Banks record Rwf13bn pre-tax profit

KIGALI - Rwanda’s banking sector appears to be on a rebound after recording the highest all time earnings in the sector’s history, a situation that the National Bank of Rwanda (BNR) terms as “high profitability.” A latest NBR report indicates that banks recorded a pre-tax profit of Rwf13.1bn in 2010. The year before, only Rwf3.8 billion was collected. BNR Governor, François Kanimba, said in the report that the record earnings have shown confidence by sector players, especially borrowers and lenders in the growth of the economy. This has led to growing predictions that the banking sector is on a path to greater profitability in the year 2011, largely based on very healthy earnings registered last year. “The developments in the banking sector through December 2010 continued to be healthy as shown by the financial soundness indicators of the Rwandan banking industry, measured in terms of capital adequacy, earnings, asset quality and liquidity,” Kanimba’s statement reads in part. Another major implication is that the record earnings registered last year will likely trigger a bigger rush for entry into the local banking sector by leading banking brands in Africa and beyond. Already, leading Kenyan banks are lining up for new banking licenses whereby Central Bank favours green field entries as illustrated by Equity Bank’s foray into Rwanda recently. The new entrants are keen on cashing in on opportunities arising out of Rwanda’s favourable status as a destination for investments in the region. Ends