BK Group registered a net profit of Rwf23.3 billion last year, an increase of 12.5 per cent compared to the previous year, officials said yesterday. The Group recorded Rwf20.8 billion profit after tax in 2016.
The growth was driven by different initiatives and campaigns conducted by the Bank of Kigali and growth of the insurance arm of the business, according to Dr Diane Karusisi, the Bank of Kigali CEO. BK Group is made up of Bank of Kigali, BK TecHouse, and BK General Insurance.
The full year performance indicates that the bank’s profit before tax also grew considerably by Rwf4.2 billion (14 per cent) to Rwf34.2 billion from Rwf30 billion recorded in the year 2016. Similarly, the bank recorded a net income of Rwf5.6 billion in the fourth quarter of 2017.
Looking across the different key metrics, the firm made substantial growth. It is a growth that bank officials say is “outstanding”, attributed to different initiatives and campaigns that were put in place.
One of these initiatives is ‘Bigereho na BK’, a four-month long nationwide campaign that ran last year with an aim to help promote the savings culture in Rwanda. This particular campaign saw the bank retain over 26,600 new clients with a total deposit of Rwf4 billion.
Releasing the figures in Kigali yesterday, the bank’s chief executive officer, Diane Karusisi, said that 2017 was a successful year for the bank, its shareholders, as well as the more than 281,000 retail and corporate clients served in the closing year.
“2017 was a very good year for Bank of Kigali Group. We continued to serve our customers digitally as much as we can. We also continued to provide good returns to our shareholders, and we are offering them diversification. Beyond this, the good growth is supporting our economy,” she said at a news briefing at the bank’s headquarters.
BK Group Plc is now operating BK TecHouse and BK General Insurance as its subsidiaries. The two subsidiaries, according to Karusisi, are giving the bank a competitive edge and a diversification to its shareholders.
The Group’s insurance firm, for instance, recorded a Rwf300 million profit in 2017 despite having started operating less than two years ago. But its technology firm, which is nearly a year-old, has not yet contributed positively to the group’s growth, although they say that they are actively building the subsidiary to be able to give positive returns in the near future.
Alex Bahizi, the CEO of BK General Insurance, highlighted that the insurance arm made impressive growth especially when it comes to settling clients’ claims, which has been an issue in the sector for the past five years.
“Last year, we had a collection of total premium of Rwf4.5 billion, a Rwf3.8 billion if you remove taxes. We also paid claims worth Rwf500 million, which is one of the primary duties of our company. Settling claims of our clients was our biggest item on the agenda when we started out, and we have tried to do this on a timely basis,” he noted.
Meanwhile, Rwanda Revenue Authority will take tax receipts of Rwf10.8 billion up from Rwf9.2 billion in 2016, representing an income tax expense ratio of 17.3 per cent from BK.
The bank will, during the next annual general meeting in May, propose a dividend payout of 40 per cent profit to shareholders.
According to the audited financials, the total assets of the bank rose by 13.9 per cent to Rwf727.2 billion up from Rwf638.3 billion in 2016, while net loans and advances grew to Rwf471.7 billion up from Rwf385.8 billion in the same year.
“In terms of new business lines, obviously insurance [BK General Insurance] has shown us that we are able to do profitable business. There are more discussions that we are having at the board level. Maybe we will do life insurance in the near future, because we have a brand, we have a network, and we have a market,” Bahizi said.