This chapter includes the following articles.
The banking sector in Papua New Guinea is sound, growing and remarkably profitable. Its largest and only publicly traded institution, Bank South Pacific, reports return on equity 10 percentage points higher than the large Australian banks, which are among the most profitable in the world. Furthermore, continued expansion is expected. With 80% of the country unbanked, growth is almost assured as inclusiveness rises and more people open accounts. Unlike the various over-banked parts of the West and Asia, PNG’s sector is not saturated and has plenty of room to grow. While the central bank works to make commercial banks more competitive, institutions are pushing to expand into under-served areas. If these efforts are managed well, banks may experience significant growth and find margins largely intact. The increase in competition and the lowering of rates and fees, meanwhile, could have a positive effect on the economy and in turn create more business for the banks.
This chapter contains interviews with Loi Bakani, Governor, Bank of Papua New Guinea (BPNG); and Robin Fleming, CEO, Bank South Pacific.