Great. Thanks, Harry, and good morning, everyone. Thanks for joining us. We really appreciate it. The webcast is really about our first half 2024 results announcement. As usual, I'll take it that most of you have had an opportunity to read the ASX announcement, particularly the 4D, which always for us is very detailed and comprehensive and there's also an investor presentation pack that was uploaded with that, and you can access that on the investor page on our website as well.
But look, it's a really good narrative for the first half and a continued story of consistent steady growth. The most pleasing aspect for us, though, is revenue was up 17% half-on-half. It's the strongest revenue result half-on-half that we've had in the history of the company. And I think it reflects the execution and success of our diversification strategy with all of the 6 key drivers of revenue actually on or above budget.
And these include net interest income from our loans and deposits, investments, which are largely in government securities and treasury bills here in PNG, also, our FX, our digital fee income, Kina investment in superannuation services, which is the funds administration business, and Kina Funds Management, licensed investment management business as well.
Specific callouts that I think of -- our maximum interest, obviously, interest on loans was up 16% half-on-half; digital, up 35% half-on-half; and FX, a remarkable increase of 71% half-on-half. And these results, again, a reflection of solid loan drawdown activity close to $400 million in the first 6 months of this year, which augurs well for the second half, primarily home lending and SME and increasingly more activity coming from the expansion we did last year of our business banking team into the key original provincial locations across the country.
Overall, market system growth, as published by the Central Bank for the first half this year, was relatively flat at 3%. So it was a really pleasing and good result for us.
Digital continues to go from strength to strength. And with the deployment of another 1,000 POS terminals over the second half, we're anticipating that growth run rate to continue. The increased FX flow, again, a really pleasing outcome and a reflection of 2 years of hard work connecting with the export sectors, especially the resource multinationals in the agri sector.
Last year, we onboarded over 30 corporates over the course of 2023. And we're starting to see some increased flows from the state-owned entities as well.
The Central Bank, the Bank of Papua New Guinea, has been deliberately providing more USD market interventions under the guise of the International Monetary Fund and we've been a major beneficiary of that activity given that we're now the second largest retail bank in the country.
We're expecting that trend to continue over the second half. It certainly has through July and August. And our less capital-intensive noninterest revenue lines now contribute 50% of our total revenue, which is a terrific result.
Excluding the extraordinary item we disclosed in June relating to the customer fraud, which I'll talk a little bit more about shortly. OpEx was up 27%, so higher than revenue, and primarily due to higher administration and employee costs incurred in the first half. This is largely seasonal, for those of you follow -- who have followed us historically, and is a similar trend to previous years.
These front-ended costs include our employee bonus scheme, which lands in April, trading and development expenses, ICT-related vendor and software costs, some strengthening of our core infrastructure and cybersecurity were the major contributing factors together with a 6% depreciation of the cross rate between the Kina and the U.S. dollar.
Most of our software licensing and IT expenses are incurred in U.S. dollars, and they hit us in that first half of the year. So we expect that to normalize over the balance of 2024. This obviously has a negative impact on our cost to income, which came in underlying at 58%, slightly higher than the first half of 2023. We're not concerned about that.
We're confident it will normalize for the remainder of the year and we're targeting a cost-to-income range of around 50 to 52 basis points or better for the full year. And that will come from continuing growth in revenue, and as I said, containing our operating expenses so that they normalize over the balance of the year.
Our net interest margin is holding firm at overall 5.6%, carving out the loan book, a slight improvement to 7.2%, and we're actually in the process of increasing our indicator lending rate by 25 basis points due to a deliberate tightening of monetary policy by the Central Bank here in PNG and once again, under the guise of the International Monetary Fund.
The tightening really is an attempt to mop up some of the excess domestic liquidity. Now the government is raising more of its fiscal budget by funding onshore. So wholesale deposit rates have moved up slightly, but fortunately not at the expense of our net interest margin.
The upside for the remainder of the year on government securities and treasury bills is looking really good, but the yields on those have increased markedly from around 3% at the beginning of this year to circa 7% for 1-year bonds. So as our existing portfolio matures, they'll be going into higher-yield investment rates. And again, as I mentioned, it's primary due to the PNG Treasury deliberately raising more of its funding onshore as opposed to offshore.
Overall deposits for us were up 8% half-on-half and not a great deal of pricing pressure coming through. And I think we remain envy of the Australian bank still being very flus with liquidity. Our deposit-to-loan ratio is sitting at around 150%.
So in summarizing all of that, our underlying NPAT result was up 7% to just under PGK 50 million and statutory down 9% to PGK 42.2 million, impacted by the non-lending loss provision of PGK 7.4 million after tax, which we disclosed earlier in June. Our underlying ROE still very strong at 15.6% and statutory ROE is 13.2%. We expect both of those to improve over the course of the second half and our earnings per share, $0.055 and dividend per share of $0.04 was announced as part of the half year result.
So a couple of important items that we have disclosed, but I just would like to give you an update on. Firstly, the corporate tax rate for the banking sector was increased here in PNG in 2023 from 30% to 45%. At the time, it was positioned as a short-term budget fix, but as we expected it rolled into the 2024 financial year.
However, some positive signs there, at the request of the PNG government and treasury, the PNG Bankers Association was asked to commission a report on the economic impact and seek a repeal of that higher tax rate. That report is now complete. It was done by KPMG. So we'll be engaging in some pretty intense stakeholder engagement over the next 4 to 6 weeks with a view to have that higher tax rate repealed.
The upside here, of course, is that the tax rate is not going to go up, but it's more likely to come down, and even if that's progressive over a period of time, it would be a much better benefit for us moving forward.
The second item is in relation to the customer fraud that we announced in mid-June. And I do want to reiterate that, it was an unfortunate but isolated incident involving a very small group of customers. And while the loss provision we took was PGK 13.5 million, that was recognized as a worst-case scenario and recovery action is well underway. This will come from insurance. We are insured for these types of events. Potential third-party liability and of course, the perpetrators themselves, these are well advanced with the proceedings. Our insurance claim has been lodged. And it is important, I think, also to note that there was no exposure to our core infrastructure and the event was not at all cyber-related.
So look, regardless of these 2 factors, our forecast guidance is really solid, and we're excited about our continued prospects for the year ahead. We have some significant tech enhancements set to launch over the second half including DigiBankr, our retail new account onboarding app. 40% of our new customer accounts for the first half of this year were successfully onboarded digitally, and we're aiming to lift this to 80% over the next 12 months.
We've got a significant upgrade of our mobile banking app to facilitate self-service, the introduction of Kina Digital Wallet, a virtual debit card, which is PNG's solution to Apple and Google Pay. They don't operate in this market. A new market-leading corporate online banking platform in conjunction with our strategic client IXL and our Pei Beta payments platform, which is PNG's BPAY, if you like, which is designed to reach considerably more of the market through digital touch points than to those customers that just bank with us and exchange another first in market model on the global payments platforms, Revolut, and TransferWise, it's a white label independent mobile app for personal remittances.
We've also partnered with 2 of the top local fintechs here in PNG, they have been commission to assist the digitalization of government and local authorities, NiuPay and SNS Tech. They build the customer experience and e-commerce interface using our Internet Payment Gateway. So we're very excited about that opportunity moving forward.
So look, I'll leave it there for now. Thanks, Harry, for the opportunity, and we're more than happy to open it up for any questions that you might have.
