BANK South Pacific (BSP) has posted K190.47 million in operating profit for the first six months of the year, up 2.4% from K185.83 million realised during the same period last year, chairman Noreo Beangke announced yesterday.
The bank earned an after-tax profit of K123.21 million during the period in review, Mr Beangke said.
At the same time, he disclosed that the bank made an abnormal provision of K7.5 million to recognise a loss arising from a series of fraudulent cheque transactions by a customer.
Collective loan provisions had increased marginally compared to same period last year, as provisioning models had been re-tuned to incorporate the potential adverse effects on operating conditions of borrowers in the domestic economy.
Mr Beangke noted that the global economic crisis had been a major factor on the bank’s performance during the period in review.
He said earlier this year, BSP determined that the bank’s performance for this year would be affected by the impact of the depressed global economic conditions.
Because of this, a cautious approach to lending had been adopted, Mr Beangke said.
He said the first-half of this year was reflective of these expectations.
Mr Beangke disclosed that since last March, the bank has been conducting exercise on operations’ improvement with help from industry and technical experts.
The bank also took up risk management and security re-assessment exercises, he said.
“Despite global challenges, there had been continued growth in BSP’s total assets – from K6.61 billion at the end of last year, to K7.58 billion as the end of last June,’ Mr Beangke said.
The customer loan and receivables exceeded K2.69 billion, up 13% from K2.34 billion as of year-end.
“The bank’s expense-to-income ratio was reduced from last year’s mark … a ratio of 41.70% was achieved, which was an improvement on the ratio of 45% from last year,” Mr Beangke said.
He said BSP capital base remained “well-capitalised” by international definition.
“Capital adequacy is 22.6%, reflecting the continued growth in BSP total balance sheet assets and the proposed dividends of K100.31 million,” he said.
Those dividends were paid last July.
“BSP anticipates economic conditions in PNG to remain subdued in the short-to-medium-term with optimism revolving around the ExxonMobil liquefied natural gas (LNG) project,” according to Mr Beangke.