BK Group registers Rwf16.1bn profit in first half of 2020

The growth was despite the turbulence currently being experienced in the local, regional and global economy as a result of the Covid-19 pandemic

Bank of Kigali head office in Nyarugenge District. / Photo: File.

By

Collins Wait

BK Group has registered an after-tax profit of Rwf16.1 billion in the first half of 2020 an increase of 10.6 per cent growth compared to Rwf14.6 billion in the same period last year

The growth was despite the turbulence currently being experienced in the local, regional and global economy as a result of the Covid-19 pandemic.

This, according to the Group’s Chief Executive, Diane Karusisi, is proof that even in crisis, there are new opportunities to pursue.

The group has four subsidiaries; Bank, BK General Insurance, BK TecHouse, and BK Capital.

The bank generated the largest share of profit raking in Rwf14.5 billion after-tax (a growth from about Rwf12.5 billion in the same period last year).

To achieve the feat, the bank served over 352,000 retail customers and over 36,600 corporate clients and at the same time expanded its agency banking network to 1,951 agents as at end June 2020.
The network processed over 1.7million transactions worth Rwf158.8 billion.
Operating income rose by 8.5 per cent to Rwf64.6 billion compared to the same period last year. This was due to potential impact of Covid-19 and significant increase in credit risk which largely affected the loan loss provisions.  Non-performing loans increased to Rwf52.8 billion, while the
Non-Performing Loans ratio remained at 5.6 per cent while the cost of risk increased to 4.6 per cent from 2.7 per cent at the end of 2019.
With the reduced business volumes and increased financial distress, the bank granted grace period between 3 to 10 months to clients who sought moratorium. With the restructuring of loans restructured facilities related to Covid-19 reached 37 per cent of gross loans and advances.
BK Insurance registered a profit of Rwf1.4 billion in the second quarter of 2020 compared to Rwf1.14 billion registered in the same period last year representing a 22 per cent growth in profitability (Year on year).
The insurance arm profit was among other things driven by an increase in gross premium from Rwf2.4 billion in 2019 to Rwf2.7 billion in second quarter of 2020 this is a growth of 12 per cent.
At BK TecHouse, there was a growth in net sales by 6 per cent year on year to Rwf515 million. Net Profit before tax stood at Rwf99 million.
The group’s ‘youngest’ subsidiary BK Capital saw assets under management grow to Rwf9.2 billion as at the end of June 2020 from Rwf2.9 billion at the same time last year.
Karusisi said that the second quarter was a turbulent period due to the effect of the pandemic on the economy.
“The second quarter was probably the most tumultuous period in a long time as the pandemic hurt economic activity across all sectors. We continued to deliver for our clients, employees, our communities and shareholders beyond just business continuity. The growth registered in net loans and customer deposits shows that even in times of crisis, it is possible to pursue new opportunities,” she said.
She expressed optimism for improved performance in coming months as the economy steadily picks up.
“As the Rwandan economy steadily picks up for the rest of the year, we remain hopeful to close this year with a much better performance than anticipated at the beginning of the pandemic,” she said.
The group in 2019 recorded an after-tax profit of Rwf37.3 billion which was a 36 per cent growth from the previous year.

cmwai@newtimesrwanda.com