Kina Bank Fuels Growth for SMEs
To expand the small and medium enterprises (SMEs) and fund additional strategic projects that enhance digital leadership in the country, Kina Bank is planning to raise around A$91 million (K224mil). According to Kina Bank chief executive officer Greg Pawson, they want to be more competitive in lending particularly for large SMEs, commercial and corporate type customers, and this equity raising will just give them a more robust and solid capital base to be able to do that.
“It also means that we will be well in advance with our prudential or regulatory requirements such as capital adequacy and leverage,” he said. It just makes us a much stronger bank, it’s not that we are weak at the moment, we are well-positioned but we wanted to push a bit harder particularly into those commercial and corporate sectors of the market.”
As part of its programme to become the leading digital bank, Pawson said that the main two or three that they are focused on at the moment is their newest internet payment gateway in partnership with a local firm called NiuPay and that’s currently in pilot with the Lands Department.
“We’re planning to roll that out to our SMEs and commercial customers in the coming weeks once we see that the pilot has been successful so that gives merchants the ability to accept payments online for goods and services,” he said. “That’s something we do in a relatively short space of time. We’re doing a lot of work with our point-of-sale (POS) network at the moment. So we arguably have the best performing POS terminals in the market in terms of reliability and speed and the next phase of that is called integrated POS. We want to continue to be at the forefront of the new technologies that are coming to support POS and the next phase of that will be starting to integrate the POS terminals with the merchant software.”
Kina Bank is also looking at a number of other things largely at payments to help facilitate e-commerce, more electronic payments for both personal and business customers in PNG and they are working very closely with some of the government departments around moving some of their services to e-commerce platforms as well and being able to accept some of the payments online.
“So a lot of the programmes are geared around e-commerce and electronic payments, and the game falls back to digital banking,” he added. “Not just for customers but also with the new organisation, a lot of our internal systems and processes are digitalised or electronic which just makes us a more efficient and productive organisation at the end of the day and it enables us to free up people to focus on more value added activities.”
In its first half of the year, Kina is in a good position. Their net profit after tax was about 24 per cent up on the same period last year and they didn’t lose any ANZ customers.
“That was deliberate on our part,” said Pawson. “We wanted to make the acquisition as seamless as possible. It was such a complex programme that took 18 months to complete but it worked. We did have some hiccups along the way but about 90 per cent of our customers were happy with the transition. We’re still building some of our business and corporate online capability. It has gone better and even off the back of that, we have on-boarded about 6,000 new customers this year alone in addition to that. So, hopefully, it’s a reflection of how well we did with the ANZ acquisition and also our brand campaign which we launched in May with our three brand ambassadors which we’re proud of.”
For the second half of the year, Pawson said it is about finding the right balance between what’s right for the resource companies versus what’s right for the sovereign. He says that the government has learned some lessons from past experience and said that it doesn’t look good offshore when these projects are delayed.
In spite of this health crisis, Kina Bank has kept its focus. According to Pawson, they are focused particularly around service sync with their desire to be the leading digital bank in PNG.
“We also want to be the leading service organisation, not necessarily a bank but as a brand, known for providing good services,” he said. “Lending is our big focus so we are very liquid following the ANZ acquisition and we want to be actively lending out to SMEs and commercial customers where we can, and bolster some economic growth. Another area that aligns with our digital capability is technology and infrastructure and just making sure we’ve got the right network and the right infrastructure to support our growth aspirations. PNG is in a reasonably good position at the moment and, yes, it’s tough like other markets but it’s still presenting us with some good opportunity for growth which we are after.”