1 day Ago By Post-Courier
BSP Financial Group Limited recently rebranded its logo, sparking mixed feelings among stakeholders. One of the founding directors of the merged BSP Bank in 2002, Dan Kakaraya, expressed his pride and nostalgia for his pivotal role in the bank’s history. In 2002, Kakaraya, former Managing Director of Mineral Resources Development Company (MRDC) group, including Petroleum Resources Kutubu Limited (PRK), orchestrated a K30 million investment by PRK in BSP as a cornerstone investor during its acquisition of the PNG Banking Corporation (PNGBC).
This transaction was the largest merger and acquisition in PNG corporate history, and Sir Mekere Morauta, the then Prime Minister and Treasurer, intervened to ensure equal opportunities for other funds and ordinary Papua New Guineans to participate. Mr Kakaraya acknowledges Sir Mekere’s foresight in his decision to privatise PNGBC, which laid the foundation for BSP’s success today and remains one of Sir Mekere’s lasting legacies. “I view the rebranding with pride and nostalgia.
I reflect on that pivotal moment in 2002 when I made the audacious decision to get the PRK Board to approve K30 million as equity investment on behalf of the PRK landowners into BSP – a third tier bank that had taken over the iconic PNGBC,” he said. “It was the largest merger and acquisition (M&A) transaction in PNG corporate history. At that time, we had more money in BSP than BSP itself.
Infact my plan was to acquire whole of the PNGBC assets for PRK. “PRK and ANZ bid was higher than the BSP bid to purchase PNGBC but the then Prime Minister and Treasurer, Sir Mekere Morauta intervened to ensure other funds and ordinary Papua New Guineans had the equal opportunity to participate in this game changing investment. “In hindsight, I acknowledge Sir Mekere’s foresight.
His decision to privatise PNGBC ultimately laid the foundation for BSP’s success today and this will remain one of Sir Mekere’s lasting legacies.” Now valued at K33.9 billion in total assets, BSP stands as the largest bank in PNG and the Oceania region, operating 121 branches across the country and delivering financial services to over 650,000 business banking customers across seven other nations including Fiji, Solomon Islands, Tonga, Samoa, Cook Islands, Vanuatu, Cambodia, and Laos.
Mr Kakaraya said that while the exponential growth and consistent profitability of BSP is a proud achievement, BSP has, in his view, taken a narrow path by becoming a typical profit-driven commercial bank rather than the peoples’ bank. “The vision was for BSP to become ‘more than a bank’ from the start. Sadly, BSP has lost its greater purpose and become purely a commercial bank overlooking its community social obligations (CSO) to bridge the gap between the ordinary Papua New Guineans, SMEs, and the unbanked majority.
” Mr Kakaraya acknowledged the then PRK Board led by Chairman of PRK, John Kapi Natto, late Yami Yawari, late Anderson Agiru, Abraham Muripe and Joseph Gabut for entrusting him as a young CEO and the shared vision to authorise him to unequivocally make the first investment for the Kutubu and Kikori landowners after first oil in Kutubu since1992. It was historical and the perfect gamble of a life time, he said. He believes BSP has a greater duty to serve the people—not just in banking services but as a driver of national economic development.
“The bank must take the lead in innovating KYC (know your customer) procedures that are inclusive of the people in rural PNG. It must onboard the 90 per cent of our unbanked population using bespoke, appropriate digital solutions”. Kakaraya further urged PNG’s business community to be sensitive to the country’s socio-political landscape and cultural dynamics.
“PNG is a unique market. We must harmonise capitalism with Melanesian communalist tradition and embrace developmental challenges and opportunities to strike a sustainable balance. Only then can businesses truly serve the people and remain viable.
” He called on BSP and other major financial institutions to partner more actively with the National Government, the Bank of Papua New Guinea and the customers in advancing inclusive and innovative economic development strategies especially in supporting indigenous SMEs and start-ups through digital transformation and financial inclusion. Hank Spier, former CEO of the Australian Competition and Consumer Commission (ACCC), praised Kakaraya’s early achievements: “I’ve known Dan for over 23 years. At just 26 years of age, he was Chair and CEO of the PNG Consumer Affairs Council and Price Controller of PNG.
We worked closely on the new PNG legislation that led to the PNG ICCC Act 2003. Dan in fact developed the core of what is now the PNG ICCC today.”.
