The consolidated net profits after tax for commercial banks registered a sharp drop from Rwf12 billion in 2008, down to Rwf4.2 billion in 2009, according to the Central Bank.
The Central Bank’s monetary policy statement that was released last week sates that the decline was primarily due to the loss registered by some commercial banks following the deterioration of their assets quality.
“The decline in asset quality was observed through a slight increase in non performing loans,” the statement says.
The National Bank of Rwanda (BNR) also said that the ratio of non-performing loans to a gross total loan portfolio detoriated to 12.8 percent at end of 2009 compared to 12.6 percent in 2008. Net non performing loan ratio stood at 11 percent by the end of last year against BNR’s target of 7 percent.
Last year, the banking system showed a few signs of distress as banks were not directly affected by the global financial crisis, BNR says.
The central bank indicates that all banks are now compliant to the minimum capital required of Rwf5 billion and as at December 2009, paid up capital had reached Rwf53.5 billion and registered an annual growth of 14.4 percent.
According to the monetary statement, shareholders funds reached Rwf78.6 billion, recording an annual growth of 17.4 percent as the capital adequacy ratio on consolidated basis increased to 19.4 percent against 15.9 percent in 2008.
“This was due to capital injections,” the statement reads in part.
However, the banks’ branch network increased by 22 branches, something BNR says has increased access to financial services.
BNR say that in the year ending 2009, the number of deposit accounts operated by the commercial banks increased by 8 percent.