Paradise

Money strategy

The financial services group that is racking up the numbers in PNG.

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Since it started as Kina Securities, a small funds administra­tor and stockbroke­r, about 17 years ago, the Kina Group has grown into a model diversifie­d financial services group in Papua New Guinea.

Today, Kina is also a funds manager with over PGK4.7 billion funds under management, a finance company, mortgage lender, insurance provider and co-founder and shareholde­r in PNG’s bourse, the Port Moresby Stock Exchange.

With over PGK340 million in assets, an annual turnover of PGK66 million and over 200 staff, Kina’s chief executive officer, Syd Yates, looks back with some satisfacti­on.

“From seven staff with two computers in 1996/97, we’ve come a long way,” Yates says.

“We’ve built Kina with a strong foundation of best-practice governance and systems and controls. We now have two banking and financial institutio­n licences, two licences under the Superannua­tion Act, a Trustee Licence, and we’re also member of the Port Moresby Stock Exchange.

“We’ve also developed a strong track record of returns in that time, and proven products and services for our customers.”

The growth of the Kina Group has mirrored the emergence of PNG’s economy, which itself has more than doubled in the past eight years and is expected to grow by more than 8 per cent this year.

As more Papua New Guineans have entered the formal economy, so demand for vehicles, white goods, payment systems, savings accounts, small business loans, investment­s and home ownership has grown. Generally regarded as well regulated by the Bank of Papua New Guinea, PNG’s financial services sector has grown steadily to meet demand.

Yates says the strength of the company is in its diversity: several businesses servicing different parts of the market, supported by a common back office.

“We are the funds manager for superannua­tion fund Nambawan Super. They started off with around PGK720 million of funds, and today their fund is worth about PGK4.2 billion. We’ve been supporting them in the growth of its investment­s and helping to secure the financial future of its members.

“But that’s just on our funds management side. On our finance side, we’ve developed products to help Papua New Guineans own their first house, to be able to get school fees to send their kids to school, to buy a car and so on.”

One of Kina Finance’s successful products has been EsiLoan, while the group has recently launched its own insurance product, underwritt­en by Tower Insurance.

“In the first month, we wrote 300 policies, which is pretty good for housing in PNG,” says Yates.

In 2007, Kina set up Kina Asset Management Limited (KAML), PNG’s only listed investment company, which now has an investment portfolio worth PGK48.6 million.

KAML’s most recent results – a year-to-date return of 17.5 per cent for the third quarter of this year – suggest it was an astute move.

Young Papua New Guineans want what everyone else wants. They want a nice house, they want to go on holidays,

they want to have investment

portfolios, and we’ve been able to help them

with that.

“Over 3000 Papua New Guinean shareholde­rs now have the opportunit­y not only just to own shares on the PNG market, but also shares on the Australian and overseas markets,” says Yates.

In addition to being quick to market with new products and services, Yates thinks one of Kina’s strengths is its ability to be responsive.

“Young Papua New Guineans want what everyone else wants. They want a nice house, they want to go on holidays, they want to have investment portfolios, and we’ve been able to help them with that.

“For instance, if our clients have an EsiLoan Cashcard, which we launched this year, we can turn customers’ loans around in two hours. That’s best practice. That’s better than most places in Australia, and this is done by everyday Papua New Guineans.

“We want to meet our customers’ expectatio­ns, and that’s what we try to do.”

With a growing middle class and youthful population, Yates sees the future for financial services in Papua New Guinea as strong.

“Young Papua New Guineans want what everyone else wants. They want a nice house, they want to go on holidays, they want to have investment portfolios, and we’ve been able to help them with that.

“We’ve seen some young people who have two, three houses now, and have also moved on to develop a small investment portfolio. To me, that’s the greatest thing.” ■

 ??  ?? Kina’s CEO Syd Yates … “We can turn customers’ loans around in two hours. That’s best practice. That’s better than most places in Australia, and this is done by everyday Papua New Guineans.”
Kina’s CEO Syd Yates … “We can turn customers’ loans around in two hours. That’s best practice. That’s better than most places in Australia, and this is done by everyday Papua New Guineans.”

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