The Rwanda Development Bank (BRD) has announced its initial trading results since it took over the operations of the former Rwanda Housing Bank (RHB) three months ago.
Top officials at BRD say that the bank made Rwf1.7 billion as profit after tax and it is now set to partner with Shelter Afrique, a regional housing development organisation, to boost the former’s mortgage product within the real estate market.
Similarly, BRD is set to partner with other strategic institutions, including the Ministry of Infrastructure, in a bid to make interventions meant to boost the supply of housing stocks in the market.
In an exclusive interview The New Times, BRD’s Director of Finance, Innocent Bulindi, observed that the partnership is primarily meant to facilitate the development of land parcels in the city that targets the rollout of affordable housing for city residents.
BRD’s second quarter results show that it has recorded Rwf1.7 billion profit after tax, out of a total income of Rwf7.6 billion.
“The biggest fraction of our earnings is from interest income on the loans; another significant gain that affected our numbers is the gain on disposal of our stake in Magerwa after its sale to a strategic investor,” Bulindi noted.
Bulindi added that the results also indicate that the takeover of Rwanda Housing Bank brought in low cost risk assets to BRD.
“The mortgage industry is known for its low ratio risks; people don’t default as much on their home loans compared to other businesses,” he explained.
BRD’s current Non Performing Loan (NPL) stands at 10.7 percent compared to the previous year’s 13.3 percent.
“The robust results are due to a restructuring exercise we carried out. For instance, we created a Credit Administration Department that focuses on client issues and they have come-up with an aggressive recovery plan. The bank is targeting to bring down NPL to 7 percent by the end of this year in line with the central bank’s threshold on NPLs,” Bulindi said.
BRD’s lending business increased to Rwf10.8 billion, which was largely allocated to support the agriculture sector particularly the coffee sector.
“Our loan book continued to grow throughout the second quarter and currently, it is standing at Rwf59.4 billion with a significant contribution of the mortgage loan book worth Rwf8 billion,” he explained.
BRD recently reduced its shareholding in Magerwa, the national ware-housing firm from 68 percent to 15 percent. The stakes were sold off to Portek East Africa Terminals.
In the deal, BRD earned Rwf2.3 billion as a gain on disposal of its shares in the public firm. Bulindi also announced that the bank’s total assets stand at Rwf79.8 billion as of 30th June, while its equity position is reportedly worth Rwf 26 billion largely due to the BHR contribution on the balance sheet.