BK Group announces Rwf59.7bn profit in 2022

The Bank of Kigali Group PLC has made significant strides in the financial year 2022, reporting a net profit of Rwf59.7 billion, marking a positive growth trend across all its subsidiaries. The CEO of Bank of Kigali Plc, Diane Karusisi, highlighted the key drivers behind this success in an exclusive interview with CNBC Africa's Fiona Muthoni. Karusisi emphasized that the substantial increase in profit after tax of over 22% was primarily attributed to asset quality improvement, particularly a reduction in non-performing loans. The strong post-COVID recovery was underscored by a decrease in the percentage of the portfolio under the COVID moratorium to below 0.5%, resulting in enhanced overall book quality. Moreover, the group experienced a notable 25% growth in non-funded income, bolstered by flourishing trade finance, foreign exchange, and payment space operations. Karusisi acknowledged the outstanding performance of Bank of Kigali and BK Capital as the primary contributors to the group's profitability, with the banking sector accounting for over 95% of the profit after tax, while BKGI, the general insurance arm, followed closely with a 4.6% contribution. Despite BK Capital's exponential growth of 198%, its current share to the group's overall performance remains below 1%. Looking ahead to 2023, Karusisi outlined BK Capital's potential as a key player in diversifying the group's offerings, with a strategic focus on supporting corporate clients in various financial aspects, such as structuring deals and capital market ventures. Additionally, she reaffirmed the commitment to enhancing shareholder value through robust dividend payouts, with a projected dividend per share of 32 francs, representing a remarkable yield of over 12% based on the Rwanda Stock Exchange's current stock price. The successful cross-listing on the Nairobi Securities Exchange in 2018 has significantly broadened the group's investor base, with increased investor traction and liquidity observed in the Nairobi market compared to the Rwandan market. Karusisi also highlighted the group's resilience amid global economic challenges, such as the war between Russia and Ukraine, crypto market fluctuations, and rising interest rates. Managing the impact of these factors on the bank's cost of funds and margins remains a key focus, as the group navigates through uncertain economic terrain. The CEO commended the considerable decrease in non-performing loans to 2.6%, signaling a robust post-COVID recovery and improved economic prospects for clients, particularly in the hospitality and commercial real estate sectors. The agribusiness and manufacturing sectors emerged as key loan demand drivers, fueled by the Economic Recovery Fund's support for businesses. Additionally, BK Tech House's digital prowess was showcased through significant growth in user numbers, notably in the payment sector, education, and agriculture arenas. The increasing trend towards digital transactions underscores the group's commitment to leveraging technology to enhance customer experience and drive financial inclusion, with a focus on monetizing data and expanding digital service offerings in the upcoming years.