Bank South Pacific

Bank South Pacific Limited

Type	Public
Traded as	PoMSOX:BSP
Industry	Financial services
Founded	1957
Headquarters	Port Moresby, Papua New Guinea
Area served	Papua New Guinea Fiji Solomon Islands Samoa Tonga Cook Islands
Key people	Robin Fleming (CEO) Kostas Constantinou (Chairman)
Products	Banking, financial and related services
Revenue	K1.67 billion PGK (2014)
Profit	K507.34 million PGK (2014)
Number of employees	3,000 full time equivalent
Website	www.bsp.com.pg

Bank South Pacific (or BSP) is Papua New Guinea’s largest bank, with 35 branches throughout the country and in operation in 6 countries. BSP currently services over 650,000 business banking customers throughout the Pacific. As of 31 December 2014 BSP has total assets valued at K15.8 billion.

The bank traces its history back to 1 May 1957 when the National Bank of Australasia established a branch in Port Moresby. As independence approached for Papua New Guinea (PNG), the incoming government made known its desire that all banks in PNG be locally incorporated, rather than branches of a foreign parent. In response, the National Australia Bank (NAB) incorporated its operations in 1974.

Then the government encouraged the bank to sell equity to local citizens. BSP conducted public offerings in 1980 and 1981, with the result that local citizens came to hold 13% of the bank's shares. Later, the government decided to acquire control of BSP. In 1993, National Investment Holdings Limited (NIHL) first acquired NAB’s 87% shareholding, and then the 13% of the shares in the hands of the public, giving it 100% ownership of BSP. In 1995 the government decided to increase the bank's capital base, which it achieved by selling a 25% stake to Credit Corporation (PNG) and a 22% stake to Motor Vehicles Insurance (PNG) Trust (now incorporated as Motor Vehicles Insurance Limited).

In 1916, Commonwealth Bank, the Australian government-owned bank, established a branch in Rabaul and agencies in other towns, to support the banking needs of the Australian Army and its troops who had taken control of the former German colony of New Guinea. In time, this operation became a full-fledged commercial banking operation. Then in 1974, Commonwealth Bank withdrew from PNG by transferring its operations to the new government, which gave the bank the name "Papua New Guinea Banking Corporation" (PNGBC). Unfortunately, PNGBC ran into problems so in 2002, BSP acquired the government’s 49% stake in PNGBC in return for giving the government a 25% stake in BSP. Between 2002 and 2008 BSP and PNGBC merged.

Since 2004, BSP has pursued a strategy of expanding in the South Pacific. It first acquired Westpac’s branch in Niue, which was the only bank of any kind on the island. Westpac had established the branch in 1988 but was interested in reducing some of its operations in the area. Two years later, in 2006, BSP made two further acquisitions. It bought National Bank of Solomon Islands from the government of the Solomon Islands, and it acquired Habib Bank (Fiji), which had begun in 1991 as a branch of HBL Pakistan.