Bank Of Kigali Group Records Significant Growth In Q1 2022
The Bank of Kigali (BK) Group BK has managed to secure a good performance for the first Quarter of the year (Q1) 2022 with a net income growth of 40 percent year on year and a stable quarterly financial performance despite a turbulent economy.
The BK Q1 2022 Financial Results report released this Tuesday, also showed a reduction in cost of risks alongside an improved asset quality and management, and a reduction on impairment charge.
The report showed a continued resilient performance year on year reporting a profit before tax growth of 44.4% and total assets increased by 22.4% (above market average) while deposits grew by 21.7%.
BK Group reported Total Assets of Rwf1, 698.7 billion in Q1 2022 compared with Rwf 1,388.0 billion in Q1 2021, a 10.8% growth in Shareholders’ Equity to Rwf293.6 billion compared with Rwf264.9 Billion in the same periods.
BK Group reported Net Loans and Advances of Rwf987.4 billion in Q1 2022 compared with Rwf897.7 billion and a 21.7% growth in Client Balances & Deposits to Rwf1, 026.3 billion in Q1 2022 compared with Rwf843.4 billion in Q1 2021.
BK Group Plc Chief Executive Officer, Dr. Diane Karusisi said that the bank’s performance in financial results of the first Quarter (Q1) 2022 are optimistic and largely driven by Commonwealth Heads of Government Meeting (CHOGM2022) investments flowing through the bank and government injecting funds in the COVID-19 economic recovery strategy.
With this flow of money Karusisi said that BK will be able to deliver on its promise of financially transforming lives and also meet the internal target of 20% increase of net income year-on-year.
“We believe that we are very much on track to meet this target,” Karusisi said.
She further said that BK teams remain committed to delivering on customers’ promise and this quarter’s performance gives them great confidence and optimism that they will meet shareholder’s expectations.
BK Chief Finance Officer (CFO) Nathalie Mpaka said that the bank will have a better performance in the second quarter after having launched the digital banking system in the previous year 2021.
Mpaka also said that the bank intends to go slow on the loan book growth and focus more on the retail and SMES strategy which means looking at large corporate finance more selectively.
Mpaka said that BK expects to see a 10 to 15 percent growth on net interest income for the year and on non-interest income where they are pushing a lot on all-business front which had 34percent growth with strong growth on forex related income and the BK general insurance subsidiary returning some good growth.
“So, our target for non-interest income is about 50 percent growth year on year but for the first quarter (Q1 2022) we are pleased to see a strong stability as in quarter four,” Mpaka said.
Reduction in Costs and Risks
Mpaka said that the bank will remain selective in cost increase in its operating expenses especially after spending a lot of recruitment costs to drive forward its IT and digital segments which drove a 49.7% growth.
Though the bank has been selective on partnership costs, Mpaka said that the recent Rwf7billion worth sponsorship of the BK Kigali Arena was worthy it so as to drive the BK digital strategy.
For the first time, BK reported a significant reduction and improvement in asset quality in which the bank managed to have a low cost of risk below 1% against the planned stability target of 2% across the year as a couple of its assets remain in Non-Performing Loans (NPL) and slow on the recovery side.
“We are very pleased to already bring down our cost of risk from 3.4 (percent) last year to 0.78 percent- which is below one percent this year,” Mpaka said.
Overall, Mpaka said that the Bank of Kigali Group is impressed with its performance and compared to the market share the bank maintains above 30% for all key metrics which will be largely driven by the BK digital drive.