BK Group registers Rwf14.6 billion in profit

Bank of Kigali headquarters in Nyarugenge District. File.

BK Group has reported a profit of Rwf14.6 billion in the first six months of 2019 with the bank and insurance arms making the most contributions to growth.

BK Group has four subsidiaries; Bank of Kigali, BK Insurance, BK TecHouse and BK Capital.

However, the group’s profits in the second quarter dropped in comparison to the first quarter and the same period last year with the management pointing to a growth in bad loans.

This saw the Group’s profit in the second quarter dip slightly to Rwf7.1 billion in comparison to Rwf7.5 billion in the first quarter.

During the period, non-performing loans grew to 6.4 per cent with the Group’s Chief Executive Pointing to a client in the trade sector.

However, the bank guaranteed shareholders that asset recovery was in progress to make up the bad debts.

Karusisi said that they were keen on bringing down the non-performing loans to below 5 per cent by the end of the year.

Among the factors that drove profits in the first half of the year was a growth in the loan book as well as diversification with the bank lending over Rwf650 billion.

The bank responded to demand in the capital by a number of big firms and investors including Mara Phones, 70Mw Peat Plant under construction among others saw lending grow by 14 per cent.

There was also a growth in personal loans driven by mortgages by buyers of the RSSB’s Vision 2020 Estate.

Nathalie Mpaka the Chief Financial Officer of BK Group Plc said that in the second half of the year, there is likely to be reduced loan disbursement in the second half of the year with more efforts towards recovery and continued digitization.

The insurance registered a profit of Rwf 974 million in the first half of the year Rwf357 million registered in the same period last year representing 172.5 per cent growth.

Gross premiums increased to Rwf2.4 billion in the first half of the year from Rwf 1.9 Billion in the first half of 2018.

Unlike the rest of the sector players, underwriting profits grew to Rwf 988M from Rwf278 million.

According to statistics from the Central Bank, in the first half of 2019, the sector made an underwriting loss of Rwf900 million.

In the first half of last year, underwriting losses stood at Rwf 3 billion and Rwf4.7 billion in first half of 2017.

BK Group is talks with the shareholders of National Insurance Company (Sonarwa), the country’s oldest insurance firm, in a bid to acquire it. BK insurance current return on equity stands at about 39 per cent.

BK TecHouse registered a net sales growth of 87 per cent with sales standing at Rwf487 million.

Among the drivers of the growth was integrating its school fees payment platform, URUBUTO School Fees /Tuition Payment with all BK - Digital payment channels as well as Airtel-Tigo Mobile Money.

The group’s latest subsidiary BK Capital saw assets under management grow by 20 per cent compared to the previous quarter reaching about Rwf3 billion June 2019 mainly from growth in private pension fund management.

editor@newtimesrwanda.com

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