Digital Transformation Drives Bank of Kigali Profits to Sh 1.8Billion

Bank of Kigali has revealed that they have had to change strategy following the entry of Kenya’s biggest bank KCB in the region.

The lender revealed that going forward it will have to invest more in digitization to grow its market share amidst competition.

This comes even as the lender reported a 39.28 percent growth in net profit to Sh1.8 billion, driven by an increase in lending and transactions income as well as efficiency gains enabled by the new core banking system.

The bank’s first quarter performance was boosted by a 33.1 percent growth in non-interest income to Sh1.1 billion; reflecting growth in macroeconomic activities helped by continued recovery from the effects of the Covid-19 pandemic.

Net interest income rose by 4.3 percent to SH3.8 billion, while the loans book grew by 8.8 percent to SH120.1 billion.

“This first quarter performance gives us great confidence and optimism going forward we have to be innovative and bet more on technology since competition has intensifies,” said the BK Group Chief Executive Officer Dr. Diane Karusisi.

Client balances and deposits grew 21.7 percent to Sh 115.8 billion in the first quarter, while shareholders’ equity went up 10.8percent to SH33.1 billion.

Total interest expenses increased by 27.2 percent to Sh1.3 billion in line with the 21.7percent growth in Customer deposits to SH115.8 billion and 43.1percent growth in deposits from other banks.

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Dr. Karusisi noted that the bank’s asset quality continues to improve, with non-performing loans ratio and cost of risk at 5.2percent and 0.7percent compared to 8.0percent and 4.7percent respectively in the first quarter of 2021.

The percentage of COVID-19 related loans on moratorium reduced to 1.3percent of the gross loans in the first three months of the year from 1.7percent in the comparative period last year, indicating wider economic recovery.

The bank’s digitization efforts continued to pay off, as BK Quick’s registered customers grew to 11,841 while the BK IKOFI wallet registered over 1,844 agro-dealer agents and 263,900 registered farmers.

Other group businesses, BK General Insurance, BK TecHouse and BK Capital all reported positive revenue and customer acquisition trends.

“The Financial sector is expected to remain sound with double-digit growth in 2022. BK’s focus remains on non-funded income, deposit mobilization and asset quality improvement,” noted Dr. Karusisi.

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