Bank of Kigali recorded a stellar performance in the first quarter of 2024.
Bank of Kigali, Rwanda’s leading bank, on Friday announced its unaudited financial results for the first quarter of 2024, reporting a net income of Rwf23.9 billion, or $18.5 million- reflecting an increase of 33.6 percent year-on-year.
The bank also reported that Return on Average Assets (ROAA) and Return on Average Equity (ROAE) reached 4.4 percent and 25.3 percent respectively for the period ended March 31, 2024, indicating a strong performance.
Similarly, in the first three months of the year, BK Groups total assets increased by 26.9 percent year-on-year, to Rwf2,210.8 billion while Net Loans and Advances increased by 18.8 percent to Rwf1,328.9 billion compared to the same period last year.
The bank, which is a subsidiary of BK Group Plc, on Friday announced a Rwf22.5 billion year-on-year increase in profit, compared to the first quarter of last year, with officials attributing the strong performance to the growth in the bank’s loan book
The stellar performance is also attributed to the bank’s ability to contain operational costs, as explained in a press conference earlier this morning to announce the financial results of the first quarter of the financial year 2024.
BK Group CEO, Beata Habyarimana said the results mark a significant milestone for the bank and the group in terms of performance, reflected in the increase in the net income across the board, amounting to Rwf23.9 billion, equivalent to $18.5 million in the first quarter of 2024.
“We are glad to see that we have been able to navigate the dynamic global economic landscape with this performance,” Habyarimana said, highlighting some of the key factors driving the growth, adding that the group’s strategy remains customer-centric.
Habyarimana said that as a group, BK has been working to enhance its compression of customer needs, which allows them to personalise their financial solutions to their client’s needs- something she said is already paying off.
In the long term, Habyarimana said BK is looking to be a one-stop ecosystem for both financial and non-financial services, with focus now going towards sustaining and stabilizing the robust economic performance recorded in the first quarter of the year.
She pointed out that the performance was also buoyed by an economic environment which is pointing towards more stability, among other things citing the decision by the Central Bank to lower the lending rate from 7.5 percent to 7 percent, which stabilised inflation at around 5 percent, as one of the reasons.
“This is very encouraging for us as it gives more means to the clients for the consumption, but also it gives us more predictability for the growth of our businesses,” Habyarimana said.
Beata Habyarimana, CEO, BK Group Plc, said the good performance marked a significant milestone for the bank and the group.
“We have also been able to see an ease in the pressure on the Rwandan franc against the dollar, which is currently lower than what we had last year,” she said, adding that in return it became easy for the bank to continue servicing its clientele in terms of more transactions.
At the group level, the impressive financial performance was buoyed by the different dividends paid out during the last Annual General Meeting, as well as good growth and profit from the group’s other subsidiaries, including BK General Insurance, BK Capital and BK TecHouse.
She also pointed out that the BK Foundation is equally doing well, pointing out that going forward the group will focus its efforts on more financial inclusion through the ‘Ni BK Nanjye’ campaign and championing more digital financial solutions.
Dr. Diane Karusisi, CEO Bank of Kigali, said they have continued to expand the banking business with loans and advances increasing by almost 19 percent, something she said is commendable and reflects the health of the economy in which they operate.
During the first quarter, Bank of Kigali recorded a good performance in fees and commissions, stemming from a boost in trade finance and remittances, with all those factors contributing to the good performance.
However, BK’s loan loss provisions increased by 26.2 percent year-on-year due to the staging migration on distressed exposures.
The bank’s total assets reached Rwf2.1 trillion, of which Rwf 1.4 trillion are customer deposits, with an allocation of Rwf1.3 trillion on loans and advances to customers
BK senior officials said the bank remains adequately capitalized, with a capital adequacy ratio of 19.6 percent, up from 19.4 percent in 2023, while client deposits have also increased by 30 percent in Q1 of 2024.
Dr. Karusisi also pointed out that the bank has become more and more efficient, on average reducing operating costs by nearly 13 percent year-on-year, which is not an easy thing for a bank of that magnitude to achieve.
“It is something we are very proud of. I don’t think many people can achieve that -to actually be able to reduce costs,” Karusisis said, adding that they have been working hard to slash operating costs across the group.
Dr. Diane Karusisi speaks during a virtual press conference to announce Q1 results.
“We have been working on seeing efficiency and across the organisation, where there are avenues or opportunities to save or reduce costs. In the payment space, we want to be a paperless organisation,” she said, pointing out that is one of the ways they are looking to minimise costs.
She pointed out that they are challenged to keep the pace in terms of cutting costs, on a quarter-on-quarter basis.
With a net income of Rwf23.9 billion, Karusisi said that through the ‘Nanjye ni BK’ campaign they are looking to onboard more clients, to make BK a retail bank of choice for all Rwandans.
Presenting the first quarter financials, Anita D. Umuhire, Chief Finance Officer (CFO) Bank of Kigali, emphasized that the double-digit, year-on-year growth of 33.6 percent was supported mainly from the banking side, mainly agribusiness, SME and retail funding.
Demand deposit mobilisation, though still limited, as well as revenues stemming from currency placement, are some of the other areas Umuhire said the bank performed well.
“We’ve seen growth in our foreign currency denominated deposits and so we’ve been able to place these deposits. Non-Funded Income continues to be an area of focus for the group, especially for the bank,”
“Our NFI ratio for Q1 was 28.5 percent up from 24.9 percent last year. Apart from the loan related fees and commissions that are correlated to the performance of the loan portfolio, we’ve also seen very good growth and prospects in trade,” Umuhire said.
Anita D. Umuhire, CFO, Bank of Kigali, presenting Q1 financials.
Umihire said that BK’s remittance business has also significantly picked up and performing and they are seeing an increase in volumes of transactions on digital channels.
Among other key highlights, client balances and deposits increased by 30.4 percent y-o-y to Rwf1,381.2 billion, equivalent to $1,130.5 million, while shareholders’ Equity increased by 18.8 percent to Rwf389.8 billion, or $ 301.4 million, compared to the same period last year.
