The Bank of Kigali Plc (BK), Rwanda’s biggest local bank by assets, has reported a net income of $41.8 million (Rwf43.5 billion), reflecting an increase of 18.4 per cent year on year, largely driven by the ongoing recovery of key sectors of the Rwandan economy.
The bank’s total assets increased by 13.4 per cent year on year to $1685.1 million (Rwf 1.755.6 billion) as of September 2022.
“We have seen sustained improvement in our business across all the subsidiaries that have allowed us to post a net income growth of 18.4 percent. We believe this a very good performance mainly driven by loans, but also a lot of investment in inter-bank treasury because we have seen very good growth in our deposits,” Bank of Kigali CEO Dr Diane Karusisi while releasing the financial performance for the third quarter.
The growth in deposits, which increased by 21 per cent year on year — the highest the bank has witnessed in recent years — is partly attributed to the expansion of its digital footprint, which is linked to its recent upgrade of the banking software.
The bank’s client balances and deposits increased by 21.5 per cent year on year to $1,081.6 million (Rwf1,127.1 billion) as of September 2022.
Net loans and advances in the bank of Kigali increased by 4.4 per cent year on year to $ 990.8 million (Rwf1,032.4 billion).
However, the bank anticipates a rise in the cost of borrowing due to the tightening of the monetary policy despite the increasing uptake of loans by the private sector, including manufacturing.
Rwanda’s Central Bank recently raised its lending rate to 6.5 per cent, the third hike this year, to contain a drastic rise in the cost of living in the country largely driven by high food prices as well as external shocks, including the impact of the war between Russia and Ukraine that has fuelled an increase in the prices of imported commodities including oil, gas, fertilizers and sunflower seed oils.
“The outlook remains positive although the macro-economic conditions are not very favourable. The Central Bank increased its lending rate from 4.5 percent at the beginning of the year to 6.5 percent. We see the cost of funding increasing,” Dr Karusisi said.