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Bank of Kigali posts $39mn full-year profit
BK Group Plc in 2020 recorded an after-tax profit of more than $39 million, which was a 3 per cent growth compared to the previous year when they registered $38 million. According to the group’s financial statement, revenues grew in all four subsidiaries, Bank of Kigali, BK General Insurance, BK TecHouse and BK Capital. Nathalie Mpaka, CFO at the BK Group joins CNBC Africa for more.
Thu, 01 Apr 2021 10:40:00 GMT
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AI Generated Summary
- Bank of Kigali recorded a 3% growth in after-tax profit, surpassing $39 million in 2020, with revenue increasing across all subsidiaries.
- The bank's strategic measures, including liquidity fortification and loan book restructuring, contributed to its resilience and sustained market share.
- BK's focus on digitization, retail, and SME markets, coupled with partnerships and asset quality enhancements, positions it for future growth and profitability.
In a surprising turn of events, Bank of Kigali (BK) Group PLC managed to defy the odds and post a substantial profit in 2020, amidst the global pandemic and economic uncertainties. The after-tax profit soared to over $39 million, marking a 3% growth compared to the previous year's figures. The group's financial statement revealed a significant increase in revenues across all four subsidiaries, including Bank of Kigali, BK General Insurance, BK TecHouse, and BK Capital. This success story comes as a ray of hope amid the challenging times faced by many businesses worldwide.
Nathalie Mpaka, the Chief Financial Officer (CFO) at BK Group PLC, shed light on the remarkable achievement during an exclusive conversation with CNBC Africa's Arnold Cuisera. Mpaka expressed her delight at the robust growth in their balance sheet and profitability, despite the turbulent economic climate brought on by the pandemic. She acknowledged the tough times faced by the industry in general, emphasizing the significant provisions and adjustments that the bank had to make to tackle the crisis.
Mpaka attributed the bank's resilience to its proactive measures, such as fortifying liquidity positions and restructuring a substantial portion of the loan book in anticipation of post-COVID impacts. She highlighted the growth in customer deposits during the pandemic as a testament to the market's confidence in the bank's stability and future prospects.
One of the key drivers of BK's success in 2020 was the substantial increase in total assets, soaring by 25% compared to the previous year. Mpaka pointed out that the bank's asset portfolio heavily relies on government expenditure and infrastructure projects, with a focus on large corporate lending. She also highlighted significant investments in projects supported by the government, such as the Convention Center, contributing to the bank's growth trajectory.
Looking towards the future, Mpaka outlined BK's strategic focus on SME and retail markets, emphasizing the importance of digitization and data collection to enhance lending operations in these segments. While acknowledging the challenges posed by uncertainties in certain sectors, particularly in the aftermath of the pandemic, she remained optimistic about the bank's growth potential in the coming years.
In terms of deposit growth, Mpaka affirmed that BK witnessed an increase in both the number of account holders and volumes per client. She emphasized the bank's strategic focus on acquiring customer deposits to bolster its liquidity position and drive down costs in the long run. Collaborations with various stakeholders and the deployment of payment systems were instrumental in attracting deposits and improving overall asset quality.
When queried about the competitive landscape, especially with the rise of FinTech products and alternative financial services, Mpaka highlighted the importance of strategic partnerships between traditional banks and FinTech firms. She viewed FinTech as complementary rather than competitive, underscoring the need for collaboration to cater to evolving customer needs effectively.
Addressing concerns about dividend payouts and financial stability, Mpaka reassured shareholders about the bank's prudent approach to capital adequacy and profitability. While acknowledging the Central Bank's cautious stance on dividend declarations, she expressed optimism about the possibility of rewarding shareholders in the near future, contingent upon improved financial performance and market conditions.
Mpaka also provided insights into the performance of BK's subsidiaries, emphasizing the profitability across all entities, including BK TechHouse, BK Capital, and BK General Insurance. She highlighted the strategic positioning of these subsidiaries in key sectors such as technology, fund management, and insurance, underscoring their growth potential and contribution to the group's diversified income streams.
In conclusion, Mpaka reiterated BK's commitment to sustainable growth and financial resilience in the face of adversities. The bank's sound financial performance in 2020 serves as a testament to its robust business strategies, proactive risk management practices, and unwavering focus on customer-centric initiatives. Despite the prevailing challenges, BK remains optimistic about its future prospects and continued success in the market.
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