Kina Securities 1H 2026 Statutory NPAT Up 4% to K59.7m

Kina Securities (ASX:KSL) reported statutory net profit after tax of K59.7 million for the half year to June 2026, up 4 per cent on the K57.7 million reported in 1H 2025. Figures are in Papua New Guinea kina unless stated otherwise, and the interim dividend is declared in both kina and Australian dollars. Revenue was K254.8 million, up 2 per cent, earnings per share were 20.3 toea, up 1 per cent, and operating costs rose 7 per cent to K159.6 million. Net interest income increased 5 per cent to K119.3 million, or 47 per cent of total revenues, with interest income on loans up 12 per cent underpinned by 2 per cent growth in the loan book against 1H 2025 and a flat net interest margin. Non-interest income was K135.5 million, a nominal decline of 2 per cent and 53 per cent of total revenues. Kina separately reported that fee and commission revenue was flat at K85.4 million, that foreign exchange revenue fell 5 per cent to K48.3 million from K50.9 million and includes a one-off K2.4 million foreign exchange loss incurred on the FY2025 final dividend paid in April 2026, and that wealth revenue grew 11 per cent to K25.6 million. The company said depreciation of the kina against the US and Australian dollars increased operating expenses, an impact offset by a reduction in the corporate tax rate applying to some qualifying Papua New Guinea banks to 35 per cent from 40 per cent in the corresponding period of 2025.

Capital adequacy strengthened to 26.0 per cent from 17.4 per cent at 31 December 2025, which the company attributed to the issue of a K235 million 10-year subordinated Tier 2 bond listed on PNGX and described as the first listed corporate bond in Papua New Guinea. Total assets were broadly stable at K5.4 billion and lending assets decreased 3 per cent to K3.1 billion, or 57 per cent of total assets. The loan book declined 3 per cent from December 2025 and rose 2 per cent against June 2025; Kina said the first-half reduction reflects deliberate balance sheet optimisation and de-risking, and that excluding those actions the underlying loan book would have grown 2 per cent from December 2025 and 7 per cent against 1H 2025. Provision coverage strengthened to 2.6 per cent of gross loans at June 2026 from 2.1 per cent at June 2025, and the non-performing loan ratio was 8.9 per cent at 30 June 2026 against 8.7 per cent at 31 December 2025, a comparative the company restated from 7.7 per cent after it began including suspended interest balances associated with credit-impaired loans; Kina said the movement was driven primarily by the 3 per cent reduction in the loan book rather than a deterioration in underlying credit quality. An interim dividend of 14.2 toea, or AUD 4.5 cents, was declared, a 13 per cent increase in kina terms and stable in Australian dollars, representing a payout ratio of 70 per cent within the company's 60 to 80 per cent policy range. Kina said growth in its payments acquiring business was delayed by interoperability issues affecting a major Papua New Guinea bank's newly issued debit cards, an external issue it expects to be resolved before the end of 2H 2026, and that it expects earnings to increase during the remainder of 2026, supported by improved foreign exchange activity and loan growth.