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BANK OF KIGALI INVESTOR PRESENTATION 1H 2012

Bank of Kigali Investor Presentation Page 1

Disclaimer
This 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 counterparties and developments in the markets in which they operate, (6) management changes and changes to the Banks 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 forwardlooking statements whether as a result of new information, future events, or otherwise.

Bank of Kigali Investor Presentation Page 2

Presentation Team
Lado Gurgenidze Chairman of the Board Email: lgurgenidze@bk.rw Mobile: +995 599 477 272 lado.gurgenidze.2008

James Gatera Chief Executive Officer Email: jgatera@bk.rw Te l : + 2 5 0 2 5 2 5 9 3 1 2 1

Lawson Naibo Chief Operating Officer Email: lnaibo@bk.rw Mobile: +250 78 830 2076

John Bugunya Chief Finance Officer Email: jbugunya@bk.rw Mobile: +250 78 830 6100

Bank of Kigali Investor Presentation Page 3

Agenda
1. Key Investment Highlights 2. Country Overview Information 3. Banking Sector Overview 4. Bank Overview 5. Corporate Governance 6. Business Overview 7. Review Of Financial Performance In 1H 2012 & 2011 8. Strategic Outlook 9. Contact Information
Bank of Kigali Investor Presentation Page 4

Key Investment Highlights


1. Best East African Bank 2012
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--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 Significant Banking Sector Potential 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 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 Conservative Business Model 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. 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 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

2. Bank of the Year 20092011

3. Best Bank in Rwanda 2009-2011


Market Leadership

4.

Company of the Year 2011 by Kenyan Institute of Management A+/A1 Credit Rating

5.

The rating reflects the Banks


established domestic franchise value, strong capital position, its systemic importance, strong asset quality and financial performance. GCR

Experienced Management Team Profitable Growth

Bank of Kigali Investor Presentation Page 5

CO U N T RY OV E RV I E W I N FO R M AT I O N

Bank of Kigali Investor Presentation Page 6

Rwanda Country Profile


National Facts Business Environment

Area Population (2010) Official Languages Capital Currency Credit Rating

26,338 sq km 10.7 million Kinyarwanda, French, English Kigali Rwandan Franc (RWF) B/Stable (Fitch Ratings) B/B (Standard & Poors)
Macro Economic Indicators

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

Nominal GDP (2011) Nominal GDP Per Capita (2011) Real GDP Growth Rate 2011 Real GDP Growth Rate 2012E Inflation Rate (July 2012) Private Sector Credit Growth (2011)

US$ 6.4 billion US$595 8.6% 7.6% 7.3% 28.4%

15.4% External Debt to GDP (2011) Currency Depreciation against USD (Year to 1.4% June 2012)
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,
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Bank of Kigali Investor Presentation Page 7

Sound Macro Fundamentals


GDP per Capita continues to grow Mln 12 10 479 8 333 6 4 2 9.2 0 2006 2007 2008 2009 2010 2011 9.6 9.8 10.1 10.4 10.7 391 519 540 US $ 700 600 500 400 300 200 100 0 20-39 40-59 60 and above Population Pyramid for Rwanda, 2011 595

Population

Nominal GDP Per Capita

Healthy GDP growth with moderating inflation US$ Bn 7 6 5 4 3 2 1 0 2006 2007 2008 2009 2010 2011
Inflation (%) Source: National Institute of Statistics Rwanda

0-19
15.4% 18.0% 16.0% 14.0% 8.8% 9.1% 10.3% 12.0% 8.3% 7.5% 10.0% 8.0% 6.0% 2.3% 4.0%

30.0%

20.0%

10.0%

0.0%

10.0%
Male %

20.0%

30.0%

Female %

54% of the population is under 19 years. 83% of the population is under 40 years. 3% of the population over 65 years.

3.1

3.7

4.7

5.2

5.6

6.4

6.6 2012E

2.0% 0.0%

Nominal GDP (US$ Bn)


Source: Ministry of Finance and Economic Planning, IMF

Bank of Kigali Investor Presentation Page 8

Macroeconomic Indicators
GDP Breakdown By Economic Activity 2011
Finance, insurance, 2.8%

Trade Structure Rwandas exports are dominated by coffee, tea and

Transport, storage, communication, 7.5% Education, 5.5% Manufacturing, 6.6% Transport, storage, communication, 7.5%

Mining and quarrying, 1.3%

minerals(tin, coltan and wolfram). The country remains a net importer. Major imports include
Agriculture, 31.9%

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

Real estate, business services, 8.0% Construction, 8.3%


Source: National Institute of Statistics Rwanda

Wholesale and retail trade, 12.9%

imports for Dec 2011


Source: NBR Monetary Policy Statement

Trade Deficit As A % Of GDP


20% 14% 15% 10% 5% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 12% 11% 10% 15% 11% 14% 15% 13%
20% 15% 10%

Current Account As a % of GDP


17% 12% 9% 4%
5% 0%

13%

2007

2008 2009 2010 Current Account Deficit as a % of GDP

2011

Source: Ministry of Finance and Economic Planning, IMF

Source: National Institute of Statistics Rwanda

Bank of Kigali Investor Presentation Page 9

Review of the Macro Economic Environment Year to June 2012


Macro Economic Review The countrys 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 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.
7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% USD GBP -1.3% -1.5% -1.6% -2.5% EURO Uganda Shillings -1.6% Kenya Shillings -2.5% Tanzania Shilling -2.0% 0.4% 2.1% 3.9% 2.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
December January February 2011 2012 2012 March April 2012 May 2012 June 2012 July 2012 2012

Inflationary Environment Year to Date


8.3% 7.8% 7.9% 8.2% 7.0% 5.9% 8.3% 7.3%

Exchange Rate Developments Year to Date


2011 1H 2012 5.8%

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B A N K I N G S EC TO R OV E RV I E W

Bank of Kigali Investor Presentation Page 11

Significant Banking Sector Potential


2011 Banking Assets/GDP 2011 Banking Assets Per Capita5
(US$)

Large Unbanked Population

Economy is still cash based with bank accounts being used


534

Kenya*

70%

Kenya

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

Tanzania*

50%

Tanzania

274

Source: Finscope Rwanda 2008

Prudential Regulations

CAR (Tier One)


Uganda* 33%
Uganda 165

10%

Total CAR Liquidity Ratio


Rwanda 25%
Rwanda 124

15% 20% 5% of total deposits

Reserve Requirement

(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

Lending in foreign currency

Restricted to exporters

Bank of Kigali Investor Presentation Page 12

Banking Sector Overview


Rwanda Banking System Total Assets USD mln 1,800.0 1,600.0 1,400.0 1,200.0 1,000.0 800.0 600.0 400.0 200.0 0.0 2007 2008 2009 2010 2011 1H 2012
Source: NBR Monetary Policy & Financial Stability Report 2011

Interest Rate Analysis 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Nov April March June Dec Mar Aug May Dec Apr Jul Oct May Jan Feb Sep Jun Jan Feb

1,636 1,474 1,226 856 922 1,011

2010

2011 Key Repo Rate Deposit Rate

2012 T-Bills Rate Lending Rate

Banking Sector Review 1H 2012

Recent Regulatory Reforms To Improve Access To Credit

As at end June 2012, Tier 2 ratios stood at 25.4% (YE 2011: 25%) well above the regulatory minimum of 15%. The sectors 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%).

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
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Timeline Of Foreign Investment In The Rwandan Banking Sector

80% stake in BCR 40% stake in Cogebanque Actis sells 80% stake in BCR to I&M Bank

2004

2006

2007

2008

2009

2010

2011

2012

30% stake in BPR

2008 Bank of Kigali Market Share by Total Assets 23.4%

2009 26.4%

2010 27.4%

2011 32.3%

1H 2012 31.6%

Bank of Kigali Investor Presentation Page 14

Banking Sector Overview Contd


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

Market Share By Total Assets In 1H 2012

Five foreigncontrolled banks, 48.3%

Top three local banks, 51.7%

Six foreigncontrolled banks, 49.5%

Top three local banks, 50.5%

Six foreigncontrolled banks, 49.6%

Top three local banks, 50.4%

BANK OF KIGALI

BANK OF KIGALI

BANK OF KIGALI

BPR UBPR UBPR

Source: the National Bank of Rwanda, company estimates

Bank of Kigali Investor Presentation Page 15


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Competitive Landscape
Market Share Dynamics %
45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Total Assets Net Loans Customer Deposits Shareholders' Equity
32.2% 28.8% 31.5% 32.3% 31.6% 29.4% 28.1% 28.0% 27.4% 26.7% 25.9% 26.8% 26.4% 25.8%

Banking Sector Growth Vs Bank of Kigali Growth 1H 2012


100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

93.2%

2009

2010

2011

41.9% 41.1%

45.6% 23.0% 29.9% 21.4% 33.4% 23.8%

52.4%

Total Assets Growth

Net Loan Book Growth

Client Deposits Growth

Shareholders' Equity

Source: NBR Supervision Department, BK Company Filings and Published results of Banks

Bank of Kigali Growth in 2011

The Rwandan Banking Sector Growth in 2011

Selected Indicators 1H 2012 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% NPLs/Gross Loans Return on Average Assets Return on Average Equity 6.0% 6.5% 2.3% 10.9% 4.0% 19.3%
Others, 20.5%

Concentration of Banking Sector Assets


30 June 2012 31 December 2011 Others, 21.4%

Top 5 Banks, 79.5%


Source: Published Bank Results

Top 5 Banks, 78.6%

Asset Quality Banking SectorAnnualised Profitability ratios BK


Source: NBR Supervision Department, BK Audited Full Year 2011 Results, BK 1H 2012 Reviewed results

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Bank of Kigali Investor Presentation Page 16

Bank Of Kigali Is The Market Leader


Rank Total Assets Net Loans Customer Deposits Equity 1
BANK OF KIGALI

31.6%
BANK OF KIGALI

28.0%
BANK OF KIGALI

28.8%
BANK OF KIGALI

41.1%

2
BPR

19.1%
BPR

23.4%
BPR

20.4%
BPR

14.5%

3
BCR

10.8%
ECOBANK

10.4%
BCR

9.0% 11.8%
BCR

4
ECOBANK

10.0%
BCR

9.6%
ECOBANK

9.9%
ECOBANK

8.6%

5
COGEBANQUE

8.0%
COGEBANQUE

9.2%
COGEBANQUE

8.2%
KCB

6.6%

6
KCB

7.1%
KCB

8.5%
FINA BANK

7.6%
COGEBANQUE

6.6%

7
FINA BANK

7.0%
FINA BANK

7.2%
KCB

7.0%
FINA BANK

4.9%

8
ACCESS BANK

4.3%
ACCESS BANK

2.5%
ACCESS BANK

4.8%
ACCESS BANK

4.5%

9
EQUITY BANK

2.1%
EQUITY BANK

1.1%
EQUITY BANK

1.4%
EQUITY BANK

4.0%

Source: Published 1H 2012 Financial Statements of Commercial Banks reviewed in accordance with BNR guidelines

Bank of Kigali Investor Presentation Page 17

B A N K OV E RV I E W

Bank of Kigali Investor Presentation Page 18

Background And History


Established in 1967 as a JV with Belgolaise S.A Current management team assembled Supervisory Board enhanced & internationalised A+ credit rating by GCR (Global Credit Rating) US$62.5 mln Initial Public Offering of 45% of its shares and listing on the RSE

1967

2006

2007 2007

2009

2010

2011

Government of Rwanda acquired 50% stake from Belgolaise becoming 100% shareholder

New strategy focusing on the universal banking business model and profitable growth adopted

AFD loan signed: EIB loan signed: EUR 5 MM 7 years


US$ 20 MM 10 years

AfDB loan signed:


-US$12 MM -10 years

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Bank of Kigali Investor Presentation Page 19

A Snapshot Of Bank Of Kigali


Key Facts 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. 60 40 267 20 0 11 2007 14 2008 18 2009 33 2010 44 2011 56 1H 2012 295 303 453 602

US$ million
Rwf/USD Period End rate

2007 2008
547.7 560.0

2009
573.2

2010
594.4

2011 1H 2012
604.4 612.4

CAGR 20072011* 24.1% 26.1% 15.5% 48.1% 19.5%

Total Assets Net Loans Client Deposits Shareholders' Equity Net Income MARKET SHARE Total Assets Net Loans Client Deposits Shareholders' Equity

221.8 215.7 88.8 128.7 186.0 167.6 23.4 28.4 7.8 10.1

264.9 134.5 191.0 32.3 9.2

332.6 170.6 228.3 53.6 10.4

476.3 203.7 299.5 101.9 14.4

510.8 232.9 342.4 103.3 9.8

Growth figures are calculated on RwF Values.

29.0% 25.3% 30.6% 28.3%

23.4% 24.4% 24.6% 22.3%

26.4% 26.8% 25.8% 26.8%

27.4% 31.5% 25.9% 32.2%

32.3% 29.4% 28.2% 41.9%

31.6% 28.0% 28.8% 41.1%

Source: Bank of Kigali Audited Financials 2007-2011

Branch Network Evolution 797


1000 800 600 400 200 0

Number of Branches

Number of Employees

Growth in ATMs, POS Terminals and # of Retail Current accounts 500 ATMs 52 34 2009 POS Retail Current Accounts('000') 202 6 0 2010 2011 1H 2012 97 57 26 26 292 124 163 39

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CO R P O R AT E G OV E R N A N C E

Bank of Kigali Investor Presentation Page 21

S h a re h o l d i n g S t r u c t u re & C o r p o ra te G o ve r n a n c e
Shareholding Structure Corporate Governance Other State Owned Entities, 0.1%

The Board of Directors is comprised of nine independent nonexecutive 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

Employees and Directors, 1.0%

Government of Rwanda, 29.8%

Rwanda Social Security Board, 26.9%

International Institutional Investors, 21.8% Retail Investors, 13.5%

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
Local Institutional Investors, 2.8%

Memorandum and Articles of Association, the Board Charter and 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

Regional Institutional Investors, 4.2%

Free float- 45%

presentations from the management on the Banks business performance, this enables the Directors to make informed decisions on governance, strategic, financials and operational issues

Bank of Kigali Investor Presentation Page 22

S h a re Tra d i n g Pe r fo r m a n c e
Current price, RwF Market Cap, US$ mln Free float Free float in US$ mln Average daily traded volume in US$ mln Common shares outstanding, mln shares 12-month high 12-month low P/E YE 2012F P/BV YE 2012F Dividend yield, 2011A Dividend yield, 2012F Ticker Code Bloomberg

3 September 2012 130 141 45% 66.5 0.13 667.3 191 118 7.2x 1.4x 5.2% 7.7% BOK BOK. RW

Analyst Coverage

Recommendation: BUY Target Price: Rwf 180

Recommendation: ACCUMULATE Fair value: Rwf 134

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

Share Price Performance since start of trading Price 190 175 160 145 130 115 100 Closing Price Rwf Volume Weighted Average Price Rwf Initial Price Rwf

1-Sep-11 6-Sep-11 11-Sep-11 16-Sep-11 21-Sep-11 26-Sep-11 1-Oct-11 6-Oct-11 11-Oct-11 16-Oct-11 21-Oct-11 26-Oct-11 31-Oct-11 5-Nov-11 10-Nov-11 15-Nov-11 20-Nov-11 25-Nov-11 30-Nov-11 5-Dec-11 10-Dec-11 15-Dec-11 20-Dec-11 25-Dec-11 30-Dec-11 4-Jan-12 9-Jan-12 14-Jan-12 19-Jan-12 24-Jan-12 29-Jan-12 3-Feb-12 8-Feb-12 13-Feb-12 18-Feb-12 23-Feb-12 28-Feb-12 4-Mar-12 9-Mar-12 14-Mar-12 19-Mar-12 24-Mar-12 29-Mar-12 3-Apr-12 8-Apr-12 13-Apr-12 18-Apr-12 23-Apr-12 28-Apr-12 3-May-12 8-May-12 13-May-12 18-May-12 23-May-12 28-May-12 2-Jun-12 7-Jun-12 12-Jun-12 17-Jun-12 22-Jun-12 27-Jun-12 2-Jul-12 7-Jul-12 12-Jul-12 17-Jul-12 22-Jul-12 27-Jul-12 1-Aug-12 6-Aug-12 11-Aug-12 16-Aug-12 21-Aug-12 26-Aug-12 31-Aug-12 Bank of Kigali Investor Presentation Page 23
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B U S I N E S S OV E RV I E W

Bank of Kigali Investor Presentation Page 24

Overview Of The Loan Book


Gross Loan Portfolio
RwF Bn

Loan Book Segmentation 30 June2012 31 December 2011


149.2 130.7

160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0

CAGR 23.2%
105.5 78.8 56.6 10.8 45.9 2007 65.2 66.5 13.6 80.9 14.4 84.8 89.5 41.2 20.7

47.0 31.5% 31.5% 68.5% 102.3 68.5%

2008

2009

2010 Retail Loans

2011

1H 2012

Corporate Loans
Source: Bank of Kigali

Corporate Loans Corporate Loan Book, 30 June2012

Retail Loans

Education, 1.1% Manufacturi ng Industries, 4.6% Commerce, 32.6% 50M100Millio n, 10.1%

0-50 million, 12.5%

Over 1 Billion, 25.7%

Hotels and Restaurants, 11.2% Transport, Warehousin g and Communicat ion, 4.9% Others , 1.9% Agriculture, 3.6%

Top 10 Corporate Loan, 21.2% Other Corporate Loan, 78.8%

Construction , 40.1%

100M500 Million, 39.5%

500M-1 Billion, 12.2%

Source: Bank of Kigali

Corporate Loans: RWF 102.3 Bn


Bank of Kigali Investor Presentation Page 25

Customer Deposit Base


Customer Deposits Growth RwF bn 250.0 CAGR - 15.5% 200.0 150.0 101.9 100.0 50.0 78.0 0.0 2007
Source: Bank of Kigali

Customer Deposit Segmentation 30 June 2012 209.7 181.0 62.9 31 December 2011

135.7 93.8 24.2 109.7 36.4 27.8

54.2 30.0% 70.0%

29.9%

23.9

70.1%

69.6 2008

81.6 2009

99.3 2010

126.8 2011

146.8 1H 2012 Corporate Deposits Retail Deposits

Structure of Deposits, 30 June 2012 Corporate: RWF 146.8 Bn Retail: RWF 62.9 Bn
30 June 2012

Customer Deposits Concentration


31 December 2011

12.8% 26.5% 2.2% 71.3% 85.5%

1.7%

Large Deposito rs*, 18.3%

Large Deposit ors*, 14%

Other, 81.7%

Other, 86%

CB Demand Deposits CB Collateral Deposits CB Term Deposits

RB Term Deposits RB Savings Deposits RB Demand Deposits

Notes: * depositors with total balances above 5% of shareholders equity of BoK Source: Bank of Kigali
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Bank of Kigali Investor Presentation Page 26

Corporate Banking
Description 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) Overdrafts Strategy
Tolirwa

Key Segments as at 30 June2012

Corporate Loans: RWF 102.3 Bn


3.7%

Corporate Deposits: Rwf 146.8 Bn

10.6% 11.0% 33.8% 62.5% 78.4%

Corporate

SMEs

NBAs

Corporate

SMEs

NBAs

Number of Corporate Accounts

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

Corporate Current Accounts 20,000 15,000 10,000 5,000 5,679 0 2009 2010 9,941 6,535 12,114

Total Corporate Accounts 18,385 15,648

Merez Petroleum

12,782 2011

15,351 1H 2012

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Bank of Kigali Investor Presentation Page 27

Executing The Retail Strategy

Bank of Kigali Investor Presentation Page 28

Retail Banking
Description The Banks 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+ 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 150,000 100,000 41,900 50,000 33,504 0
Source: Bank of Kigali

Key Segments as at 30 June 2012 Retail Loans: RWF 47.0 Bn Micro loans, 4.7% Other, 7.3% 12.8% Consumer loans, 45.9% 1.7% Retail Deposits: RWF 62.9 Bn

Mortgage s, 35.2%

85.5%

Overdraft s, 6.8% Number of Retail Accounts Retail Current Accounts

RB Term Deposits RB Savings Deposits RB Demand Deposits

250,000 200,000

Total Retail Accounts 199,155 125,245

72,182

57,297 2010
29

125,245 2011

163,005 1H 2012

2009

Bank of Kigali Investor Presentation Page 29

Growing Our Distribution Network


Ubiquitous footprint
120 100 80 60 40 20 0

Increasing functionalities of our delivery channels

Branches
65 77 89 101

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

44

56

2011 180 160 140 120 100 80 60 40 20 0

2012F

2013F

2014F

2015F 145

2016F 165

Agency Banking 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

ATMs
115 86 26 125

applications and disbursement. Introduce 20 BK owned agent kiosks in high traffic

2011
4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0

2012F

2013F

2014F

2015F

2016F
4,100

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

POS
3,400 2,650 1,850 1,000 202

2012 Become super agents for mobile telcos to attract their customers to BK

2011

2012F

2013F

2014F

2015F

2016F

and increase cross selling opportunities

Bank of Kigali Investor Presentation Page 30

Expanding Our Self Service Products


Growing our Card Business Increasing our Mobile product offering Attractive Products

2011 Achievements
Issuing of approximately 40,000 VISA Electron cards Interoperability of our ATMs with VISA Electron and local proprietary Cards

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

2012 Targets
AMEX acquiring.) Launch of three new card products VISA Prepaid VISA Classic (Credit Card) VISA Gold (Credit Card) Launch of E-commerce

Order cheque books

2. Launching our mobile payment platform


This platform will enable our clients to make purchases at selected merchants using their mobile phones mPay was launched in the 1H 2012

Achievements Year to Date


CUP and Diners Club Card Acquiring Launch of Visa Prepaid and VISA Gold Credit Card

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

Bank of Kigali Investor Presentation Page 31

Refreshing Product And Service Line Up


New Business Lines

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
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

Bank of Kigali Investor Presentation Page 32

REVIEW OF FINANCIAL PERFORMANCE IN 1H 2012 & 2011

Bank of Kigali Investor Presentation Page 33

Balance Sheet Highlights


Total Assets Rwf bn 350.0 300.0 250.0 200.0 121.5 150.0 100.0 50.0 0.0 2007 2008 2009 2010 2011 1H 2012 100.0 50.0 0.0 2007 2008 2009 Net Loans
YTD growth-2.7% YTD growth-8.7%

Total Liabilities RwF bn 300.0 250.0


YTD growth-10.3%

312.8 287.9

249.6 226.3 165.8 133.3 150.0 108.7 104.9

197.7 151.9 120.8

200.0

2010

2011

1H 2012

Shareholders Equity Rwf bn 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 2007 2008 2009 2010 2011 1H 2012 12.8 15.9 18.5 31.9 RwF bn 160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0 2007 2008 48.7 72.1

YTD growth-15.8%

61.6

63.3

142.6 123.1 101.4 77.1

2009

2010

2011

1H 2012

Bank of Kigali Investor Presentation Page 34

Asset Quality
Cost of Risk**, % % 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0%
2007 2008 2009 2010 2011 1H 2012
Notes: * 1H2012 figure is annualized ** LLP charge / Average gross loans for period

Manageable NPL Ratio %


25.0%

Improving Coverage Ratio Rwf Bn NPLs 72.6% 55.3% 57.1% 45.8% Coverage ratio 69.1% 67.8% % 80.0% 70.0% 60.0% 50.0% 40.0% 6.0 6.5% 4.0 2.0 30.0% 20.0%

3.8%
20.0%

19.4% 15.4%

14.0 12.0 10.0 8.0

2.5% 1.9%

15.0% 10.0%

8.3%

8.5%

8.3%

1.1% 0.4%

1.0%
5.0%

11.0
0.0%
2007 2008 2009 2010 2011 1H 2012

12.1
2008

6.7
2009

9.0
2010

10.9
2011

9.7
1H 2012

10.0% 0.0%

0.0
2007

NPLs by segment
30 June 2012 31 December 2011

Collateral Structure Unsecured, 21.2% Cash Cover, 1.5% Guarantees, 1.8%

Retail NPLs, 20.7% Corporat e NPLs, 79.3%

Retail NPLs, 31.7%

Corpor ate NPLs, 68.3%

Unregistered, 19.3%

Real Estate, 56.2%

Source: Bank of Kigali Audited IFRS Statements 2007-2010, Bank of Kigali Unaudited IFRS Statements 2011

Bank of Kigali Investor Presentation Page 35

Funding
Funding Structure, %
30 June2012 31 December 2011

Significant Potential For Growth In Higher Yielding Assets


90.0% 80.0% 70.0% Net Loans/Customer Deposits 76.8% 70.4% 60% 47.8% 40% 51% 51% 43% 46% Net Loans/Assets 74.7% 68.0% 68.0% 9.1%

6.8% 21.4%

20.2% 67.0% 6.0%

60.0% 50.0% 62.9% 40.0% 30.0%

6.6%

20.0% 10.0% 0.0% 2007 2008 2009 Highlights 64.9% 58.8% 2010 2011 1H 2012

Deposits

Due to Banks

Shareholders Equity

Other

Strong Capital And Liquidity Position 70.0% 60.0% 50.0% 40.0% 30.0% 19.9% 20.0% 10.0% 0.0% 2007 2008 2009 2010 2011 1H 2012 14.0% 14.9% 20.1% 35.9% 34.7% 29.1% 27.4% 47.3% 42.1% CAR,% Liquidity Ratio, %

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

Bank of Kigali Investor Presentation Page 36

1H 2012 Performance Highlights


Net Interest Income
Rwf bn 12.0 10.0 8.0 6.0 4.0 2.0 0.0 1H 2011 1H 2012 7.7

Net Non-Interest Income


10.3 Rwf bn 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 1H 2011 1H 2012 5.7 7.0 Rwf bn 20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0

Total Operating Income

32.4%

21.8%

27.9%
13.5

17.3

1H 2011

1H 2012

Total Operating Costs


Rwf bn 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Rwf bn 9.0

Profit Before Provisions


45.3%
6.9 8.3 Rwf bn 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 1H 2011 1H 2012 3.9

Net Income
ROAA* 4.4% ROAE* 20.5%

35.2%
6.6

8.9

8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0

54.5%

6.0

1H 2011

1H 2012

1H 2011

1H 2012 *Annualized

Bank of Kigali Investor Presentation Page 37

2011 Performance Highlights


Net Interest Income
RwF bn 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0
-

Net Non-Interest Income


RwF bn

Total Operating Income


RwF bn 35.0 30.0

+36%

16.6

14.0 12.0

+43%

12.9

+39%

29.5

12.2

10.0 8.0 6.0 4.0 2.0


-

9.0

25.0 20.0 15.0 10.0 5.0

21.2

2010

2011

2010

2011

2010 2011

Total Operating Costs


RwF bn 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 2010 2011 +42% RwF bn 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 -

Profit Before Provisions


RwF bn +37%

Net Income
15.2
10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 +40%

14.3

8.7

ROAA 3.6% ROAE 18.6%

10.1

11.1

6.2

2010

2011

2010

2011

Bank of Kigali Investor Presentation Page 38

Income Statement Highlights


Total Operating Income Rwf bn 20.0 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 1H 2011 Total Operating Costs Rwf bn 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 1H 2012 Composition Of Total Operating Expenses
30 June 2012 31 December 2011

Composition Of Total Operating Income


30 June 2012 31 December 2011

2.6%

27.9%
13.5

17.3

20.8% 26.0% 59.4% 17.2% 14.7%

3.0%

56.3%

Net interest income

Fees & Commisions

FX gains

Other non- interest income

35.2%
6.6

8.9 31.1% 54.6% 33.1% 49.8%

14.3% 17.1%

Personnel expenses 1H 2011 1H 2012 Other operating expenses

Depreciation and amortization

Bank of Kigali Investor Presentation Page 39

Consistent Profitable Growth


Sustainable Net Interest Margin, %
Nigeria average: 6.8% SA average: 6.8%

Attractive Cost/Income ratio


Nigeria average: 67.3% SA average: 59.1%

12.0% 9.5% 9.0% 6.0% 3.0% 0.0% 2007 2008 2009 2010 2011 1H 2012 9.0% 8.2% 8.3% 8.4% 8.3% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 39.5% 39.8% 44.1% 47.5% 48.2% 51.7%

0.0% 2007 2008 2009 2010 2011

1H 2012

Consistent Returns To Shareholders, % 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 39.4% 37.5% 30.7% 24.5% 18.6% 19.3%
SA average: 14.4% Nigeria average: 10.4%

Strong Return on Average Assets, %


Nigeria average: 1.5%

2007

2008

2009

2010

2011

1H 2012

5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0%

4.7% 4.1% 3.9% 3.5%

SA average: 1.1%

3.6%

4.0%

*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

2007

2008

2009

2010

2011

1H 2012

Bank of Kigali Investor Presentation Page 40

ST R AT EG I C O U T LO O K

Bank of Kigali Investor Presentation Page 41

Strategic Outlook
Objectives Strategies
Build a ubiquitous branch footprint throughout the country Build sufficient channel capacity

Action
Expand the branch network to 60+ branches by YE 2013 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, cobranded cards, utilities, etc) 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

Outcomes
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 Maximize the product-to-client ratio Grow with clients Valuable source of retail clients through payroll programs Growth of loan book and F&C income

Customer growth in terms of current accounts

Expand retail product offering

Increase the loan to deposit ratio to 60% Increase retail loans penetration

Integrated client coverage Leverage the superior lending capacity Cross-selling opportunities Documentary operations & trade finance, FX, other solutions Rep offices in EAC from 2012 Leverage the superior access to wholesale funding to complement the deposit funding base

Healthy structure & growth of balance sheet

Consolidate the leading position in corporate banking Increase the maturing profile of liabilities Create a universal banking platform

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

Reduce maturity gap Enable further expansion of long-term lending Further diversification of revenue streams

Private Banking, Securities, Insurance

Earnings growth ~30% Return on Average Equity > 20%

Maintain profitable growth

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

Bank of Kigali Investor Presentation Page 42

Management Targets
Total AssetsGrowth Total Assets Growth 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 46% 70% 60% 60% 30% 50% 40% 30% 20%
1H 2012: +9% YTD

Gross Loans/Total Assets

Other Management targets Selected Other Management targets

Launch representative offices within the EAC region

45%

1H 2012: 48%

Kampala Launch agency banking

Nairobi

10% 0%

Launch Premier Banking - targeting 500 clients by YE


2011 Branch expansion 2012P

2011

2012P

2013

Return on Average Equity 21% 20% 20% 19% 19% 19% 18% 18% 2011
* Annualised

Revamp the existing digital wallet/mobile banking


60 20%
1H 2012*: 19.3%

56 44
1H 2012: 56

distribution channel

50 40 30 20 10 0

2012P

2011

2012P

Bank of Kigali Investor Presentation Page 43

Contact Information
For information please contact: Lado Gurgenidze Chairman of the Board Email: lgurgenidze@bk.rw Mobile: +995 599 477 272 Lawson Naibo Chief Operating Officer Email: lnaibo@bk.rw Mobile: +250 78 830 2076 Shivon Byamukama Company Secretary Email: sbyamukama@bk.rw Mobile: +250 78 838 4547 James Gatera Chief Executive Officer Email: jgatera@bk.rw Mobile: +250 78 814 3000 John Bugunya Chief Finance Officer Email: jbugunya@bk.rw Mobile: +250 78 830 6100 Linda Rusagara Investor Relations Officer Email: lrusagara@bk.rw Mobile: +250 784 300 334

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

Bank of Kigali Investor Presentation Page 44

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