FINANCIAL SERVICES
Banking on the future
Credit Corporation (PNG) Ltd, one of PNG’s longest-established finance companies, is entering 2022 in good shape and with a renewed purpose, according to Robinson, who was confirmed as the company’s CEO in September 2021 after six months acting in the role. In September 2021, the company announced half-year profits had risen by 12 per cent. This was led by stronger finance business and steady returns from investments. On the downside, it was impacted by lower occupancy in its portfolio of residential property. ‘On the PNG front, the business has performed well,’ he says. ‘We’ve seen things starting to turn around in terms of the finance business.’ Credit Corporation’s finance division has a focus on equipment and vehicle finance a barometer of economic activity in a country such as PNG. ‘What we’re seeing is middle market and high net worth individuals who have employment and are looking to upgrade motor vehicles and other things of that nature. So, that’s just a sign of a reasonably healthy environment,’ Robinson observes.
Bank licence On the back of a more positive financial performance, Robinson is now focused on taking Credit Corporation into new territory. ‘Our board have signed off on us becoming a licensed bank,’ he says. PNG only has four licensed banks— BSP Financial Group, Kina Bank, Westpac and ANZ. That number almost became three in 2021, when Kina Bank unsuccessfully tried to acquire Westpac, in a deal ultimately rejected by PNG’s Independent
CREDIT: CREDIT CORPORATION
After over 40 years as a finance company in Papua New Guinea, Credit Corporation (PNG) Ltd is planning to apply for a banking licence. CEO Danny Robinson explains the company’s plans to Business Advantage PNG.
Credit House in Port Moresby.
Consumer and Competition Commission.
Transition Credit Corporation, which holds seven per cent of BSP’s shares, was a bidder for the Westpac business itself. Now, it has decided to add to the competition in the banking sector by joining the fray itself. ‘I believe the SMEs, the commercial customers and the high net worth individuals have been ignored,’ notes Robinson. ‘What we’ve done really well in the past is bank the unbankable customer who is starting up a business. We’ve been able to support those people with equipment finance-type transactions and we’ve seen those businesses succeed. And, then, they move on to one of the financial institutions … ‘We think the natural progression for us is to continue to support start-ups through our typical finance products. But then, when they’re in a position to borrow larger amounts, or for longer term, and can provide security, we can offer them a more holistic financial services package similar to what the banks are providing. ‘Credit Corporation’s been lending BUSINESS ADVANTAGE PAPUA NEW GUINEA 35
WHAT WE’VE DONE REALLY WELL IN THE PAST IS BANK THE UNBANKABLE CUSTOMER
money for 42 years in PNG. And the board of directors and senior management have an understanding of the market.’ He suggests that the company’s property portfolio could be sold to fund the transition into a bank, including capital adequacy requirements. He is hopeful the transition, which is subject to regulatory approvals, won’t take too long. ‘We’d definitely look to have the banking license in place by the end of 2022,’ he says. ‘Then we’d be out in the market with a products offering and being able to target new customers.’
