The Bank of Kigali (BK) Group Plc has reported it earned Rwf28.3 billion in the first half of this year which is equivalent to an increase of 24.5% compared to the same period last year.
The bank also recorded a Return on Average Assets (ROAA) and Return on Average Equity (ROAE) reaching 3.5% and 19.5% respectively for the period ended June 30th, 2022.
Year-on-Year, BK total Assets increased by 16.8% y-o-y to Rwf 1.6 trillion ($ 1,602.2 million) as at June 30th, 2022; Net Loans and Advances increased by 10.6% to Rwf 1.0 trillion ($ 988.9 million) in the same period,
Client Balances and Deposits increased by 19.6% to Rwf1.0 trillion ($ 1,000.2million) as Shareholders’ Equity increased by 9.4% y-o-y to Rwf 296.5 billion ($ 289.3 million) as at June 30th, 2022.
The formidable growth against global financial depression and growing internal banking competition was announced today during a virtual press briefing in which the groups released its second quarter (Q2) and Half Year (HY) 2022 Financial Results.
“The growth in profits is good news for our clients and we see that we will be doing well in the next quarter and half of the year, ” Dr. Diane Karusisi the BK Plc CEO said.
Karusisi noted that these profits will help clients to reinvest and build trust in the bank and this will enable the bank to offer more loans with lower interest rates.
Total interest income rose by 8.0% Rwf92.7 billion supported by higher income from loans & advances, which grew by 10.3% to Rwf 1.1 trillion Year-on-Year .
Total interest expenses increased by 36.5% to Rwf25.4 billion in line with the growth in customer deposits to Rwf 1.0 trillion (+19.6%) and interbank deposits (+28.3%) to Rwf189.4 billion.
Overall, net interest income grew to Rwf67.3 billion; with Net Interest margin decreasing to 9.5% from 10.9% in FY21.
Non-interest income of Rwf 20.6 billion increased by 27.7% y-o-y driven mostly by the growth in forex (FX) related income, fees and commission on trade finance products; as we continue to see macroeconomic recovery that started last year. Total operating income rose by 5.5% to Rwf 87.9 billion, while the total operating expenses rose by 32.9% y-o-y to Rwf 36.4 billion.
However, the Loan loss provisions decreased by 58.9% to Rwf9.1 billion though asset quality is improving with NPLs ratio and cost of risk at 5.1% and 1.7% from 6.6% and 4.6% respectively from 1H21.
The percentage of COVID-19 related loans on moratorium reduced to 2.7% of the gross loans from 47% restructured facilities.
“Bank of Kigali Plc recorded good performance in Q2 & 1H 2022; our loan book has not grown in line with expectations but we are seeing improvement in asset quality reflecting post-COVID recovery which allows us to record a solid 1 st half performance. We look forward to a greater second half of 2022” said Dr. Diane Karusisi.
Currently, BK Group Plc is the largest financial institution in the country with total assets of Rwf1304.0 billion, equal to 30.3% of the country’s capital market. As of December 31, 2020, Bank of Kigali had 356,200 small customers and 26,000 large customers.
In 2020, the Bank of Kigali provided loans of Rwf851.1 billion, equivalent to an increase of 25% compared to 2019. These loans amount to 35.7% of the capital market’s total as of December 31, 2020.
Nathalie Mpaka said: “Because we continued to work with our clients and the Bank’s employees, especially through technology, we were able to reduce the cost that we incurred such as in advertising, travel, etc., so that there is a lot of money we saved.”
Mpaka also said that all BK subsidiaries performed well on average and the bank is open to compete effectively as formidable competition is being leveraged by new and competitive players on the market.
In the next five years, BK said that it will also be focusing on the growth, recovery and attracting more investment to impact on the country’s growth.