BSP Financial : 2022 Full Year Financial Statements

About this update from Bsp Financial Group Ltd.

BSP Financial Group Limited ARBN 649 704 656 Financial Statements 31 December 2022 Contents of Financial Statements Page Directors' Report 1 Statements of Comprehensive Income 3 Statements of Financial Position 4 Statements of Changes in Shareholders' Equity 5 Statements of Cash Flows 6 Notes to the Financial Statements 7 Note 1 Financial Statements Preparation 7 Financial Performance 10 Note 2 Segment Reporting 10 Note 3 Net Interest Income 11 Note 4 Non-Interest Income 11 Note 5 Operating Expenses 12 Note 6 Impairment of Financial Assets 13 Note 7 Income Tax 14 Note 8 Earnings per Ordinary Share 16 Note 9 Reconciliation of Operating Cash Flow 16 Financial Instruments: Financial Assets 17 Note 10 Cash and Operating Balances with Central Banks 19 Note 11 Amounts Due from Other Banks 19 Note 12 Treasury and Central Bank Bills 19 Note 13 Cash Reserve Requirement with Central Banks 19 Note 14 Other Financial Assets 20 Note 15 Loans and Receivables from Customers 20 Note 16 Other Assets 26 Financial Instruments: Financial Liabilities 27 Note 17 Amounts Due to Other Banks 28 Note 18 Customer Deposits 28 Note 19 Other Liabilities 28 Note 20 Contingent Liabilities and Commitments 28 Risk Management 30 Note 21 Risk Management Framework and Controls 30 Note 22 Credit Risk and Asset Quality 30 Note 23 Liquidity Risk 40 Note 24 Operational Risk 42 Note 25 Foreign Exchange Risk 42 Note 26 Interest Rate Risk 44 Note 27 Fair Values of Financial and Non-Financial Assets and Liabilities 45 Capital and Dividends 46 Note 28 Ordinary Shares 46 Note 29 Retained Earnings and Other Reserves 47 Note 30 Capital Adequacy 49 Group Structure 50 Note 31 Insurance 50 Note 32 Investment in Subsidiaries 57 Note 33 Investment in Joint Ventures 58 Other 58 Note 34 Fiduciary Activities 58 Note 35 Related Party Transactions 58 Note 36 Directors and Executive Remuneration 59 Note 37 Events Occurring After Balance Sheet Date 61 Note 38 Remuneration of Auditor 61 Independent Auditor's Report 62 APRA Disclaimer: BSP Financial Group Limited (BSP) is not authorised under the Banking Act 1959 (Commonwealth of Australia) and is not supervised by the Australian Prudential Regulation Authority (APRA). BSP's products are not covered by the depositor protection provisions in Section 13A of the Banking Act 1959 and will not be covered by the financial claims scheme under Division 2AA of the Bank Act 1959. Directors' Report for the Year Ended 31 December 2022 The Directors take pleasure in presenting the Financial Statements of the BSP Financial Group Limited and its subsidiaries (Bank and the Group) for the year ended 31 December 2022. In order to comply with the provisions of the Companies Act 1997, the Directors report as follows: Principal activities The principal activity of the BSP Financial Group Limited (BSP) is the provision of commercial banking and financial services throughout Papua New Guinea (PNG) and the Asia Pacific region. The Group's activities also include fund management and life insurance business services. BSP is a company listed on the PNG Exchange Markets (PNGX) and the Australian Stock Exchange (ASX), incorporated under the Companies Act of Papua New Guinea, and is an authorised Bank under the Banks and Financial Institutions Act of Papua New Guinea. The Group is also licensed to operate in Solomon Islands, Fiji, Cook Islands, Samoa, Tonga, Vanuatu, Cambodia and Lao. The registered office is at Section 34, Allotment 6 & 7, Klinki Street, Waigani Drive, Port Moresby. Review of operations For the year ended 31 December 2022, the Group's profit after tax was K1,081.069 million (2021: K1,075.218 million). The Bank's profit after tax was K1,045.279 million (2021: K1,036.455 million). The Directors are of the view that there are reasonable grounds to believe that the Bank and the Group will be able to pay their debts as and when they become due and payable; and the attached financial statements and notes thereto are in accordance with the PNG Companies Act 1997, including compliance with accounting standards and give a true and fair view of the financial position and performance of the Bank and the Group. The results of the Bank and the Group operations during the financial year have, in the opinion of the Directors, not been materially affected by items of an abnormal nature, other than those disclosed in the financial statements. In the opinion of the Directors, no circumstances have arisen, that make adherence to the existing method of valuation of assets or liabilities of the Bank and the Group misleading or inappropriate. At the date of this report the Directors are not aware of any circumstances that would render the values attributed to current assets in the financial statements misleading. No contingent liability other than that disclosed in the notes to the attached financial statements has become enforceable, or is likely to become enforceable, within a period of twelve months from the date of this report, that will materially affect the Bank and the Group in its ability to meet obligations as and when they fall due. Dividends Dividends totaling K788.906 million were paid in 2022 (2021: K676.464 million). A detailed breakup of this is provided in Note 28. Directors and officers The following were directors of the BSP Financial Group Limited at 31 December 2022: Sir K Constantinou, OBE Mr. R Fleming, CSM (retired 31 December 2022) Mr. S Davis Ms. P Kevin Mr. S Brewis-Weston Mr. F Bouraga Mr. R Bradshaw Mr. A Sam Dr. F Lua'iufi Mrs. P. Taureka-Seruvatu Details of directors' tenure and directors and executives' remuneration during the year are provided in Note 36 of the Notes to the Financial Statements. The Group CEO Robin Fleming was the only executive director. The company secretary is Mary Johns. 1 BSP Financial Group Limited 2022 Financial Statements Statements of Comprehensive Income for the Year Ended 31 December 2022 Consolidated Bank All amounts are expressed in K'000 Note 2022 2021 2022 2021 Interest income 3 1,834,996 1,710,501 1,727,733 1,593,872 Interest expense 3 (89,936) (107,242) (78,578) (90,613) Net interest income 1,745,060 1,603,259 1,649,155 1,503,259 Net fee and commission income 4 419,042 370,468 384,767 338,171 Other income 4 394,686 363,392 408,442 378,786 Net insurance operating income 31 40,224 35,052 - - Net operating income before impairment and operating expenses 2,599,012 2,372,171 2,442,364 2,220,216 Impairment of financial assets 6 5,359 42,655 15,170 51,138 Operating expenses 5 (989,263) (888,967) (912,980) (813,224) Additional company tax 7 (190,000) - (190,000) - Profit before income tax 1,425,108 1,525,859 1,354,554 1,458,130 Income tax expense 7 (344,039) (450,641) (309,275) (421,675) Net profit for the year 1,081,069 1,075,218 1,045,279 1,036,455 Other comprehensive income Items that may be subsequently reclassified to profit or loss: Translation of financial information of foreign operations to presentation currency 29 (52,381) (40,680) (28,345) (22,425) Items that will not be reclassified to profit or loss: Recognition of deferred tax on asset revaluation reserve movement 29 1,581 1,566 1,581 1,566 Fair value gain / (loss) on re-measurement of investment securities 29 (82) 15 (82) 15 Net movement in asset revaluation reserve 29 42 560 - - Other comprehensive income, net of tax (50,840) (38,539) (26,846) (20,844) Total comprehensive income for the year 1,030,229 1,036,679 1,018,433 1,015,611 Earnings per share - basic and diluted (toea) 8 231.4 230.1 223.7 221.8 Comparative period amounts have been restated to conform to presentation in the current year. The attached notes form an integral part of these financial statements 3 BSP Financial Group Limited 2022 Financial Statements

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