Banking
From The Report: Papua New Guinea 2017
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Papua New Guinea’s banking sector is sound, stable and profitable. Despite slow economic growth in the country in recent years, institutions have managed their exposures well and entered the current weak patch in a strong position. They are generating good results and investing in future growth. Regulation is solid and improving, with the central bank updating key laws and bringing the sector closer to international standards in terms of anti-money laundering. Innovation is helping to improve customer experience and geographical coverage, while it also promises to revolutionise the way money moves throughout the country. The establishment of Kina Bank in 2015 did not result in a dramatic change in the competitive landscape, but the dynamics of the sector are evolving, with institutions increasingly responsive on price and offering. At the highest levels work on inclusion continues.

This chapter contains interviews with Loi Bakani, Governor, Bank of Papua New Guinea and Mark Baker, Managing Director, ANZ Bank Papua New Guinea.

Articles from this Chapter

Overview

Savings grace: The sector is well positioned to meet emerging challenges
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Papua New Guinea’s banking sector is sound, stable and profitable. Despite slow economic growth in the country in recent years, institutions have managed their exposures well and entered the current weak patch in a strong position. They are generating good results and investing in future growth. Regulation is solid and improving, with the central bank updating key laws and bringing the sector closer to international standards in terms of anti-money laundering (AML). Innovation is helping…

Analysis

Access all areas: A concerted effort is being made to broaden the sector’s reach
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By most measures Papua New Guinea is under-banked. Branch density is low and has not risen in at least a decade, while the loan-to-GDP ratio is 31%, well below that reported by neighbours and peers. The Philippines is at 41%, Solomon Islands 38%, Thailand 151%, Vietnam 111% and Indonesia 39%. It is estimated that only 20% of people in PNG have a formal financial services account. PNG’s mountains, rivers and jungles make the establishment of bank branches difficult. The many languages and…

Interview

Inclusive growth: Loi Bakani, Governor, Bank of Papua New Guinea (BPNG), on increasing financial literacy and the growth of microfinance
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Interview: Loi Bakani What approach are banks taking to increase financial literacy, and how can this impact the economy? LOI BAKANI: Financial literacy is considered an important part of the strategy for financial inclusion in Papua New Guinea. The aim is to create a financially competent generation so that available resources are managed effectively, and they are able to exploit the opportunities presented by economic development. With the assistance of the Centre for Excellence in Financial…

Interview

Finding solutions: Mark Baker, Managing Director, ANZ Bank Papua New Guinea, on foreign exchange and the importance of digital banking
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Interview: Mark Baker In what way do you see the shortage of foreign exchange in Papua New Guinea developing? MARK BAKER: The kina has never been a widely traded currency; the only buying and selling of the currency is for customer orders, and from this perspective it has always been thinly traded. This has created some volatility as the economy absorbed the $20bn PNG LNG project. The regulators have tried maintain financial stability and are doing the best they can with the relatively limited…

Analysis

Chain reaction: Market ripe for the adoption of new technologies
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The importance of technology in the banking sector has long been recognised in Papua New Guinea. Both the regulators and the institutions understand that advanced systems, networks and devices can help promote growth and stability. Their adoption is also seen as instrumental in improving inclusiveness. Laws and regulations have been written to accommodate technology, while relevant infrastructure has been built and products launched. In recent months PNG has started considering a revolutionary…