Taxes to dent BSP profits: CEO

BANK South Pacific (BSP) delivered a record K1.136 billion underlying profit in 2022 but its statutory (net) profit will be reduced to K1.081 billion once the impacts of the new Government taxes are applied, the company says.
As a consequence, BSP shareholders’ K1.74 full year dividend was only marginally higher (by 0.6 per cent) than the prior year’s K1.73.
BSP Financial Group Limited’s acting chief executive officer Ronesh Dayal said the result was impacted by the K190 million additional company tax (ACT) and a one-off tax credit of K135 million.
The tax credit comes after the Papua New Guinea bank’s closing deferred tax assets and liabilities for 2022 were re-measured at 45 per cent in accordance with international accounting standards.
The PNG commercial bank tax rate was then increased from 30 per cent to 45 per cent in 2023.
“Despite these challenges, BSP has posted a record K1.081 billion statutory net profit after tax (NPAT), up 0.5 per cent from the prior year (2021) NPAT of K1.075 billion,” Dayal said.
He also noted that the group’s underlying NPAT was K1.136 billion, excluding one-off tax impacts and represented a 5.7 per cent increase on 2021 profits.
“Improved economic conditions in the Pacific with the reopening of borders and resumption of business activities were the key drivers of the underlying result,” he said.
“Consequently, net interest income increased by 8.8 per cent, foreign exchange income increased by 11.2 per cent, and total loans increased by 4.6 per cent to K15 billion.”
Maintaining a dividend payout ratio of 75 per cent, BSP has declared K813.5 million in dividends to shareholders for FY2022.
A final dividend of K1.40 per share, payable on April 23, 2023, combined with the K0.34 per share interim dividend paid on Oct 14, 2022, brings the dividend to 14 per cent.