# Bank South Pacific

BSP Financial Group Limited (BSP) is the largest bank in Papua New Guinea, with 121 branches throughout the country and in 7 countries. BSP currently services over 650,000 business banking customers throughout the Pacific. As at 31 December 2022, BSP had total assets valued at K33.9 billion. Bank South Pacific is listed on the PNG Exchange Markets (PNGX) and, as of 25 May 2021, the Australian Securities Exchange (ASX).

## History

BSP traces its history 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. Bank of Papua New Guinea, the country's central bank, was established in 1973. The National Australia Bank (NAB) incorporated its operations in PNG 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). In 2002, PNGBC ran into problems, and BSP acquired the government's 49% stake in PNGBC in return for the government taking a 25% stake in BSP. Between 2002 and 2008 BSP and PNGBC merged the operations.
On 25 May 2021, BSP listed on the Australian Stock Exchange.

### South Pacific expansion

Since 2004, BSP has pursued a strategy of expanding in the South Pacific. It 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. In April 2013, BSP sold the Niue branch to New Zealand bank Kiwibank.
In 2006, BSP acquired the National Bank of Solomon Islands from the Solomon Islands government, which at the time had the largest network of offices (eight branches and eight agencies) in the islands. BSP also acquired Habib Bank (Fiji), which had begun in 1991 as a branch of HBL Pakistan.
In October 2009, BSP acquired the Colonial National Bank in Fiji from the Commonwealth Bank.

### Operations in Samoa, Cook Islands, Solomon Islands, Vanuatu, and Tonga

In 1988, Westpac acquired the European Pacific Banking Corporation in the Cook Islands and a HSBC subsidiary, the Solomon Islands Banking Corporation, which HSBC had established as a branch in 1973. Westpac also acquired HSBC's branches, one each, in Fiji and the New Hebrides (now Vanuatu). (HSBC had established its branch in Fiji only some 18 months earlier.) In 1990, Bank of New Zealand sold half its shares in Bank of Tonga to Westpac and half to Bank of Hawaii, giving each of them 30%. In 2001 Bank of Hawaii sold its interest in Pacific Commercial Bank (42.7%) to Westpac, which held an equal portion. WBC offered Samoan investors, who held the remaining shares, the same price it had paid Bank of Hawaii. Westpac ended up owning 93.5% of Westpac Bank Samoa and Samoan companies and individuals owned 6.5%. In Tonga, Bank of Hawaii sold its shares in Bank of Tonga to Westpac, giving WBC 60% ownership of what became Westpac Bank of Tonga. On 29 January 2015, BSP announced that BSP had entered into an agreement to acquire Westpac's banking operations in Samoa, Cook Islands, Solomon Islands, Vanuatu, and Tonga for A$125 million. The final stage of the acquisition was completed in July 2016.
In July 2020, BSP celebrated its fifth anniversary of operations in the Cook Islands.

## Citations

* ↑ "BSP now the major banking group in the Pacific" (PDF). 16 December 2009. Archived from the original (PDF) on 24 May 2010. Retrieved 24 February 2010.
* ↑ "BSP Info Brochure" (PDF). colonial.com.fj. Archived from the original (PDF) on 20 July 2011.
* ↑ "2022 Annual Report" (PDF). BSP Financial Group Limited. Archived from the original on 9 June 2023. Retrieved 15 June 2023.{{cite web}}: CS1 maint: bot: original URL status unknown (link)
* ↑ "BSP now listed on ASX". PNG Post-Courier. 26 May 2021. Retrieved 3 June 2021.
* ↑ "Kiwibank set to branch out to Niue - Send Money Pacific". Archived from the original on 14 March 2016. Retrieved 28 July 2015.
* ↑ "Papua New Guinea bank buys Colonial". Fiji Sun. 7 October 2009. Retrieved 30 July 2020.
* ↑ "BSP buys 3 Westpac operations in the Pacific". FBC. 14 July 2015. Retrieved 30 July 2020.
* ↑ "Bank of South Pacific takes over Westpac Operations in Vanuatu". Vanuatu Daily Post. 5 July 2016. Retrieved 30 July 2020.
* ↑ Melina Etches (8 July 2020). "Five years for BSP". Cook Islands News. Retrieved 9 July 2020.