Bank of Kigali, Rwanda’s largest bank by assets has posted a slight increase of its net profit by 2.9% in the past nine months.
The Bank announced its taxes had also increased from Rwf 4.1 billion to Rwf 8.3 billion in the nine months of 2016.
Nathalie Mpaka, Chief Finance Officer told KT Press, in the same period, the Banks net profit increased to Rwf 487.8 billion compared to an increase of 4.6 billion in its profit before tax.
Bank of Kigali had been exempted from taxes for the past five years when it listed on the Stock Exchange. However, taxes have since increased after the expiry of tax holiday.
“The bank has been enjoying a reduced corporation tax rate of 20% for the previous 5 years due to listing more than 40% in Rwanda Stock exchange. This year, corporate income tax rate returns to its normal 30%,” she told KT Press.
The bank was exempted up to 20% on corporate income tax instead of 30% it is supposed to pay.
Although, this is a positive development to the national treasury as more taxes are coming in, the bank is cutting an extra 20% from its profit before taxes, implying more efforts are needed to keep its profitability in balance.
The sector’s largest lender however still says this will not affect its profit margins going forward, another relief for its customers as well as the country’s financial sector that is shifting from traditional banking to technology led banking.
In the nine months of 2016 the bank’s total assets amounted to Rwf 596.4 billion indicating an increase of 13.6% on annual basis while gross loans totalled Rwf 4107 billion increasing by 26.5% in first nine months of this year and 35.5% on year on year .
The bank’s net loans increased by 27.6% in the nine months of 2016 and 35.8% on annual basis amounting to Rwf 400.5 billion with gross/total assets ratio standing at 68.9% by end of 30 September 2016 increasing from 57.7%.
Also, by end of September 2016, the bank’s net income was Rwf 42.9 billion indicating an increase of 26.5%, net non-income increased by 21.6% to Rwf 16.0 billion by the end of September, 2016.
Operating costs at the bank increased from 21.3% to 26.1% while cost/income ratio effectively managed at 44.3% compared to 47.8%.
“We attribute the positive outlook in the nine months to our efforts to further embrace digital and branchless banking,” said Mpaka.
“During the year, we increased our distribution channels by opening 4 new branches and reached 1,240 active agents.”
The bank’s client balances and deposits totalled Rwf 392.7 billion in the nine months of this year which is an increase of 2.1% to date and 9.6% on annual basis.
Shareholders’ equity amounted to Rwf 107.7%, an increase of 13.7% on annual basis.