŶŝĞƐĐƚϭϵϵϳ;ĂŵĞŶĚĞĚϮϬϮϮͿ͕ŝŶŽƵƌŽƉŝŶŝŽŶ͗
• tĞŽďƚĂŝŶĞĚĂůůŝŶĨŽƌŵĂƚŝŽŶĂŶĚĞdžƉůĂŶĂƚŝŽŶƐƚŚĂƚǁĞƌĞƌĞƋƵŝƌĞĚ͖ĂŶĚ
• WƌŽƉĞƌĂĐĐŽƵŶƚŝŶŐƌĞĐŽƌĚƐŚĂǀĞďĞĞŶŬĞƉƚďLJƚŚĞ'ƌŽƵƉĨŽƌƚŚĞLJĞĂƌĞŶĚĞĚϯϭĞĐĞŵďĞƌϮϬϮϰ͘
tĞŚĂǀĞŶŽŝŶƚĞƌĞƐƚŝŶƚŚĞŽŵƉĂŶLJĂŶĚƚŚĞ'ƌŽƵƉŽƌĂŶLJŽƚŚĞƌƌĞůĂƚŝŽŶƐŚŝƉ͕ŽƚŚĞƌƚŚĂŶƚŚĂƚŽĨƚŚĞĂƵĚŝƚŽƌŽĨ
ƚŚĞŽŵƉĂŶLJĂŶĚƚŚĞ'ƌŽƵƉ͘
The engagement partners on the audit resulting in this independent auditor’s report are Mark Stretton and
,ĞƌďĞƌƚDĂŐƵŵĂ͘
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,ĞƌďĞƌƚDĂŐƵŵĂ
WĂƌƚŶĞƌ
WĂƌƚŶĞƌ
ŚĂƌƚĞƌĞĚĐĐŽƵŶƚĂŶƚƐ
ŚĂƌƚĞƌĞĚĐĐŽƵŶƚĂŶƚƐ
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WŽƌƚDŽƌĞƐďLJ͕ϯϭDĂƌĐŚϮϬϮϱ
93
Mr Isikeli Taureka
Director and Chairman
Mr. Ivan Vidovich
CEO & Managing Director
The notes on pages 98 to 156 are an integral part of these consolidated financial statements.
Notes
Consolidated
Parent
2024
K‘000
2023
K‘000
2024
K‘000
2023
K‘000
Interest income
6
274,469
253,340
274,325
252,614
Interest expense
6
(52,246)
(50,020)
(53,018)
(50,180)
Net interest income
222,223
203,320
221,307
202,434
Fee and commission income
7
161,683
136,979
119,316
102,493
Fee and commission expense
7
(32)
(16)
(32)
(16)
Net fee and commission income
161,651
136,963
119,284
102,477
Foreign exchange income
85,970
51,342
85,489
51,363
Dividend income
8
944
660
64
40
Net gains from financial assets at fair value through profit
and loss
16
7,913
2,733
4,766
2,776
Other income
9
6,198
9,139
8,145
7,445
Operating income before impairment losses and other
operating expenses
484,899
404,157
439,055
366,535
Expected credit losses on financial instruments at
amortised cost
4b
(18,151)
(9,900)
(17,593)
(10,215)
Administrative and operating expenses
10
(286,638)
(218,718)
(273,340)
(209,656)
Profit before tax
180,110
175,539
148,122
146,664
Income tax expense
11
(79,814)
(70,576)
(71,969)
(62,081)
Net profit for the year
100,296
104,963
76,153
84,583
Other comprehensive income
-
-
-
-
Total comprehensive income for the year
100,296
104,963
76,153
84,583
2024
2023
Earnings per share – basic (toea)
28b
34.90
36.67
Earnings per share – diluted (toea)
28b
34.69
36.39
Statements of Comprehensive Income.
For the year ended 31 December 2024
94
These financial statements have been approved for issue by the Board of Directors and signed on its behalf by:
The notes on pages 98 to 156 are an integral part of these consolidated financial statements.
Statements of Financial Position.
As at 31 December 2024
95
Notes
Consolidated
Parent
2024
K‘000
2023
K‘000
2024
K‘000
2023
K‘000
Assets
Cash and cash equivalents
13
529,810
396,840
526,713
391,357
Central bank bills
14
762,088
1,236,496
762,088
1,236,496
Regulatory deposits
15
522,784
433,274
522,784
433,274
Financial assets at fair value through profit or loss
16
41,656
35,816
35,876
31,105
Loans and advances to customers
17
2,883,500
2,562,078
2,872,457
2,558,747
Investments in Government Inscribed Stocks
18
93,331
157,554
93,331
157,554
Due from subsidiaries
30
-
-
1,095
4,284
Deferred tax assets
12
36,803
35,099
35,846
34,618
Investments in subsidiaries
19
-
-
249
249
Property, plant and equipment
20
69,303
71,954
69,303
71,954
Goodwill
37
92,786
92,786
92,786
92,786
Intangible assets
21
35,893
27,608
35,893
27,608
Other assets
22
148,874
129,829
150,430
125,687
5,216,828
5,179,334
5,198,851
5,165,719
Liabilities
Due to other banks
135
13,912
135
13,912
Due to customers
23
4,351,990
4,344,571
4,386,215
4,368,599
Current income tax liabilities
24
10,329
11,461
9,091
10,332
Due to subsidiaries
30 b
-
-
50,856
43,899
Employee provisions
25
14,472
16,461
12,893
14,698
Lease liabilities
26
31,484
33,775
31,484
33,775
Other liabilities
27
142,224
118,831
140,094
114,149
4,550,634
4,539,011
4,630,768
4,599,364
Net assets
666,194
640,323
568,083
566,355
Shareholders’ equity
Issued and fully paid ordinary shares
28 a
397,254
394,693
397,254
394,693
Share-based payment reserve
28 c
1,878
2,776
1,878
2,776
Retained earnings
267,062
242,854
168,951
168,886
Total equity
666,194
640,323
568,083
566,355
Consolidated
Attributable to the equity holders of the Group
Share
Capital
Share Based
Payment
Reserve
Retained
Earnings
Total
K‘000
K‘000
K‘000
K‘000
Balance as at 31 December 2022
394,693
2,477
212,133
609,303
Profit for the year
-
-
104,963
104,963
Employee share scheme – vested rights
-
(1,529)
-
(1,529)
Employee share scheme – value of employee services
-
2,073
-
2,073
Deferred tax on share-based payment
-
(245)
-
(245)
Dividend paid
-
-
(74,242)
(74,242)
Balance as at 31 December 2023
394,693
2,776
242,854
640,323
Profit for the year
-
-
100,296
100,296
Employee share scheme – vested rights
-
(3,738)
-
(3,738)
Employee share scheme – value of employee services
-
2,674
-
2,674
Deferred tax on share-based payment
-
166
-
166
Additional shares issued
2,561
-
-
2,561
Dividend paid
-
-
(76,088)
(76,088)
Balance as at 31 December 2024
397,254
1,878
267,062
666,194
Parent
Attributable to the equity holders of the Parent
Share
Capital
Share Based
Payment
Reserve
Retained
Earnings
Total
K‘000
K‘000
K‘000
K‘000
Balance as at 31 December 2022
394,693
2,477
158,545
555,715
Profit for the year
-
-
84,583
84,583
Employee share scheme – vested rights
-
(1,529)
-
(1,529)
Employee share scheme – value of employee services
-
2,073
-
2,073
Deferred tax on share-based payment
-
(245)
-
(245)
Dividend paid
-
-
(74,242)
(74,242)
Balance as at 31 December 2023
394,693
2,776
168,886
566,355
Profit for the year
-
-
76,153
76,153
Employee share scheme – vested rights
-
(3,738)
-
(3,738)
Employee share scheme – value of employee services
-
2,674
-
2,674
Deferred tax on share-based payment
-
166
-
166
Additional shares issued
2,561
-
-
2,561
Dividend paid
-
-
(76,088)
(76,088)
Balance as at 31 December 2024
397,254
1,878
168,951
568,083
The notes on pages 98 to 156 are an integral part of these consolidated financial statements.
Statements of Changes in Equity.
For the year ended 31 December 2024
96
The notes on pages 98 to 156 are an integral part of these consolidated financial statements.
Statements of Cash Flows.
For the year ended 31 December 2024
97
Notes
Consolidated
Parent
2024
K‘000
2023
K‘000
2024
K‘000
2023
K‘000
Cash flows from operating activities
Interest received
265,208
245,205
265,064
244,479
Interest paid
(50,630)
(51,865)
(51,402)
(52,025)
Foreign exchange income
85,970
51,342
85,489
51,363
Dividend received
944
660
64
40
Fee and commission income received
154,294
137,286
119,639
102,174
Fee and commission expense paid
(32)
(16)
(32)
(16)
Net trading and other operating income
6,043
15,256
5,913
13,784
Recoveries on loans previously written-off
7,998
499
7,998
499
Cash payments to employees and suppliers
(284,928)
(198,036)
(258,720)
(142,192)
Income tax paid
24
(82,438)
(68,506)
(74,241)
(62,516)
Cash flows from operating profits before changes
in operating assets and liabilities
102,429
131,825
99,772
155,590
Changes in operating assets and liabilities:
– net (increase)/decrease in regulatory deposits
(89,510)
(50,191)
(89,510)
(50,191)
– net increase in loans and advances to customers
(320,706)
(402,486)
(320,706)
(402,486)
– net decrease/(increase) in other assets
(19,045)
(53,634)
(24,743)
(52,313)
– net increase in due to customers
5,804
467,581
16,000
473,486
– net (decrease)/increase due to other banks
(13,777)
11,851
(13,777)
11,851
– net (decrease)/increase in other liabilities
23,933
(5,428)
26,485
(5,396)
Net cash inflow/(outflow) from operating activities
29c
(310,872)
99,518
(306,479)
130,541
Cash flows from investing activities
Purchase of property, equipment and software
(27,334)
(12,817)
(27,334)
(12,817)
Proceeds from sale of property and equipment
154
89
154
89
Net movement in investment securities
29b
548,639
(39,533)
546,561
(39,577)
Net cash inflow/(outflow) generated from/(used in)
investing activities
521,459
(52,261)
519,381
(52,305)
Cash flows from financing activities
Dividend paid
(76,088)
(74,242)
(76,088)
(74,242)
Lease liability payments
(12,449)
(11,838)
(12,449)
(11,838)
Issuance of new shares
2,561
-
2,561
-
Net cash inflow/(outflow) generated from/(used in)
financing activities
(85,976)
(86,080)
(85,976)
(86,080)
Net increase in cash and cash equivalents
124,611
(38,823)
126,926
(7,844)
Effect of exchange rate movements on cash and
cash equivalents
8,359
2,175
8,430
1,825
Cash and cash equivalents at beginning of year
396,840
433,488
391,357
397,376
Cash and cash equivalents at end of year
29a
529,810
396,840
526,713
391,357
Notes to the Financial Statements.
For the year ended 31 December 2024 (from pages 98 – 156)
98
1.
Material accounting policies
1.1 General information
The Company and its subsidiaries are incorporated
in Papua New Guinea. The Group’s business activities
include the provision of banking services, personal
and commercial loans, money market operations,
provision of share brokerage, fund administration,
investment management services, asset financing,
and corporate advice.
Effective 9 July 2021, Kina Securities Limited
amalgamated with Kina Bank Limited (KBL),
Kina Ventures Limited (KVL) and Kina Properties Limited
(KPL) and is now known as Kina Securities Limited.
The directors have, at the time of approving the financial
statements, a reasonable expectation that the Company
and Group have adequate resources to continue
in operational existence for the foreseeable future.
Thus, they continue to adopt the going concern basis
of accounting in preparing the financial statements.
1.2 Basis of preparation
The financial statements of the Company and Group
have been prepared in accordance with IFRS Accounting
Standards and the requirements of the Papua New Guinea
Companies Act 1997 (amended in 2022)
The financial statements of the Company and Group
as at and for the year ended 31 December 2024 were
authorised for issue by the Board of Directors on
31 March 2025.
The financial statements of the Company and Group have
been prepared on a historical cost basis, except for the
revaluation of certain financial instruments at fair value.
Cost is based on the fair values of the consideration given
in exchange for assets.
1.3 Amendments to IFRS Accounting
Standards that are mandatorily effective
for the current reporting period
In the current year, the Group has applied a number of
amendments to IFRS Accounting Standards issued by the
International Accounting Standards Board (IASB) that are
mandatorily effective for an accounting period that begins
on or after 1 January 2023. Their adoption has not had
any material impact on the disclosures or on the amounts
reported in these financial statements.
1.4 New and revised IFRS standards in issue but not yet effective
At the date of authorisation of these financial statements, the Group has not applied the following revised IFRS standards
that have been issued but are not yet effective:
Amendments to IFRS 10 and IAS 28
Sale or Contribution of Assets between an Investor and its Associate
or Joint Venture
Amendments to IAS 1
Classification of Liabilities as Current or Non-current
Amendments to IAS 1
Non-current Liabilities with Covenants
Amendments to IAS 7 and IFRS 7
Supplier Finance Arrangements
Amendments to IFRS 16
Lease Liability in a Sale and Leaseback
Amendments to IFRS 17
Insurance Contracts
Amendments to IFRS 18
Presentation and Disclosure in Financial Statements
The directors do not expect that the adoption of the Standards listed above will have material impact on the financial
statements of the Group in the future period.
99
2.
Basis of Consolidation
The consolidated financial statements incorporate the
financial statements of the Company and its controlled
entities (its subsidiaries) made up to 31 December each
year. Control is achieved when the Company:
• has the power over the investee;
• is exposed, or has rights, to variable returns from its
involvement with the investee; and
• has the ability to use its power to affect its returns.
The Group reassesses whether or not it controls an investee
if facts and circumstances indicate that there are changes to
one or more of the three elements of control listed above.
The Group considers all relevant facts and circumstances
in assessing whether or not the Group’s voting rights in an
investee are sufficient to give it power, including:
• the size of the Group’s holding of voting rights relative
to the size and dispersion of holdings of the other
vote holders;
• potential voting rights held by the Group, other vote
holders or other parties;
• rights arising from other contractual arrangements;
and
• any additional facts and circumstances that indicate
that the Group has, or does not have, the current
ability to direct the relevant activities at the time that
decisions need to be made, including voting patterns
at previous shareholders’ meetings.
Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the
Group loses control of the subsidiary. Specifically, the
results of subsidiaries acquired or disposed of during
the year are included in the consolidated profit or loss
account from the date the Group gains control until the
date when the Group ceases to control the subsidiary.
All intragroup assets and liabilities, equity, income,
expenses and cash flows relating to transactions
between the members of the Group are eliminated on
consolidation, with the exception of foreign currency gains
and losses on intragroup monetary items denominated in
a foreign currency of at least one of the parties.
2.1 Segment reporting
Operating segments are presented on a basis that is
consistent with information provided internally to the
Group’s key decision makers. The chief operating decision-
maker, who is responsible for allocating resources and
assessing performance of the operating segments, has
been identified as the Board of Directors. The Group has
two reportable segments, which are the two business
divisions – Banking & Finance and Wealth Management.
2.2 Foreign currency translation
Items included in the financial statements of each of
the Group’s entities are measured using the currency of
the primary economic environment in which the entity
operates (the functional currency). The consolidated
financial statements are presented in Kina, which is
the Company’s and the Group’s functional and
presentation currency.
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of
such transactions and from the translation at year-
end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in
the statement of comprehensive income.
2.3 Interest income and interest expense
Interest income and expense for all financial instruments
except for those measured or designated as at fair value
through profit and loss (FVTPL) are recognised as ‘Interest
income’ or ‘Interest expense’ in the profit or loss account
using the effective interest method.
The effective interest rate (EIR) is the rate that exactly
discounts estimated future cash flows of the financial
instrument through the expected life of the financial
instrument or, where appropriate, a shorter period, to
the net carrying amount of the financial asset or financial
liability. The future cash flows are estimated taking into
account all the contractual terms of the instrument.
The calculation of the EIR includes all fees and points
paid or received between parties to the contract that are
incremental and directly attributable to the specific lending
arrangement, transaction costs, and all other premiums or
discounts. For financial assets at FVTPL transaction costs
are recognised in profit or loss at initial recognition.
The interest income/expense is calculated by applying
the EIR to the gross carrying amount of non-credit
impaired financial assets (i.e. at the amortised cost of the
financial asset before adjusting for any expected credit
loss allowance), or to the amortised cost of financial
liabilities. For credit-impaired financial assets the interest
income is calculated by applying the EIR to the amortised
cost of the credit-impaired financial assets (i.e. the gross
carrying amount less the allowance for expected credit
losses (ECLs)).
100
2.4 Fee and commission income
The Group recognises fee and commission income from
following major services it provides to customers:
• Investment and portfolio management – The Group
manages investments for a number of superannuation
funds and corporate clients. These services are
provided by the Group on a monthly basis and the
performance obligation is satisfied over time. Bills are
raised monthly and revenue is recognised on this basis.
• Fund administration – The Group earns a fee through
administration of funds for its customers based on
the fee rates agreed under the terms of the contract.
These services are provided by the Group on a
monthly basis and the performance obligation is
satisfied over time. Bills are raised monthly and
revenue is recognised on this basis.
• Share brokerage – The Group generates share
brokerage from trading services for customers on
the Port Moresby Stock Exchange (“PNGX”) and
the Australian Stock Exchange (“ASX”). Income is
recognised at a point in time upon settlement of
the trade which is commensurate with when the
performance obligation is satisfied.
• Loan fee and bank commission – The Group
charges various loan fees and commissions to its
customers during the tenure of the loan unrelated to
establishment of the loan facility. Income is recognised
at a point in time when services promised under the
contract are completed.
• Digital banking fees – The Group increases the
services it provides through digital access solutions
giving customers convenient ways to do transactions.
The services include online banking, utility top-ups,
cashless transactions using payment platforms, and
card transactions. Income is recognised at a point in
time when the transaction to which the fee relates
is settled which is a point at which performance
obligation is satisfied.
2.5 Leases
At inception of a contract, the Group assesses whether a
contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use
of an identified asset for a period of time in exchange for
consideration. A right-of-use asset and a corresponding
lease liability is recognised with respect to all lease
arrangements in which it is the lessee, except for
short-term leases (defined as leases with a lease term
of 12 months or less) and leases of low value assets
(such as tablets and personal computers, small items
of office furniture and telephones). For these leases, the
Group recognises the lease payments as an operating
expense on a straight-line basis over the term of the lease
unless another systematic basis is more representative
of the time pattern in which economic benefits from the
leased assets are consumed.
To assess whether a contract conveys the right to
control the use of an identified asset, the Group
assesses whether:
• the contract involves the use of an identified asset
– this may be specified explicitly or implicitly and
should be physically distinct or represent substantially
all of the capacity of a physically distinct asset. If the
supplier has a substantive substitution right, then the
asset is not identified;
• the Group has the right to obtain substantially all
of the economic benefits from use of the asset
throughout the period of use; and
• the Group has the right to direct the use of the asset.
The Group has this right when it has the decision-
making rights that are most relevant to changing how
and for what purpose the asset is used. In rare cases
where the decision about how and for what purpose
the asset is used is predetermined, the Group has the
right to direct the use of the asset if either:
• the Group has the right to operate the asset; or
• the Group designed the asset in a way that
predetermines how and for what purpose it will
be used.
At inception or on reassessment of a contract that
contains a lease component, the Group allocates the
consideration in the contract to each lease component on
the basis of their relative stand-alone prices. However, for
the leases of land and buildings in which it is a lessee, the
Group has elected not to separate non-lease components
and account for the lease and non-lease components as a
single lease component.
The Group recognises a right-of-use asset and a lease
liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease
2.
Basis of Consolidation (continued)
101
payments made at or before the commencement date,
plus any initial direct costs incurred and an estimate of
costs to dismantle and remove the underlying asset or
to restore the underlying asset or the site on which it is
located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using
the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use
asset or the end of the lease term. The estimated useful
lives of right-of-use assets are determined on the same
basis as those of property and equipment. In addition, the
right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain re-measurements
of the lease liability.
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily
determined, at the Group’s incremental borrowing rate.
Lease payments included in the measurement of the lease
liability comprise the following:
• fixed payments, including in-substance fixed
payments, less any lease incentive receivable;
• variable lease payments that depend on an index or a
rate, initially measured using the index or rate as at the
commencement date;
• the amount expected to be payable under a residual
value guarantee, if any; and
• the exercise price, if any, under a purchase option
that the Group is reasonably certain to exercise, lease
payments in an optional renewal period if the Group
is reasonably certain to exercise an extension option,
and penalties for early termination of a lease unless
the Group is reasonably certain not to terminate early.
The lease liability is re-measured when there is a change
in future lease payments arising from a change in an
index or rate, if there is a change in the Group’s estimate
of the amount expected to be payable under a residual
value guarantee, or if the Group changes its assessment
of whether it will exercise a purchase, extension or
termination option.
When the lease liability is re-measured in this way, a
corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in profit
or loss if the carrying amount of the right-of-use asset has
been reduced to zero.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets
and lease liabilities for all short-term leases that have a
lease term of 12 months or less. The Group recognises the
lease payments associated with these leases as an expense
on a straight-line basis over the lease term.
2.6 Taxation
The income tax expense or credit for the period is the tax
payable on the current period’s taxable income based
on the applicable income tax rate adjusted by changes in
deferred tax assets and liabilities attributable to temporary
differences and to unused tax losses.
The current income tax charge is calculated on the basis
of the tax laws enacted or substantively enacted at the
end of the reporting period in the country where the
Company and its subsidiaries operate and generate
taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in
which applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authority.
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts
in the consolidated financial statements. However,
deferred tax liabilities are not recognised if they arise from
the initial recognition of goodwill. Deferred income tax is
also not accounted for if it arises from initial recognition of
an asset or liability in a transaction other than a business
combination that at the time of the transaction affects
neither accounting nor taxable profit and loss. Deferred
income tax is determined using tax rate (and law) that
have been enacted or substantially enacted by the end
of the reporting period and are expected to apply when
the related deferred income tax asset is realised or the
deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable
that future taxable amounts will be available to utilise
those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is
a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the
same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right
to offset and intends either to settle on a net basis, or to
realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss,
except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
2.
Basis of Consolidation (continued)
2.5
Leases (continued)
102
2.7 Cash and cash equivalents
For the purpose of presentation in the statement of cash
flows, cash and cash equivalents includes cash on hand
and deposits held at call with financial institutions which
are subject to an insignificant risk of changes in value,
and bank overdrafts.
In the statement of financial position, cash and bank
balances comprise cash (i.e. cash on hand and demand
deposits) and cash equivalents. Cash equivalents are short-
term (generally with an original maturity of three months or
less), highly liquid investments that are readily convertible
to a known amount of cash and which are subject to an
insignificant risk of changes in value. Cash equivalents
are held for the purpose of meeting short-term cash
commitments rather for investment or other purposes.
For the purposes of the statement of cash flows, cash and
cash equivalents consist of cash and cash equivalents as
defined above.
2.8 Financial instruments
Financial assets and financial liabilities are recognised in
the statement of financial position when the Company or
Group becomes a party to the contractual provisions of
the instrument.
Recognised financial assets and financial liabilities are
initially measured at fair value. Transaction costs that
are directly attributable to the acquisition or issue of
financial assets and financial liabilities (other than financial
assets and financial liabilities at FVTPL) are added to or
deducted from the fair value of the financial assets or
financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition
of financial assets or financial liabilities at FVTPL are
recognised immediately in profit or loss.
Financial assets
All financial assets are recognised and de-recognised
on a trade date where the purchase or sale of a financial
asset is under a contract whose terms require delivery of
the financial asset within the timeframe established by the
market concerned, and are initially measured at fair value,
plus transaction costs, except for those financial assets
classified as at FVTPL.
Transaction costs directly attributable to the acquisition
of financial assets classified as at FVTPL are recognised
immediately in profit or loss.
All recognised financial assets that are within the scope
of IFRS 9 are required to be subsequently measured at
amortised cost or fair value on the basis of the entity’s
business model for managing the financial assets and the
contractual cash flow characteristics of the financial assets.
Specifically:
• debt instruments that are held within a business
model whose objective is to collect the contractual
cash flows, and that have contractual cash flows that
are solely payments of principal and interest on the
principal amount outstanding (SPPI), are subsequently
measured at amortised cost;
• debt instruments that are held within a business model
whose objective is both to collect the contractual cash
flows and to sell the debt instruments, and that have
contractual cash flows that are SPPI, are subsequently
measured at fair value through other comprehensive
income (FVTOCI);
• all other debt instruments (e.g. debt instruments
managed on a fair value basis, or held for sale)
and equity investments are subsequently measured
at FVTPL.
Financial assets at FVTPL
Financial assets at FVTPL are:
• assets with contractual cash flows that are not SPPI;
or/and
• assets that are held in a business model other than
held to collect contractual cash flows or held to collect
and sell; or
• assets designated at FVTPL using the fair value option.
These assets are measured at fair value, with any gains/
losses arising on re-measurement recognised in profit
or loss, and therefore no reclassifications were made.
Changes in contractual cash flows are considered under
the accounting policy on Modification and de-recognition
of financial assets described below.
Impairment
The Group measures and recognises loss allowances
for ECLs on the following financial instruments that are
measured at amortised cost:
• Loans and advances;
• Investment in Government Inscribed Stocks;
• Other financial assets;
• Loan commitments issued; and
• Financial guarantee contracts issued.
ECLs are required to be measured through a loss
allowance at an amount equal to:
• 12-month ECL, i.e. lifetime ECL that result from those
default events on the financial instrument that are
possible within 12 months after the reporting date,
(referred to as Stage 1); or
2.
Basis of Consolidation (continued)
103
• full lifetime ECL, i.e. lifetime ECL that result from all
possible default events over the life of the financial
instrument, (referred to as Stage 2 and Stage 3).
A loss allowance for full lifetime ECL is required for a
financial instrument if the credit risk on that financial
instrument has increased significantly since initial
recognition. For all other financial instruments, ECLs are
measured at an amount equal to the 12-month ECL. More
details on the determination of a significant increase in
credit risk and determination of ECL are provided in note 3.
Significant increase in credit risk
The Group monitors all financial assets, issued loan
commitments and financial guarantee contracts that are
subject to the impairment requirements to assess whether
there has been a significant increase in credit risk since
initial recognition. If there has been a significant increase
in credit risk the Group will measure the loss allowance
based on lifetime rather than 12-month ECL.
The Group’s accounting policy is not to use the practical
expedient that financial assets with ‘low’ credit risk at the
reporting date are deemed not to have had a significant
increase in credit risk. As a result, the Group monitors all
financial assets, issued loan commitments and financial
guarantee contracts that are subject to impairment for
significant increase in credit risk.
In assessing whether the credit risk on a financial
instrument has increased significantly since initial
recognition, the Group compares the risk of a default
occurring on the financial instrument at the reporting date
with the risk of a default occurring that was anticipated
when the financial instrument was first recognised. In
making this assessment, the Group considers both
quantitative and qualitative information that is reasonable
and supportable. Irrespective of the outcome of this
assessment, the Group presumes that the credit risk on
a financial asset has increased significantly since initial
recognition when contractual payments are more than
30 days past due, unless the Group has reasonable and
supportable information that demonstrates otherwise.
Definition of default
The definition of default is used in measuring the amount
of ECL and in the determination of whether the loss
allowance is based on 12-month or lifetime ECL, as
default is a component of the probability of default (PD)
which affects both the measurement of ECLs and the
identification of a significant increase in credit risk (see
note 3). The Group considers that default has occurred
when a financial asset is more than 90 days past due
unless the Group has reasonable and supportable
information to demonstrate that a more lagging default
criterion is more appropriate.
Write-off
Loans and debt securities are written off when the
Company or Group has no reasonable expectations of
recovering the financial asset (either in its entirety or a
portion of it). This is the case when it is determined that
the borrower does not have assets or sources of income
that could generate sufficient cash flows to repay the
amounts subject to the write-off. A write-off constitutes a
de-recognition event. The Group may apply enforcement
activities to financial assets written off. Recoveries
resulting from the Group’s enforcement activities will
result in impairment gains.
Presentation of allowance for ECL in the statement
of financial position
Loss allowances for ECL are presented in the statement of
financial position as a deduction from the gross carrying
amount of the financial assets held at amortised cost.
Derecognition of financial assets
The Group derecognises a financial asset only when
the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership of
the asset to another entity. If the Group neither transfers
nor retains substantially all the risks and rewards of
ownership and continues to control the transferred asset,
the Group recognises its retained interest in the asset
and an associated liability for amounts it may have to
pay. If the Group retains substantially all the risks and
rewards of ownership of a transferred financial asset,
the Group continues to recognise the financial asset
and also recognises a collateralised borrowing for the
proceeds received. On derecognition of a financial asset
measured at amortised cost, the difference between the
asset’s carrying amount and the sum of the consideration
received and receivable is recognised in profit or loss.
Financial liabilities
A financial liability is a contractual obligation to deliver
cash or another financial asset or to exchange financial
assets or financial liabilities with another entity under
conditions that are potentially unfavourable to the Group
or a contract that will or may be settled in the Group’s own
equity instruments and is a non-derivative contract for
which the Group is or may be obliged to deliver a variable
number of its own equity instruments, or a derivative
contract over own equity that will or may be settled
other than by the exchange of a fixed amount of cash (or
another financial asset) for a fixed number of the Group’s
own equity instruments.
Financial liabilities are classified as ‘other financial
liabilities’ as the Group does not have any financial
liabilities that are classified or designated as at FVTPL.
2.
Basis of Consolidation (continued)
2.8
Financial instruments (continued)
104
Other financial liabilities
Other financial liabilities, including deposits and
borrowings, are initially measured at fair value, net
of transaction costs. Other financial liabilities are
subsequently measured at amortised cost using the
effective interest method.
The effective interest method is a method of calculating
the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The EIR is the
rate that exactly discounts estimated future cash payments
through the expected life of the financial liability, or,
where appropriate, a shorter period, to the net carrying
amount on initial recognition.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and
only when, the Group’s obligations are discharged,
cancelled or have expired. The difference between the
carrying amount of the financial liability derecognised and
the consideration paid and payable is recognised in profit
or loss.
When the Group exchanges with the existing lender
one debt instrument into another one with substantially
different terms, such exchange is accounted for as an
extinguishment of the original financial liability and the
recognition of a new financial liability.
Financial guarantee contracts
A financial guarantee contract is a contract that requires
the issuer to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails
to make payments when due in accordance with the terms
of a debt instrument.
Financial guarantee contracts issued by a group entity are
initially measured at their fair values and, if not designated
as at FVTPL and not arising from a transfer of a financial
asset, are subsequently measured at the higher of:
• the amount of the loss allowance determined in
accordance with IFRS 9; and
• the amount initially recognised less, where
appropriate, cumulative amount of income recognised
in accordance with the Group’s revenue recognition
policies.
Financial guarantee contracts not designated at FVTPL are
presented as provisions on the consolidated statement of
financial position and the re-measurement is presented in
other income.
The Group has not designated any financial guarantee
contracts as at FVTPL.
2.9 Property, plant and equipment
Property, plant and equipment is stated at historical cost
less accumulated depreciation. Depreciation is calculated
on the basis of straight line to write-off the cost of such
assets to their residual values over their estimated lives
as follows:
Furniture and fittings
11.25% to 15%
Building improvements
10%
Motor vehicles
30%
Office equipment
15% to 30%
The assets’ residual values and useful lives are reviewed,
and adjusted, if appropriate at each balance date. Gains
and losses on disposal (being the difference between
the carrying value at the time of sale or disposal and the
proceeds received) are taken into account in determining
operating profit for the year. Repairs and maintenance
costs are charged to statement of comprehensive income,
when the expenditure is incurred.
2.10 Intangible assets and other
non-financial assets
Goodwill
Goodwill is measured as described in note 36 Goodwill
having an indefinite useful life is not amortised but it
is tested for impairment annually or more frequently if
events or changes in circumstances indicate that it might
be impaired, and is carried at cost less accumulated
impairment losses. Gains and losses on the disposal of
an entity include the carrying amount of goodwill relating
to the entity sold. Goodwill is allocated to cash-generating
units for the purpose of impairment testing. The allocation
is made to those cash-generating units or groups of
cash-generating units that are expected to benefit from
the business combination in which the goodwill arose.
The units or groups of units are identified at the lowest
level at which goodwill is monitored for internal
management purposes, being the operating segments.
Other non-financial assets
Other assets are tested for impairment whenever events
or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs of
disposal and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash inflows which
are largely independent of the cash inflows from other
assets or groups of assets cash-generating units (CGU).
Non-financial assets other than goodwill that suffered
impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.
2.
Basis of Consolidation (continued)
2.8
Financial instruments (continued)
105
Customer deposits relationship / intangible assets
A customer deposits relationship asset was recognised
with the acquisition of Maybank (PNG) Limited in 2015.
Also, the acquisition of Australian and New Zealand
(ANZ) Bank’s retail, commercial and SME banking
businesses in PNG on 23 September 2019 gave rise to
the recognition of core customer deposit relationship
intangible asset (note 20), representing the value, or
avoided cost, of having a deposit base from consumer
and business transaction accounts, savings accounts, term
deposits and other money market accounts that provide
a cheaper source of funding than alternative sources of
funding. The customer deposits relationship intangible
asset is amortised using the straight-line method over a
period of five years and three years on the Maybank and
ANZ acquisition respectively, and is stated at cost less
accumulated amortisation and impairment. The customer
deposits relationship intangible asset is also assessed for
any indication of impairment at each reporting date and
whenever there is an indicator that these may be impaired.
Software
Costs associated with maintaining computer software
programs are recognised as an expense as incurred.
Costs that are directly associated with identifiable and
unique software products controlled by the Group that
will probably generate economic benefits exceeding
costs beyond one year are recognised as intangible
assets. Direct costs include staff costs of the software
development team and an appropriate portion of
relevant overheads. Expenditure which enhances or
extends the performance of computer software programs
beyond their original specifications is recognised as a
capital improvement and added to the original cost of
the software. Computer software development costs
recognised as assets are amortised using the straight-line
method over their useful lives, not exceeding a period of
five years.
2.11 Provisions
Provisions are recognised when the Group has a present
legal or constructive obligation as a result of past events,
it is probable that outflow of resources embodying
economic benefits will be required to settle the obligation,
and a reliable estimate of the amount of the obligations
can be made.
2.12 Employee benefits
Short-term obligations
Provision is made for benefits accruing to employees in
respect of annual leave and other short term obligations
when it is probable that settlement will be required and
they are capable of being measured reliably.
Provisions made in respect of employee benefits
expected to be settled within twelve months, are
measured at their nominal values using the remuneration
rate expected to apply at the time of settlement.
Liabilities recognised in respect of employee benefits
which are not expected to be settled within twelve months
are measured as the present value of the estimated future
cash outflows to be made by the Group in respect of
services provided by employees up to reporting date.
The contributions in relation to employees of the Group
who contribute to defined contribution pension plans are
charged to the statement of comprehensive income in the
year to which they relate.
Share-based payments
Senior executive employees are entitled to participate
in a share ownership incentive scheme. The fair value
of share rights provided to senior executive employees
as share-based payments is recognised as an expense
with a corresponding increase in equity. The fair value
is measured at grant date and is recognised over the
period the services are received being the expected
vesting period at the end of which the senior executive
employees would become entitled to exercise their share
rights. The fair value of the share based payments is based
on the market price of the shares at grant date and market
vesting conditions upon which the rights were granted.
Non-market vesting conditions are taken into account by
adjusting the number of rights which will eventually vest.
Cash bonus
The Group recognises a liability and an expense for
bonuses based on a formula that takes into consideration
the profit attributable to the Company’s shareholders after
certain adjustments. The Group recognises a provision
where contractually obliged or where there is a past
practice that has created a constructive obligation.
2.13 Share capital and other equity accounts
Share capital
Ordinary shares are classified as equity. Incremental
costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax,
from the proceeds.
Dividends
Dividends on ordinary shares are recognised in equity
in the period in which they are declared by the
Company’s directors.
Reserves
Capital reserve comprises accumulated gains on
historic asset revaluation. Share-based payment reserve
comprises the fair value of unvested performance rights
as at the reporting date.
2.
Basis of Consolidation (continued)
2.10 Intangible assets and other non-financial assets (continued)
106
2.14 Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the
profit attributable to owners of the Company, excluding
any costs of servicing equity other than ordinary shares
by the weighted average number of ordinary shares
outstanding during the financial year (note 27(b)).
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into
account the after income tax effect of interest and other
financing costs associated with dilutive potential ordinary
shares, and the weighted average number of additional
ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential
ordinary shares.
2.15 Fiduciary activities
The Group provides custodian, trustee, corporate
administration, investment management and advisory
services to third parties, which involve the Group making
allocation and purchase and sale decisions in relation
to a wide range of financial instruments. Those assets
that are held in a fiduciary capacity are not included in
these consolidated financial statements. Details of such
investments held under trust may be found in note 30.
3.
Critical accounting estimates
and judgments
In the application of the Group’s accounting policies,
which are described in note 1, the directors are required
to make judgements that have a significant impact on
the amounts recognised and to make estimates and
assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on
historical experience and other factors that are considered
to be relevant. Actual results may differ from these
estimates. The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
estimate is revised if the revision affects only that period,
or in the period of the revision and future periods if the
revision affects both current and future periods.
The areas involving significant estimates or judgments are:
• Significant increase in credit risk – note 4
• Estimated allowance for loans and advances to
customers – note 17 and 4(b)
• Estimated goodwill impairment – note 37
• Valuation of unlisted shares
4.
Financial risk management
By its nature the Group’s activities are principally related
to the use of financial instruments. The Group accepts
deposits from customers at both fixed and floating rates
and for various periods and seeks to earn above-average
interest margins by investing these funds in high quality
assets. The Group seeks to increase these margins by
consolidating short-term funds and lending for longer
periods at higher rates whilst maintaining sufficient
liquidity to meet all claims that might fall due. The Group
raises its interest margins by obtaining above-average
margins, net of provisions, through lending to commercial
and retail borrowers with a range of credit standing.
The Group also enters into transactions denominated
in foreign currencies. This activity generally requires
the Group to take foreign currency positions in order to
exploit short-term movements to the foreign currency
market. The Board places trading limits on the level of
exposure that can be taken in relation to both overnight
and intra-day market positions.
Risk in the Group is managed by a system of delegated
limits. These limits set the maximum level of risks that
can be assumed by each operational unit and the Group
as a whole. The limits are delegated from the Board of
Directors to executive management and then to the
respective operational managers.
(a) Market risk
Market risk is the risk that movements in market factors,
such as foreign exchange rates, interest rates, credit
spreads and equity prices, will reduce the Group’s income
or the value of its portfolios.
The group is exposed to the following type of market risks:
(i)
Foreign exchange risk;
(ii)
Interest rate risk; and
(iii)
Equity price risk.
(i) Foreign exchange risk
The Group undertakes transactions denominated in
foreign currencies from time to time and resulting from
these activities, exposures in foreign currencies arise.
Though there are no specific hedging activities to
mitigate any currency risk, this exposure is monitored
by management on an ongoing basis.
2.
Basis of Consolidation (continued)
107
Exposure
The Group’s exposure to foreign currency risk at the end of the reporting period, expressed in PGK, was as follows:
K ‘000
USD
AUD
SGD
GBP
EUR
NZD
JPY
Others
31 December 2024
Cash balance
670
400
3
16
133
557
160
789
Due from other banks
113,159
10,190
1,772
10,006
955
801
204
6,460
Due to other banks
(3)
-
-
-
-
-
-
(99)
113,826
10,590
1,775
10,022
1,088
1,358
364
7,150
31 December 2023
Cash balance
177
51
135
87
145
589
178
149
Due from other banks
27,584
5,496
83
8,498
1,715
160
239
932
Due to other banks
(6,667)
(4,399)
(2,022)
-
-
-
-
(651)
21,094
1,148
(1,804)
8,585
1,860
749
417
430
Sensitivity
As shown in the table above, the Group is primarily exposed to changes in USD/PGK exchange rates. The sensitivity of
profit or loss to changes in the exchange rates arises mainly from US dollar denominated financial instruments.
Impact on statement of
comprehensive income in
K‘000
K‘000
2024
2023
USD/PGK – exchange rate – increase 10% (2023:10%)
(10,287)
(1,902)
USD/PGK – exchange rate – decrease 10% (2023:10%)
12,573
2,324
(ii) Interest rate risk
Interest rate risk in the statements of financial position
arises from the potential for a change in interest rate to
have an adverse effect on the earnings in the current
and future years. As interest rates and yield curves
change over time the Group may be exposed to a loss
in earnings due to the effects of interest rates on the
components of the statements of financial position.
Sensitivity to interest rates arises from mismatches in re-
pricing dates, cash flows and other characteristics of the
assets and their corresponding liability funding.
These mismatches are actively managed by the Assets
and Liabilities Committee (ALCO), which meets regularly
to review the effects of fluctuations in the prevailing levels
of market interest rates of the financial position and cash
flows of the Group.
4.
Financial risk management (continued)
(a)
Market risk (continued)
108
The following table risks summarises the Group’s exposure to interest rate risks:
Year ended 31 December 2024
Carrying amount
Average
interest rate
Assets
K ‘000
(% p.a.)
Cash and cash equivalents
529,810
0%
Central bank bills
762,088
3.84%
Loans and advances to customers
2,883,500
8.21%
Investments in Government Inscribed Stocks
93,331
9.74%
Liability
Due to customers
4,351,990
1.15%
Year ended 31 December 2023
Carrying amount
Average
interest rate
Assets
K ‘000
(% p.a.)
Cash and cash equivalents
396,840
0.21%
Central bank bills
1,236,496
3.62%
Loans and advances to customers
2,562,078
8.22%
Investments in Government Inscribed Stocks
157,554
9.02%
Liability
Due to customers
4,344,571
1.15%
Sensitivity
Given the profile of assets and liabilities at 31 December 2024 and prevailing interest rates, a 200 basis points
increase/decrease in market rates in relation to interest bearing assets and liabilities will result in a maximum
of K1,665,217 (2023: K167,967) decrease/increase in net interest income at a Group level.
4.
Financial risk management (continued)
(a)
Market risk (continued)
109
(iii) Equity price risk
The Group is exposed to equity securities price risk due
to the listed shares traded on stock exchange. To manage
its price risks arising from financial assets at fair value
through profit or loss, the Group diversifies its portfolio.
Diversification of the portfolio is done in accordance with
the limits set by the Group. The Group’s financial assets at
fair value through profit or loss are publicly traded on the
Port Moresby Stock Exchange (PNGX).
Sensitivity
The sensitivity analysis below has been determined based
on the exposure to equity price risks at the end of the
reporting period. If equity prices had been 5% higher/
lower, net profit for the year ended 31 December 2024
and net assets as of balance date would have been
affected by K2,280,316 (2023: K899,745).
Impact on statement of comprehensive income
in K ‘000
2024
2023
Equity prices – increase 5% (2023:5%)
2, 083
900
Equity prices – decrease 5% (2023:5%)
(2,083)
(900)
(b) Credit risk
Credit risk is the risk that a customer or counterparty will
default on its contractual obligations resulting in financial
loss to the Group. The Group’s main income-generating
activity is lending to customers and therefore credit risk
is a principal risk. Credit risk mainly arises from loans and
advances to customers and other banks (including related
commitments to lend such as loan or credit card facilities)
and investments in debt securities. The Group considers
all elements of credit risk exposure such as counterparty
default risk, geographical risk and sector risk for risk
management purposes.
(i)
Credit risk management
The Group’s credit committee is responsible for managing
the Group’s credit risk by:
• Ensuring that the Group has appropriate credit risk
practices, including an effective system of internal
control, to consistently determine adequate allowances
in accordance with the Group’s stated policies and
procedures, IFRS and relevant supervisory guidance.
• Identifying, assessing and measuring credit risk
across the Group, from an individual instrument
to a portfolio level.
• Creating credit policies to protect the Group against
the identified risks including the requirements to obtain
collateral from borrowers, to perform robust ongoing
credit assessment of borrowers and to continually
monitor exposures against internal risk limits.
• Limiting concentrations of exposure by type of asset,
counterparties, industry, credit rating, geographic
location etc.
• Establishing a robust control framework regarding the
authorisation structure for the approval and renewal
of credit facilities.
• Developing and maintaining the Group’s risk grading
to categorise exposures according to the degree
of risk of default. Risk grades are subject to regular
reviews.
• Developing and maintaining the Group’s processes
for measuring ECL including monitoring of credit risk,
incorporation of forward looking information and the
method used to measure ECL.
• Ensuring that the Group has policies and procedures
in place to appropriately maintain and validate
models used to assess and measure ECL.
• Establishing a sound credit risk accounting
assessment and measurement process that provides
it with a strong basis for common systems, tools and
data to assess credit risk and to account for ECL.
Providing advice, guidance and specialist skills to
business units to promote best practice throughout
the Group in the management of credit risk.
The internal audit function performs regular audits making
sure that the established controls and procedures are
adequately designed and implemented.
(ii) Significant increase in credit risk
As explained in note 1 the Group monitors all financial
assets that are subject to impairment requirements to
assess whether there has been a significant increase in
credit risk since initial recognition. If there has been a
significant increase in credit risk the Group will measure the
loss allowance based on lifetime rather than 12-month ECL.
(iii) Incorporation of forward-looking information
The Group uses forward-looking information that is
available without undue cost or effort in its assessment
of significant increase of credit risk as well as in its
measurement of ECL.
4.
Financial risk management (continued)
(a)
Market risk (continued)
110
(iv) Measurement of ECL
The key inputs used for measuring ECL are (1) Probability
of default (PD), (2) Loss given default (LGD) and (3)
Exposure at default (EAD). These figures are generally
derived from internally developed statistical models
and other historical data and they are adjusted to reflect
probability-weighted forward-looking information.
PD is an estimate of the likelihood of default over a
given time horizon. It is estimated as at a point in time.
The calculation is based on rating models and assessed
using rating tools tailored to the various categories of
counterparties and exposures. These models are based
on market data (where available), as well as internal data
comprising both quantitative and qualitative factors.
LGD is an estimate of the loss arising on default. It is
based on the difference between the contractual cash
flows due and those that the lender would expect to
receive, taking into account cash flows from any collateral.
EAD is an estimate of the exposure at a future default
date, taking into account expected changes in the
exposure after the reporting date, including repayments
of principal and interest, and expected drawdowns on
committed facilities.
(v) Groupings based on shared risks characteristics
In determining the ECL, the financial instruments are
grouped on the basis of shared risk characteristics, such
as instrument type, credit risk grade, collateral type, the
value of collateral relative to financial asset (loan-to-
value (LTV) ratios) etc. The groupings are reviewed on a
regular basis to ensure that each group is comprised of
homogenous exposures.
(vi) Credit quality
The Group monitors credit risk per class of financial instrument. The table below outlines the classes identified, as well as
the financial statement line item and the note that provides an analysis of the items included in the financial statement line
for each class of financial instrument:
Class of financial instrument
Financial statement line
Note
Cash and cash equivalents at amortised cost
Cash and cash equivalents
Note 13
Treasury and central bank bills at amortised cost
Central bank bills
Note 14
Regulatory deposits at amortised cost
Regulatory deposits
Note 15
Loans and advances to customers at amortised cost
Loans and advances to customers
Note 17
Investments in Government Inscribed Stocks at amortised cost
Investments in Government Inscribed Stocks
Note 18
Bank guarantees
Contingent liabilities
Note 33
Other financial assets
Other assets
Note 22
An analysis of the Group’s credit risk concentrations per class of financial asset is provided in the following tables.
Unless specifically indicated, for financial assets, the amounts in the table represent gross carrying amounts.
For documentary letters of credit and bank guarantees, the amounts in the table represent the amounts committed
or guaranteed, respectively.
4.
Financial risk management (continued)
(b)
Credit risk (continued)
111
Consolidated
31 December 2024
K‘000
31 December 2023
K‘000
Cash and cash equivalents at amortised cost
Concentration by sector
Cash on hand
177,076
173,876
With central bank (exchange settlement account)
199,839
168,972
With other banks
152,895
53,992
Total
529,810
396,840
Concentration by region
Papua New Guinea
387,179
365,871
Offshore*
142,631
30,969
Total
529,810
396,840
*Bank accounts maintained in Australia, New Zealand, Great Britain, Singapore, Malaysia, Philippines, Japan, India and Turkey
Parent
31 December 2024
K‘000
31 December 2023
K‘000
Cash and cash equivalents at amortised cost
Concentration by sector
Cash on hand
177,076
173,876
With central bank (exchange settlement account)
199,839
168,972
With other banks
149,798
48,509
Total
526,713
391,357
Concentration by region
Papua New Guinea
387,179
365,871
Offshore*
139,534
25,486
Total
526,713
391,357
*Bank accounts maintained in Australia, New Zealand, Great Britain, Singapore, Malaysia, Philippines, Japan, India and Turkey
4.
Financial risk management (continued)
(b)
Credit risk (continued)
112
Consolidated
31 December 2024
K‘000
31 December 2023
K‘000
Treasury and central bank bills at amortised cost
Concentration by sector
With central banks
762,088
1,236,496
Total
762,088
1,236,496
Concentration by region
Papua New Guinea
762,088
1,236,496
Total
762,088
1,236,496
Parent
31 December 2024
K‘000
31 December 2023
K‘000
Treasury and central bank bills at amortised cost
Concentration by sector
With central banks
762,088
1,236,496
Total
762,088
1,236,496
Concentration by region
Papua New Guinea
762,088
1,236,496
Total
762,088
1,236,496
Consolidated
31 December 2024
K‘000
31 December 2023
K‘000
Regulatory deposits at amortised cost
Concentration by sector
With central banks
522,784
433,274
Total
522,784
433,274
Concentration by region
Papua New Guinea
522,784
433,274
Total
522,784
433,274
Parent
31 December 2024
K‘000
31 December 2023
K‘000
Regulatory deposits at amortised cost
Concentration by sector
With central banks
522,784
433,274
Total
522,784
433,274
Concentration by region
Papua New Guinea
522,784
433,274
Total
522,784
433,274
4.
Financial risk management (continued)
(b)
Credit risk (continued)
113
Consolidated
31 December 2024
K‘000
31 December 2023
K‘000
Loans and advances to customers at amortised cost
Concentration by sector
Individuals:
Mortgages
634,701
601,556
Unsecured lending
99,450
88,812
Corporate entities:
Agriculture, Forestry & Fishing
10,968
4,101
Mining
11,860
15,486
Manufacturing
24,768
21,079
Electrical, Gas & Water
12,207
869
Building and Construction
251,961
183,612
Wholesale & Retail
846,860
770,868
Hotel & Restaurants
95,599
75,058
Transport & Storage
76,335
67,775
Financial Intermediation
575
655
Real Estate/Renting/Business Services
426,880
360,122
Post & Telecommunication
96,730
96,731
Equipment Hire
20,921
34,037
Other Business
338,021
290,705
Personal Banking
2,972
3,078
Total
2,950,808
2,614,544
Concentration by region
Papua New Guinea
2,950,808
2,614,544
Total
2,950,808
2,614,544
4.
Financial risk management (continued)
(b)
Credit risk (continued)
114
Parent
Loans and advances to customers at amortised cost
31 December 2024
K‘000
31 December 2023
K‘000
Concentration by sector
Individuals:
Mortgages
634,701
601,556
Unsecured lending
99,450
88,812
Corporate entities:
Agriculture, Forestry & Fishing
10,968
4,101
Mining
11,860
15,486
Manufacturing
24,768
21,079
Electrical, Gas & Water
12,207
869
Building and Construction
251,961
183,612
Wholesale & Retail
846,860
770,868
Hotel & Restaurants
95,599
75,058
Transport & Storage
76,335
67,775
Financial Intermediation
575
655
Real Estate/Renting/Business Services
426,880
360,122
Post & Telecommunication
96,730
96,731
Equipment Hire
20,921
34,037
Other Business
325,757
286,709
Personal Banking
2,972
3,078
Total
2,938,544
2,610,548
Concentration by region
Papua New Guinea
2,938,544
2,610,548
Total
2,938,544
2,610,548
Consolidated
Investments in Government Inscribed Stocks at amortised cost
31 December 2024
K‘000
31 December 2023
K‘000
Concentration by sector
Sovereign
94,620
159,856
Total
94,620
159,856
Concentration by region
Papua New Guinea
94,620
159,856
Total
94,620
159,856
Parent
Investments in Government Inscribed Stocks at amortised cost
31 December 2024
K‘000
31 December 2023
K‘000
Concentration by sector
Sovereign
94,620
159,856
Total
94,620
159,856
Concentration by region
Papua New Guinea
94,620
159,856
Total
94,620
159,856
4.
Financial risk management (continued)
(b)
Credit risk (continued)
115
Consolidated
Bank guarantees
31 December 2024
K‘000
31 December 2023
K‘000
Concentration by sector
Corporate entities:
Agriculture, Forestry & Fishing
-
1,121
Mining
5,190
10,439
Manufacturing
2,150
2,000
Wholesale & Retail
320
531
Building and Construction
210
9,213
Transport & Storage
660
1,064
Other Business
3,833
2,465
Total
12,363
26,833
Concentration by region
Papua New Guinea
12,363
26,833
Total
12,363
26,833
Parent
Bank guarantees
31 December 2024
K‘000
31 December 2023
K‘000
Concentration by sector
Corporate entities:
Agriculture, Forestry & Fishing
-
1,121
Mining
5,190
10,439
Manufacturing
2,150
2,000
Wholesale & Retail
320
531
Building and Construction
210
9,213
Transport & Storage
660
1,064
Other Business
3,833
2,465
Total
12,363
26,833
Concentration by region
Papua New Guinea
12,363
26,833
Total
12,363
26,833
The amount of bank guarantees disclosed above represent notional amount guaranteed being the maximum exposure
to credit risk.
4.
Financial risk management (continued)
(b)
Credit risk (continued)
116
An analysis of the Group’s credit risk exposure per class of financial asset and “stage” without taking into account the
effects of any collateral or other credit enhancements is provided in the following table. Unless specifically indicated,
for financial assets, the amounts in the table represent gross carrying amounts. For loan commitments and financial
guarantee contracts, the amounts in the table represent the amounts committed or guaranteed, respectively.
Consolidated
31 December 2024
Stage 1
Stage 2
Stage 3
POCI
Total
K‘000
K‘000
K‘000
K‘000
K‘000
Cash and cash equivalents
529,810
-
-
-
529,810
Treasury and central bank bills
762,088
-
-
-
762,088
Regulatory deposits
522,784
-
-
-
522,784
Loans and advances
2,577,492
45,747
318,746
8,823
2,950,808
Investments in Government Inscribed Stocks
94,620
-
-
-
94,620
Other financial assets
139,475
-
-
-
139,475
Total gross carrying amount
4,626,269
45,747
318,746
8,823
4,999,585
Loss allowance
(32,817)
(3,701)
(36,069)
-
(72,587)
Net carrying amount
4,593,452
42,046
282,677
8,823
4,926,998
Consolidated
31 December 2023
Stage 1
Stage 2
Stage 3
POCI
Total
K‘000
K‘000
K‘000
K‘000
K‘000
Cash and cash equivalents
396,840
-
-
-
396,840
Treasury and central bank bills
1,236,496
-
-
-
1,236,496
Regulatory deposits
433,274
-
-
-
433,274
Loans and advances
2,401,427
46,756
157,597
8,764
2,614,544
Investments in Government Inscribed Stocks
159,856
-
-
-
159,856
Other financial assets
123,984
-
-
-
123,984
Total gross carrying amount
4,751,877
46,756
157,597
8,764
4,964,994
Loss allowance
(25,174)
(5,480)
(28,104)
-
(58,758)
Net carrying amount
4,726,703
41,276
129,493
8,764
4,906,236
4.
Financial risk management (continued)
(b)
Credit risk (continued)
117
4.
Financial risk management (continued)
(b)
Credit risk (continued)
Parent
31 December 2024
Stage 1
Stage 2
Stage 3
POCI
Total
K‘000
K‘000
K‘000
K‘000
K‘000
Cash and cash equivalents
526,713
-
-
-
526,713
Treasury and central bank bills
762,088
-
-
-
762,088
Regulatory deposits
522,784
-
-
-
522,784
Loans and advances
2,568,494
45,363
315,864
8,823
2,938,544
Investments in Government Inscribed Stocks
94,620
-
-
-
94,620
Other financial assets
141,083
-
-
-
141,083
Total gross carrying amount
4,615,782
45,363
315,864
8,823
4,985,832
Loss allowance
(32,817)
(3,701)
(34,848)
-
(71,366)
Net carrying amount
4,582,965
41,662
281,016
8,823
4,914,466
Parent
31 December 2023
Stage 1
Stage 2
Stage 3
POCI
Total
K‘000
K‘000
K‘000
K‘000
K‘000
Cash and cash equivalents
391,357
-
-
-
391,357
Treasury and central bank bills
1,236,496
-
-
-
1,236,496
Regulatory deposits
433,274
-
-
-
433,274
Loans and advances
2,398,406
46,461
156,917
8,764
2,610,548
Investments in Government Inscribed Stocks
159,856
-
-
-
159,856
Other financial assets
119,832
-
-
-
119,832
Total gross carrying amount
4,739,221
46,461
156,917
8,764
4,951,363
Loss allowance
(25,176)
(5,478)
(27,439)
-
(58,093)
Net carrying amount
4,714,045
40,983
129,478
8,764
4,893,270
In addition to the above, the Group has issued financial guarantee contracts with a notional value of K12,362,807
(2023: K 26,833,000) which are secured against cash and term deposits for which loss allowance of NIL (2023: NIL) has
been recognised.
118
This table summarises the loss allowance as of the year end by class of exposure/asset.
Consolidated
Loss allowance by classes
31 December 2024
K‘000
31 December 2023
K‘000
Loans and advances to customers at amortised cost
67,308
52,466
Investments in Government Inscribed Stocks at amortised cost
1,289
2,302
Other financial assets
3,990
3,990
Total
72,587
58,758
Parent
Loss allowance by classes
31 December 2024
K‘000
31 December 2023
K‘000
Loans and advances to customers at amortised cost
66,087
51,801
Investments in Government Inscribed Stocks at amortised cost
1,289
2,302
Other financial assets
3,990
3,990
Total
71,366
58,093
Other financial assets comprise of miscellaneous receivables from individuals on which lifetime ECL has been recognised.
No ECL has been recognised on other classes of financial assets either due to negligible probability of default or the
assets being fully collateralised by high quality liquid assets.
Table below summarises the movement in ECL during the year by class of financial assets:
Consolidated
Loss allowance by classes
Balance at
01 January 2024
K‘000
ECL recognised
during the year
K‘000
Write-offs
K‘000
Bad debt
Recoveries
K‘000
Balance at
31 December 2024
K‘000
Loans and advances to customers
at amortised cost
52,466
19,164
(12,320)
7,998
67,308
Investments in Government
Inscribed Stocks at amortised cost
2,302
(1,013)
-
-
1,289
Other financial assets
3,990
-
-
-
3,990
Total
58,758
18,151
(12,320)
7,998
72,587
4.
Financial risk management (continued)
(b)
Credit risk (continued)
119
Consolidated
Loss allowance by classes
Balance at
01 January 2023
K‘000
ECL recognised
during the year
K‘000
Write-offs
K‘000
Bad debt
Recoveries
K‘000
Balance at
31 December 2023
K‘000
Loans and advances to customers
at amortised cost
42,497
9,758
(288)
499
52,466
Investments in Government
Inscribed Stocks at amortised cost
2,231
71
-
-
2,302
Other financial assets
3,990
-
-
-
3,990
Total
48,718
9,829
(288)
499
58,758
Parent
Loss allowance by classes
Balance at
01 January 2024
K‘000
ECL recognised
during the year
K‘000
Write-offs
K‘000
Bad debt
Recoveries
K‘000
Balance at
31 December 2024
K‘000
Loans and advances to customers
at amortised cost
51,801
18,606
(12,320)
7,999
66,087
Investments in Government
Inscribed Stocks at amortised cost
2,302
(1,013)
-
-
1,289
Other financial assets
3,990
-
-
-
3,990
Total
58,093
17,593
(12,320)
7,999
71,366
Parent
Loss allowance by classes
Balance at
01 January 2023
K‘000
ECL recognised
during the year
K‘000
Write-offs
K‘000
Bad debt
Recoveries
K‘000
Balance at
31 December 2023
K‘000
Loans and advances to customers
at amortised cost
41,479
10,111
(288)
499
51,801
Investments in Government
Inscribed Stocks at amortised cost
2,231
71
-
-
2,302
Other financial assets
3,990
-
-
-
3,990
Total
47,700
10,182
(288)
499
58,093
4.
Financial risk management (continued)
(b)
Credit risk (continued)
120
Consolidated
31 December 2024
Stage 1
Stage 2
Stage 3
12-month ECL
Lifetime ECL
Lifetime ECL
POCI
Total
Loss allowance – Loans and advances to
customers at amortised cost
K‘000
K‘000
K‘000
K‘000
K‘000
Loss allowance as at 01 January
18,882
5,481
28,103
-
52,466
Changes in the loss allowance
- Transfer to stage 1
1,216
(1,216)
-
-
-
- Transfer to stage 2
(510)
510
-
-
-
- Transfer to stage 3
(837)
(3,466)
4,303
-
-
- Write-offs
-
-
(12,320)
-
(12,320)
New financial assets originated or purchased
18,224
3,235
26,529
-
47,988
Financial assets that have been derecognised
(9,437)
(843)
(10,546)
-
(20,826)
Loss allowance as at 31 December
27,538
3,701
36,069
-
67,308
Consolidated
31 December 2023
Stage 1
Stage 2
Stage 3
12-month ECL
Lifetime ECL
Lifetime ECL
POCI
Total
Loss allowance – Loans and advances to
customers at amortised cost
K‘000
K‘000
K‘000
K‘000
K‘000
Loss allowance as at 01 January
17,460
5,458
19,579
-
42,497
Changes in the loss allowance
- Transfer to stage 1
1,066
(543)
(523)
-
-
- Transfer to stage 2
(1,457)
2,766
(1,309)
-
-
- Transfer to stage 3
(4,552)
(1,266)
5,818
-
-
- Write-offs
-
-
(288)
-
(288)
New financial assets originated or purchased
13,810
4,363
10,883
-
29,056
Financial assets that have been derecognised
(7,445)
(5,297)
(6,057)
-
(18,799)
Loss allowance as at 31 December
18,882
5,481
28,103
-
52,466
4.
Financial risk management (continued)
(b)
Credit risk (continued)
121
Parent
31 December 2024
Stage 1
Stage 2
Stage 3
12-month ECL
Lifetime ECL
Lifetime ECL
POCI
Total
Loss allowance – Loans and advances to
customers at amortised cost
K‘000
K‘000
K‘000
K‘000
K‘000
Loss allowance as at 01 January
18,884
5,479
27,438
-
51,801
Changes in the loss allowance
- Transfer to stage 1
1,216
(1,216)
-
-
-
- Transfer to stage 2
(510)
510
-
-
-
- Transfer to stage 3
(837)
(3,466)
4,303
-
-
- Write-offs
-
-
(12,320)
-
(12,320)
New financial assets originated or purchased
18,224
3,235
25,951
-
47,410
Financial assets that have been derecognised
(9,439)
(841)
(10,524)
-
(20,804)
Loss allowance as at 31 December
27,538
3,701
34,848
-
66,087
Parent
31 December 2023
Stage 1
Stage 2
Stage 3
12-month ECL
Lifetime ECL
Lifetime ECL
POCI
Total
Loss allowance – Loans and advances to
customers at amortised cost
K‘000
K‘000
K‘000
K‘000
K‘000
Loss allowance as at 01 January
17,462
5,456
18,561
-
41,479
Changes in the loss allowance
- Transfer to stage 1
1,066
(543)
(523)
-
-
- Transfer to stage 2
(1,457)
2,766
(1,309)
-
-
- Transfer to stage 3
(4,552)
(1,266)
5,818
-
-
- Write-offs
-
-
(288)
-
(288)
New financial assets originated or purchased
13,810
4,363
10,847
-
29,020
Financial assets that have been derecognised
(7,445)
(5,297)
(5,668)
-
(18,410)
Loss allowance as at 31 December
18,884
5,479
27,438
-
51,801
4.
Financial risk management (continued)
(b)
Credit risk (continued)
122
Consolidated
31 December 2024
Stage 1
Stage 2
Stage 3
12-month ECL
Lifetime ECL
Lifetime ECL
POCI
Total
Loans and advances to customers at
amortised cost
K‘000
K‘000
K‘000
K‘000
K‘000
Gross carrying amount as at 01 January
2,401,427
46,756
157,597
8,764
2,614,544
Changes in the gross carrying amount
- Transfer to stage 1
3,663
(3,663)
-
-
-
- Transfer to stage 2
(33,520)
33,520
-
-
-
- Transfer to stage 3
(144,777)
(26,045)
170,822
-
-
- Write-offs
-
-
(12,320)
-
(12,320)
New financial assets originated or purchased
900,283
12,804
47,088
59
960,234
Financial assets that have been derecognised
(549,584)
(17,625)
(44,441)
-
(611,650)
Gross carrying amount as at 31 December
2,577,492
45,747
318,746
8,823
2,950,808
Consolidated
31 December 2023
Stage 1
Stage 2
Stage 3
12-month ECL
Lifetime ECL
Lifetime ECL
POCI
Total
Loans and advances to customers at
amortised cost
K‘000
K‘000
K‘000
K‘000
K‘000
Gross carrying amount as at 01 January
1,899,383
110,370
178,079
13,586
2,201,418
Changes in the gross carrying amount
- Transfer to stage 1
55,034
(38,942)
(16,092)
-
-
- Transfer to stage 2
(17,860)
20,186
(2,326)
-
-
- Transfer to stage 3
(21,478)
(14,970)
36,448
-
-
- Write-offs
-
-
(499)
-
(499)
New financial assets originated or purchased
869,174
13,201
22,471
-
904,846
Financial assets that have been derecognised
(382,826)
(43,089)
(60,484)
(4,822)
(491,221)
Gross carrying amount as at 31 December
2,401,427
46,756
157,597
8,764
2,614,544
4.
Financial risk management (continued)
(b)
Credit risk (continued)
123
Parent
31 December 2024
Stage 1
Stage 2
Stage 3
12-month ECL
Lifetime ECL
Lifetime ECL
POCI
Total
Loans and advances to customers at
amortised cost
K‘000
K‘000
K‘000
K‘000
K‘000
Gross carrying amount as at 01 January
2,398,406
46,461
156,917
8,764
2,610,548
Changes in the gross carrying amount
- Transfer to stage 1
3,663
(3,663)
-
-
-
- Transfer to stage 2
(33,520)
33,520
-
-
-
- Transfer to stage 3
(144,777)
(26,045)
170,822
-
-
- Write-offs
-
-
(12,320)
-
(12,320)
New financial assets originated or purchased
891,285
12,419
44,856
59
948,619
Financial assets that have been derecognised
(546,563)
(17,329)
(44,411)
-
(608,303)
Gross carrying amount as at 31 December
2,568,494
45,363
315,864
8,823
2,938,544
Parent
31 December 2023
Stage 1
Stage 2
Stage 3
12-month ECL
Lifetime ECL
Lifetime ECL
POCI
Total
Loans and advances to customers at
amortised cost
K‘000
K‘000
K‘000
K‘000
K‘000
Gross carrying amount as at 01 January
1,895,673
110,248
176,935
13,586
2,196,442
Changes in the gross carrying amount
- Transfer to stage 1
55,034
(38,942)
(16,092)
-
-
- Transfer to stage 2
(17,860)
20,186
(2,326)
-
-
- Transfer to stage 3
(21,478)
(14,964)
36,442
-
-
- Write-offs
-
-
(499)
-
(499)
New financial assets originated or purchased
866,159
12,899
22,443
-
901,501
Financial assets that have been derecognised
(379,122)
(42,966)
(59,986)
(4,822)
(486,896)
Gross carrying amount as at 31 December
2,398,406
46,461
156,917
8,764
2,610,548
4.
Financial risk management (continued)
(b)
Credit risk (continued)
124
The table below provides an analysis of the gross carrying amount of loans and advances to customers by past due status.
Consolidated
Year ended 2024
Year ended 2023
Loans and advances to customers
Gross carrying amount
K‘000
Loss allowance
K‘000
Gross carrying amount
K‘000
Loss allowance
K‘000
0-29 days
2,647,023
28,138
2,401,297
25,190
30-59 days
48,976
3,270
33,137
2,835
60-89 days
17,255
1,129
15,539
1,108
90-180 days
45,542
6,485
22,348
3,526
More than 181 days
192,012
28,286
142,223
19,807
Total
2,950,808
67,308
2,614,544
52,466
Parent
Year ended 2024
Year ended 2023
Loans and advances to customers
Gross carrying amount
K‘000
Loss allowance
K‘000
Gross carrying amount
K‘000
Loss allowance
K‘000
0-29 days
2,638,026
28,138
2,398,277
25,190
30-59 days
48,743
3,270
32,921
2,835
60-89 days
17,102
1,129
15,459
1,108
90-180 days
43,385
5,950
22,342
3,524
More than 181 days
191,288
27,600
141,549
19,144
Total
2,938,544
66,087
2,610,548
51,801
4.
Financial risk management (continued)
(b)
Credit risk (continued)
125
Collateral held as security and other credit enhancements
The Group holds collateral or other credit enhancements
to mitigate credit risk associated with financial assets.
The main types of collateral and the types of assets these
are associated with are listed in the table below.
Exposure type
Type of collateral held
Mortgage lending
Mortgage over residential
property
Personal lending
Mortgage over residential
property / bill of sale
Corporate lending
Mortgage over commercial
property
Investment securities
Sovereign guarantee
Lease receivables
Charge over property
and equipment
Bank guarantee and
documentary letters of credit
Charge over cash deposit
In addition to the collateral included in the table above,
the Group holds other types of collateral and credit
enhancements, such as second charges, floating charges
and guarantees for which specific values are not
generally available.
Mortgage lending
The Group holds mainly residential properties as collateral
for the mortgage loans it grants to customers. In some
cases it does hold cash as collateral. It monitors its
exposure to retail mortgage lending using a Loan
To Discounted Value (LTDV) ratio. At origination, the
Group lends based on a discounted collateral value
which is calculated at 80% of the market value at that
time. This becomes the Value definition for the LTDV.
The Group then lends up to 100% of this Value. The
following table reflects the exposure by ranges based
on this methodology. The Group believes that this
methodology provides further risk reduction in case of
changes in market value. For credit-impaired loans the
value of collateral is based on the most recent valuations.
Consolidated
Year ended
2024
Year ended
2023
Mortgage lending LTDV ratio
Gross
carrying
amount
K‘000
Gross
carrying
amount
K‘000
Less than 50%
64,370
68,556
51-75%
86,721
82,524
75-90%
62,473
55,401
90-100%
177,877
166,144
More than 100%
243,260
228,931
Total
634,701
601,556
Parent
Year ended
2024
Year ended
2023
Mortgage lending LTDV ratio
Gross
carrying
amount
K‘000
Gross
carrying
amount
K‘000
Less than 50%
64,370
68,556
51-75%
86,721
82,524
75-90%
62,473
55,401
90-100%
177,877
166,144
More than 100%
243,260
228,931
Total
634,701
601,556
4.
Financial risk management (continued)
(b)
Credit risk (continued)
126
Consolidated
Year ended
2024
Year ended
2023
Credit impaired – Mortgage
lending LTDV ratio
Gross
carrying
amount
K‘000
Gross
carrying
amount
K‘000
Less than 50%
10,442
7,899
51-75%
18,386
12,278
75-90%
9,939
7,631
90-100%
10,822
4,927
More than 100%
33,742
23,846
Total
83,331
56,581
Parent
Year ended
2024
Year ended
2023
Credit impaired – Mortgage
lending LTDV ratio
Gross
carrying
amount
K‘000
Gross
carrying
amount
K‘000
Less than 50%
10,442
7,899
51-75%
18,386
12,278
75-90%
9,939
7,631
90-100%
10,822
4,927
More than 100%
33,742
23,846
Total
83,331
56,581
Personal lending
The Group’s personal lending portfolio consists of
secured and unsecured loans as follows:
Consolidated and Parent
Year ended
2024
K‘000
Year ended
2023
K‘000
Secured
634,701
601,556
Unsecured
99,450
88,812
Total
734,151
690,368
For secured loans, the Group requires formal valuation of
collateral to be performed prior to approval of the loan
facility. The valuation is conducted by the external firm
of valuers independent of the Group who are required
to meet certain minimum standards as per the Group’s
policy. Collateral value determined by the valuer is further
discounted by 20-30% before determining the facility
limit. The discounted value of the collateral must exceed
the facility limit by at least 12.5% to allow for sufficient
buffer should there be any adverse movement in value
due change in macroeconomic indicators.
The collateral value is updated when the facility is
classified as stage 3 or at least every 2 years. The Group
monitors the collateral value on an ongoing basis and
in event of any indicator which may result in significant
decline will require the fresh valuation to be performed.
As at 31 December 2024, the portfolio of secured
personal lending is entirely secured by eligible collateral.
For unsecured loans, the Group takes a higher level
of return to reflect the credit risk. However, credit risk
standards are maintained to ensure a reasonable standard
of debt servicing is proven.
4.
Financial risk management (continued)
(b)
Credit risk (continued)
127
Corporate lending
The most relevant indicator of corporate customers’
creditworthiness is an analysis of their financial
performance and their liquidity, leverage, management
effectiveness and growth ratios. In addition, the Group also
requires collaterals and guarantees to secure the corporate
loans. Similar to personal lending, collaterals are required
to be valued by independent firm of valuers before the
facility is approved. The approved facility limit is equal to
or less than the assessed value of the collateral discounted
by 10-50% to allow for sufficient buffer should there be
any adverse movement in the value due to change in
macroeconomic indicators. Collateral values are updated
at least every 2 years if there are any changes to the loan
facilities or if the facility is classified as stage 3 loan. The
Group monitors the collateral value on an ongoing basis
and in event of any indicator which may result in significant
decline will require the fresh valuation to be performed.
As at 31 December 2024, the portfolio of the corporate
lending is fully collateralised by eligible collateral.
Investment securities
The Group holds Investments in Government Inscribed
Stocks measured at amortised cost with a carrying
amount of K93,331,180 (2023: K157,554,061) which
are collateralised by sovereign guarantee.
Bank guarantee and documentary letters of credit
Bank guarantees and documentary letters of credit are
fully collateralised by charge over the cash deposits.
(c) Liquidity risk
Liquidity risk is the risk of being unable to meet financial
obligations as they fall due. The Group’s liquidity and
funding risks are governed by a policy framework which is
approved by the Board of Directors. Liquidity and funding
positions and associated risks are overseen by the ALCO.
The following outlines the Group’s approach to liquidity
and funding risk management focusing on conditions
brought on by the current global economic environment:
• ensuring the liquidity management framework is
compatible with local regulatory requirements,
• daily liquidity reporting and scenario analysis to
quantify the Group’s positions,
• targeting commercial and corporate customers’
liability compositions,
• intense monitoring of detail daily reports to alert
management and directors of abnormalities, and
• arranging back up facilities to protect against
adverse funding conditions and to support
day-to-day operations.
The Group is monitoring its liquidity contingency plans,
lending requirements and guidelines which include:
• the monitoring of issue severity/stress levels with
high level diligence,
• early warning signals indicative of an approaching
issue and a mechanism to monitor and report these
against signals,
• action plans and courses of action to account for early
warning signals as noted above,
• management reporting at a higher level,
• maintenance of contractual obligations in regards to
deposits, and
• assigned responsibilities for internal and external
written communications.
4.
Financial risk management (continued)
(b)
Credit risk (continued)
128
Maturities of financial assets and liabilities
The table below presents a maturity analysis of the Group’s financial liabilities including issued financial guarantee
contracts and corresponding analysis of financial assets held to manage the inherent liquidity risk using undiscounted
contractual cash flows associated with those assets and liabilities.
Consolidated
Up to 1
month
1 to 3
months
4 to 12
months
1 to 5
years
Over 5
years
Total
contract
value
Total
carrying
value
K‘000
K‘000
K‘000
K‘000
K‘000
K‘000
K‘000
31 December 2024
Cash and cash equivalents
529,810
-
-
-
-
529,810
529,810
Central bank bills
45,000
405,000
325,000
-
-
775,000
762,088
Regulatory deposits
522,784
-
-
-
-
522,784
522,784
Total financial assets
1,097,594
405,000
325,000
-
-
1,827,594
1,814,682
Due to other banks
135
-
-
-
-
135
135
Due to customers
3,303,008
371,360
619,725
76,971
57
4,371,121
4,351,990
Other liabilities
142,224
-
-
-
-
142,224
142,224
Total financial liabilities
3,445,367
371,360
619,725
76,971
57
4,513,480
4,494,349
Issued financial guarantee
contracts
169
651
11,523
20
-
12,363
12,363
Issued loan commitments
13,160
-
-
-
-
13,160
13,160
Total
13,329
651
11,523
20
-
25,523
25,523
31 December 2023
Cash and cash equivalents
396,840
-
-
-
-
396,840
396,840
Central bank bills
28,000
391,200
838,380
-
-
1,257,580
1,236,496
Regulatory deposits
433,274
-
-
-
-
433,274
433,274
Total financial assets
858,114
391,200
838,380
-
-
2,087,694
2,066,610
Due to other banks
13,912
-
-
-
-
13,912
13,912
Due to customers
3,241,808
306,318
773,524
40,166
306
4,362,122
4,344,571
Other liabilities
118,831
-
-
-
-
118,831
118,831
Total financial liabilities
3,374,551
306,318
773,524
40,166
306
4,494,865
4,477,314
Issued financial guarantee
contracts
9,650
951
16,232
-
-
26,833
26,833
Issued loan commitments
39,152
-
-
-
-
39,152
39,152
Total
48,802
951
16,232
-
-
65,985
65,985
4.
Financial risk management (continued)
(c)
Liquidity risk (continued)
129
Parent
Up to 1
month
1 to 3
months
4 to 12
months
1 to 5
years
Over 5
years
Total
contract
value
Total
carrying
value
K‘000
K‘000
K‘000
K‘000
K‘000
K‘000
K‘000
31 December 2024
Cash and cash equivalents
526,713
-
-
-
-
526,713
526,713
Central bank bills
45,000
405,000
325,000
-
-
775,000
762,088
Regulatory deposits
522,784
-
-
-
-
522,784
522,784
Due from subsidiaries
1,095
-
-
-
-
1,095
1,095
Total financial assets
1,095,592
405,000
325,000
-
-
1,825,592
1,812,680
Due to other banks
135
-
-
-
-
135
135
Due to customers
3,337,233
371,360
619,725
76,971
57
4,405,346
4,386,215
Other liabilities
140,094
-
-
-
-
140,094
140,094
Due to subsidiaries
50,856
-
-
-
-
50,856
50,856
Total financial liabilities
3,528,318
371,360
619,725
76,971
57
4,596,431
4,577,300
Issued financial guarantee
contracts
169
651
11,523
20
-
12,363
12,363
Issued loan commitments
13,160
-
-
-
-
13,160
13,160
Total
13,329
651
11,523
20
-
25,523
25,523
31 December 2023
Cash and cash equivalents
391,357
-
-
-
-
391,357
391,357
Central bank bills
28,000
391,200
838,380
-
-
1,257,580
1,236,496
Regulatory deposits
433,274
-
-
-
-
433,274
433,274
Due from subsidiaries
4,284
-
-
-
-
4,284
4,284
Total financial assets
856,915
391,200
838,380
-
-
2,086,495
2,065,411
Due to other banks
13,912
-
-
-
-
13,912
13,912
Due to customers
3,276,024
306,318
773,524
40,166
306
4,396,338
4,368,599
Other liabilities
114,149
-
-
-
-
114,149
114,149
Due to subsidiaries
43,899
-
-
-
-
43,899
43,899
Total financial liabilities
3,447,984
306,318
773,524
40,166
306
4,568,298
4,540,559
Issued financial guarantee
contracts
9,650
951
16,232
-
-
26,833
26,833
Issued loan commitments
39,152
-
-
-
-
39,152
39,152
Total
48,802
951
16,232
-
-
65,985
65,985
The liquidity gap in ‘up to 1 month’ bucket is due to the assumption that current and saving deposits amounting to
K2,573 million (31 December 2023: K2,411 million) included within ‘due to customers’ mature within one month since
these are on demand and do not have any fixed or determinable maturity.
4.
Financial risk management (continued)
(c)
Liquidity risk (continued)
130
5.
Capital adequacy
Kina Securities Limited (“KSL”) as the consolidated
Company is required to comply with prudential standard
PS1/2003 `Capital Adequacy` issued by the Bank of Papua
New Guinea (“BPNG”). BPNG is the Government authority
responsible for the prudential supervision of Banks and
financial institutions in Papua New Guinea. The prudential
guidelines issued by BPNG follow the prudential
guidelines set by the Bank of International Settlements
under the terms of the Basel Accord (Basel 1).
KSL calculates and reports its capital adequacy in respect
of the bank.
Prudential Standard PS1/2003 `Capital Adequacy’ is
intended to ensure KSL maintains a level of capital which:
1) Is adequate to protect the interest of depositors
and creditors,
2) Is commensurate with risk profile and activities of
KSL, and
3) Provide public confidence in KSL as a financial
institution and the overall banking system
PS1/2003 `Capital Adequacy` prescribes ranges of capital
ratios to measure whether KSL is under, adequately, or
well capitalised and also prescribes a leverage ratio.
The minimum capital adequacy ratios prescribed under
PS1/2003 `Capital Adequacy` are:
1) Tier 1 risk based ratio of 8%,
2) Total risk-based capital of 12%,and
3) Leverage capital of 6%.
As at 31 December 2024, KSL’s capital ratios were in
compliance with the BPNG Minimum capital adequacy
requirements as follows:
2024
2023
K‘000
K‘000
Risk weighted assets
2,854,943
2,516,916
Capital : tier 1
400,418
379,868
Capital : tier 2
135,982
136,426
Capital : tier 1 and tier 2
523,400
502,516
Capital adequacy ratios
Tier 1 capital
14.0%
15.1%
Total capital ratio
18.3%
20.0%
Leverage capital ratio
7.9%
7.6%
The measure of capital used for the purpose of prudential
supervision is referred to as base capital. Total base
capital varies from the capital shown in the statements
of financial position and is made up of Tier 1 (core) and
Tier 2 (supplementary) capital, after deducting the value
of investments in other banks and financial institutions.
Tier 1 capital is obtained by deducting intangible assets
including deferred tax assets from equity capital and
audited retained earnings (or accumulated losses).
Tier 2 capital cannot exceed the amount of tier 1 capital,
and can include subordinated loan capital, specified
assets revaluation reserves, un-audited profits (or losses)
and a small percentage of general loan provisions.
The Leverage Capital is calculated as Tier 1 Capital (less
inter-group loans) divided by Total Assets. Risk-weighted
assets are derived from on-statements of financial
positions assets. On-statements of financial position
assets are weighted for credit risk by applying weightings
(0, 20, 50 and 100 percent) according to risk classification
criteria set by the BPNG, for example cash and money
market instruments have a zero-risk weighting which
means that no capital is required to support the holding
of these assets.
131
6.
Net interest income
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Interest income
Cash and short-term funds
38,659
45,232
38,515
44,506
Investments in Government Inscribed Stocks
12,224
13,993
12,224
13,993
Loans and advances to customers
223,586
194,115
223,586
194,115
274,469
253,340
274,325
252,614
Interest expense
Banks and customers
(52,246)
(50,020)
(53,018)
(50,180)
(52,246)
(50,020)
(53,018)
(50,180)
Net interest income
222,223
203,320
221,307
202,434
7.
Net fee and commission income
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Fees and commission income
Investment and portfolio management
11,325
10,438
-
-
Fund administration
27,392
23,180
-
-
Shares brokerage
2,413
1,500
1,202
914
Loans fees and bank commissions
29,864
30,358
29,864
30,358
Digital banking fees
80,930
63,819
80,930
63,819
ATM and other transaction fees
9,759
7,684
7,320
7,402
161,683
136,979
119,316
102,493
Fee and commission expenses
(32)
(16)
(32)
(16)
Net fee and commission income
161,651
136,963
119,284
102,477
8.
Dividend income
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Dividend income from investments
Financial assets at fair value through profit or loss
944
660
64
40
944
660
64
40
132
9.
Other income
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Profits from disposal of property and equipment
154
89
154
89
Unrealised foreign currency gains/losses
1,323
5,576
1,020
4,062
Support fees from subsidiaries
-
-
1,842
(88)
Management fees
-
-
235
(91)
Other
4,721
3,474
4,894
3,473
6,198
9,139
8,145
7,445
10. Other operating expenses
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Staff costs
102,859
86,059
97,097
81,497
Administrative expenses
98,253
71,865
94,774
68,917
Depreciation and amortisation
31,317
29,946
31,317
29,946
Operating lease
6,358
4,331
6,297
4,173
Software maintenance and support charges
10,789
8,365
7,284
7,483
Auditor’s remuneration (note 36)
2,210
1,965
1,946
1,769
Other*
34,852
16,187
34,625
15,871
286,638
218,718
273,340
209,656
* Other expenses include non-lending losses amounting to K13 million on account of a fraud incident involving a small number of customers. Through root cause analysis, the
Group identified certain system vulnerabilities which were addressed upon identification of the incident. Based on detailed reconciliations, the Group recorded a provision of
K12.6 million. The Group is currently evaluating all its options and prospects for recovery of these losses, however, no recoveries have been accounted for in these financial statements.
Staff costs are detailed as below:
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Salaries, wages and other benefits
95,870
80,534
90,320
76,148
Superannuation costs
4,315
3,726
4,103
3,550
Cost of employee share based incentive plan
2,674
1,799
2,674
1,799
Total staff costs
102,859
86,059
97,097
81,497
As at 31 December 2024, the Group had 736 employees (2023: 718) and 6 consultants (2023: 8). The Parent had 679
(2023: 699) employees and 5 (2023: 3) consultants.
133
11. Income taxes
The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense in
the financial statements as follows:
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Profit before tax
184,059
175,539
152,072
146,664
Prima facie tax* (2023: 30%)
78,029
74,662
68,432
65,999
Tax effect of:
Permanent differences
(4,290)
(3,069)
(3,088)
(2,900)
Prior year adjustment
(3,090)
(1,017)
(2,540)
(1,018)
Impact of phased decrease in tax rate on deferred taxes
9,165
-
9,165
-
Income tax expense
79,814
70,576
71,969
62,081
Represented by:
Current tax
81,901
75,853
73,031
67,725
Deferred taxes
(2,087)
(5,277)
(1,062)
(5,644)
Income tax expense
79,814
70,576
71,969
62,081
* 2024 Income tax rate applied on Parent: 45% and 30% for subsidiaries.
The Group applied corporate tax rate of 45% on the taxable income of the parent entity whereas the corporate tax rate for
subsidiary entities to remain at 30%.
In December 2024, during the PNG Government’s roll out of the 2025 national budget, a decrease in the corporate income
tax rate from 45% to 40% on smaller commercial banks (defined as those with annual earning up to K300 million) was
announced effective 1 January 2025. Kina’s Deferred taxes were therefore remeasured as at 31 December 2024 to the
new rate in line with IFRS to reflect the change. This has resulted in a decrease in deferred tax asset of K9.2 million and a
corresponding exceptional tax expense of K9.2 million included in the statutory net profit after tax for 31 December 2024.
The tax rate for smaller banks is scheduled to decline again in 2026 to 35%.
12. Deferred taxes
(a) Net deferred tax assets where there is a right to offset:
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Allowance for losses
32,592
29,423
32,225
29,224
Employee benefit provision
5,275
7,143
4,802
6,614
Lease liability
11,527
15,199
11,527
15,199
49,394
51,765
48,554
51,037
Depreciation and amortisation
(10,304)
(15,590)
(10,304)
(15,590)
Others
(2,287)
(1,076)
(2,404)
(829)
(12,591)
(16,666)
(12,708)
(16,419)
Net deferred tax asset
36,803
35,099
35,846
34,618
134
(b) The movement on deferred tax account is as follows:
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Balance at beginning of year
35,099
30,067
34,618
29,220
Statement of comprehensive income credit/(charge)
1,704
5,032
1,228
5,398
Balance at end of year
36,803
35,099
35,846
34,618
Represented by:
Deferred tax assets (note 12(a))
49,394
51,765
48,554
51,037
Deferred tax liabilities (note 12(a))
(12,591)
(16,666)
(12,708)
(16,419)
36,803
35,099
35,846
34,618
13. Cash and cash equivalents
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Cash on hand
177,076
173,876
177,076
173,876
Exchange settlement accounts
199,839
168,972
199,839
168,972
Due from other banks
152,895
53,992
149,798
48,509
529,810
396,840
526,713
391,357
14. Central bank bills
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Central bank and treasury bills
Less than 90 days
450,000
419,200
450,000
419,200
Over 90 days
325,000
838,380
325,000
838,380
Unearned discount
(12,912)
(21,084)
(12,912)
(21,084)
762,088
1,236,496
762,088
1,236,496
Central bank bills are debt securities issued by the Bank of Papua New Guinea (BPNG) and are measured at amortised cost.
12.
Deferred taxes (continued)
135
15. Regulatory deposits
Regulatory deposit of the Group as at 31 December 2024 amounted to K522,783,600 (2023: K433,273,700). This
represents the mandatory balance required to be maintained in a non-interest-bearing account with the Central Bank -
Bank of Papua New Guinea. Regulatory deposits are measured at amortised cost. Regulatory deposit of the parent as at
31 December 2024 amounted to K522,783,600 (2023: K433,273,700).
16. Financial assets at fair value through profit or loss
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Securities
- Listed
5,846
4,878
95
196
- Unlisted
35,810
30,938
35,781
30,909
41,656
35,816
35,876
31,105
The movement in financial assets at fair value through profit or loss is reconciled as follows:
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Balance at beginning of year
35,816
15,262
31,105
10,508
Gains from changes in fair value
7,418
2,733
4,902
2,776
Realised gain from disposal of fair value of securities
495
-
41
-
Financial assets acquired/(disposed) during the year
(2,073)
17,821
(172)
17,821
Balance at end of year
41,656
35,816
35,876
31,105
The fair value of the listed equities is based on quoted market prices at the end of the reporting period. The quoted
market price used is the current market prices. These financial instruments are categorised as level 1 within the fair value
hierarchy. Unlisted equities are categorised within level 3 of the fair value hierarchy.
17. Loans and advances to customers
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Loans to individuals
679,498
693,446
679,498
693,446
Loans to corporate entities
2,271,310
1,921,098
2,259,046
1,917,102
Gross loans and advances to customers
2,950,808
2,614,544
2,938,544
2,610,548
Expected credit losses (note 4b)
(67,308)
(52,466)
(66,087)
(51,801)
2,883,500
2,562,078
2,872,457
2,558,747
136
Details of gross loans and advances to customers are as follows:
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Overdrafts
98,942
97,628
98,942
97,628
Property mortgage
720,031
685,343
720,031
685,343
Asset financing
97,916
92,584
97,916
92,585
Business and other loans
2,033,919
1,738,989
2,021,655
1,734,992
2,950,808
2,614,544
2,938,544
2,610,548
Movements in expected credit losses are as follows:
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Balance at beginning of year
52,466
42,497
51,801
41,479
Impairment losses during the year
18,151
9,758
17,593
10,111
Loans written off
(3,881)
(288)
(3,879)
(288)
Bad debt recoveries
572
499
572
499
Balance at end of year
67,308
52,466
66,087
51,801
18. Investments in Government Inscribed Stocks
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Government Inscribed Stocks principal balance
95,000
160,000
95,000
160,000
Unamortised premium
79
258
79
258
Unamortised discount
(2,534)
(3,140)
(2,534)
(3,140)
Accrued interest
2,075
2,738
2,075
2,738
Gross Investments in Government Inscribed Stocks
94,620
159,856
94,620
159,856
Expected credit losses (note 4b)
(1,289)
(2,302)
(1,289)
(2,302)
93,331
157,554
93,331
157,554
17.
Loans and advances to customers (continued)
137
The movement in Investments in Government Inscribed Stocks is as follows:
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Balance at beginning of year
157,554
152,650
157,554
152,650
Additions / (maturities)
(65,000)
5,000
(65,000)
5,000
Amortised discount/(premium)
427
103
427
103
Accrued interest
(663)
(128)
(663)
(128)
Write back / (addition) of expected credit losses
1,013
(71)
1,013
(71)
93,331
157,554
93,331
157,554
Investments in Government Inscribed Stocks are measured at amortised cost. Included within the balance is an amount
of K nil (31 December 2023:K nil) which has been pledged with a third party against repurchase agreement transaction.
19. Investments in subsidiaries
Shareholdings*
2024
2023
2024
2023
%
%
Amount (PGK)
Amount (PGK)
Kina Funds Management Limited (KFM)
100
100
2
2
Kina Investment and Superannuation Services
Limited (KISS)
100
100
2
2
Kina Wealth Management Limited (KWML)
100
100
2
2
Kina Nominees Limited (KNL)
100
100
500,002
500,002
Kina Securities (Fiji) PTE Limited
100
100
197
197
Total Investment at cost
500,205
500,205
Provision for impairment
(251,677)
(251,677)
Balance as at 31 December
248,528
248,528
* All the subsidiaries are incorporated in Papua New Guinea and in Fiji. The results of the operations of the above subsidiaries have been consolidated in the Group’s financial statements.
18.
Investments in Government Inscribed Stocks (continued)
138
20. Property, plant and equipment
Consolidated
Furniture
& Fittings
Building
improvements
Motor
Vehicles
Office
Equipment
Land &
Building
Work in
Progress
Right-of-
use assets
Total
Cost
K‘000
K‘000
K‘000
K‘000
K‘000
K‘000
K‘000
K‘000
Balance
31 December 2022
4,814
25,968
4,246
58,894
2,129
1,435
64,173
161,659
Additions
23
1,300
3,447
2,893
-
73
952
8,688
Transfer in (out)
-
441
-
-
-
(441)
-
-
Disposals
-
-
(453)
-
-
-
(4,180)
(4,633)
Balance
31 December 2023
4,837
27,709
7,240
61,787
2,129
1,067
60,945
165,714
Additions
41
205
1,960
5,833
-
981
16,272
25,292
Transfer in (out)
-
-
-
-
-
-
-
-
Disposals
-
-
(963)
(176)
-
-
(19,866)
(21,005)
Balance
31 December 2024
4,878
27,914
8,237
67,444
2,129
2,048
57,351
170,001
Accumulated depreciation
Balance
31 December 2022
(3,750)
(10,665)
(3,379)
(31,877)
-
-
(29,149)
(78,820)
Charge during
the year
(546)
(2,414)
(1,063)
(6,609)
-
-
(9,348)
(19,980)
Disposals
-
-
453
-
-
-
4,587
5,040
Balance
31 December 2023
(4,296)
(13,079)
(3,989)
(38,486)
-
-
(33,910)
(93,760)
Charge during
the year
(432)
(2,324)
(1,697)
(6,880)
-
-
(9,956)
(21,289)
Disposals
-
-
963
156
-
-
13,232
14,351
Balance
31 December 2024
(4,728)
(15,403)
(4,723)
(45,210)
-
-
(30,634)
(100,698)
Book value
Balance
31 December 2024
150
12,511
3,514
22,234
2,129
2,048
26,717
69,303
Balance
31 December 2023
541
14,630
3,251
23,301
2,129
1,067
27,035
71,954
139
Parent
Furniture
& Fittings
Building
improvements
Motor
Vehicles
Office
Equipment
Land &
Building
Work in
Progress
Right-of-
use assets
Total
Cost
K‘000
K‘000
K‘000
K‘000
K‘000
K‘000
K‘000
K‘000
Balance
31 December 2022
4,814
25,968
4,246
58,894
2,129
1,435
64,173
161,659
Additions
23
1,300
3,447
2,893
-
73
952
8,688
Transfer in (out)
-
441
-
-
-
(441)
-
-
Disposals
-
-
(453)
-
-
-
(4,180)
(4,633)
Balance
31 December 2023
4,837
27,709
7,240
61,787
2,129
1,067
60,945
165,714
Additions
41
205
1,960
5,833
-
981
16,272
25,292
Transfer in (out)
-
-
-
-
-
-
-
-
Disposals
-
-
(963)
(176)
-
-
(19,866)
(21,005)
Balance
31 December 2024
4,878
27,914
8,237
67,444
2,129
2,048
57,351
170,001
Accumulated depreciation
Balance
31 December 2022
(3,750)
(10,665)
(3,379)
(31,877)
-
-
(29,149)
(78,820)
Charge during
the year
(546)
(2,414)
(1,063)
(6,609)
-
-
(9,348)
(19,980)
Disposals
-
-
453
-
-
-
4,587
5,040
Balance
31 December 2023
(4,296)
(13,079)
(3,989)
(38,486)
-
-
(33,910)
(93,760)
Charge during
the year
(432)
(2,324)
(1,697)
(6,880)
-
-
(9,956)
(21,289)
Disposals
-
-
963
156
-
-
13,232
14,351
Balance
31 December 2024
(4,728)
(15,403)
(4,723)
(45,210)
-
-
(30,634)
(100,698)
Book value
Balance
31 December 2024
150
12,511
3,514
22,234
2,129
2,048
26,717
69,303
Balance
31 December 2023
541
14,630
3,251
23,301
2,129
1,067
27,035
71,954
20.
Property, plant and equipment (continued)
140
21. Intangible assets
Consolidated
Software
Customer deposit
relationship / intangible
Work in
Progress
Total
Cost
K‘000
K‘000
K‘000
K‘000
Balance 31 December 2022
62,927
22,468
5,474
90,869
Additions
1,013
-
4,069
5,082
Transfer in (out)
506
-
(506)
-
Balance 31 December 2023
64,446
22,468
9,037
95,951
Additions
697
-
17,616
18,313
Transfer in (out)
119
-
(119)
-
Balance 31 December 2024
65,262
22,468
26,534
114,264
Accumulated amortisation
Balance 31 December 2022
(35,908)
(22,468)
-
(58,376)
Charge during the year
(9,967)
-
-
(9,967)
Balance 31 December 2023
(45,875)
(22,468)
-
(68,343)
Charge during the year
(10,028)
-
-
(10,028)
Balance 31 December 2024
(55,903)
(22,468)
-
(78,371)
Book value
Balance 31 December 2024
9,359
-
26,534
35,893
Balance 31 December 2023
18,571
-
9,037
27,608
141
Parent
Software
Customer deposit
relationship / intangible
Work in
Progress
Total
Cost
K‘000
K‘000
K‘000
K‘000
Balance 31 December 2022
62,927
22,468
5,474
90,869
Additions
1,013
-
4,069
5,082
Transfer in (out)
506
-
(506)
-
Balance 31 December 2023
64,446
22,468
9,037
95,951
Additions
697
-
17,616
18,313
Transfer in (out)
119
-
(119)
-
Balance 31 December 2024
65,262
22,468
26,534
114,264
Accumulated amortisation
Balance 31 December 2022
(35,908)
(22,468)
-
(58,376)
Charge during the year
(9,967)
-
-
(9,967)
Balance 31 December 2023
(45,875)
(22,468)
-
(68,343)
Charge during the year
(10,028)
-
-
(10,028)
Balance 31 December 2024
(55,903)
(22,468)
-
(78,371)
Book value
Balance 31 December 2024
9,359
-
26,534
35,893
Balance 31 December 2023
18,571
-
9,037
27,608
The acquisition of Australian and New Zealand (ANZ) Bank’s retail, commercial and SME banking businesses in PNG on
23 September 2019 gave rise to the recognition of core customer deposit intangible.
The intangible assets were estimated to have a useful life of five years and three years respectively based on the license
term of software and expected length of customer deposit relationship and core deposit intangible. Customer deposit
relationship and core deposit intangible was fully amortised in 2022.
21.
Intangible assets (continued)
142
22. Other assets
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Prepayments
13,389
9,895
13,338
9,845
Security deposits and bonds
35,412
31,303
35,353
31,255
Other debtors
30,819
42,125
32,485
38,081
152,864
133,819
154,420
129,677
Less: Expected credit losses
(3,990)
(3,990)
(3,990)
(3,990)
148,874
129,829
150,430
125,687
Movement of expected credit loss on other assets is as follows:
Balances at beginning of year
(3,990)
(3,990)
(3,990)
(3,990)
Write-off
-
-
-
-
Balance at end of year
(3,990)
(3,990)
(3,990)
(3,990)
23. Due to customers
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Corporate customers
3,296,393
3,335,288
3,330,618
3,359,317
Retail customers
1,055,597
1,009,283
1,055,597
1,009,282
4,351,990
4,344,571
4,386,215
4,368,599
24. Current income tax (assets) liabilities
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Balance at beginning of year
11,461
4,196
10,332
5,130
Paid during the year
(82,438)
(68,506)
(74,241)
(62,516)
Current provision
81,306
76,788
73,001
68,736
Prior year under provision
-
(1,017)
-
(1,018)
Balance at end of year
10,329
11,461
9,091
10,332
Net current income tax (assets) liabilities are represented by:
Current income tax assets
(6)
(13)
-
-
Current income tax liabilities
10,335
11,598
9,091
10,332
10,329
11,461
9,091
10,332
143
25. Employee provisions
Consolidated
2024
Opening balance
Additions
Payments
Closing balance
K‘000
K‘000
K‘000
K‘000
Provision for Annual Leave
5,029
3,170
(3,560)
4,639
Provision for Long Service Leave
5,847
919
(64)
6,702
Provision for Salaries
(47)
66,121
(67,384)
(1,310)
Provision for Bonus
5,632
7,346
(8,537)
4,441
Total
16,461
77,556
(79,545)
14,472
Parent
2024
Opening balance
Additions
Payments
Closing balance
K‘000
K‘000
K‘000
K‘000
Provision for Annual Leave
4,490
3,429
(3,580)
4,339
Provision for Long Service Leave
5,309
871
(66)
6,114
Provision for Salaries
(50)
61,649
(62,855)
(1,256)
Provision for Bonus
4,949
6,946
(8,199)
3,697
Total
14,698
72,895
(74,700)
12,893
2024
Consolidated
Parent
Represented by:
Short term provisions
7,770
6,779
Long term provisions
6,702
6,114
Total employee provision
14,472
12,893
144
Consolidated
2023
Opening balance
Additions
Payments
Closing balance
K‘000
K‘000
K‘000
K‘000
Provision for Annual Leave
4,663
3,842
(3,476)
5,029
Provision for Long Service Leave
4,745
1,099
3
5,847
Provision for Salaries
1
57,257
(57,305)
(47)
Provision for Bonus
4,702
7,898
(6,968)
5,632
Total
14,111
70,096
(67,746)
16,461
Parent
2023
Opening balance
Additions
Payments
Closing balance
K‘000
K‘000
K‘000
K‘000
Provision for Annual Leave
4,342
3,550
(3,402)
4,490
Provision for Long Service Leave
4,197
1,114
(2)
5,309
Provision for Salaries
1
54,026
(54,077)
(50)
Provision for Bonus
4,177
7,434
(6,662)
4,949
Total
12,717
66,124
(64,143)
14,698
2023
Consolidated
Parent
Represented by:
Short term provisions
10,614
9,389
Long term provisions
5,847
5,309
Total employee provision
16,461
14,698
25.
Employee provisions (continued)
145
26. Lease Liabilities
Details of associated lease liabilities recognised in respect of the right of use assets are presented below:
Consolidated
31 December 2024
31 December 2023
Maturity analysis – contractual undiscounted cash flows
K‘000
K‘000
Less than one year
12,095
10,829
One to five years
23,086
26,871
More than five years
-
1,066
Total undiscounted lease liabilities
35,181
38,766
Lease liabilities included in statement of financial position
Current
12,211
10,992
Non-current
19,273
22,783
31,484
33,775
Amounts recognised in statement of comprehensive income
Interest on lease liabilities
2,477
2,805
Expense relating to short-term leases
11,516
8,474
13,993
11,279
Amounts recognised in statement of cash flows
Total cash outflow for short-term lease
11,366
8,381
Total cash outflow for leases
12,449
11,838
Parent
31 December 2024
31 December 2023
Maturity analysis – contractual undiscounted cash flows
K‘000
K‘000
Less than one year
12,095
10,829
One to five years
23,086
26,871
More than five years
-
1,066
Total undiscounted lease liabilities
35,181
38,766
Lease liabilities included in statement of financial position
Current
12,211
10,992
Non-current
19,273
22,783
31,484
33,775
Amounts recognised in statement of comprehensive income
Interest on lease liabilities
2,477
2,805
Expense relating to short-term leases
11,196
8,148
13,673
10,953
Amounts recognised in statement of cash flows
Total cash outflow for short-term lease
11,053
8,058
Total cash outflow for leases
12,449
11,838
146
27. Other liabilities
Consolidated
Parent
2024
2023
2024
2023
K’000
K‘000
K’000
K‘000
Accruals
27,192
26,295
26,656
25,389
Unclaimed money and stale cheques
20,217
17,322
20,217
17,322
Bank cheques
1,924
10,473
1,924
10,473
Accounts payable
4,041
4,736
4,015
4,681
Unearned commission income
175
310
175
310
Advance payments
49,821
35,305
49,821
35,305
Other liabilities
38,854
24,390
37,286
20,669
Balance at end of year
142,224
118,831
140,094
114,149
28. Issued and paid ordinary shares
(a)
Movement
The Company does not have authorised capital and ordinary shares have no par value. The table below provides the
annual balances in share capital.
Number of shares
Share capital
Shares
K‘000
Balance as at 31 December 2022
286,936
394,693
Share issued during the year
-
-
Balance as at 31 December 2023
286,936
394,693
Share issued during the year
1,013
2,561
Balance as at 31 December 2024
287,949
397,254
(b) Earnings per share
Basic earnings per ordinary share is calculated by dividing the net profit attributable to shareholders by the weighted
average number of ordinary shares on issue during the year. The group has no significant dilutive potential ordinary
shares. Consequently, basic earnings per ordinary share equals diluted earnings per share.
Consolidated
2024
2023
Net profit attributable to shareholders – K’000
100,296
104,963
Weighted average number of ordinary shares basic earnings
287,414
286,936
Weighted average number of ordinary shares diluted earnings
289,120
289,093
Basic earnings per share (in toea)
34.90
36.67
Diluted earnings per share (in toea)
34.69
36.39
147
(c) Share-based payment reserve
Kina operates both a Short Term Incentive (STI) and
Long Term Incentive (LTI) plan. The purpose of these
Plans is to assist in the reward, retention and motivation
of key management personnel and align the interests
of management and shareholders. The plans are
commensurate with those adopted by major banks
in Australia and the Pacific and is managed by an
independent Plan manager. The operation of both
the STI and LTI plans are explained below:
Short term incentive plan (STI Plan)
The STI plan provides participants with an opportunity to
earn an incentive calculated as a percentage of their salary
each year, conditional upon them achieving specified
performance targets. Under the plan 100% of any award
granted is paid in cash except for the CEO&MD where
65% of any award granted is paid as a cash bonus, with
the remaining 35% awarded as a grant of performance
rights to shares. The granted performance rights are
restricted from exercise and subject to the Company’s
clawback policy and subject to the rules of the Plan.
The following STI plan arrangements were in place during the year ended 31 December 2024:
Date of grant
1 April 2024
1 April 2023
Number of share rights granted
335,163
338,448
Market value at grant date
AUD 368,847
AUD 265,072
Vesting date
1 April 2026
1 April 2025
Vesting conditions
Continued service
Continued service
Long term incentive plan (LTI plan)
The LTI plan provides participants with an opportunity to
receive an equity interest in Kina through the granting
of performance rights. LTI plan participants may be
offered performance rights that may be subject to vesting
conditions as set out by the Board. The selection of
participants is at the discretion of the Board.
A performance right is a contractual right to receive one
ordinary share in Kina, subject to performance and vesting
conditions being met. Each vested performance right
represents a right to one ordinary share. If the participant
leaves Kina any unvested Performance Rights will be
forfeited (unless the Board determines otherwise).
The following LTI plan arrangements were in place during the year ended 31 December 2024.
Date of grant
1 April 2024
1 April 2023
1 April 2022
Number of share rights granted
2,058,859
1,345,023
1,297,727
Market value at grant date
AUD 2,265,775
AUD 1,053,424
AUD 1,006,516
Fair value at grant date
AUD 1,060,312
AUD 571,635
AUD 629,398
Vesting date
1 April 2027
1 April 2026
1 April 2025
Vesting conditions
Continued service
Continued service
Continued service
50% target TSR
50% target TSR
50% target TSR
50% target EPS growth
50% target EPS growth
50% target EPS growth
The estimated fair value of share rights issued on 1 April
2024 under the LTI plan was AUD 0.52, compared to the
grant date market value per share of AUD 1.101. Fair value
is generally estimated using a Monte Carlo simulation
model taking into account the share price at grant date,
the vesting period, share price volatility, risk-free interest
rate and market performance conditions.
Retention incentive
Retention awards are no longer applicable or awarded
in the ordinary course of business.
28.
Issued and paid ordinary shares (continued)
148
Movement in outstanding share rights
Consolidated
2024
2023
Number
Number
Outstanding rights at beginning of year
5,229,763
5,035,388
New rights granted
2,394,022
1,683,471
Rights vested and shares issued/purchased
(2,248,565)
(1,489,096)
Outstanding rights at end of year
5,375,220
5,229,763
The fair value at grant date of share rights awarded under the incentive schemes is recognised as an expense over the
expected vesting period with a corresponding increase in the share based payments reserve in equity. The movement in
the Share Based Premium Reserve is as below:
Consolidated
2024
2023
K’000
K’000
Brought forward from previous year
2,776
2,477
Expense arising from share incentive plans
3,945
2,073
Rights vested
(3,738)
(1,529)
Rights forfeited or lapsed
-
-
Deferred tax asset on share based payment
(1,105)
(245)
Total
1,878
2,776
29. Statements of cash flows
(a)
For the purposes of the statements of cash flow, cash and cash equivalents comprises the following:
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Cash and cash equivalents (note 13)
529,810
396,840
526,713
391,357
529,810
396,840
526,713
391,357
(b)
Movement in investment securities is as follows:
Consolidated
2024
2023
Movement
K‘000
K‘000
K’000
Central bank bills*
775,000
1,257,580
(482,580)
Government Inscribed Stocks*
93,711
157,697
(63,987)
Financial assets at FVTPL**
33,743
35,816
(2,072)
902,454
1,451,093
(548,639)
* excluding accrued interest
** excluding FV gain
28.
Issued and paid ordinary shares (continued)
(c)
Share-based payment reserve (continued)
149
Parent
2024
2023
Movement
K‘000
K‘000
K’000
Central bank bills*
775,000
1,257,580
(482,580)
Government Inscribed Stocks*
93,711
157,697
(63,986)
Financial assets at FVTPL**
31,110
31,105
5
899,821
1,446,382
(546,561)
* excluding accrued interest
** excluding FV gain
(c)
Reconciliation of net profit after tax for the year to net cash flows from operating activities is presented below.
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Net profit after tax
100,296
104,963
76,153
84,583
Profit from disposal of property and equipment
(154)
(89)
(154)
(89)
Depreciation and amortisation
31,317
29,946
31,317
29,946
(Premium)/ Discount amortisation
427
103
427
103
Share-based payment expense
2,674
2,073
2,674
2,073
Net losses/ (gains) from changes in fair values of
financial assets
(7,913)
(2,733)
(4,766)
(2,776)
Dividend income on equity investments
(944)
(660)
(64)
(40)
Interest income on convertible notes
(852)
(620)
(852)
(620)
Impairment losses-loans and advances to customers
18,151
9,900
17,593
10,215
Foreign translation loss/ (gain) on Nostro bank account
(8,359)
(2,175)
(8,430)
(1,825)
Increase/(decrease) in current tax liability
(1,132)
7,264
(1,241)
5,201
Increase/(decrease) in deferred tax balances
(1,703)
(5,032)
(1,228)
(5,399)
(Increase)/decrease in assets
(430,523)
(513,234)
(425,464)
(466,946)
Increase/(decrease) in liabilities
(12,157)
469,812
7,556
476,115
Net cash (outflow)/ inflow generated from
operating activities
(310,872)
99,518
(306,479)
130,541
29.
Statements of cash flows (continued)
150
30. Related party transactions
Parties are considered to be related if one party has the
ability to control the other party or exercise significant
influence over the other party in making financial or
operational decisions. The Group is controlled by Kina
Securities Limited (“KSL”) incorporated in Papua New
Guinea, which owns 100% of the ordinary shares of its
subsidiaries, unless otherwise stated.
A number of banking transactions are entered into
with related parties in the normal course of business.
These include loans, deposits and foreign currency
transactions. These transactions were carried out on
normal commercial terms and at normal market rates.
The volumes of related party transactions, outstanding
balances at 31 December 2024, and related expenses
and income for the year ended are as follows:
a) Directors and management transactions
From time to time during the year, Directors and
Senior Management of the Parent and subsidiaries had
deposits in the Group on normal terms and conditions.
Brokerage rates for buying and selling shares for
the Senior Management and staff are discounted.
A listing of the members of the Board of Directors
is shown in the Annual Report. In 2024, the total
remuneration of the Directors was K4,572,339
(2023: K4,209,303).
Key management personnel (KMP) of the group includes
directors and the executive general managers (EGMs)
during the year.
The table below shows the Group specified EGM remuneration in aggregate (in K’000).
No of KMP
Salary
Bonus
Superannuation
Equity Options
Other benefits
Total
2024
12*
10,441
4,441
184
3,738
1,900
20,704
2023
11
10,297
3,543
184
544
1,694
16,262
* 2 resigned as of 10th May 2024 and 2nd August 2024, 3 positions added as of 1st January 2024,1st April 2024 and 22nd May 2024.
(b) Subsidiary transactions and balances
The Company maintains an intercompany account with subsidiary undertakings, which are interest-bearing at the rate of
KSL cost of funds plus 12.50 (2023: 12.50) basis points, unsecured and with no fixed term of repayment. Details as follows:
Transactions
Balance outstanding
Income
Expenses
Income
Expenses
Due from
Due to
2024
2024
2023
2023
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
K‘000
K‘000
K‘000
K‘000
KFM
451
135
193
-
-
-
(11,788)
(7,359)
KISS
1,626
637
-
915
-
-
(36,906)
(36,540)
KWM
-
-
-
-
1,031
714
-
-
KNL
-
-
-
-
64
64
-
-
KSL Fiji
-
-
-
-
-
-
-
-
2,077
772
193
915
1,095
778
(48,694)
(43,899)
151
31. Investments under trust
The Group acts as trustee holding or placing of assets on behalf of superannuation funds and individuals. As the Group
acts in a fiduciary capacity, these assets are not assets of the Group and, therefore, are not included in its statements of
financial position. The Group is also engaged in investing client monies. A corresponding liability in respect of these
monies is also excluded from the statements of financial position. Investments under trust at year end are:
Consolidated
Parent
2024
2023
2024
2023
K‘000
K‘000
K‘000
K‘000
Clients funds held for shares trading
3,600
6,941
3,600
6,901
3,600
6,941
3,600
6,901
32. Segment reporting
The segment information provided to the Chief Operating Decision Maker for the reportable segments for the year
ended 31 December 2024 is as follows:
Banking & Finance
Wealth Management
Total
K‘000
K‘000
K‘000
Interest income
273,553
916
274,469
Interest expense
(52,246)
-
(52,246)
Foreign exchange income
85,489
481
85,970
Fee and commission income
119,284
42,367
161,651
Other revenue
10,898
4,157
15,055
Total external income
436,978
47,921
484,899
Other operating expenses
(242,023)
(13,298)
(255,321)
Provision for impairment
(17,594)
(557)
(18,151)
Depreciation and amortisation
(31,317)
-
(31,317)
Total external expenses
(290,934)
(13,855)
(304,789)
Profit before inter-segment revenue and expenses
146,044
34,066
180,110
Inter-segment income
2,078
-
2,078
Inter-segment expense
-
(2,078)
(2,078)
Profit before tax
148,122
31,988
180,110
Income tax expense
(71,969)
(7,845)
(79,814)
Profit after tax
76,153
24,143
100,296
Total assets
5,195,755
21,073
5,216,858
Total assets include:
Additions to non-current assets
27,334
-
27,334
Total liabilities
(4,545,687)
(4,947)
(4,550,634)
Banking and finance segments include the operations of Kina Bank while Wealth Management includes fund management
and fund administration business.
152
The segment information provided to the management for the reportable segments for the year ended 31 December
2023 is as follows:
Banking & Finance
Wealth Management
Total
K‘000
K‘000
K‘000
Interest income
252,454
886
253,340
Interest expense
(50,020)
-
(50,020)
Foreign exchange income
51,363
(21)
51,342
Fee and commission income
102,478
34,485
136,963
Other revenue
10,442
2,090
12,532
Total external income
366,717
37,440
404,157
Other operating expenses
(179,712)
(9,060)
(188,772)
Provision for impairment
(10,215)
315
(9,900)
Depreciation and amortisation
(29,946)
-
(29,946)
Total external expenses
(219,873)
(8,745)
(228,618)
Profit before inter-segment revenue and expenses
146,844
28,695
175,539
Inter-segment income
179
-
179
Inter-segment expense
-
(179)
(179)
Profit before tax
147,023
28,516
175,539
Income tax expense
(62,081)
(8,495)
(70,576)
Profit after tax
84,942
20,021
104,963
Total assets
5,165,719
13,615
5,179,334
Total assets include:
Additions to non-current assets
12,817
-
12,817
Total liabilities
(4,599,364)
(60,353)
(4,539,011)
There is only one segment for the Parent entity and the information is the same as the primary statements.
32.
Segment reporting (continued)
153
33. Contingent liabilities
Litigations and claims
Contingent liabilities exist in respect of actual and
potential claims and proceedings that have not been
determined. An assessment of the Group’s likely loss has
been made on a case by case basis for the purposes of
the financial statements and specific provisions are made
where appropriate. As at 31 December 2024, the Group
is a party to some litigation before the courts, however,
management does not believe these will result in any
material loss to the Group. There was no litigation matter
of a material nature that is not already provided for in the
financial statements.
34. Commitments
Capital commitments
There was a total of K3.9 million relating to commitments
under contracts for capital expenditure at reporting date
(31 December 2023: K1.9 million).
Loan commitments
There was a total of K13.2 million relating to loan
commitments at balance sheet date (31 December 2023:
K39.2 million).
35. Fair value of financial assets
and liabilities
The Group measures fair values in accordance with IFRS
13, which defines fair value as the price that would be
received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at
the measurement date. The Group also uses a fair value
hierarchy that categorises into three levels the inputs to
valuation techniques used to measure fair value, which
gives highest priority to quoted prices.
• Level 1 inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities that the
entity can access at the measurement date. Assets
and liabilities are classified as Level 1 if their value is
observable in an active market.
• Level 2 inputs are inputs other than quoted prices
included within Level 1 that are observable for the
asset or liability, either directly or indirectly. A Level 2
input must be observable for substantially the full term
of the instrument. Level 2 inputs include quoted prices
for similar assets or liabilities in active markets, quoted
prices for identical or similar assets or liabilities in
markets that are not active, inputs other than quoted
prices that are observable for the asset or liability.
• Level 3 inputs are unobservable inputs. Assets and
liabilities are classified as Level 3 if their valuation
incorporates significant inputs that are not based on
observable market data.
Where possible, fair value is determined by reference to a
quoted market price for the instrument valued. The group
does not hold any material financial instruments for which
quoted prices are not available other than investment in
unlisted shares which are classified in Level 3 category.
The following table provides an analysis of financial
instruments that are measured subsequent to initial
recognition at fair value, grouped by fair value
hierarchy level.
154
Financial instruments measured at fair value
The following tables present the Group’s and the parent’s assets and liabilities that are measured at fair value at
31 December 2024.
Consolidated
Level 1
Level 2
Level 3
Total
K‘000
K‘000
K‘000
K‘000
Investment securities measured at FVTPL
- Investment in securities – Listed
5,847
-
-
5,847
- Investment in securities – Unlisted
-
-
35,809
35,809
Total assets
5,847
-
35,809
41,656
Consolidated
Level 1
Level 2
Level 3
Total
K‘000
K‘000
K‘000
K‘000
Investment securities measured at FVTPL
- Investment in securities – Listed
95
-
-
95
- Investment in securities – Unlisted
-
-
35,781
35,781
Total assets
95
-
35,781
35,876
The following tables present the Group’s and the parent’s assets and liabilities that are measured at fair value at
31 December 2023.
Parent
Assets
Level 1
Level 2
Level 3
Total
K‘000
K‘000
K‘000
K‘000
Investment securities measured at FVTPL
- Investment in shares – Listed
4,878
-
-
4,878
- Investment in shares – Unlisted
-
-
30,938
30,938
Total assets
4,878
-
30,938
35,816
Parent
Assets
Level 1
Level 2
Level 3
Total
K‘000
K‘000
K‘000
K‘000
Investment securities measured at FVTPL
- Investment in shares – Listed
196
-
-
196
- Investment in shares – Unlisted
-
-
30,909
30,909
Total assets
196
-
30,909
31,105
35.
Fair value of financial assets and liabilities (continued)
155
Reconciliation of level 3 fair value measurements
of financial assets and financial liabilities
The group holds investment in unlisted securities
amounting to K39,759,787 (31 December 2023:
K30,937,556) in level 3 category. During the year,
there were additions or disposals in these securities.
The increase is primarily attributable to the addition
of WLTH convertible Note.
The parent holds investment in unlisted securities
amounting to K39,731,500 (31 December 2023:
K30,909,269) in level 3 category. During the year,
there were additions or disposals in these securities.
The increase is primarily attributable to the addition
of WLTH convertible Note.
Financial instruments not measured at fair value
For the financial instruments not measured at fair value
as at 31 December 2024 and 2023, there is no material
difference between the fair value and carrying value of
the Group’s and the Parent’s financial assets and liabilities.
36. Auditors’ remuneration
Consolidated
2024
2023
K‘000
K‘000
Audit and audit related
2,210
1,965
Other services
-
-
2,210
1,965
Parent
2024
2023
K‘000
K‘000
Audit and audit related
1,946
1,769
Other services
-
-
1,946
1,769
37. Goodwill
On September 2015, the Group, through Kina Ventures
Limited, a 100% owned subsidiary of Kina Securities
Limited, acquired all of the shares in Maybank (PNG)
Limited and Maybank Property (PNG). Maybank (PNG)
and Maybank Property (PNG) are the PNG subsidiaries
of Malaysia’s largest bank. The acquisition strengthened
Kina Bank’s investment in PNG as it was an excellent fit
for its expansion program.
The goodwill arising on this acquisition was recorded at
K92.8 million. The goodwill was attributable to Maybank
(PNG) Limited’s strong position and synergies expected
to arise after the Group’s acquisition of the new subsidiary.
None of the goodwill is expected to be deductible for
tax purposes.
For the purpose of impairment test, goodwill is
allocated to the Group’s banking business as an
independent cash generating unit (CGU). The banking
CGU including goodwill was tested for impairment as
at 31 December 2024 by comparing the CGU’s carrying
amount with its recoverable amount and no impairment
loss was recognised.
The recoverable amount is determined based on a
value-in-use calculation which uses post-tax cash flow
projections based on financial budgets approved by
the directors discounted by a cost of equity of 18%
(2023: 18%) applicable to banking business. Given a
banking business is generally valued on equity basis,
the use of post-tax cash flows and discount rate is
considered more appropriate. The projected cash
flows cover a period of 5 years beyond which they are
extrapolated using an estimated terminal growth rate
of 3% (2023: 3%) which does not exceed the long-term
average growth rate for the market in which the Group
operates. Cash flows during the forecast period are
derived from approved budgets, and assume an average
growth rate in net profit after tax (NPAT) over the forecast
period of 26% (2023: 12.2%), which is consistent with the
rolling average growth rates over the last 3-5 year period
and is driven by growth in the interest-bearing assets,
foreign exchange income, and banking fees income,
whilst retaining a controlled cost-to-income base.
35.
Fair value of financial assets and liabilities (continued)
156
Sensitivity analysis
Under above assumptions, the estimated recoverable
amount of the CGU exceeds its carrying amount by
K400 million.
The Group has conducted an analysis of sensitivity of
the impairment test to changes in the key assumptions
used to determine the recoverable amount. The directors
believe that the following represent reasonably possible
changes in the key assumptions on which the recoverable
amount of the banking CGU is based would result in the
carrying amount to exceed its recoverable amount:
• If all other assumptions remain the same, should the
discount rate be increased to 20.1%, the carrying value
will exceed the recoverable amount by K270 million.
• If all other assumptions remain the same, should the
average NPAT growth rate be reduced to 9.2%, the
carrying value will exceed the recoverable amount
by K1million.
During the prior year, the corporate income tax was
increased from 30% to 45% effective 01 January 2023.
The increase had a significant impact on the cash flows
used in the value-in-use calculations and consequently on
the recoverable amount. Throughout the year, the Group
has been assessing its strategic response to the change
which include intense focus on loan growth, repricing
of loans and deposits, maximising investment of surplus
funds in available market instruments, reviewing fees and
commissions, and cost control.
Where practical and appropriate, some short-term
measures have been implemented, and more strategic
action has been taken in the normal course of business,
as evidenced by the growth in lending and loan interest
spread, and the decline in the cost to income ratio.
Business development efforts continue in the area
of foreign exchange client relationships with targeted
efforts on large importers and exporters in key industries,
where revenue potential is set to build as the large
natural resource projects proceed along their
implementation path.
Whilst these strategic developments are expected to
produce positive impacts on the cash flows, the Group
has not fully incorporated the effect of these positive
impacts on the cash flow projections used in the
estimation of recoverable amount.
38. Events after reporting date
Declaration of dividend
Subsequent to the financial reporting date, the directors
declared a final dividend of K15.5 toea (AUD 6.0 cents)
per share with a total dividend of K44.7 million.
37.
Goodwill (continued)
157
Additional information required by the Australian Securities Exchange Limited Listing Rules and not
disclosed elsewhere in the Report is set out below. The information is current as of 31 March 2025.
(a)
The distribution of holders of quoted securities (fully paid ordinary shares)
Range
Securities
%
No. of holders
%
1 to 1,000
315,811
0.11
540
12.16
1,001 to 5,000
3,048,750
1.06
1,064
23.97
5,001 to 10,000
5,263,959
1.83
666
15.00
10,001 to 100,000
62,362,349
21.66
1,895
42.68
100,001 and over
216,958,410
73.34
275
6.19
Total
287,949,279
100.00
4,440
100.00
(b) The distribution of holders of unquoted securities (performance rights)
Range
Securities
%
No. of holders
%
1 to 1,000
-
-
-
-
1,001 to 5,000
-
-
-
-
5,001 to 10,000
-
-
-
-
10,001 to 100,000
312,816
5.82
7
36.84
100,001 and over
5,062,404
94.18
12
63.16
Total
5,375,220
100.00
19
100.00
(c)
Number of holders for each class of equity securities on issue
Class of equity security
Securities
No. of holders
Quoted securities (fully paid ordinary shares)
287,949,279
4,440
Unquoted securities (performance rights)
5,229,763
19
(d) Unmarketable Parcel of Shares
The number of shareholders holding less than a marketable parcel of ordinary shares is 138, holding 9,211 securities.
(e)
Substantial Shareholders
Name
Number of shares
% of total shares issued
HSBC Custody Nominees (Australia) Limited
25,424,964
8.83
(f)
Stock Exchanges
The Company’s ordinary fully paid shares are listed on the Australian Securities Exchange (ASX) and the
Papua New Guinea National Stock Exchange (PNGX).
Shareholder Information.
158
14
159
(g)
Voting Rights
Each ordinary shareholder present at a general meeting (whether in person, by proxy or by representative),
is entitled to one vote on a show of hands, or on a poll, for each fully paid ordinary share held.
(h)
20 largest holders of quoted securities (fully paid ordinary shares)
Rank
Name
Number of
shares
% of total
shares issued
1
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
25,424,964
8.83
2
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED (ASIAN DEVELOPMENT BANK A/C)
10,751,916
3.73
3
COMRADE TRUSTEE SERVICES LIMITED
9,611,791
3.34
4
CITICORP NOMINEES PTY LIMITED
7,536,536
2.62
5
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO CUSTOMER
7,000,000
2.43
6
SKY FINANCE LIMITED
6,410,721
2.23
7
NATIONAL SUPERANNUATION FUND
5,978,507
2.08
8
MINERAL RESOURCES CMCA
5,312,834
1.85
9
PACIFIC MARKETS PTY LTD
5,150,000
1.79
10
BNP PARIBAS NOMS PTY LTD
4,992,156
1.73
11
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
4,408,347
1.53
12
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
4,076,958
1.42
13
BNP PARIBAS NOMINEES PTY LTD
4,025,626
1.40
14
CAPITAL NOMINEES LIMITED
3,787,348
1.32
15
ROCKCAR PTY LTD
3,600,000
1.25
16
AIRWOLF LIMITED
2,885,390
1.00
17
MR IVAN LU
2,671,145
0.93
18
KINA NOMINEES LIMITED
2,637,034
0.92
19
GAS RESOURCES PNGLNG PLANT
2,139,037
0.74
20
PNG LENDING CONSULTANTS LTD
1,910,515
0.66
Total Top 20
120,310,825
41.78
Balance of Register
167,638,454
58.22
Total fully paid ordinary shares on issue
287,949,279
100.00
(i)
On-market buy-back
There is no current on-market buy-back.
(j)
Securities purchased on-market during the reporting period
Number of shares purchased
Average purchase price
To satisfy the entitlements of holders of performance
rights under the Kina Performance Rights Plan
1,548,729
$0.91
Directors
Ian Clough (Chairman)
Ivan Vidovich (CEO)
Karen Smith-Pomeroy
Dr Jane Thomason
Paul Hutchinson
Andrew Carriline
Richard Kimber
Company Secretary
Johnson Kalo
Share Registry
Papua New Guinea
PNG Registries Ltd
Level 4, Cuthbertson Haus
PO Box 1265, Port Moresby
Papua New Guinea
Telephone: (675) 321 6377
Facsimile: (675) 321 6379
Email: salaniet.athew@mpms.mufg.com
Australia
MUFG Corporate Markets (AU) Limited
Liberty Place, Level 41
161 Castlereagh St
Telephone: 1300 554 474
(within Australia)
+61 1300 544 474 (outside Australia)
Auditor
Deloitte Touche Tohmatsu Ltd
Level 9 Deloitte Haus
MacGregor St
PO Box 1275, Port Moresby
National Capital District
Papua New Guinea
Telephone: +675 308 7000
Facsimile: +675 308 7001
www.deloitte.com/pg
Stock Exchange Listing
ASX Code: KSL
PNGX Code: KSL
www.kinabank.com.pg
Registered Office
Head Office
Level 9, Kina Bank Haus Douglas St
PO Box 1141, Port Moresby
National Capital District 121
Papua New Guinea
Telephone: +675 308 3888 or
+675 308 3800
Alotau Office
Chascorp Haus,
Section 10, Allotment 9,
Office 6, Ground Floor, Alotau
PO Box 723, Alotau
Milne Bay Province
Papua New Guinea
Business Centre Harbour City
Portion 13 Section 44
Allotment 30
Off Poreporena Freeway
PO Box 1141, Port Moresby 121
National Capital District
Papua New Guinea
Digital Hubs (Port Moresby)
Elisio Rainbow Shopping Mall
Elisio Waigani Shopping Mall
Boroko Post Office
Rangeview Shopping Mall
Goroka Branch
Cnr of Fox & Elizabeth St
Ground Floor, Gouna Plaza
PO Box 767, Goroka 441
Eastern Highlands Province
Papua New Guinea
Hides Branch
Block 8 – HGDC Para Camp,
Tari, Hela Province
Papua New Guinea
Jacksons Branch
Jacksons International Airport
PO Box 1152, Port Moresby 121
National Capital District
Papua New Guinea
Kimbe Branch
Cnr San Remo Drive and Talasea Rd
PO Box 466, Kimbe 621
West New Britain Province
Papua New Guinea
Kina Bank Centre
Level 1, Kada Gunan Building
Habour City
PO Box 1141, Port Moresby
National Capital District
Papua New Guinea
Kokopo Branch
Peter Torot Street,
Tabubar Kokopo,
PO Box 419, Kokopo
East New Britain Province
Papua New Guinea
Lae Market Branch
Cnr Cedarbank St and Aircorps Rd
Second St, Top Town
PO Box 674, Lae Morobe Province
Papua New Guinea
Lae Top Town Branch
Ground Floor, Nambawan Super Haus
2nd St Top Town
PO Box 682, Lae Morobe Province
Papua New Guinea
Lihir Branch
Block 830, Wide Rd, Londolovit
PO Box 223, Lihir
New Ireland Province
Papua New Guinea
Madang Branch
Section 20, Lot 08
Coastwatcher’s Ave
PO Box 181, Madang 511
Madang Province
Papua New Guinea
Mt Hagen Branch
Hagen Dr
PO Box 121, Mt Hagen 281
Western Highlands Province
Papua New Guinea
Popondetta Office
Comfort Inn
Top Town, Section 7 Allotment 2
Killerton Road
Papua New Guinea
Port Moresby Branch
Cnr Musgrave St and Champion Parade
PO Box 143, Port Moresby 121
National Capital District
Papua New Guinea
Vision City Branch
Ground Floor, Sir John Guise Drive
PO Box 1141, National Capital
District 121
Papua New Guinea
Waigani Cameron Rd Branch
Cnr Waigani Dr and Cameron Rd
PO Box 252, Waigani 131
National Capital District 121
Papua New Guinea
Waigani Drive Branch
Cnr Waigani and Islander Dr
PO Box 1141, Port Moresby
National Capital District 121
Papua New Guinea
Wewak Branch
Centre St, PO Box 1069, Wewak 531
East Sepik Province
Papua New Guinea
Corporate Directory.
160
161
161
15
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can be accessed via
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