Rwanda Commercial Bank (BCR) reported yesterday that its net income dropped from Rwf898m in 2008 to Rwf859m in 2009 on account of the slow growth of the Rwandan economy and the global financial crisis.

Despite a 20.9 percent drop in deposits to Rwf64b from Rwf81b in 2008, the bank said that it emerged from 2009 stronger, more profitable and well capitalized with healthy liquidity levels.

The bank’s loan portfolio slid by 26.5 percent where net loans reduced from Rwf43b to Rwf34b as it took a conservative approach to its loan portfolio growth.  

"These amounts reflect BCR’s strategy to be conservative in the growth of our loan portfolio and to be prudent in provisioning where our approach is to recognize problems at an early stage and take appropriate action,” Michael Turner the representative of Actis— a UK private equity firm with 80 percent shares in BCR said.

He added that last year  was a demanding one for the banking industry which shrunk significantly in terms profitability.

"The overall net profit of all banks in Rwanda declined from Rwf12 billion to Rwf4.2 billion and this did not spare BCR,” said Turner.

However, BCR’s capital and reserves improved from Rwf8.1 billion to Rwf8.9 billion, leading to a year end capital adequacy ratio of 19.5 percent compared to Rwf13.7 percent in the previous year.

"The capital adequacy ratio was well in excess of the regulatory requirement of 10 percent and places BCR amongst the best capitalized banks in the market,” added Turner.

Last year, the entire banking sector registered a slight overall decline of asset quality with non performing loans ratio of 12.8 percent compared to 12.6 percent in 2008.

BCR however can boast of a health liquidity ratio of 119 percent compared to 100 percent in 2008. With this liquidity situation, BCR is said to be the net provider of funds in the inter-bank market.

The bank’s key initiatives for this year include a selective and controlled growth of the loan book across all customer segments, relaunching of retail business with focus on the customers’ employees, expansion of the capital markets products like handling initial public issues and debt syndications.  

Ends