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BK Group Plc nets Rwf 25 billion in 2019 third quarter



BK Group Plc has announced its audited financial results, reporting net profit after tax (PAT) of Rwf 25 billion (US$ 27.5 million). This translates into an increase of 27.0% year on year (y-o-y); with Return On Average Total Assets (ROAA) Return On Average Total Equity (ROAE reaching 3.7% and 16.4% respectively for the period that ended on 30thSeptember 2019.

The results have been released this Thursday at the group’s headquarters.

BK Group Plc counts for subsidiaries mainly; Bank of Kigali Plc which provides corporate and retail banking services; BK TecHouse’s whose task is to drive digital innovation through providing connectivity solutions. Software and analytics products; BK General Insurance that offers insurance packages including motor, fire, transport and money insurance as well as BK Capital Ltd.

In the same quarter, the group’s total assets increased by 23.7% y-o-y to Rwf 944.3 billion (US$ 1,037.3 billion), net loans and advances increased by 30.1% y-o-y to Rwf 651.1 billion (US$ 715.2 million), client balances and deposits increased by 20.5% y-o-y to Rwf 593.1 billion (US$ 651.5 million) while shareholders’ equity increased by 58.2% y-o-y to Rwf 212.8 billion (US$ 233.8 million) as at 30th September 2019.

According to BK Group management, Total Interest Income rose by 26.5% y-o-y to Rwf 86.7 billion; supported by higher income from loans and advances which grew by 32.4% y-o-y. The loan book expanded by 16.2% Year To Date (YTD) to Rwf 697.8 billion while investments in government securities also increased by 26.5% YTD to Rwf 93.1 billion.

Projects financed this year were in Energy, Transport and Manufacturing sectors. Net Non-Interest Income was Rwf19.3 billion which includes a 50% increase in contribution from the group’s insurance subsidiary. There was a 4.8% decrease y-o-y due to changes for fees and commissions tariffs to promote digital products and channels.

Total Operating Income rose by 19.5% to FRw 90.1 billion. Pre-provision Operating Profit reached Rwf54.8 billion, a growth of 32.7% y-o-y. Excluding provisions, operating expenses grew by 3.6% to Rwf 35.2 billion; with an improved Cost/Income ratio of 39.1% from 45.1% in the same period last year.

Net Loans increased by 14.6% YTD to Rwf 651.1 billion. Net Loans/Total Assets ratio stood at 69.0% as at 30 September 2019, compared with 64.7% of 2018. Client Balances and Deposits reached Rwf 593.1 billion, recording an increase of 20.5% y-o-y. Total dividend payable balance stood at Rwf 8.9 billion as a provision for 35% pay-out ratio.

Shareholders’ Equity equaled Rwf 212.8 billion, up 4.3% quarter on quarter (q-o-q) and 58.2% y-o-y. Liquid Assets divided by Total Deposits stood at 35.9% as at 30th September 2019, reducing from 40.9% in September 2018 while annualized ROAA stood at 3.7%, whereas annualized ROAE stood at 16.4%.

Commenting on the performance, BK CEO, Dr. Diane Karusisi highlighted that the results are very commendable and lauded all people including the staff but mainly clients who have contributed to this tremendous success.

She observed that netted profit reflects increased services delivered to clients especially lending to private sector to grow and provide job opportunities.

“In line with Rwanda’s stellar economic progress, BK Group PLC continues to deliver a solid financial performance. We remain the largest financier of the economy as shown by the growth of our loan book, that amounted to Rwf 651.1 billion, registering a YTD increase of 14.6%. Other lines of business, BK General Insurance in particular, have continued to grow significantly. Third-quarter net income growth for BK Group PLC reached 27.0% y-o-y; confirming our adherence to creating value for our shareholders. Overall, the Group is on track to deliver set targets for 2019.” said Karusisi.

Subsidiaries’ performance 

Bank of Kigali Plc

As at 30th September 2019, the Bank of Kigali served over 325,000 Retail customers and over 24,000 Corporate clients, expanded the Agency Banking Network to 1,416 agents and processed over 967,000 transactions worth Rwf 60.3 million.

The bank had 68 branches, 95 ATMs and 2,048 POS terminals that accepts most international cards including VISA & MasterCard. Retail clients’ balances and deposits reached Rwf 164.0 billion, up 11.5% YTD while business banking clients’ balances and deposits were Rwf 229,996 billion as at 30th September 2019, up 21.7% YTD.

BK General Insurance

BK Insurance registered a profit of Rwf 1,039 million in the third quarter of  2019 compared to Rwf 559 million registered same period last year; representing 86% growth in profitability y-o-y. Underwriting profit grew from Rwf 456 million to Rwf 796 million; up 74% y-o-y.  Key prudential ratios remain compliant with Solvency margin of 156%; Claims/Net Earned Premium of 44%; Retention Ratio of 68%; ROAE of 28% and ROAA of 11%.  Generally, total assets increased by 42% y-o-y to Rwf 12.4 billion.

BK TecHouse

BK TecHouse registered a sales revenue of Rwf 788 million as at 30th September 2019 compared to Rwf 458 million registered same period last year; representing 72% growth in sales revenue y-o-y. Broadband contributed to 50% of the total sales. BK TecHouse enhanced URUBUTO payment platform with the below digital features to support the e-cashless economy: Integration of URUBUTO tuition payment with all BK-digital payment channel (internet banking, IKOFI and Agency- networking), integration of URUBUTO Tuition Payment with Airtel-Tigo Mobile Money (on top of MTN-MoMo); Extended the use of e-tuition payment to Higher Learning Institutions whereby universities have been successfully on-boarded to URUBUTO for the payment of tuition fees.  These include UR with all its colleges, University of Kigali, INES-Ruhengeri and IPRC-Kigali.

Among others, the company successfully achieved the integration of Smart Nkunganire System -SNS- with IKOFI whereby agro-dealers are enabled to sale agro-inputs to farmers using Mobile Order Processing Application – MOPA – and farmers paying with IKOFI.

BK Capital Ltd

BK Capital’s q-o-q turnover in the bond’s market increased by 542% and 27.8% in equity market. The Rwanda Stock Exchange (RSE) recorded a good performance compared to Q2 where turnover and volume in equities increased by 33% and 72% respectively and bonds increased by 96% and 94% respectively.

Assets under management grew by 171% compared to previous quarter reaching about Rwf 8 billion as at September 2019. The Government issued the first new 20-year bond at 13.25% with an oversubscription rate of 141% and two 5-year re-open bonds of a coupon of 11.3% and 11.2% at a subscription rate of 121% and 125% respectively.

Total revenues during the Q3 2019 increased by 73% from previous quarter driven by fees from advisory services, fund management activities as well as commission from brokerage activities.

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