BK Group PLC registered a profit of Rwf6 billion in the first quarter of 2018 from their four subsidiaries; Bank of Kigali, BK General Insurance, BK TecHouse and BK Capital.
Banking operations were propelled by a growing loan portfolio, which expanded by 13.6 per cent year-on-year, according to latest figures from the lender.
The group, which is a publicly listed on Rwanda Stock Exchange, made presentation of its Quarter 1 numbers spanning January to March.
The increased profits and returns came amid the implementation of the new international financial reporting standard (IFRS 9) which requires banks to make provisions for both performing and non-performing loans.
With the new standard, financial institutions have to provide for possible future credit losses in the very first reporting period a loan goes on the books – even if it is highly likely that the asset will be fully recovered.
This saw Bank of Kigali increase their net loans loss provisions by about 26 per cent (year-on-year) to about Rwf4.9 billion.
Dr Diane Karusisi, the Group Chief Executive Officer said that the bank had profit before tax of about Rwf9.7 billion while the group’s total assets stood at Frw755.2 billion.
"BK Group Plc continues to show resilient performance reporting a Profit before tax growth of 22.9% y-o-y. Our Total Assets also increased by 14.1% y-o-y. We continue to put a lot of focus on sustainability and innovation to maintain our leadership position in the market,” she said.
BK Insurance posted an increase in profitability for Quarter One of 2018 of Frw79.9m after underwriting premiums worth about Rwf700m.
The subsidiary’s head, Alex Bahizi, said that fire and motor insurance took the lion’s share.
The firm has recently launched a tourism insurance product which they hope can further increase their market share from their current 10 per cent.
Bahizi also said that they were gearing on introducing agriculture insurance products for crops and animals which they believe could drive further penetration.
Insurance penetration in Rwanda is currently below 4 per cent.
BK TecHouse also facilitated the reported profits after registering an increase in digital users to reach 600,000 at the end of March this year from 150,000 in December last year.
Regis Regemanshuro the BK TecHouse CEO said that the growth was in uptake of their services such as School Management Solution. The firm is targeting at having a million clients by the end of this year which could be driven by their upcoming service; Tenant Management System.
BK Group PLC shareholders last week approved plans to cross list on the Nairobi Securities Exchange following approval by the Annual General Meeting today morning.
The process is expected to raise between $60M-$70M with a section of it earmarked for continued digitization of the group’s operations.
The bank is working on listing by October this year after complying with all regulatory requirements and procedures.
The number of shares to be issued will depend on the rights issue price but the move could push shareholder equity up to $200million.
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