Kina Bank’s vision is to be the Papua New Guinea’s leading digital bank, CEO Greg Pawson tells Business Advantage PNG. He also reveals the ASX-listed bank’s plans to absorb ANZ’s retail, commercial and SME businesses in PNG.
‘What does digital banking mean? Effectively, for our customers, it means they can transact with us anywhere, anytime, anyhow,’ says Greg Pawson.
‘Quality, convenience and simplicity are the key themes of our banking proposition.
‘We were recently crowned the Most Innovative Business in PNG. We’re building best-in-class digital capabilities that support the growing middle market demographic.
‘Customers want to transact digitally—they have smart phones and they’re very tech-savvy.’
Mass retail market
In June 2018, Kina Bank announced it would seek regulatory approval to buy ANZ’s retail, commercial and SME banking business in PNG for K24.2 million (AUD$10 million).
If approved, the sale gives Kina Bank an additional 15 retail branch premises, 72 ATMs and more than 1800 EFTPOS terminals.
It will increase its lending market share from 5.8 per cent to 8.8 per cent and double its market share of deposits to 9.9 per cent to become the second largest bank in PNG.
‘This is a tremendous opportunity for us. The proposed acquisition is very much in line with our current target and strategy to reach the emerging mass/affluent segment in retail banking, and commercial and SME customers,’ Pawson tells Business Advantage PNG.
‘Papua New Guineans are buying their first homes. Some are starting to buy investment properties and so forth. We’re seeing that trend and it’s good.’
‘Our focus on the customer experience means we’re offering innovation in the product space. Our expanding suite of products and services are designed specifically to meet the changing needs of customers.’
The strategy, he says, is long-term and will see more products and services being provided online.
Kina Bank has about 85 separate digital-based projects being developed at the moment.
‘Some of it is process re-engineering within the company, too. We want to be digital on the inside as well as digital on the outside. And we’re doing a huge amount of work to make sure that, if and when ANZ customers transition to Kina Bank, it’s seamless for them.
‘We’ve found a lot of our systems and processes require some form of manual intervention, which is costly.
‘We completed an upgrade of our core banking system, ICBA; that was quite a significant investment. It enables us to streamline a lot of these operations by performing them digitally.’
Pawson sees home lending as a huge opportunity.
‘Papua New Guineans are buying their first homes. Some are starting to buy investment properties and so forth. We’re seeing that trend and it’s good.
‘You can buy a house for K300,000 to K500,000 and a lot of Papua New Guineans, a lot of our staff here, are well positioned to take advantage of a home loan.’
Kina Bank has just lowered a Port Moresby or Lae home loan applicant’s deposit requirement to 10 per cent.
‘And a lot of employers now are sponsoring their staff into homes.
‘It’s good for retention and it’s the right thing to do.’
New equity fund for SMEs
As part of Kina Bank’s focus on SMEs, it’s actively participating in the formation of an equity fund to help businesses that are starved of capital grow.
‘This concept has been around for a few years and is now progressing well,’ says Pawson.
‘We’re talking to a number of agencies at the moment to build the fund, which will be a first for PNG. The PNG government is very focused on growing the SME sector, so this as a nice alignment with their policy.’