BK Group in 2019 recorded an after-tax profit of Rwf37.3 billion which was a 36 per cent growth from the previous year.

In 2018, the group recorded a net profit of Rwf27.4 billion and Rwf23.3 billion profit after tax in 2017.

Dr. Diane Karusisi, the group’s Chief Executive Officer, said that that the final quarter of 2019 was a positive one, with the group meeting growth targets in assets and profitability.

"In 2019, we achieved Rwf 37.3 billion in net income, up 36.3 per cent year-on-year with Rwf 41.4 in earnings per share. Meanwhile, our total assets exceeded Rwf1 trillion in Q4 following an increase of 19.3 per cent in loans and advances to our customers from last year,” she said.

According to the group’s financial statement, revenues from all four subsidiaries (Bank, BK General Insurance, BK TecHouse and BK Capital) grew with banking and insurance having largest growth.

In banking, the loan book expanded by 19.3 per cent to Rwf678.0 billion while investments in government securities also increased by 69.6 per cent year-on-year to Rwf 124.8 billion.

The group’s insurance arm, BK insurance's gross premium increased from Rwf 6.2 billion in 2018 to Rwf 7.3 billion at the end of 2019, a 16 per cent growth.

Consequently, underwriting profit grew from Rwf 795 million in 2018 to Rwf 1.0 billion in 2019.

BK TecHouse registered a net sales growth of 73 per cent from Rwf 618 million in 2018 to Rwf 1.1 billion in 2019. This was among other things driven by the growth of digital users on agriculture platform to over 1.8m users.

BK Capital which offers services such as investment and wealth management, corporate finance and advisory services brokering of capital markets instruments saw an increase in revenues by 17 per cent compared to 2018.

This was driven by commissions from advisory services, fund management activities, brokerage business as well as interest income from investments.

While profits grew, the exposure to risk also went up. Non-performing loans were at 5.7 per cent at the end of the year.

According to Dr. Diane Karusisi, the group’s Chief Executive Officer, the cost of risk has increased to 2.7 per cent mostly due to a higher Non Performing Loans ratio and higher impairments as per the IFRS9 model.

"Our recovery efforts have paid off in the past and we remain hopeful that a large chunk of the loan loss provisions in 2019 will be released in 2020 yielding to an increase in our budgeted income. Overall the team remains committed to exceeding our shareholders’ expectations,” she said.

Karusisi said that improved performance was also due to efforts to ensure cost efficiency which reduced the operating costs.

Cost to income ratio for 2019 was 42.2 per cent. Cost-to-income ratio is calculated by dividing the operating expenses by the operating income generated. This is important for determining the profitability of a bank. A lower efficiency ratio is best because lower ratios indicate that it takes less cost to generate income.

The lender is bracing to support the country’s recovery post-COVID-19, the chief executive said. As the biggest bank in assets and liquidity, there is much expectation on its role in driving the recovery of the local private sector.

With most of the sectors have slowed down with other halting operations altogether, clients will be among other things seeking to defer loans, seeking loans to restart operations among others.

She said that BK Group remains ready to work with the private sector to deploy capital as the country seeks to get back from the crisis, post COVID-19.

While the bank will be careful on their liquidity levels during the post-COVID-19 period, the Central Bank’s interventions such as the Rwf50 billion facility to boost liquidity as well as revision of reserve requirements will come in handy.