BSP’s quarterly profit gains momentum as deposits and lending grow

Quarterly profit gains momentum

BSP Financial Group Limited (ASX:BFL, PNGX:BSP) produced a stronger third quarter, with unaudited net profit after tax rising to K334 million, 18% above the prior comparable quarter and 8% ahead of the first-half 2026 quarterly average. On an Australian-dollar basis, the result was A$107 million, up 2% on the comparable quarter and 5% on the first-half average, reflecting the exchange rates disclosed by the bank.

Revenue rose to K997 million, up 16% year on year and 6% against the first-half quarterly average. Net interest income contributed K619 million, while foreign-exchange income climbed 26% from the comparable quarter to K231 million and fee income increased 13% to K127 million. That mix gives the result more than a single lending-driven explanation, with BSP pointing to continued lending growth and deeper customer relationships across its South Pacific operations.

Loans and deposits widen the balance sheet

Gross loans increased 1.6% from June, led largely by retail mortgages and personal lending products. Total deposits reached K37.5 billion, a 3.6% increase over the same period. The figures suggest a busier quarter for both sides of the banking franchise, although the update does not provide a new full-year earnings forecast.

The latest numbers extend the trajectory reported in BSP’s strong first-half result, when the bank reported an 8.4% rise in net profit and an 8.6% expansion in its loan book. The third-quarter update does not disclose a standalone capital adequacy figure, but says the ratio is more than double the 12% regulatory minimum and that the leverage ratio remains above its 6% requirement.

Investment costs remain under control

Operating expenses rose 16% from the comparable quarter to K435 million, as BSP continues investing in its Modernising for Growth program. Even so, the cost-to-income ratio edged down to 43.6%, keeping it around the midpoint of the bank’s 42-45% target range. Return on equity improved by 100 basis points from the first-half quarterly average to an annualised 24.9%.

Credit impairment charges fell to K30 million from K38 million in the first-half quarterly average, and management said credit quality remained broadly stable with no material deterioration in provisioning trends during the quarter. That is supportive for the period’s earnings, but future impairment movements remain one of the more consequential variables for a bank operating across economies exposed to fuel prices, weather conditions and commodity cycles.

PNG growth outlook meets regional risks

BSP said economic growth across the South Pacific had held up reasonably well despite global geopolitical and macroeconomic pressures. It remains optimistic about Papua New Guinea, citing resilient copper, coffee and cocoa prices and potential medium- to longer-term support from major energy and resources projects, including Papua LNG.

The bank also highlighted its multi-year sponsorship agreement with the PNG Chiefs, becoming the club’s principal foundation partner ahead of the team’s planned entry into the National Rugby League in 2028. The announcement gives BSP a prominent national brand association, but the filing does not disclose the sponsorship’s financial value or commercial terms.