BK Group’s net earnings grew 35% in 2021

BK Group, a leading financial institution in Rwanda, has announced impressive financial results for the year 2021. The Group's net earnings surged by 35% to over $51 million, while revenue grew by 24.8% to $171.8 million. In an exclusive interview with CNBC Africa, BK Group's Chief Executive Officer, Dr. Diane Karusisi, shared insights into the factors driving this growth and the strategic plans for the future. One of the key drivers of the impressive financial performance was the growth in all business lines, including a 33% increase in gross premiums for the insurance segment and a 16% expansion in loans for the banking sector. Additionally, improved asset quality, evidenced by a reduction in the cost of risk from 4.5% to 3.4%, contributed to the Group's success. Dr. Karusisi highlighted the positive impact of the economic recovery in Rwanda, with sectors like real estate and hospitality showing signs of improvement. This recovery has led to a reduction in non-performing loans (NPLs) and an upgrade of clients to performing classes. Despite the ongoing challenges in the hospitality sector, Dr. Karusisi remains optimistic about the potential for recovery, especially with upcoming events like CHOGM and BAL set to boost the industry. The Group's focus on synergy between its various subsidiaries, leveraging the bank's large clientele base to drive growth in sectors like insurance, has also been instrumental in the positive financial performance. Dr. Karusisi emphasized the untapped potential in the insurance market, with plans to expand into life insurance through a greenfield business model. The successful implementation of a digital transformation strategy has been pivotal in enhancing operational efficiencies and adapting to the changing business landscape. The Group's investment of $20 million in digital initiatives, including a core banking system and end-to-end digitization of internal processes, has facilitated a shift towards online channels and reduced cash transactions significantly. The robust agent banking network, with over 20,000 daily transactions, continues to play a vital role in servicing clients and creating job opportunities. Looking ahead, BK Group aims to maintain its growth trajectory by focusing on digital innovation, cost efficiencies, and diversification into new product offerings. Despite challenges posed by ongoing global uncertainties, such as supply chain disruptions and inflation, the Group remains vigilant in managing risks and ensuring sustainable growth. With a target of exceeding a 20% return on average equity by the end of 2022, BK Group is poised for continued success in the financial sector.