Key Highlights

  • Kina Securities Ltd (ASX:KSL) shares go ex-dividend on 4 September 2026, with the interim Dividend payable on 7 October 2026.
  • The Interim Dividend has been set at AUD 4.5 cents per share (14.2 toea), unfranked, representing a 13 per cent increase in PGK terms year-on-year.
  • Statutory NPAT for 1H 2026 grew 4 per cent to K59.7 million, supported by 5 per cent growth in net interest income.
  • Capital adequacy strengthened to 26.0 per cent from 17.4 per cent at 31 December 2025, following the issuance of a PGK235 million Tier 2 Bond.

Kina Securities Ltd, which operates as Kina Bank and is listed on both the ASX and PNGX under the code KSL, is scheduled to trade ex-dividend from 4 September 2026. The company declared an interim dividend of 14.2 toea per share, equivalent to AUD 4.5 cents per share, unfranked, with payment scheduled for 7 October 2026. This represents a 13 per cent increase in PGK terms compared with the prior corresponding period, although the dividend remains flat in AUD terms due to the Depreciation of the Kina (PGK) against the Australian dollar. The distribution reflects a Payout Ratio of 70 per cent, within the company's dividend policy range of 60 to 80 per cent.

Half-Year Financial Performance

For the half year ended June 2026, Kina Securities reported statutory NPAT growth of 4 per cent to K59.7 million, up from K57.7 million in the first half of 2025. This was supported by 5 per cent growth in net interest income, which reached K119.3 million and represented 47 per cent of total revenues. Revenue for the half increased 2 per cent to K254.8 million, while operating costs rose 7 per cent to K159.6 million. Earnings Per Share increased 1 per cent to 20.3 toea.

Non-interest income for the half was K135.5 million, a nominal decline of 2 per cent, representing 53 per cent of total revenues. Fee and commission revenue, including digital channels, was flat at K85.4 million, with growth in the company's payments acquiring Business temporarily constrained by interoperability issues affecting a major PNG bank's newly issued debit cards, an issue described as external to KSL. Foreign exchange revenue declined 5 per cent to PGK48.3 million from PGK50.9 million, which included a one-off foreign exchange loss of K2.4 million associated with the FY2025 final dividend payment made in April 2026.

Loan Book and Asset Quality

The Loan book declined 3 per cent from December 2025, though it increased 2 per cent compared with June 2025, a movement the company attributed to deliberate Balance Sheet optimisation and de-risking initiatives, including the targeted reduction of selected lending exposures. Excluding these actions, the underlying loan book would have grown 2 per cent from December 2025 and 7 per cent compared with the first half of 2025.

Loan Impairment provisions increased to 2.6 per cent of gross loans at June 2026, compared with 2.1 per cent at June 2025. Following the adoption of updated IFRS 9 methodology for suspended interest treatment, the reported non-performing loan ratio increased marginally from 8.7 per cent to 8.9 per cent, an increase the company said was primarily due to the 3 per cent reduction in the overall loan book rather than a deterioration in underlying Credit quality.

Capital Strength and Strategic Initiatives

Capital adequacy strengthened significantly to 26.0 per cent at June 2026, up from 17.4 per cent at 31 December 2025, following the issuance of KSL's PGK235 million Tier 2 Bond, the first listed Corporate Bond in Papua New Guinea. The bond issuance was oversubscribed and attracted support from institutional investors, businesses and sophisticated investors. Total Assets remained broadly stable at PGK5.4 billion, with lending assets decreasing 3 per cent to PGK3.1 billion.

During the period, Kina Securities also launched its Pei Beta Digital Wallet and introduced a new Corporate Online Banking platform, alongside continued Investment in anti-money laundering and credit risk management capabilities as part of its 2030 Strategy execution.

Outlook

The company's corporate tax rate applicable to qualifying banks in Papua New Guinea reduced to 35 per cent for 2026 from 40 per cent in 2025, which partly offset the impact of Currency Depreciation on operating expenses. Management said it expects earnings to increase during the remainder of 2026, supported by improved foreign exchange activity and loan growth, with industry remediation of the debit card interoperability issue expected to be completed by the end of the second half of the year.

Conclusion

Kina Securities' 1H 2026 result shows a period of modest earnings growth achieved against a backdrop of currency depreciation, Margin pressure on government securities and a temporary constraint on payments revenue linked to an external debit card interoperability issue, while Capital strength was materially reinforced through the issuance of Papua New Guinea's first listed corporate bond. The interim dividend of AUD 4.5 cents per share, going ex-dividend on 4 September 2026, was increased 13 per cent in local currency terms even as the AUD-denominated amount remained flat.