Bank of Kigali(BK) has started the year on a high following a profitable first quarter in which it earned a net income of Rwf5.6 billion.
The figure represents a 31.9 per cent quarter to quarter growth and 5.8 per cent in annualised context, according to Nathalie Mpaka, BK’s chief finance officer.
Mpaka told the media, yesterday, that growth was positive across all business indicators.
The bank’s net interest income increased by 11.4 per cent quarter-on-quarter to Rwf14.2 billion, thanks to an increase in gross loan book which rose by 24.5 per cent on annualised basis.
Total assets rose by 3.6 per cent (quarter-on-quarter) and 13.9 per cent (year-on-year) to Rwf661.6 billion ($796.2 million) as of March 31, 2017.
Dr Diane Karusisi, the chief executive, attributed the bank’s good performance to increased confidence from clients and shareholders, and reiterated commitment to unveil more innovative products that meet customer needs.
“We are very pleased to release our results for the first quarter ending March 31, 2017, during which our profit before tax grew by 2.8 per cent year-on-year, while our total assets also increased by 13.9 per cent year-on-year,” she said.
“We have implemented our new risk-based pricing model, which has seen reduced lending rates to loyal customers and businesses with sound governance.”
The chief executive of Rwanda’s largest financial institution by shares said, as BK celebrates 50 years, it will continue aiming at putting focus on sustainability and innovation to maintain the bank’s leadership position in the market.
As part of the 50 years celebrations, we have, for instance, launched our ‘Urumuri Initiative’ in which we are mentoring 50 youth-led start-ups on top of providing Rwf60 million interest-free loan to the top projects,” Dr Karusis said.
Increased operational cost
However, the bank’s good performance came at a slightly increased operational cost, which rose by 2.3 per cent during the first quarter to Rwf10.6 billion.
In spite of that, the lender’s profit before tax in the first three months of the year amounted to Rwf7.9 billion, an increase of almost 55.5 per cent quarter-on-quarter and 2.8 per cent year-on-year.
As the economy promises to pick up in 2017 – with a projected growth of 6.2 per cent – Bank of Kigali boosted its lending muscle with total assets reaching Rwf661.6 billion, up by 13.9 per cent year-on-year.
The growth in assets was on account of the bank’s loan book, which surged by 10.3 per cent to Rw438 billion, with net loans rising by Rw426 billion.
The bank’s growth is from its retail and corporate customer base, which stood at over 241,30 and 25,100, respectively.
“It’s a small but reliable base,” Karusisi said. “It’s also an indication of how much opportunity exists, to tap more Rwandans into formal banking. We intend to deploy new strategies to acquire more customers to grow our base,”
As opposed to opening new branches, the bank chose to expand its agency network, which stood at 1,321 during the first quarter of the year.
The agents, who help take the bank’s services to where it has no branch presence, processed over 306,800 transactions worth Rwf15.9 billion.
BK boasts 79 branches, 93 ATMs and 1,038 point of sale terminals that accept most international cards, including VISA and MasterCard.
The expansive network helped the bank mobilise clients’ balances and deposits which increased to Rwf95.0 billion during the period under review, an 8.4 per cent increase year-on-year.
In March, the bank unveiled two new subsidiaries; BK General Insurance and BK TecHouse, with the latter expected to help the bank stay ahead of technology by being the engine of innovation.
Recently, the bank opened a modern digital service centre at Kigali Heights, a paperless branch aimed at giving the bank’s customers a sneak peek into the future.