BK Group Plc has recorded a 29.5 per cent increase in net profit to Rwf47.8 billion in the first half of 2024, attributed to the performance of the lending arm, Bank of Kigali.
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As announced on August 30, the Group’s total assets stood at Rwf2.3 trillion, financed by the growth in deposits, and shareholders’ equity increased by 13 per cent to Rwf414.2 billion.
Bank of Kigali’s net interest income rose to Rwf89 billion while non-interest income – revenue generated from sources other than the traditional interest earned on bank loans – grew by 27.3 per cent to Rwf32 billion in the period under review.
According to Anita Umuhire, BK’s Chief of Finance, the demand for post-import facilities, especially for oil importers, fueled the increase in interest on treasury loans of Rw4.1 billion.
The financial statement indicates that net loans and advances increased by 14 per cent to Rwf1.41 trillion while deposits increased by 6.5 per cent to Rwf1.46 trillion.
"We expect to continue this trajectory [profit at Rwf47.8 billion] to the end of the year and our growth will continue to be supported by our expectations on growth of loan book and non-funded income, foreign exchange trading, and improvement on loan-related fees that had been stagnant in the first half.”
Overall, Umuhire said the bank expects a 25 per cent annual growth compared to last year.
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Commenting on Non-Performing Loans ratio which stood at 5.8 per cent, Dr. Diane Karusisi, CEO of Bank of Kigali, said that the bank has measures in place for ‘forced’ recovery at the end of the year, which will contribute to improving assets quality.
She noted that the overall performance is in line with projections the lender had made, and they seek to keep the growth momentum in the second half of the year to achieve the target of increased loans and profitability.
Cost-to-income ratio which is important for determining the profitability of a bank decreased from 40.2 per cent to 36.6 per cent year-on-year. A low cost-to-income ratio is a positive development as it indicates that it takes less cost to generate income.
It is also worth noting that key profitability indicators improved with Return on Average Assets and Return on Assets Equity ratios of 4.3 per cent and 24.5 per cent, respectively.
On subsidiary level, BK Insurance registered a profit of Rwf2.14 billion, and total assets increased by 15 per cent year-to-date to Rwf34 billion.
Gross premiums increased by 19 per cent to Rwf7.3 billion compared to Rwf6.4 billion sold in the same period last year. However, the claims paid in half one of 2024, led to a loss ratio of 39 per cent.
BK TecHouse registered a sales revenue of Rwf746.8 million, with digital platforms users increasing to 4.1 million. In particular, Urubuto Pay transaction value increased to Rwf16.8 billion.
BK Capital booked a net operating income of Rwf860 million in quarter two of 2024, a 14 per cent increase attributed to placement fees from trading and strong growth in fund management assets under management.
Within the brokerage business, BK Capital saw an increase in equities turnover of 42 per cent due to high demand on Bralirwa and Bank of Kigali counters, however, bonds turnover decreased by 1 per cent year-on-year.
Dr. Uzziel Ndagijimana, BK Group Chief Executive Officer, said that the improvement in macroeconomic environment of the country has greatly contributed to the performance of the group, noting the economic growth and reduced inflationary pressures on the market.
"Rwandan economy has continued to grow at high rates and showed resilience to multiple external shocks."