The Bank of Kigali (BK) Group has registered another off-the-chart financial result in the third quarter (Q3) for this financial year, with good news to pay off dividends and retain its high performance which it used to register before COVID-19.
Compared to previous quarter, the Bank reported (in Q3) a Net Income of Rwf36.7 billion ($36.6 million) an increase of 33.0% Year-on- Year (y-o-y) with a return on average total assets and equity reaching 3.4% and 18.2% respectively for the period ended September 30th, 2021
In the previous quarter – Q2, the bank recorded a net income of Rwf16.1 billion ($ 17.0 million) an increase of 10.6% year- on-year (y-o-y) with a return on average total assets and equity reaching 2.9% and 14.2% respectively for the period ended June 30th , 2020.
The Bank also boasted of total Assets increased by 28.5% y-o-y to Rwf1, 548.4 billion ($1,542.6 million) as of September 30th, 2021; while Net Loans and Advances increased by 20.4% y-o-y to Rwf989.0 billion ($ 985.3 million).
Also Client Balances and Deposits increased by 19.9% y-o-y to Rwf927.5 billion (US$ 924.1 million) while Shareholders’ Equity increased by 16.4% y-o-y to Rwf278.0 billion ($ 277.0million) in the same reported financial period.
The BK financial report also showed total interest income rise by 20.1% y-o-y to Rwf129.5 billion supported by higher income from loans and advances, which grew by 21.4% y-o-y to Rwf1.1 trillion.
Though its Loan loss provisions rose to Rwf28.0 billion in line with the loan book growth, the bank said that its Asset quality was improving within non-performing loans (NPLs) ratio and cost of risk at 6.2% and 3.7% from 6.7% and 4.0% respectively from 2020.
The percentage of COVID-19 related loans on moratorium reduced to 2.6% of the gross loans from 47% restructured facilities.
Good News for Shareholders
Interestingly BK Group Plc said it has adequately capitalized with Total Capital to Risk Weighted Assets at 21.5% to have the Group’s Total Assets stand at Rwf1,5 trillion markup 28.5% y-o-y.
The bank’s Chief Finance Officer (CFO) Nathalie Mpaka said that this year the bank is proud to announce that it will pay off dividends as the total dividend payable balance stood at Rwf31.4 billion, which include Rwf13.3 billion payable dividend for 2019 and a 50% pay-out ratio for the current year’s profit.
This was as a result of shareholders’ equity increased to Rwf278.0 billion, up to 16.4% y-o-y while Liquid Assets by Total Deposits stood at 42.5% as at September 30th, 2021 an increase from 37.9% in the same period last year.
Leveraging Tech and Markets
Dr. Diane Karusisi, the BK Chief Executive Officer said the group recorded strong growth (in Q3) probably the highest in the sub Saharan region with a double digit growth on all key performance metrics.
Karusisi said that they have kept a prudent stance with regards to COVID-19 challenges however the projected economy to rebound in the current year with positive outlook through to 2022, supported by high infrastructure project spending and a pickup in the manufacturing and service sectors as the effects of the pandemic dissipate.
“We are happy to see improvement in asset quality which allows us to look forward to closing the year with a solid performance,” said Dr. Karusisi who revealed the bank’s success story of investing in the Nairobi stock exchange (NSE) will attract more investments.
Karusisi also said the Bank of Kigali will also focus on corporate banking services using their new data link platform to improve services in the corporate and bulk banking networks.
Marc Holtzman, Chairman of Board of Directors – BK Group PLC said that the above growth can be described as an off the chart record driven by the bank’s commitment to improve.
“We have had a full conversion of our core banking systems. This signal commitment of the bank and forward thinking of the bank,” Holtzman said, noting that the bank is currently focusing on serving Rwanda’s population before going regional.
Established in 1966, Bank of Kigali has a leading market share of over 30% across key metrics and has a distribution network comprising of 68 branches, 13 outlets, 9 mobivans, 3,044 agents and serves 361,595 individuals and 27,117 business entities
BK Subsidiary General Performance
From its core business of banking (Bank of Kigali Plc), BK Group has grown to increase services through its subsidiaries- BK General Insurance, BK TecHouse, and BK Capital Ltd.
Bank of Kigali Plc served 361,585 retail customers and 27,117 Corporate clients.
The bank expanded the Agency Banking Network to 3,044 agents and processed 1.6 million transactions worth Rwf 189.1 billion.
Its Retail clients’ balances and deposits reached Rwf246.3 billion, while business banking clients’ balances and deposits were Rwf531.4 billion with BK Quick service now recording 116,075 registered customers and disbursed over Rwf6.1 billion.
BKs e-wallet product ‘IKOFI’ wallet registered 1,850 Agro-Dealers/Agents and 262,900 registered farmers.
BK Insurance registered a Profit of Rwf 1.8 billion in Q3 2021 compared to Rwf1.5 billion registered in same period last year, representing 17% Growth in profitability y-o-y; with Gross Premium increasing from Rwf7.7 billion in Q3 2020 to Rwf10.4 Billion in Q3 2021 reflecting a growth of 35%.
BK TecHouse Increase in the Net Operating Income up to Rwf 794 million with 54% growth y-o-y also improved payment systems in the education using the Increase in Payment collections through UrubutoPay up to Rwf12.9 billion with 215% growth and increase of the Digital consumers up to 2,152,000 across all digital platforms with 13% growth.
BK total revenues for this period stood at Rwf134.6 billion and assets under management grew by 81%.