BSP Financial Group Limited is budgeting K345 million (US$90 million) in capital expenditure over two years starting this year, says Group Chief Executive Officer, Mark Robinson.
Speaking during the bank’s 2024 annual general meeting last Friday, Robinson said this will be for the bank’s modernisation programme.
“Specifically, we are budgeting K345 million (US$90 million) in capital expenditure over a 2-year period commencing this year, for BSP’s modernisation programme,” Robinson said.
“We’re making substantial investments in technology and leveraging data more effectively to gain a deeper understanding of customer needs and risks.
“Encouragingly, some of the steps we’ve taken are already yielding results, such as our ability to pre-approve loans originated and processed entirely digitally.
“Additionally, we’ve significantly reduced wait times at branches starting in the latter half of 2023 and established dedicated business banking centres in key urban areas to support our customers.
“Looking ahead, on balance, the fundamentals of our South Pacific economies are improving.
“At the same time, we recognise in PNG that a number of challenges continue to impact business confidence. Nevertheless, we remain optimistic that PNG’s outlook remains positive with “mega-projects” of over K100 billion(US$26 billion) either just being renewed or in the pipeline.
“We are already experiencing the benefits of the Porgera Mine reopening this year, and when it becomes fully operational it’s expected to deliver K1 billion (or US$250 million) in FX inflows annually to PNG.
“We expect that some of our markets will experience an easing of inflation this year, whereas PNG and Fiji businesses and households are expected to experience additional pressure, as inflation remains elevated.
“These economies continue to be fundamentally sound and we remain optimistic about their outlook.
“We are prepared for evolving economic conditions, and our robust balance sheet offers flexibility to navigate the current landscape, ensuring support for our customers, while delivering sustainable returns.
“Pleasingly, we have made a good start to 2024, with our Q1 results showing strong growth across the Group. Our assets were up 7 percent on the same quarter in 2023, as were our liabilities. Our Q1 underlying earnings were up 9.6 percent compared with Q1 in 2023. Due to higher provisioning, our net income of K214 million (US$55 million) was 2.3 percent below the same period last year.
“The higher provisions were due to one corporate borrower and some weakening of the retail portfolio.
“Also, in April our settlement with the government for the Additional Company Tax dispute was executed and BSP received our share of the settlement, being K95 million (US$24 million). It is good to settle this and get it behind us.
“As we look ahead, we remain committed to investing in our business and delivering our strategy to offer an exceptional customer experience in our region. “Our focus will remain on improving our customer service levels, contributing to our communities, and supporting the prosperity of the Pacific,” he said.