BSP plans to pay dividend

The National Business

BANK South Pacific will pay a dividend of 38 toea per share in two months.
Chairman Sir Kostas Constantinou announced the group’s half year results up to June 30 yesterday, saying the dividend would be payable on Oct 18.
Sir Kostas said the interim dividend of 38 toea per share represented;

  • Gross interim dividend amount of about K177.6 million (2018 K168.2 million)
  • an interim payout ratio of 40.8 per cent, (interim 2018: 40.2 per cent) and;
  • an annualised yield on a current K11.20 share price of 12.41 per cent, similar to prior year levels.

Sir Kostas said the timing of the dividend was ex-dividend Oct 2, record date Oct 9 with payment on Oct 18.
He said the payment of the interim dividend recognised the bank’s commitment to its shareholders and that it reflected BSP’s desire to ensure that all shareholders benefitted from BSP’s profitable operating performance.
Sir Kostas said business conditions in the Pacific and in the country remained stable and despite the modest growth in the countries where BSP operated, notwithstanding the current subdued economic conditions in the country, the group had again achieved positive results in the first half of this year, highlighted by the following:

  • A consolidated operating profit after tax of K434.9 million for the 2019 half year, a 3.97 per cent increase on the consolidated 2018 operating profit after tax of K418.3 million for the comparative period. Total assets of the group increased by about K3.264 million to K23.390 billion, predominantly due to an increase in the loan book for the period across all countries;
  • Total group revenues marginally increased for the comparative period (2018 had K19.2m in other income as a result of the insurance recovery on aircraft loss in the Southern Highlands).
  • Revenue growth had been derived from interest income streams, in particular from loans and advances, with BSP growing its loan book by 4.2 percent. Its Pacific branches and subsidiaries had also contributed well to the first half performance. Revenues from foreign exchange income increased from K151.8m to K160.8m as a consequence of good export flows in PNG in the first half of this year as well as Bank of PNG’s intervention.
  • BSP bank’s ongoing growth was also positive with after tax profits increasing by 8.2 per cent to K443.3 million from K409.9 million (note includes dividend receipts from subsidiaries and which eliminate on consolidation). Total assets of the bank at the half year 2019 were K20.878 billion compared to K20.696 billion last year. Loans and advances to customers have seen net growth of K0.476 billion to K11.708 billion.

Customer deposits had decreased slightly to K16.876billion which reflected customers being able to obtain more foreign exchange and so are paying overseas suppliers more promptly.

  • The group’s operating expenses had decreased by K22.5m which was partially due to the write-off of an aircraft loss of K14.1m in 2018 but otherwise reflected good cost containment.
    The cost to income ratio for the group was at 38.46 per cent, a 2.24 per cent reduction from 40.7 per cent last year. The bank cost to income ratio was 36.36 per cent versus 39.27 per cent in 2018 comparative period.
  • The group’s capital base remained sound. Total capital adequacy at the half year 2019 was 20.9 per cent, down from 22.9 per cent at the end of 2018, reflecting the impact of the final dividend payout on June 22, of K471.9m and compared to 22.7 per cent last June. The capital adequacy ratio exceeded the minimum Bank of PNG prudential requirement of 12.00 per cent.
  • Notwithstanding the more subdued trading conditions in the country, the first half of this year had been notable for the continuation of positive performances for the bank and most of its subsidiaries, as well as additional growth in the group’s balance sheet.
  • BSP’s overseas operations and subsidiaries had all contributed strongly to this year’s result.