Kina Securities Limited has reported a major setback following the discovery of a customer fraud incident affecting several accounts. The company revealed that the fraudulent activities have resulted in an aggregate loss estimated to be between PGK12 million and PGK15 million before taxes. Investigations into the matter are ongoing to determine the exact extent of the financial damage.
The incident, which was promptly addressed following a root cause analysis, highlighted vulnerabilities within certain systems. Kina Securities has since taken immediate steps to bolster its security measures and is planning further enhancements to prevent future occurrences.
In a statement released recently, Kina Securities expressed concerns over the financial implications of the fraud, noting that the exact impact remains uncertain at this stage. Based on current information and assuming no recovery of the losses incurred, the company anticipates a significant decrease in its net profit after tax (NPAT) for the half-year ending 30 June 2024. Analyst consensus estimates suggest a potential 13% to 17% reduction in NPAT compared to previous expectations. This adjustment equates to approximately 6% to 7% lower than the market’s consensus forecast for the full year NPAT for FY24.
According to analysts, the consensus NPAT for the half-year was projected at PGK49.5 million. However, in light of the recent events, Kina Securities now forecasts a revised NPAT ranging between PGK34.6 million and PGK42.9 million for the same period. Similarly, the consensus forecast for the full-year NPAT for FY24 stood at PGK117.8 million, but has now been adjusted to between PGK102.9 million and PGK111.2 million.
Kina Securities emphasized that it is actively assessing all available options and prospects for recovering the losses incurred due to the fraud. At present, the company has assumed no recoveries against these losses for the first half of the year.
The incident underscores the challenges faced by financial institutions in safeguarding against increasingly sophisticated fraudulent activities, prompting renewed scrutiny and reinforcement of security measures across the industry.
