Interest Rates Insights – Episode 2 (2026)

Added: 2026-05-14

[00:00:07]Hi and welcome to the walkabout talk about show with NCSL. I am Caligananda your host and today I'm joined by the chief operating officer and also the acting chief executive officer Mr. Shane Kennedy to participate in this interesting talk and interest being the key word here as we've got some announcements to make in particular. But first and foremost, please let me make welcome Mr. Shane Kennedy. Shane, great to see you. How's the year been? The last time we caught up was probably in Christmas, but since that time, how's it been for you?

[00:00:37]>> Uh, very good, Culligan. Um, basically for this year, we've uh we've hit the we've hit the hit the road running uh for Q1. Uh, now we're now we're into Q2, but um yeah, every uh we've we've had further progress with regards to our core banking system. Uh we've got a lot of a lot of operational um matters up and running smoothly. Um and we're still sort of eyeing out a lot of our sort of later later um implementation of various various uh projects within within the organization. But um yeah, the year's been great so far. Thank you.

[00:01:10]>> Great. And again for those viewers watching and and members of NCSL, the whole aim of this show is to bring you some of the latest updates, the news and even on products and services being offered by NCSL. Speaking of which, I do understand that um what's transpired recently, you've had the system upgrades from last year coming through to this year, tracking for that matter. Many many great things are happening with NCSL as such. But I think you've got a really really big announcement to make.

[00:01:39]>> Yes. Well, uh the big announcement that we are making is that uh we we've we've recently paid the annual bonus interest uh to our members. It was a significant amount this year. I think it's the largest amount we've had at least possibly on record but for the last five years at least.

[00:01:55]>> It was uh 17.6 million uh all up for the annual interest earned by members. Um of of a breakdown of that was we essentially paid 6.6 6 million during the year to member savings accounts and then once we once we determined our net profit for the year we paid an additional 11 million kina to our members which yeah from the records that I've seen is is pretty much um the most we've ever paid to members >> that that is pretty big 17.6 million ka and you saying this is probably one of the highest you paid sales paid to its members. Yes.

[00:02:28]>> Now for those who might um might not be clear with the concept of the interest being paid um if you could break it down in layman's terms for uh for our members.

[00:02:37]>> Yeah. Essentially when it comes to the annual interest um that's all determined by our net profit for the end of the year and from that we essentially um based on credential standards uh we we normally allocate at least 80% of that to our members um based on our our fin the statement of financial position that we are in at the end of the year but um you know we had a we had a a significant profit for this year which was um 15.4 million kina which was up from 5.4 4 million kin the year before. That's a 10 million ken increase in our net profit uh year on year. And we were we were fortunate enough or in a good enough position that we could allocate uh the majority of that. We're 11 million keener of that towards our members this year um obviously benefiting them and in their in their savings progress um through their journey. Yeah.

[00:03:28]>> Now this also brings to the main question. How did you get so much interest on this?

[00:03:36]I said okay so we we essentially reach this figure um and basically it's it's a board approved figure so we we we we get our um 15 we get our we get our net profit for the year and based on the credential standards we um we we are required to to allocate 20% of that towards the general reserve. So we we we can't um unless in certain circumstances we can't allocate all of it, but we obviously want to allocate as much of much of it as we can to our members in order to help with their savings. Um so that that that was basically um you know we we did the 20% towards the general reserve and then um a significant portion of what was left remaining um not the entire amount but yeah 11 million kina was essentially allocated to members interest. We did keep a little bit aside for obviously a lot of um a lot of improvements in capital expenditure that we want for uh going forward for the for this coming year 2026 which will obviously enhance our our products and services to members. Um but you know to to the members I say watch this space we will be implementing a few other additional benefits uh in in the in the coming in the coming year.

[00:04:43]Now was this growth um in the interest was it attributed to new members signing on or an increase in loan uh in people actually taking those loan products that are on offer?

[00:04:52]>> Uh it was a bit of both. Um we did have significant uh membership growth uh for the year. So at the end of at the end of last year, so the end of uh December 2025, we had a annual member we had membership of about 165,000 members up from 154,000 for the previous year. So that was um essentially almost 11 11,000 new members for the year. Um and in terms of our loan portfolio that did reduce slightly over the year but um but you know because of a lot of other a um other essential potential savings expenditures etc. We we were well actually we did we did have significant revenue growth for the year as well which which helped um contribute to that increase in the net profit. Well, I'll say one thing. With the interest that's been paid, you're looking at almost 5.4% increase in this case.

[00:05:47]>> Yes.

[00:05:47]>> Now, with that compared to NCSL's 1.75 peranom interest >> as such like what does that say about NCSL and then other financial institutions as far as performance goes?

[00:05:58]>> Well, it says that we are committed to our members and obviously we want to pass on those those those benefits as much as possible. Yeah. The 1.75 is what we pay to our general savings account during the year. Although having said that the earlier this year in February we actually increase that percentage from 1.75 to 2%. So the members will get the 2% on the general savings and then whatever our profit is come the end of end of this year we'll also add that on top. So the potential for our members is that they will get um you know all things all things being equal and all things going going well which we can't predict the f the future but we will be looking at potentially having an even better interest outcome and interest payment to our members come the end of next year come the start of next year.

[00:06:41]>> Awesome. And of course this is from the performance of 2025. Yes.

[00:06:44]>> From yourself what were some of the key uh highlights from the the financial highlights from 2025? Uh so as mentioned um we had we had a significant increase in our membership. We also had um an increase in our assets. So our assets grew fromund uh 351 million kina to 355 million kina.

[00:07:04]>> Wow.

[00:07:04]>> Um we also had um yeah and as mentioned our net income was a significant increase as well. So I mean in terms of the um we also had significant revenue growth. Um we I think it's the first time NCSL has done more than 60 million kener in revenue. So so that was um that was also a significant highlight for this year. for yourself any other financial insights?

[00:07:29]>> Um, apart from that um we are we are seeing our our loan our loan portfolio uh it did take a it did take a did reduce slightly over over last year but we are looking at um and we are on track to have that have that grow again this uh this this coming year. So in the future we will see um significant portfolio increases as well. Now for the fact that you mentioned um almost what 11,000 new members signing on itself. Do you think personally do you think the concept of financial literacy is getting out there? People are starting to realize the importance of actually saving and not just saving in just any other account but actually considering building that savings with that savings culture um with a society just like um NCSL. Yeah, I I do I I do believe it is a it is a complex and slow road, but I do believe positively that we are getting positive traction in terms of membership savings. Um I I will also add that um you know at the end of December we did have 165,000 members but as of the end of March we have over 170,000 members. So we are we are getting significant increases. So that's March 2026. Um we are getting significant increases in membership. uh we are sending our PE our staff out to um to particularly target members but at the same time we also want to make financial literacy a part of that product offering to get them to increase their savings.

[00:08:54]Um and as I said before I do believe um it's a slow road but but we are getting positive traction in in in in that in that space >> and most importantly for NCSL it's an institution a financial institution that's that's for both the public and private sector. It's not just restricted to the private sector only.

[00:09:12]>> Yes. Correct. Correct. Um um no matter who you work for, you you can become a member of NCSO. And I think one particular key area which I I'm hoping that um for those of you who might be listening particularly those small holder growers in uh particularly in agriculture if you're if you're a farmer small holder farmer whether it be in oil farm or uh in cobra or cocoa whichever it is there has been a boom without commodity prices particularly for cocoa and whatnot. Um I do understand that uh NCSL is also making a push to sign on new members from the agriculture sector particularly those small holder growers.

[00:09:48]Yes. Um we do find the small holder sector is a significant sector for us and we are specifically targeting or or reaching out to those potential members and and that's where we are seeing a lot of our significant growth and we do see that that is that is an industry that we believe um is is um is is where there's a lot of potential for savings and it's also one of those sectors that we do believe is is beneficial for the nation as a whole. So that's why we are sort of moving into those particular areas and yeah small growers in particular.

[00:10:22]>> I'm excited about what uh what the future holds for us with the I think last week with the recent recent uh court decision to allow Starink uh back in. I'm I'm seeing connectivity and the fact that we do have the mys app. If you haven't signed on, please sign on for the MyNCSL app that you have as well plus the cards. You're almost operating like a bank, but you've time and time again said that you're not going to be a bank. Correct. you remain you remain a savings and loan society for that matter. But um interestingly when the connectivity takes place right across the right across the land through um a platform such as Starink itself all of a sudden you have those rural farmers or those rural growers all of a sudden having access to the mysel app and a whole heap of other services that NCSL provides on their online platform.

[00:11:04]>> Yes, correct. I mean the mysel app is a great product that we offer. It's um it allows you to do a lot of things that you don't have to necessarily go into the branch to do. So you obviously don't have to leave your leave your workplace or or travel for significant distances and incur the cost of travel to um get a lot of the services that you're looking for uh done. Um also in terms of that we um we do have um our our customer service consultants and and our business relations team that do go out to these remote agricultural areas to speak directly to the small growers. And if they don't have smartphones, we also have a tablet and we can onboard them using our walkabout tablet which has been a great feature that we introduced last year. And um you know with added connectivity we can make that we can make it a lot easier for them for membership to occur and also for services to occur. And um finally um Shane for any of these potential members who might be looking at NCSL and might be looking at also other institutions why should they come to NCSL? Come to NCSL because first of all we're a savings and loans. Um and we're also we're also a large savings and loans that offers a a great suite of products to our members. We offer some of the lowest um interest rates on loans. We offer some of the highest interest rates on savings. Um we are and we and our our entire team which includes our more than 150 employees are dedicated to serving you and um and yeah that that's basically our our main um our main our main value proposition. It's service, it's products and um we are committed to um enhancing our members savings and providing them with um competitive loan products. And apart from that, the 17.6 million kina that's been paid in interesting to each of our members general savings accounts. That's another great reason to stick with NCSO. But with that being said, Shane, any last parting comments before we end.

[00:13:07]>> Um well, first of all, thank you for having me on for this show, Culligan.

[00:13:11]And um yeah, to our members, um you know, NCSL are here for the long run. We are a savings and loans. And um you know, by all means um if you can get the app uh the Minds CSL app, download it, get online, and you'll see how easy it is to transact and um use utilize our services. Um yeah, and and that that's what I leave our members with. Thank you. Once again, I'd like to thank chief operating officer and acting CEO for NCSL, Mr. Shane Kennedy, joining me this morning, joining me today, pardon me.

[00:13:43]And with that being said, again, if you have any questions or any comments that you'd like to add or any particular issue you'd like to us to follow up on, please do not hesitate to drop a comment in our YouTube channel comment space also on Facebook as well when we do have then we do post these videos on uh online as well. And apart from that, please don't not hesitate to visit the NCSL website as well. That's www.ncsl.com.pg.

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