BK Group Plc has recorded a net profit worth Rwf17.9 billion in the first quarter of 2023, a 28 percent increase from Rwf15.6 billion registered in the same period last year. In 2022, the group raked Rwf59.7 billion net income. In the Annual General Meeting of shareholders held on May 19, It announced a dividend payment of Rwf32.5 for each ordinary share, representing 50 percent pay-out ratio of the Group’s net income. According to Anita D.Umuhire, BK’s Chief of Finance, the good performance stems from non-funded income that has grown by 79.7 percent year-on-year, contributing about 17 billion to the bottom line. The lender’s total interest income rose to Rwf36.2 billion supported by high income from loans and advances which grew by 13.3 percent to Rwf1.1 trillion. Asset quality has significantly improved with a low NPLs ratio of 2.6 percent compared to the general market, and a cost to income ratio which stood at 38.5 percent. Cost-to-income ratio is important for determining the profitability of a bank. A low cost-to-income ratio is a positive development as it indicates that it takes less cost to generate income. The financial statement shows that key profitability indicators improved with Return on Average Assets and Return on Assets Equity ratios of 4 percent and 22.1 percent, respectively. However, Umuhire noted: “Our customer deposits slightly reduced by Rwf16 billion mainly due to loss of pricing related challenges and the decrease of our funding base has adversely affected our investments mainly in government securities where you notice that there’s about Rwf50 billion in treasury bills that have matured and not renewed.” Beata Habyarimana, Group CEO, said that the performance in the first quarter showcases the resilient rebound of the economy, while also achieving notable advancements in asset quality and profitability, accompanied by substantial growth across all performance indicators. On subsidiary level, BK Insurance registered a profit of Rwf797 million, however, total assets decreased by three percent to Rwf21 billion. Gross premiums increased by 20 percent to Rwf2.5 billion compared to Rwf2.1 billion sold in the same period last year. BK TecHouse registered a sales revenue of Rwf389.2 million, representing a growth rate of 54 per cent when compared to Rwf251.9 million year-on-year. Digital platforms generated Rwf157.2 million while broadband products generated Rwf219.3 million, with 40 percent and 56 percent contribution in sales, respectively. BK Capital booked a net operating income of Rwf23.4 million, a 708 percent growth attributed to the increased trading on the Rwanda Stock Exchange (RSE) and sustainable growth in the fund management assets under management. Within the brokerage business, BK Capital increased bond trading due to an overall RSE turnover growth of 508 percent, however, it saw a decrease in equity turnover due to low market activity. The group also has BK Foundation as the youngest subsidiary launched in January 2023, as an umbrella of all the CSR activities the group conducted over the years through each and every subsidiary. It has a focus on driving ESG (Environmental, Social, and Governance) ambitions across the group and for better engagement in various sustainability opportunities. ALSO READ: BK Foundation donates e-motorbikes to women in drive to raise their transport share Diane Karusisi, CEO of Bank of Kigali, observed that with the launch of a new mobile banking application, they have seen clients’ migration from branch and agency banking channels to self-service channels as a result of digital transformation. Going forward, she said: “We believe we will continue seeing healthy growth not only of profit but also net loans so that the banking sector continues financing the economy.” Karusisi added that the increasing digital trend in the industry means lower operating cost for the bank and there might be even better lending rates once macroeconomics conditions improve. In the first quarter, BK Tech House received ISO certification for Information security and Quality management, whereas Bank of Kigali was recertified for business continuity management system and information security system.
