Kenya Commercial Bank (KCB) Rwanda has reported a net operating loss of Rwf1.56 bn for the year ending December 2009, according to the bank’s annual financial statement.
KCB, which is the latest entrant into Rwanda’s banking industry, said the loss was due to the time lag between building customer base and upfront investment costs.
“While we expect 2010 to be much stronger in terms of revenues, we are also cognizant of the fact the cost of our operations will be at its peak due to the costs of a full branch network and our profitability projections for the year remain as planned,” the bank said in a statement.
KCB Rwanda, a subsidiary of Kenya’s KCB Group started operations in Rwanda in 2008 has expanded its branch network to 9 branches. KCB Group is also the only company that is quoted on the Rwanda bourse following its cross listing in 2009.
The bank says that despite the loss in net earnings, it has seen significant growth with total assets for the period jumping by 165 percent from Rwf6 bn at the inception to Rwf16.1bn by the end of 2009.
According to the bank’s financial statements, it disbursed loans amounting to Rwf3.8 bn spread out in corporate banking, SME and personal lending.
In order to ensure stability and create adequate financial capacity, the shareholders made an additional capital investment to the tune of Rwf903m in the course of 2009.
Management says that this year an additional investment of Rwf2.1 bn has been planned to expand the bank’s outreach through electronic channels that offer efficiency and convenience to customers.
According to the statement, the additional capital investment in the bank is a strong indication of the confidence of the main shareholders of the bank in the performance and future prospects of the bank in Rwanda.
The total customer deposits by the end of the year had grown to over Rwf7.7bn while revenue reached Rwf809m owing to active customer acquisition and banking operations.