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BANK OF KIGALI
INVESTOR PRESENTATION
1H 2012
Bank of Kigali Investor Presentation Page 1
1H 2012
DisclaimerThis presentation contains statements that constitute “forward-looking statements”, including, but not
limited to, statements relating to the implementation of strategic initiatives and other statements
relating to our business development and financial performance.
While these forward-looking statements represent our judgments and future expectations concerning
the development of our business, a number of risks, uncertainties and other factors could cause actual
developments and results to differ materially from our expectations.
These factors include, but are not limited to, (1) general market, macroeconomic, governmental
policies, legislative and regulatory trends, (2) movements in local and international currency exchange
rates, interest rates and securities markets, (3) competitive pressures, (4) technological
developments, (5) changes in the financial position or credit worthiness of our customers, obligors and
Bank of Kigali Investor Presentation Page 22
developments, (5) changes in the financial position or credit worthiness of our customers, obligors and
counterparties and developments in the markets in which they operate, (6) management changes and
changes to the Bank’s structure and (7) other key factors that we have indicated could adversely affect
our business and financial performance, which are contained elsewhere in this presentation and in our
past and future filings and reports, including those filed with the National Bank of Rwanda and the
Rwanda Stock Exchange.
We are under no obligation (and expressly disclaim any such obligations to) update or alter our forward-
looking statements whether as a result of new information, future events, or otherwise.
Presentation Team
J a m e s G a t e r aC h i e f E x e c u t i v e O f f i c e rE m a i l : j g a t e r a @ b k . r wT e l : + 2 5 0 2 5 2 5 9 3 1 2 1
L a d o G u r g e n i d z eC h a i r m a n o f t h e B o a r dE m a i l : l g u r g e n i d z e @ b k . r wM o b i l e : + 9 9 5 5 9 9 4 7 7 2 7 2
l a d o . g u r g e n i d z e . 2 0 0 8
Bank of Kigali Investor Presentation Page 33
L a w s o n N a i b oC h i e f O p e r a t i n g O f f i c e rE m a i l : l n a i b o @ b k . r wM o b i l e : + 2 5 0 7 8 8 3 0 2 0 7 6
J o h n B u g u n y aC h i e f F i n a n c e O f f i c e rE m a i l : j b u g u n y a @ b k . r wM o b i l e : + 2 5 0 7 8 8 3 0 6 1 0 0
Agenda
1. Key Investment Highlights
2. Country Overview Information
3. Banking Sector Overview
4. Bank Overview
5. Corporate Governance
Bank of Kigali Investor Presentation Page 4
5. Corporate Governance
6. Business Overview
7. Review Of Financial Performance In 1H 2012 & 2011
8. Strategic Outlook
9. Contact Information
Sound Macro
Fundamentals
Politically stable country with sound governance
Very attractive demographic profile: population of 10.7 million with 83% below the age of 40
Robust economic growth of 4.1%-11.2% between 2006-2010 and 8.8% expected for 2011
Moderate inflation: Maintained single digit inflation at 8.3% in 2011 vis-à-vis East African Community
Partners
Very friendly business environment, recognized as the 2nd most reformer globally 2005-2011 in
World Bank Doing Business Report
Significant headroom for growth given low banking penetration
Total assets/GDP of 23%
Large unbanked population of approximately 80%
Well regulated banking sector: fairly conservative regulator relative to regulators in the EAC
Market leadership by
Total assets (RwF 312.8 billion as of 30 June2012) – 31.6% market share
Net Loans (RwF 142.6 billion as of 30 June2012) – 28.0% market share
Significant
Banking Sector
Potential
Market
Leadership
Key Investment Highlights
2. Bank of the Year 2009-
2011
3. Best Bank in Rwanda
2009-2011
1. Best East African Bank
2012
Bank of Kigali Investor Presentation Page 5
Net Loans (RwF 142.6 billion as of 30 June2012) – 28.0% market share
Customer Deposits (RwF 209.7 billion as of 30 June 2012) – 28.8% market share
Shareholders’ equity (RwF 63.3 billion as of 30 June2012) –41.1% market share
Relatively high capital adequacy ratios ranging from 14.0% - 29.1% between 2007 and YTD 2012
Manageable level of non-performing loans – 6.5% of gross loans in 1H 2012, down from 19.4% in
2007
Loans to deposit ratio range of 54.8% - 72.7% between 2007 and 1H 2012.
Leadership
Conservative
Business
Model
Experienced
Management
Team
Management team with combined banking sector experience of 79 years
Complemented by an experienced and diversified Board of Directors
Track record of producing stellar results
Profitable
Growth
Robust asset growth at a CAGR of 24.4% (2007-2011) to RWF 312.8 billion in 1H 2012
ROAA ranging from 3.0% - 4.0% between 2006 and 1H 2012
5. A+/A1 Credit Rating
“The rating reflects the Bank’s
established domestic franchise
value, strong capital position, its
systemic importance, strong asset
quality and financial performance.”
GCR
4. Company of the Year
2011 by Kenyan
Institute of
Management
Bank of Kigali Investor Presentation Page 6
COUNTRY OVERVIEW INFORMATION
Rwanda – Country Profile
Nominal GDP (2011) US$ 6.4 billion
Nominal GDP Per Capita (2011) US$595
Rwanda has been recognized by the World Bank as the second
most active reformer globally 2005-2011
Since 2005, Rwanda has implemented over 22 business
regulation reforms in the areas measured by the World Bank
Doing Business Index
Today, entrepreneurs can register a new business in 24 hours
as well as online
Area 26,338 sq km
Population (2010) 10.7 million
Official Languages Kinyarwanda, French, English
Capital Kigali
Currency Rwandan Franc (RWF)
Credit Rating B/Stable (Fitch Ratings)
B/B (Standard & Poors)
Business Environment
Macro Economic Indicators
National Facts
Bank of Kigali Investor Presentation Page 7
7
Real GDP Growth Rate 2011 8.6%
Real GDP Growth Rate 2012E 7.6%
Inflation Rate (July 2012) 7.3%
Private Sector Credit Growth (2011) 28.4%
External Debt to GDP (2011) 15.4%Currency Depreciation against USD (Year to
June 2012) 1.4%
FDI as % of GDP (2011E) 1.9%
Source: IMF, CIA World Factbook, Ministry of Finance and Economic Planning, National Institute of Statistics Rwanda, National Bank of Rwanda,
GDP per Capita continues to grow Population Pyramid for Rwanda, 2011
Sound Macro Fundamentals
20-39
40-59
60 and above
9.2 9.6 9.8 10.1 10.4 10.7
333391
479 519 540
595
0
100
200
300
400
500
600
700
0
2
4
6
8
10
12
2006 2007 2008 2009 2010 2011
US $Mln
Population Nominal GDP Per Capita
Bank of Kigali Investor Presentation Page 8
3.1 3.7 4.7 5.2 5.6 6.4 6.6
8.8% 9.1%
15.4%
10.3%
2.3%
8.3%7.5%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
0
1
2
3
4
5
6
7
2006 2007 2008 2009 2010 2011 2012E
US$ Bn
Nominal GDP (US$ Bn) Inflation (%)
Healthy GDP growth with moderating inflation
Source: National Institute of Statistics RwandaSource: Ministry of Finance and Economic Planning, IMF
54% of the population is under 19 years.
83% of the population is under 40 years.
3% of the population over 65 years.
30.0% 20.0% 10.0% 0.0% 10.0% 20.0% 30.0%
0-19
Female % Male %
GDP Breakdown By Economic Activity 2011
Macroeconomic Indicators
Rwanda’s exports are dominated by coffee, tea and
minerals(tin, coltan and wolfram).
The country remains a net importer. Major imports include
intermediary goods especially construction materials,
consumer goods, energy and lubricants and capital goods.
Informal cross-border trade is a significant component of
Rwandan external trade (approx. 18% of total exports). More
than 78% of these exports are destined to DRC.
Official reserves were estimated at 7.7 months of goods
imports for Dec 2011
Agriculture,
31.9%
Real
estate, business
Transport,
storage,
communication,
7.5%
Manufacturing,
6.6%
Education,
5.5%
Transport,
storage,
communication,
7.5%
Finance,
insurance,
2.8%
Mining and
quarrying, 1.3%
Trade Structure
Bank of Kigali Investor Presentation Page 9
12%11% 10%
14% 15%
11%
14% 15%13%
0%
5%
10%
15%
20%
2003 2004 2005 2006 2007 2008 2009 2010 2011
Current Account As a % of GDPTrade Deficit As A % Of GDP
9
Source: NBR Monetary Policy Statement
Source: Ministry of Finance and Economic Planning, IMF
imports for Dec 2011
4%
9%
12% 13%
17%
0%
5%
10%
15%
20%
2007 2008 2009 2010 2011
Current Account Deficit as a % of GDPSource: National Institute of Statistics Rwanda
Source: National Institute of Statistics Rwanda
Wholesale and
retail
trade, 12.9%
Construction,
8.3%
estate, business
services, 8.0%
Macro Economic Review
Review of the Macro Economic Environment Year to June 2012
The country’s GDP continues to perform well, in line with the
annual real GDP growth projections.
In Q1 2012, real GDP increased by 7.7% boosted by the high
increase in services (+14%) despite moderate performance in
industry (1%) and agriculture (3%).
The annual headline inflation decelerated to 5.92% in June
from 8.18% in March 2012 and 8.34% in December 2011.
However inflation during the period fluctuated around 8% on
annual basis, mainly driven by food and energy prices.
The Central Bank policy rate was increased in May 2012 from
Inflationary Environment Year to Date
8.3%
7.8%
7.9%
8.2%
7.0%
8.3%
5.9%
7.3%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
December
2011
January
2012
February
2012
March
2012
April 2012 May 2012 June 2012 July 2012
Exchange Rate Developments Year to Date
Bank of Kigali Investor Presentation Page 10 10
The Central Bank policy rate was increased in May 2012 from
7.0% to 7.5%.
Exports value increased by 25.1% during the first half of 2012
on annual basis, against 22.1% for imports.
The imports cover improved to 18.7% in the first half of 2012
from 18.2% in the corresponding period of the last year.
Exchange Rate Developments Year to Date
-1.6% -1.5%
0.4%
3.9%
2.0%
5.8%
-1.3%
-2.5%
2.1%
-1.6%
-2.5%-2.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
USD GBP EURO Uganda
Shillings
Kenya
Shillings
Tanzania
Shilling
2011 1H 2012
Bank of Kigali Investor Presentation Page 11
BANKING SECTOR OVERVIEW
2011 Banking Assets/GDP Large Unbanked Population
Economy is still cash based with bank accounts being used
mostly for cash deposits and withdrawals
Approximately 20% of the population is banked
90% of banked adults have a product with UBPR or credit
unions
2011 Banking Assets Per Capita 5
Significant Banking Sector Potential
(US$)
Source: Finscope Rwanda 2008
Prudential Regulations
CAR (Tier One) 10%
33%
50%
70%
Uganda*
Tanzania*
Kenya* 534
274
165
Kenya
Tanzania
Uganda
Bank of Kigali Investor Presentation Page 12
(1) Source: Central Bank of Kenya and Economic Survey 2011
(2) Source: IMF and Tanzania Banking Survey 2011 (Serengeti Advisers)
(3) Source: IMF and Bank of Uganda Joint Annual Supervision & Financial Stability Report December 2010
(4) Source: NISR, National Bank of Rwanda Monetary Policy review
(5) Source: Population stats by IMF
*2010 figures are used for Tanzania and Uganda
Total CAR 15%
Liquidity Ratio 20%
Reserve Requirement 5% of total deposits
Lending in foreign currency Restricted to exporters
25%
33%
Rwanda
Uganda* 165
124
Uganda
Rwanda
Banking Sector Overview
Rwanda Banking System Total Assets
Banking Sector Review 1H 2012
Source: NBR Monetary Policy & Financial Stability Report 2011
Interest Rate Analysis
0.0%2.0%4.0%6.0%8.0%
10.0%12.0%14.0%16.0%18.0%
De
c
Jan
Feb
Ma
r
Ap
r
Ma
y
Jun
Jul
Au
g
Sep
Oct
No
v
De
c
Jan
Feb
Ma
rch
Ap
ril
Ma
y
Jun
e
2010 2011 2012
Key Repo Rate T-Bills Rate
Deposit Rate Lending Rate
856 922
1,011
1,226
1,474
1,636
0.0
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0
1,800.0
2007 2008 2009 2010 2011 1H 2012
USD mln
Bank of Kigali Investor Presentation Page 13
Banking Sector Review 1H 2012 Recent Regulatory Reforms To Improve Access To Cre dit
Enactment of Law on Mortgages, requiring the registration of mortgages
and enabling lenders to foreclose on defaulters
Establishment of Commercial Courts dealing solely with commercial
disputes
Reorganization of the Land Centre which has computerised records and
operations in addition to timely issuance of property titles
Reorganization of the Office of the Registrar General to enhance and fast
track registration of mortgages and foreclosures
Establishment of Credit Reference Bureau to enhance information sharing
among banks and other financial institutions in order to assist with credit
risk assessment
13
As at end June 2012, Tier 2 ratios stood at 25.4% (YE 2011: 25%) well above
the regulatory minimum of 15%. The sector’s liquidity position stood at 48.3%
in June 2012 (YE 2011: 45.3%).
The sector profitability remained good decreasing slightly by 0.4%, from RWF
13.4 billion in June 2012.
Credit to the private sector increased by 18.1%. The distribution of credit to
private sector is dominated by the construction sector (26.8%), commerce
, restaurants and hotel (31.5%) and retail lending(15.4%)
The quality of assets improved significantly as the Non-performing loans
(NPLs) to total gross loans reduced to 6% in June 2012 (YE 2011: 8%).
Timeline Of Foreign Investment In The Rwandan Banking Sector
2004 2006 2007 2008 2009 2010 2011 2012
80% stake
in BCR
40% stake in Cogebanque Actis sells 80% stake in
BCR to I&M Bank
Bank of Kigali Investor Presentation Page 14
2008 2009 2010 2011 1H 2012
Bank of Kigali Market Share by Total Assets 23.4% 26.4% 27.4% 32.3% 31.6%
30%
stake in
BPR
Banking Sector Overview Cont’d
Case study: Rwanda– six out of nine banks in Rwanda are owned by regional and Pan African bank and have
lost market share to locally-run banks
Market Share By Total Assets In 2008 Market Share By Total Assets In 2011
Top three “local”
banks, 50.5%
Six foreign-
controlled banks,
49.5%
Top three “local”
banks, 51.7%
Five foreign-
controlled
banks, 48.3%
Market Share By Total Assets In 1H 2012
Top three “local”
banks, 50.4%
Six foreign-
controlled banks,
49.6%
Bank of Kigali Investor Presentation Page 15
Page 15
Source: the National Bank of Rwanda, company estimates
BANK OF
KIGALI
UBPR
BANK OF
KIGALI
BPR
BANK OF
KIGALI
UBPR
Competitive Landscape
Market Share Dynamics
Source: NBR Supervision Department, BK Company Filings and Published results of Banks
Banking Sector Growth Vs Bank of Kigali Growth
45.6%
21.4%
33.4%
93.2%
23.0%29.9%
23.8%
52.4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total Assets
Growth
Net Loan Book
Growth
Client Deposits
Growth
Shareholders'
Equity
Bank of Kigali Growth in 2011 The Rwandan Banking Sector Growth in 2011
26.4% 26.8%25.8%
26.7%27.4%
31.5%
25.9%
32.2%32.3% 29.4% 28.1%
41.9%
31.6%28.0%
28.8%
41.1%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Total Assets Net Loans Customer Deposits Shareholders' Equity
% 2009 2010 2011 1H 2012
Bank of Kigali Investor Presentation Page 16
16
Concentration of Banking Sector AssetsSelected Indicators 1H 2012
Source: Published Bank Results
31 December 2011
Top 5
Banks,
78.6%
Others,
21.4%
Source: NBR Supervision Department, BK Audited Full Year 2011 Results, BK 1H 2012 Reviewed results
30 June 2012
6.0%
2.3%
10.9%
6.5%4.0%
19.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
NPLs/Gross Loans Return on Average
Assets
Return on Average
Equity
Asset Quality Annualised Profitability ratiosBanking Sector BK
Top 5
Banks,
79.5%
Others,
20.5%
Bank Of Kigali Is The Market LeaderRank Total Assets Net Loans Customer Deposits Equity
31.6%
BANK OF KIGALI
BPR
19.1%
ECOBANK
10.8%
BCR
10.0%
8.0%
1
2
3
4
5
28.0%
BANK OF KIGALI
28.8%
BANK OF KIGALI
41.1%
BANK OF KIGALI
BPR
23.4%
BPR
20.4%
BPR
14.5%
BCR
9.0%
ECOBANK
10.4%
BCR
9.6%
9.2% 8.2% 6.6%
ECOBANK
11.8%
BCR
9.9%
ECOBANK
8.6%
Bank of Kigali Investor Presentation Page 17
Source: Published 1H 2012 Financial Statements of Commercial Banks reviewed in accordance with BNR guidelines
COGEBANQUE
8.0%
FINA BANK
7.0%
KCB
7.1%
ACCESS BANK
4.3%
5
6
7
8
COGEBANQUE
9.2%
ACCESS BANK
2.5%
KCB
8.5%
ACCESS BANK
4.8%
COGEBANQUE
8.2%
FINA BANK
7.6%
KCB
7.0%
COGEBANQUE
6.6%
FINA BANK
4.9%
KCB
6.6%
ACCESS BANK
4.5%
FINA BANK
7.2%
9
EQUITY BANKEQUITY BANK EQUITY BANK EQUITY BANK
4.0%2.1% 1.1% 1.4%
Bank of Kigali Investor Presentation Page 18
BANK OVERVIEW
Background And History
A+ credit rating by
GCR (Global Credit
Rating)
20112006
Established in 1967
as a JV with
Belgolaise S.A
1967
Current
management team
assembled
2007 2009
Supervisory Board
enhanced &
internationalised
2010
US$62.5 mln
Initial Public
Offering of 45%
of its shares and
listing on the RSE
2007
Bank of Kigali Investor Presentation Page 1919
2011
Government of
Rwanda acquired
50% stake from
Belgolaise becoming
100% shareholder
20061967 2007
New strategy
focusing on the
universal banking
business model and
profitable growth
adopted
2009 2010
EIB loan signed:
‒ EUR 5 MM
‒ 7 years
AFD loan signed:‒ US$ 20 MM
‒ 10 years
AfDB loan signed:
-US$12 MM
-10 years
2007
Key Facts
A Snapshot Of Bank Of Kigali
The leading bank in Rwanda (31.6% market share by total assets as of 30
June 2012), offering a wide spectrum of commercial banking services to
corporate, SME and retail customers
As of 30 June 2012 the Bank had:
Over 24,000 corporate accounts
Over 163,000 retail current accounts
56 branches
39 ATMs
797 employees
32,724 debit cards in circulation
Western Union Agent for International Transfers
One of two Banks in Rwanda that issue International VISA cards.Branch Network Evolution
Source: Bank of Kigali Audited Financials 2007-2011
US$ million 2007 2008 2009 2010 2011 1H 2012
CAGR
2007-
2011* Rwf/USD Period End rate 547.7 560.0 573.2 594.4 604.4 612.4
Total Assets 221.8 215.7 264.9 332.6 476.3 510.8 24.1%
Net Loans 88.8 128.7 134.5 170.6 203.7 232.9 26.1%
Client Deposits 186.0 167.6 191.0 228.3 299.5 342.4 15.5%
Shareholders' Equity 23.4 28.4 32.3 53.6 101.9 103.3 48.1%
Net Income 7.8 10.1 9.2 10.4 14.4 9.8 19.5%Growth figures are calculated on RwF Values.
MARKET SHARE
Total Assets 29.0% 23.4% 26.4% 27.4% 32.3% 31.6%
Net Loans 25.3% 24.4% 26.8% 31.5% 29.4% 28.0%
Client Deposits 30.6% 24.6% 25.8% 25.9% 28.2% 28.8%
Shareholders' Equity 28.3% 22.3% 26.8% 32.2% 41.9% 41.1%
Bank of Kigali Investor Presentation Page 20
One of two Banks in Rwanda that issue International VISA cards.
20
Growth in ATMs, POS Terminals and # of Retail Curre nt accounts
11 14 18 33 44 56
267 295 303453
602
797
0
200
400
600
800
1000
0
20
40
60
2007 2008 2009 2010 2011 1H 2012
Number of Branches Number of Employees
6 26 26 3952 97202
292
34 57124 163
0
500
2009 2010 2011 1H 2012
ATMs POS Retail Current Accounts('000')
Bank of Kigali Investor Presentation Page 21
CORPORATE GOVERNANCE
Sharehold ing Structure & Corporate Governance
The Board of Directors is comprised of nine independent non-
executive directors (including two non-resident directors with
extensive expertise in international banking practices)
The Board of Directors is approved by the Central Bank and meets
on a quarterly basis or more frequently as the business demands
The Board sets the strategy and retains full responsibility for the
direction and control of the Bank as spelled out in the
Memorandum and Articles of Association, the Board Charter and
the corporate governance guidelines
Shareholding Structure Corporate Governance
Employees and
Directors, 1.0%
Government of
Rwanda, 29.8%
Other State
Owned
Entities,
0.1%
International
Institutional
Investors,
21.8%
Local
Institutional
Investors, 2.8%
Retail
Investors,
13.5%
Rwanda Social
Security
Board, 26.9%
Bank of Kigali Investor Presentation Page 22
the corporate governance guidelines
The Board sub-committees have clear TORs which underscore the
scope and context of their performance as approved by the Board
& corporate governance regulation
The Board receives detailed financial information and regular
presentations from the management on the Bank’s business
performance, this enables the Directors to make informed
decisions on governance, strategic, financials and operational
issues
Free float- 45%
Investors, 2.8%
Regional
Institutional
Investors, 4.2%
Share Trading Performance
3 September 2012
Current price, RwF 130
Market Cap, US$ mln 141
Free float 45%
Free float in US$ mln 66.5
Average daily traded volume in US$ mln 0.13
Common shares outstanding, mln shares 667.3
12-month high 191
12-month low 118
P/E YE 2012F 7.2x
P/BV YE 2012F 1.4x
Dividend yield, 2011A 5.2%
Dividend yield, 2012F 7.7%
Ticker Code BOK
Bloomberg BOK. RW
Recommendation: BUY
Target Price: Rwf 180
Recommendation: ACCUMULATE
Fair value: Rwf 134
Analyst Coverage
Bank of Kigali Investor Presentation Page 23 23
Share Price Performance since start of trading
Rwf/USD Exchange Rate (e-o-p) of 614.6 as at 3 September 2012
*Capital gains on the RSE transactions are exempted from Capital Gains Tax
100115130145160175190
1-S
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12
13
-Ma
y-1
21
8-M
ay-
12
23
-Ma
y-1
22
8-M
ay-
12
2-J
un
-12
7-J
un
-12
12
-Ju
n-1
21
7-J
un
-12
22
-Ju
n-1
22
7-J
un
-12
2-J
ul-
12
7-J
ul-
12
12
-Ju
l-1
21
7-J
ul-
12
22
-Ju
l-1
22
7-J
ul-
12
1-A
ug
-12
6-A
ug
-12
11
-Au
g-1
21
6-A
ug
-12
21
-Au
g-1
22
6-A
ug
-12
31
-Au
g-1
2
Price
Closing Price Rwf Volume Weighted Average Price Rwf Initial Price Rwf
Bank of Kigali Investor Presentation Page 24
BUSINESS OVERVIEW
45.965.2 66.5
84.8 89.5 102.310.8
13.6 14.4
20.741.2
47.0
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
2007 2008 2009 2010 2011 1H 2012
Corporate Loans Retail Loans
56.6
78.880.9
105.5
130.7CAGR 23.2% 149.2
68.5%
31.5%
Corporate Loans Retail Loans
Gross Loan Portfolio Loan Book Segmentation
Overview Of The Loan Book
RwF Bn
Corporate Loan Book, 30 June2012
Source: Bank of Kigali
31 December 201130 June2012
68.5%
31.5%
Bank of Kigali Investor Presentation Page 25
Corporate Loan Book, 30 June2012
Source: Bank of KigaliCorporate Loans: RWF 102.3 Bn
Top 10
Corporate
Loan,
21.2%
Other
Corporate
Loan,
78.8%
Over 1
Billion,
25.7%
500M-1
Billion,
12.2%
100M-
500
Million,
39.5%
50M-
100Millio
n, 10.1%
0-50
million,
12.5%
Construction
, 40.1%
Manufacturi
ng
Industries,
4.6%
Commerce,
32.6%
Education,
1.1%
Hotels and
Restaurants,
11.2%
Transport,
Warehousin
g and
Communicat
ion, 4.9%
Agriculture,
3.6%Others
, 1.9%
78.0 69.6 81.6 99.3 126.8 146.8
23.924.2
27.8
36.4
54.2
62.9
0.0
50.0
100.0
150.0
200.0
250.0
2007 2008 2009 2010 2011 1H 2012
RwF bn
181.0
135.7109.793.8101.9
CAGR - 15.5%209.7
Customer Deposits Growth
Customer Deposit Base
Source: Bank of Kigali
Customer Deposit Segmentation
70.1%
29.9%
31 December 201130 June 2012
70.0%
30.0%
Corporate Deposits Retail Deposits
Bank of Kigali Investor Presentation Page 26
Structure of Deposits, 30 June 2012 Customer Deposits Concentration
26
Corporate: RWF 146.8 Bn Retail: RWF 62.9 Bn
Notes: * depositors with total balances above 5% of shareholders’ equity of BoK
Source: Bank of Kigali
Large
Deposit
ors*,
14%
Other,
86%
31 December 201130 June 2012
71.3%
2.2%
26.5%
CB Demand Deposits
CB Collateral Deposits
CB Term Deposits
12.8%1.7%
85.5%
RB Term Deposits
RB Savings Deposits
RB Demand Deposits
Large
Deposito
rs*,
18.3%
Other,
81.7%
Corporate Deposits: Rwf 146.8 Bn
Description Key Segments as at 30 June2012
Clients include corporate, SMEs and NBAs*
Interest rates are in the 15.0%-17.25% range Key
products:
CAPEX loans: long-term loans for investment or
expansion of the business
Commercial mortgage loans: typical customer
participation at 30% of property value, typical
tenor of up to 10 years
Working capital loans: financing business needs
to an agreed limit for a short period (usually
<1yr)
Corporate Banking
Corporate Loans: RWF 102.3 Bn
62.5%
33.8%
3.7%
78.4%
11.0%
10.6%
Corporate SMEs NBAs
Bank of Kigali Investor Presentation Page 27
Number of Corporate Accounts
<1yr)
Overdrafts
Strategy
Introduce new services, integrate client coverage
Grow and consolidate market share
Leverage superior lending capacity
Focus on payroll services
*NBAs (Non Business Associations) includes Non-Profit
Organizations, Charities, Religious institutions, Educational
Institutions, Cooperatives,etc
27
Merez
Petroleum
Tolirwa
Corporate SMEs NBAs Corporate SMEs NBAs
5,679 9,941 12,782 15,351
6,535
12,114
15,648
18,385
0
5,000
10,000
15,000
20,000
2009 2010 2011 1H 2012
Corporate Current Accounts Total Corporate Accounts
Executing The Retail Strategy
Bank of Kigali Investor Presentation Page 28
Description Key Segments as at 30 June 2012
Retail Banking
The Bank’s retail business is primarily focused on mortgages and
consumer loans with notable share of overdrafts
Key products:
Mortgage loan: up to 10 years with typical customer participation
at 30% of property value
Consumer loan: up to 12x monthly salary and 48 months
Overdraft: up to 50% of monthly salary (normally repaid in 30
days)
Other products include credit cards and asset leasing
Strategy:
Build a ubiquitous branch footprint throughout the country
Build sufficient channel capacity to be able to service 500,000+
Retail Loans: RWF 47.0 Bn Retail Deposits: RWF 62.9 Bn
12.8%1.7%
85.5%
RB Term Deposits
RB Savings Deposits
RB Demand Deposits
Consumer
loans,
45.9%
Overdraft
Mortgage
s, 35.2%
Micro
loans,
4.7%
Other,
7.3%
Bank of Kigali Investor Presentation Page 29
Number of Retail Accounts
29
Source: Bank of Kigali
Build sufficient channel capacity to be able to service 500,000+
clients by 2015
Build out the retail product lineup to achieve relevance to the
daily lives of the banked population
Expand credit card/debit card offering to other providers
(MasterCard, Amex etc)
Our Products
RB Demand Deposits
33,504 57,297 125,245 163,005
41,900
72,182
125,245
199,155
0
50,000
100,000
150,000
200,000
250,000
2009 2010 2011 1H 2012
Retail Current Accounts Total Retail Accounts
Overdraft
s, 6.8%
Ubiquitous footprint
Agency Banking
Growing Our Distribution Network
Increasing functionalities of our delivery channels
2012 Targets
Cash out and Cash in at Point of sale merchants
Deposit taking ATMs
Cardless Transactions at ATMs through our mobile
banking and mobile wallet
Recruitment of 400 existing businesses as agents in
underway
Agents will be able to perform cash in and cash out
transactions, account opening and micro loan
44 56
6577
89101
0
20
40
60
80
100
120
2011 2012F 2013F 2014F 2015F 2016F
Branches
86
115 125
145 165
80100120140160180 ATMs
Bank of Kigali Investor Presentation Page 30
transactions, account opening and micro loan
applications and disbursement.
Introduce 20 BK owned agent kiosks in high traffic
areas
Partnership with mobile telcos for our clients to
transact at their agents
Other Initiatives
Launch of mobile branches: so far 5 mobile vans have been ordered for
2012
Become super agents for mobile telcos to attract their customers to BK
and increase cross selling opportunities
26
020406080
2011 2012F 2013F 2014F 2015F 2016F
202
1,000
1,850
2,650
3,400
4,100
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2011 2012F 2013F 2014F 2015F 2016F
POS
Growing our Card Business Increasing our Mobile product offering
Expanding Our Self Service Products
2011 Achievements
Issuing of approximately 40,000 VISA
Electron cards
Interoperability of our ATMs with VISA
Electron and local proprietary Cards
2012 Targets
AMEX acquiring.)
Launch of three new card products
1. Enhancing our mobile banking service
In 2011, the Bank upgraded its SMS banking service to a
mobile banking service allowing customers to perform
the following transactions:
Purchasing prepaid TV, airtime and electricity
Check Balances and Bank information
Order cheque books
2. Launching our mobile payment platform
Attractive Products
Bank of Kigali Investor Presentation Page 31
Launch of three new card products
VISA Prepaid
VISA Classic (Credit Card)
VISA Gold (Credit Card)
Launch of E-commerce
Achievements Year to Date
CUP and Diners Club Card Acquiring
Launch of Visa Prepaid and VISA Gold
Credit Card
This platform will enable our clients to make purchases
at selected merchants using their mobile phones
mPay was launched in the 1H 2012
3. Launch of mobile wallet
Issuing of a mobile wallet that is either linked to a
current account or not linked to a current account
Wallet will enable our customers to store cash and
transact at our ATMs and agents
Expected launch date: November 2012
Refreshing Product And Service Line UpNew Business Lines
Grow Retail Product Offering
1. Teleco mobile money agency
Super agent for the two telcos
All our 56branches will be agents for the mobile teleco money
Virtual money customers can deposit, withdraw at any of the BK branches
countrywide
2. Establishing BK Securities subsidiary
BK custody has over 60% of the local investors
The securities brokerage services will offer our investors seamless
services
Bank of Kigali Investor Presentation Page 32
Grow Retail Product Offering
1. Loan Products
Top up mortgages
Consumer loans to tap the growing middle class
Credit cards
Payroll loans: Leveraging our corporate clients’ payrolls
2. Remittances
Grow our Western Union market share from 36% to 40%
Increase functionality of Western Union to enable direct transfers to current accounts and mobile
wallets
Harmonise BK tariff structure with the region to increase competitiveness
R E V I E W O F F I N A N C I AL
Bank of Kigali Investor Presentation Page 33
R E V I E W O F F I N A N C I AL P E R FO R M A NC E I N 1 H 2 0 1 2 & 2 0 1 1
Balance Sheet HighlightsTotal Assets Total Liabilities
121.5 120.8151.9
197.7
287.9312.8
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
2007 2008 2009 2010 2011 1H 2012
Rwf bn
108.7 104.9133.3
165.8
226.3
249.6
0.0
50.0
100.0
150.0
200.0
250.0
300.0
2007 2008 2009 2010 2011 1H 2012
RwF bnYTD growth-10.3%
YTD growth-8.7%
Bank of Kigali Investor Presentation Page 34
Shareholders’ Equity Net Loans
2007 2008 2009 2010 2011 1H 2012 2007 2008 2009 2010 2011 1H 2012
48.7
72.177.1
101.4
123.1
142.6
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
2007 2008 2009 2010 2011 1H 2012
RwF bn YTD growth-15.8%
12.815.9 18.5
31.9
61.663.3
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
2007 2008 2009 2010 2011 1H 2012
Rwf bn YTD growth-2.7%
1.1%
0.4%
1.9%
2.5%
3.8%
1.0%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
2007 2008 2009 2010 2011 1H 2012
%
Cost of Risk**, %
Asset Quality
Notes: * 1H2012 figure is annualized
Manageable NPL Ratio Improving Coverage Ratio
19.4%
15.4%
8.3% 8.5% 8.3%
6.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2007 2008 2009 2010 2011 1H 2012
%
11.0 12.1 6.7 9.0 10.9 9.7
72.6%
55.3%57.1%
45.8%
69.1% 67.8%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2007 2008 2009 2010 2011 1H 2012
%Rwf Bn NPLs Coverage ratio
Bank of Kigali Investor Presentation Page 35
Corporat
e NPLs,
79.3%
Retail
NPLs,
20.7%Corpor
ate
NPLs,
68.3%
Retail
NPLs,
31.7%
Collateral Structure
Source: Bank of Kigali Audited IFRS Statements 2007-2010, Bank of Kigali Unaudited IFRS Statements 2011
Notes: * 1H2012 figure is annualized
** LLP charge / Average gross loans for period
NPLs by segment
30 June 2012 31 December 2011 Cash
Cover, 1.5%Guarantees,
1.8%
Real
Estate, 56.2%
Unregistered,
19.3%
Unsecured,
21.2%
62.9%
6.6%
21.4%
9.1%
Funding Structure, % Significant Potential For Growth In Higher Yielding Assets
Strong Capital And Liquidity Position Highlights
Funding
31 December 201130 June2012
47.8%
76.8%70.4%
74.7%
68.0% 68.0%
40%
60%
51% 51%
43% 46%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
2007 2008 2009 2010 2011 1H 2012
Net Loans/Customer Deposits Net Loans/Assets
67.0%6.0%
20.2%
6.8%
Deposits Due to Banks Shareholders Equity Other
Bank of Kigali Investor Presentation Page 36
Strong Capital And Liquidity Position Highlights
Deposits are the primary source of funding with share of deposits
exceeding 65% as at June2012
Strong growth in deposits has been driven by our branch expansion
The Bank has also signed 3 long-term credit lines with the European
Investment Bank worth € 5 million for 7 years, US$20 million for 10
years with the French Development Agency and US$12 million for 10
years with the African Development Bank,
The Bank had drawn down EUR 4.5 m & US$5.0 million on the EIB &
AFD loans respectively by 30 June 2012
Source: Bank of Kigali audited IFRS Statements
14.0% 14.9%19.9% 20.1%
29.1% 27.4%
35.9% 34.7%
42.1%47.3%
64.9%
58.8%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
2007 2008 2009 2010 2011 1H 2012
CAR,% Liquidity Ratio, %
1H 2012 Performance Highlights
Net Interest Income Net Non-Interest Income Total Operating Income
Total Operating Costs Profit Before Provisions Net Income
13.5
17.3
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
1H 2011 1H 2012
Rwf bn
27.9%
7.7
10.3
0.0
2.0
4.0
6.0
8.0
10.0
12.0
1H 2011 1H 2012
Rwf bn
32.4%
5.7
7.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
1H 2011 1H 2012
Rwf bn
21.8%
Bank of Kigali Investor Presentation Page 37
Total Operating Costs Profit Before Provisions Net Income
ROAA* 4.4%
ROAE* 20.5%
*Annualized
6.6
8.9
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
1H 2011 1H 2012
Rwf bn
35.2%
3.9
6.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
1H 2011 1H 2012
Rwf bn
54.5%
6.9
8.3
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
1H 2011 1H 2012
Rwf bn
45.3%
2011 Performance Highlights
Net Interest Income Net Non-Interest Income Total Operating Income
12.2
16.6
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
2010 2011
RwF bn
+36%
9.0
12.9
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2010 2011
RwF bn
+43%
21.2
29.5
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2010 2011
RwF bn
+39%
Bank of Kigali Investor Presentation Page 38
Total Operating Costs Profit Before Provisions Net Income
10.1
14.3
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2010 2011
RwF bn
+42%
11.1
15.2
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2010 2011
RwF bn
+37%
6.2
8.7
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2010 2011
RwF bn
+40%
ROAA 3.6%
ROAE 18.6%
56.3%
14.7%
26.0%
3.0%
Total Operating Income Composition Of Total Operating Income
Income Statement Highlights
31 December 201130 June 2012
13.5
17.3
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
1H 2011 1H 2012
Rwf bn
27.9%
59.4%
17.2%
20.8%
2.6%
Net interest income Fees & Commisions FX gains Other non- interest income
Bank of Kigali Investor Presentation Page 39
54.6%
14.3%
31.1%
Personnel expenses Depreciation and amortization
Other operating expenses
Total Operating Costs Composition Of Total Operating Expenses
31 December 2011
49.8%
17.1%
33.1%
30 June 2012
6.6
8.9
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
1H 2011 1H 2012
Rwf bn
35.2%
39.5% 39.8% 44.1%47.5% 48.2%
51.7%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
2007 2008 2009 2010 2011 1H 2012
9.5%9.0%
8.2% 8.3%8.4% 8.3%
0.0%
3.0%
6.0%
9.0%
12.0%
2007 2008 2009 2010 2011 1H 2012
Sustainable Net Interest Margin, % Attractive Cost/Income ratio
Consistent Profitable Growth
Nigeria average: 6.8%
SA average: 6.8%
Nigeria average: 67.3%
SA average: 59.1%
* *
Bank of Kigali Investor Presentation Page 40
4.1%
4.7%
3.9%3.5% 3.6%
4.0%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
2007 2008 2009 2010 2011 1H 2012
37.5%39.4%
30.7%
24.5%
18.6% 19.3%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
2007 2008 2009 2010 2011 1H 2012
Nigeria average: 1.5%
SA average: 1.1%
Consistent Returns To Shareholders, % Strong Return on Average Assets, %
*1H 2012 figures are annualized
Source: Bank of Kigali Audited IFRS Statements 2007-2011
Bank of Kigali reviewed results 1H 2012, African Alliance Research 2012
Nigeria average: 10.4%
SA average: 14.4%
**
Bank of Kigali Investor Presentation Page 41
STRATEGIC OUTLOOK
Strategic OutlookObjectives Strategies Action Outcomes
Customer growth in
terms of current
accounts
Benefit from first-mover advantage
outside the capital city, making it more
difficult for the competitors to follow suit
Reach out to the unbanked (but
bankable) population
Become the bank of choice and
convenience for the middle class and
youth entering the employment sector
Create capacity to service 500,000+
clients
Increase the number of ATMs, POS terminals and cards outstanding
Build a modern and scalable mobile banking and Internet banking
platforms
Alternative client acquisition & service channels (retail chains, co-
branded cards, utilities, etc)
Expand the branch network to 60+ branches by YE 2013
“Grow with clients”
Valuable source of retail clients through
payroll programs
Growth of loan book and F&C income
Maximize the product-to-client ratio
Expand retail product offering
Build sufficient channel capacity
Build a ubiquitous branch footprint
throughout the country
Flexible, offset, variable-rate, etc mortgages
Full range of consumer loan products
Revolving credit cards
Payroll & pension-backed loans & overdrafts
Microfinance
Modern, multi-currency current accounts with debit cards
Ubiquity of ATMs and POS terminals in urban centers and reasonable
proximity elsewhere
Payment & e-wallet solutions
Full range of deposit products
Integrated client coverageIncrease the loan to deposit ratio to
Diversification of funding base
Bank of Kigali Investor Presentation Page 42
Earnings growth ~30%
Return on Average Equity
> 20%
Continuous improvement of risk management policies &
procedures
Disciplined capital management, medium term target CAR of
15%-17% and ROAE of 20%+, implying ROAA in the 3.5% range
No profitability sacrifices for the sake of market
share gains
Sensible dividend policy as the growth curve
flattens out over time
Maintain profitable growth
Healthy structure &
growth of balance sheet
Integrated client coverage
Leverage the superior lending capacity
Cross-selling opportunities
Documentary operations & trade finance, FX, other solutions
Rep offices in EAC from 2012
Private Banking, Securities, Insurance
Leverage the superior access to wholesale funding to
complement the deposit funding base Reduce maturity gap
Enable further expansion of long-term
lending
Increase the maturing profile of
liabilities
Create a universal banking platform
Consolidate the leading position in
corporate banking
Further diversification of revenue streams
Increase retail loans penetration
Increase the loan to deposit ratio to
60% Diversification of funding base
Expand the share of higher-margin lending
Maximise the cross-sell opportunities
Grow the share of retail in the loan book up to
30%-40% in the medium term
46%
30%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2011 2012P
1H 2012:
+9% YTD
Management Targets
Total Assets Growth
Branch expansionReturn on Average Equity
Launch representative offices within the EAC region
Kampala Nairobi
Launch agency banking
Launch Premier Banking - targeting 500 clients by YE
2013
Other Management targetsTotal Assets Growth Gross Loans/Total Assets Selected Other Management targets
45%
60%
0%
10%
20%
30%
40%
50%
60%
70%
2011 2012P
1H 2012: 48%
Bank of Kigali Investor Presentation Page 43
Branch expansionReturn on Average Equity
Revamp the existing digital wallet/mobile banking
distribution channel
19%
20%
18%
18%
19%
19%
20%
20%
21%
2011 2012P
1H 2012*:
19.3%
44
56
0
10
20
30
40
50
60
2011 2012P
1H 2012: 56
* Annualised
For information please contact:
Lado Gurgenidze
Chairman of the Board
Email: lgurgenidze@bk.rw
Mobile: +995 599 477 272
James Gatera
Chief Executive Officer
Email: jgatera@bk.rw
Mobile: +250 78 814 3000
Lawson Naibo
Chief Operating Officer
Email: lnaibo@bk.rw
Mobile: +250 78 830 2076
Contact Information
John Bugunya
Chief Finance Officer
Email: jbugunya@bk.rw
Mobile: +250 78 830 6100
Bank of Kigali Investor Presentation Page 4444
Linda Rusagara
Investor Relations Officer
Email: lrusagara@bk.rw
Mobile: +250 784 300 334
Mobile: +250 78 830 2076
Visit our website, www.bk.rw, or follow us on Scribd to access our Investor Presentations, Press
Releases and Annual Reports.
Telephone number: +250 252 593100. Address: Plot 6112, Avenue de la Paix, Kigali Rwanda
Mobile: +250 78 830 6100
Shivon Byamukama
Company Secretary
Email: sbyamukama@bk.rw
Mobile: +250 78 838 4547
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