Good morning everyone, and welcome to the presentation of Kina Securities Limited full year results for 2025. My name is Ivan Vidovich, CEO and Managing Director.

Thank you for joining us today as we share our strong financial performance and the key drivers of our growth over the past year. I'm joined today by our Chief Financial Officer, Johnson Kalo, who will be joining me in presenting today and will be available for questions at the conclusion of the presentation.

As many of you will know, Johnson has been with Kina since 2019. Before we begin, please note the disclaimer in our presentation pack, which outlines that this document contains forward-looking statements and is not financial product advice.

For those following the pack, we'll start on slide 4. I'm pleased to report our 2025 results, which reflect a strong performance across the organisation.

Underlying NPAT grew 15% to 126 million kina, and statutory NPAT was up 20% to 121 million kina, also assisted by a decline in the tax rate for our banking operations. Pleasingly, our results were underpinned by broad-based revenue growth of 13% across our diversified portfolio, with double-digit growth across major revenue lines including lending, foreign exchange, and digital channels.

At the same time, we've maintained disciplined cost management, keeping our operating cost growth to 4%, totalling 298 million kina. The year-on-year comparison, however, is aided by a one-off cost that was reported in the prior year 2024.

Return on equity increased 200 basis points to 17.4%, and full-year dividend in PGK were up 22% year-on-year, translating to 10% year-on-year lift in AUD. In terms of our market share, our lending market share grew further in 2025.

Strong growth in the second half of the year saw year-end gross loans up 17.8% year-on-year versus system lending growth of 8.4%. This growth was largely driven by our commercial lending portfolio.

Customer deposits also rose to plan, growing from 4.3 billion to 4.6 billion kina. The spike in system deposits shown on slide 5 and corresponding drop in Kina's market share, despite our growth to plan, is largely due to movements in government-related banking activity, which is unrelated to KSL.

Turning to shareholder returns, our strong balance sheet and earnings growth enabled us to deliver dividend growth in 2025. We're pleased to announce a final dividend of 19.3 toea, or 6.5 Australian cents per share, bringing our full-year dividend to 31.9 toea, or 11 Australian cents, representing a 22% increase in our PGK dividend and 10% increase in AUD dividend.

This reflects a payout ratio of 77%, sitting at the higher end of our dividend policy, which acknowledges the decline in the PGK to AUD exchange rate alongside our strong underlying growth. Furthermore, our earnings per share increased by 20% to 41.8 toea.

Turning to slide 8, our underlying NPAT of 126 million kina benefited not only from broad-based revenue growth and moderate cost increases, but also from a scheduled 5% decline in the statutory corporate tax rate for our banking operations. For 2025, the standard rate for banks with profits under 300 million kina dropped from 45% to 40%, and it will reduce further to 35% in the current year 2026.

It is worth noting that this tax rate reduction required us to revalue our deferred tax assets, resulting in a one-off non-cash increase in tax expense of 5.5 million kina, which is reflected in our statutory NPAT. In terms of revenue, all major revenue lines grew by double digits in 2025, including treasury and government investments, lending, foreign exchange, and digital.

Our net interest income for 2025 was up 20% year-on-year to 268 million kina, now representing 49% of our total revenues. Lending income was fuelled by strong loan book growth of 13%, reaching 3.3 billion kina.

This growth was broad-based across our segments, with business loans up 17%, asset financing 16% up, investment property loans up 11%, and home lending up 4%. Our business lending expansion is a direct result of our customer-centric model, strong client engagement, and increased share of wallet, which reinforces Kina's position as the trusted partner for business in PNG.

The interest spread on these loans increased slightly to 7.2% versus 7.1% in both FY24 and FY23. This in part reflects an IFRS 9 aligned re-estimation of interest income, resulting in a non-material uplift, offset by a planned increase in our cost of funds as we move to strengthen the bank's funding base.

Net interest income was also supported by a 44% increase in income from Treasury bills and government inscribed stock, buoyed by strong interest rates throughout the year. In terms of non-interest revenue, this grew by 6% to 278 million kina.

A major contributor here was foreign exchange revenue, up 17% to 100 million kina. This FX performance reflects higher commodity prices, strong export volumes, and a maturing interbank FX market.

We expect the market to continue to evolve in 2026 as the Bank of PNG's FX intervention activity reduces in favour of interbank trades, given the expectations of some surplus positions. The result being a larger market, but potentially tighter margins.

Digital and partnerships income saw solid growth, up 13% year-on-year. We achieved strong transactional increases across our key channels.

Internet banking fees rose by 31%, merchant acquiring fees, which includes e-commerce, grew by 18%, and mobile banking fees increased by 17%. Visa fee income grew more modestly at 6%, but we have partnership initiatives underway with Visa aimed at restoring higher growth.

Finally, our wealth business revenue grew by 2% to 47.8 million kina, driven by increased fees in non-superannuation funds under management. Strong underlying growth in non-interest income was partly offset by reductions in non-operating income and valuation reductions from financial assets.

I'll now pass over to Johnson to provide an overview of our operating costs performance, asset quality, and capital adequacy.

Thank you very much, Ivan. I'll take listeners and viewers through slide 13 to 15.

On slide 13, operational efficiency and capability investments. Early progress was made to increase operational efficiency during 2025 and remains a focus.

Operating costs increased by just 4%, 298 million kina, versus 13% revenue growth. Because we grew revenue significantly faster than expenses, our cost-to-income ratio improved from 59.1% last year down to 54.7% this year.

As noted earlier by Ivan, the year-on-year comparison is partly aided by the total number of one-off costs in 2024. Pleasingly, we've contained cost inflation despite domestic inflationary pressures and the depreciation of the kina against the USD and AUD, which increased the local currency cost of our technology and consulting services, as well as some salaries.

At the same time, we made disciplined strategic investments into the core capabilities that will support organisational resilience and long-term growth. Key areas of investment include uplifting senior leadership capability and specialist capability in areas including strategy, risk, technology, digital innovation, and data; investments into technology and networks resilience; investments into uplifting AML and CTF capabilities; and specialist consulting in areas including risk, [feathers?]

, and strategy. Some of these investments will continue into 2026 on a targeted basis.

Sensible and appropriate cost controls aligned to our growth strategy will continue to be deployed alongside the delivery of customer-focused operational efficiencies and digitisation. Moving to slide 14, turning to asset quality, the provisions have increased by 39 million kina over the year.

19.3 million of this increase is attributable to organic growth in the loan book. In addition, as part of our IFRS 9 maturity review, we recognised a one-off 19.7 million increase in loan provisions to address a number of aged, non-performing loans.

This review also resulted in a reclassification of interest income as required under IFRS 9, creating a one-off non-material reallocation of income from prior years into the current period. Despite this one-off provision, the underlying quality of our assets continue to improve alongside strong quality new lending, which was written in 2025.

Our non-performing loan ratio decreased by 40 basis points to 7.7%, reflecting active management that reduced both early and late stage arrears. Our gross loans and advances coverage sits at a healthy and prudent 2.6%, providing a strong buffer against potential worse losses.

With regards to capital adequacy, our balance sheet remains very robust. Total assets grew 6% to 5.6 billion kina.

Our capital adequacy ratio ended the year at 17.1%, which is well above the BPNG's well-capitalised minimum threshold. A notable milestone will be reached in 2026 when Kina, subject to the relevant approvals, plans to issue the first PNGX-listed corporate bond under the country's new Capital Markets legislation.

The expectation is to issue a corporate bond of up to 250 million kina, which will increase our Tier 2 capital base, strengthen the balance sheet, provide capacity for future growth, and lower our cost of capital. I'll now pass back to Ivan to share further information about our 2030 strategy and 2026 outlook.

Ivan.

Thank you, Johnson. On to slide 17.

As we conclude our 2025 strategic cycle, we're set for a seamless transition into our new 2030 strategy. Since the acquisition of ANZ's retail, SME, and commercial business in 2019, Kina has firmly established itself as PNG's challenger bank, having deployed a diversified portfolio of products, services, and partnerships to meet the evolving customer needs and to compete effectively with established incumbents, the market-dominant player, and emerging new entrants.

Our 2030 strategy is centered on our purpose of creating brighter futures and acknowledges our deep connection with the people of Papua New Guinea over a 40-year period and our broader role in nation building as PNG's second largest commercial bank and foremost diversified financial services company. Our strategic priorities include putting the customer first, empowering our team, driving operational excellence, and pursuing growth through innovation.

As we continue to grow through our diversified portfolio, we are sharpening our focus on the customer segments where we are best placed to serve. This approach will underpin the delivery of value for all of our stakeholders.

Our revised company values and the accompanying culture development program, both are critical to delivering our strategy, are now shaping the development of our change-ready workforce, equipped for risk-aligned growth, which is consistent with the evolving market context in which we operate. For the immediate 2026 and 2027 horizon, our focus will be on driving organic growth in our target segments, optimising our capital planning, executing our culture development program, and continuously improving customer experience and process efficiency.

Furthermore, while our core PNG business will continue to generate the majority of our earnings, we have refocused our inorganic growth criteria for opportunities that can enhance income diversification, deliver scale, enable access to capabilities, and that deliver improved shareholder returns. On to slide 19, we remain deeply committed to enhancing prosperity and making a positive impact in the communities where we operate.

In 2025, through our Strongim Komuniti Grants program, Kina Bank team members participated in 10 diverse projects across provincial PNG. This included providing school desks to local primary schools, installing solar lights in Kimbe and Morobe, and donating medical equipment to clinics in Hohola and Ginidobada.

We also partnered with the Light House International to fund computer labs in 10 PNG schools, and worked with the Kokoda Track Foundation to provide mentoring and leadership training to 12 young university graduates. These initiatives reflect our belief that financial progress must go hand in hand with social responsibility.

Moving on to slides 20 and 21, looking at the broader economic landscape, Papua New Guinea remains the Pacific powerhouse. Macroeconomic growth is forecast at a stable 3.4% over the medium term.

The resource sector is currently benefiting from strong global gold prices, and the ramping up of output at Porgera and Ok Tedi will drive further FX inflows. We also see upside on the horizon with the TotalEnergies-led Papua LNG project, scheduled to begin in 2026, which, along with other major resources projects, is expected to inject up to $27 billion into the economy over the medium to longer term.

In terms of inflation, we are monitoring imported inflation pressures stemming from US dollar volatility and the strengthening Australian dollar, though domestic consumer demand remains strong. The Bank of PNG's crawling peg regime is successfully working to restore FX convertibility, and we are seeing improved FX waiting times for importers.

I also want to touch on the recent news that Papua New Guinea was added to the Financial Action Task Force, or FATF, grey list on February 13, 2026. This places the country under increased monitoring regarding its AML and CTF frameworks.

Kina Bank has been preparing for this outcome for some time, noting we also communicated with markets about this at the first half results 2025. We continue to work closely with regulators, government agencies, correspondent banks, and the local banking sector as part of a national program to address these findings.

Importantly, we do not expect this grey listing to have any material financial impact on our operating performance, nor to impose any substantive constraints on the execution of our strategy. On to slide 22, as we look forward to 2026, we anticipate another year of earnings growth.

This will be driven by revenue uplift across our diversified portfolio, a strengthening domestic economy, and our ongoing efforts to grow market share in a targeted and risk-aligned manner. We'll also benefit from the corporate tax rate for our banking operations decreasing to 35% from 45% in 2025.

We also remain prepared for some expected headwinds. We expect lower yields on government securities and a more competitive foreign exchange market, which may place some pressures on margins alongside further depreciation of PGK against AUD.

However, our well-capitalised balance sheet, disciplined cost management, and targeted investment into key capabilities means we enter the new financial year fully prepared to support our customers and to capture market growth opportunities. In closing, I would like to express my sincere gratitude to our dedicated Kina Bank team members, our executive leadership, and to our Board of Directors.

It is hard work and commitment deliver our success as a growing organisation. To our customers and shareholders, thank you for your ongoing trust in Kina Securities Limited.

We're very excited about the future and look forward to delivering on our 2030 strategy. Thank you very much for your time today.

As I now pass back to the moderator for questions, I'm also rejoined by our CFO, Johnson Kalo. Thank you.

Morning, gents. Can you hear me okay?

We can, Dave. Thank you.

Thanks. Just first quick one, Johnson, word on the operating costs, they haven't blown out much, which is great.

Done. A sort of a top-down question.

If we have a look at the first half, second half, looks like there's been a slowdown in loan issuance and customer deposits. Is there anything happening, I guess, in the economy or is it anything you guys have consciously done vis-a-vis marketing, etc.?

I just wondered why there's a bit of a step-down in loan growth in the second half and customer deposits.

No, we've managed our book and definitely hit loan draw-down and growth targets we had anticipated or expected. We have managed our net interest income closely because of deposit competition, which you will have seen in the slide pack where system growth, we had to manage against that as well.

No, I don't think there's a market impact in terms of the macro issues affecting our growth, David.

David, from a top-down perspective as well, I'd add that historically, when Kina was a smaller organisation in the past, there was typically quite a marked difference between first half and second half. It's perhaps the case that as a growing organisation with more scale in the business, we are starting to perhaps see a more balanced approach to half-on-half.

Nevertheless, continuing,

yeah. Next one, again sort of big picture.

The Tier 2 corporate bond, 250 million kina, where are we on that? We've sort of been waiting for it for a while now.

I guess you've got to get through the regulatory process. On the back of that, once that's done, that alone, how much would that grow the loan book at your typical leaning rates?

Thanks for the question, David. Look, I might answer the second part of the question first, we're looking at potentially another 1 billion or so, approximately, give or take, growth we believe we can achieve or fund through deploying of the Tier 2 bond.

In terms of timing, we're very close. As previously mentioned, we had conducted a from-scratch development, first of its type in the local market.

A lot of work to be done, a lot of heavy lifting around our policies, our processes, our risk assurance procedures, and we're well advanced in terms of the approval process with the necessary regulators. Hence, we felt the opportunity to communicate a little bit more clearly in this year's results.

We would be expecting, pending those approvals, to be deploying in the first half.

Great. Okay.

Last one for me because I'll let others jump on the line. The impact of FX, and then obviously on repatriating earnings back to Australia for dividends, etc.

If you actually see some growth in the resource projects, do you think you'll see the PNG government sort of back off on the depreciation of PGK and let the market dictate? I'm just trying to get a feel for when you think actually the Kina will start to flatten out and/or appreciate against both the US dollar and the Aussie dollar.

I suppose the movements in the market recently with the Aussie dollar against the US dollar and how that flows through to impact the kina rate against both of those. Look, we're planning for our next year and the short to medium term on the basis of the rate of downward movement in that kina value along the same historical basis as it has been over the last 2 to 3 years, which I think is roughly about between a 7% to 10% downward track each year.

Then we will have to probably overlay that a little bit with the grey listing impacts. Then, on the other side of that, or balancing that, is the prospect of the projects coming online within the next 12 to 24 months.

I know there's probably a lot of noise and a huge range of opinions with the minimum and the max, but I think, holding a steady course is the prudent thing at this time. I can't guess what the government would do at this point.

No. Thanks, Johnson, and thanks, Ivan.