Bank loans up by 42.7%

Commercial bank loans to the public increased by 42.7 per cent between January and September this year. Figures from the central bank indicate that loans in quarter three of 2011 grew from Rwf449.4b in the whole of 2010 to Rwf559.1b. Deposits and loans increased by 36.4 percent and 42.7 percent respectively, in September this year, compared to the same period last year, indicating public confidence in the banking sector. “In quarter three, deposits increased to Rwf662.37 billion from combined total deposits of Rwf565.15 billion in the whole of 2010,” the report indicates. The report further statesthat the country’s banking system was reasonably sound, properly regulated and in a better position to cope with the effects of the present financial crisis. The central bank report further shows that the consolidated balance sheet of the banking industry expanded by 38.1 percent in quarter three, this year compared to 2010 with net profit surging by 235.9 percent in September 2011 from Rwf5.2b to 17.4b. In a phone interview, KCB Rwanda Managing Director, Maurice K. Toroitich, told Business Times that commercial banks had primarily augmented their balance sheets with more interest income from lending. “Generally, there has been an increase in the level of economic activities and now, with a stable interest rate, people can service their loans, hence leading to tremendous performance generally,” Toroitich explained. He further noted that there had been a decline in non-performing loans with strong efforts by banks to write-off bad loans. The central bank says that the banking system continues to be highly liquid and profitable with non performing loans declining from 10.8 percent at the end of 2010 to 9.2 percent in September 2011. Ends

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Bank loans up by 42.7%