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Bank of Kigali Limited

Rwanda Bank Analysis Security class Long term Short term


Financial data:
(US$m Comparative) 31/12/09 31/12/10 RwF/US$ (avg.) 568.29 583.26 RwF/US$ (close) 571.24 594.45 Total assets 265.9 332.5 Tier I capital 32.5 41.6 Tier II capital 3.0 Liquid assets 114.0 123.5 Net advances 135.0 170.6 Operating 18.3 21.2 NPAT 9.3 10.6 Market cap US$149.8m Market share* 27.2%
Market cap as at 9 November 2011. * Based on banking industry total assets as at 31 December 2010.

December 2011 Currency Rwandan Franc Rwandan Franc Rating A+ A1 Rating outlook Positive Expiry date 12/2012

Rating scale National National

Fundamentals:

Established in December 1966, Bank of Kigali Ltd (BK or the Bank) is a commercial bank, offering a wide array of products and services to large corporates, small & medium size enterprises (SMEs) and the consumer segment. The Bank was initially established as a joint venture with Bank Belgolaise of Belgium. In January 2007, the Government of Rwanda acquired Bank Belgolaises stake, taking the Governments direct stake to 66.3%, while a further 33.7% was held via the Social Security Fund of Rwanda. However, government has since reduced its stake to 55%, following the success of an initial public offering concluded in August 2011. BK commenced trading on the Rwanda Stock Exchange (RSE) on 1 September 2011. GCR contacts:
Jennifer Mwerenga jennifer@globalratings.net +27 11 784-1771 Paul Greeff greeff@globalratings.net +27 11 784-1771 Website: www.globalratings.net

Rating rationale The rating rationale is based on the following key factors: The accorded ratings reflect BKs established domestic franchise value, financial flexibility, improved financial performance and risk appropriate capitalisation. These are, however, partly offset by the uncertainties surrounding the continued stable economic environment. Government support is considered likely, given that it is the major shareholder and the fact that BK is the largest bank in Rwanda with a 27% share of industry assets as at FYE10. Subsequent to FYE10, the government significantly reduced its stake in the bank to 55% via an Initial Public Offering (IPO) concluded in August 2011. The IPO was part of a process by Government to dilute its stake, as well as shore up BKs capital base. The IPO, which was oversubscribed, raised RwF37.5bn (US$63m), of which RwF21bn was injected into the Bank. The total risk weighted capital adequacy ratio amounted to 20.1% (FYE09: 17.4%) as at FYE10, increasing further to 20.5% as at 1HF11, against a regulatory minimum of 15%. Gross impaired loans grew by 35% to RwF9bn as at FYE10, representing a slightly higher 7.7% (FYE09: 7.2%) of gross loans. Although considered high, the gross NPLs ratio compares favourably to the industry average of 11.3% as at FYE10. Arrears coverage declined to 46% (F09: 57%), with net NPLs increasing to 4.8% (FYE09 3.7%) of net loans, although decreasing slightly to 15.3% of capital. Cognisance must, however, be taken of the potential lag in arrears following a period of rapid loan growth. NPBT grew by 16.7% to RwF8.7bn for F10, after contracting 9.7% in the previous year, although remaining below pre-crisis levels, with high bad debt charges and branch roll-out related costs continuing to impact profitability. As at FYE10, 75.8% of BKs deposits had a maturity profile of less than 1 month, compared to 16.7% of loans & advances. To manage the resultant mismatch, the Bank holds reserves in highly tradable instruments or money market placements, with liquid assets covering deposits by 48% (F09: 52%), which was well above the prudential minimum of 20%. Proceeds from the IPO are further expected to underpin liquidity going forward. Financial flexibility The Bank is primarily funded via customer deposits, with access to additional capital via the listing on the RSE. Further augmenting the funding base, the Bank recently secured lines of credit from the Agence Franaise de Dveloppement (AFD) for US$20m, African Development Bank (AfDB) for US$12m and the European Investment Bank (EIB) for EUR5m for on-lending to SMEs.

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Business profile Ownership Government reduced its aggregate stake in BK to 55% during F11 via an IPO which raised RwF37.5bn (US$62.5m). The offer included the sale of Governments 20% stake (facilitating its partial divesture) and a further 25% through a new share issue (raising funding for BKs expansion initiatives), for a total of 300.3m shares. The oversubscribed IPO was concluded in August 2011, with trading on the RSE commencing on 1 September 2011. Accordingly, RwF21bn of the proceeds was injected into the Bank with the balance allocated to National Treasury. Table 1 below provides BKs shareholding pre and post the IPO. Government remains the major shareholder with a 30% direct shareholding and 27% held via the Social Security Fund of Rwanda.
Table 1: Shareholders profile Government of Rwanda Social Security Fund of Rwanda Other state owned entities International institutional investors Retail investors (East African Community) Regional institutional investors Local institutional investors Employees & directors Total Source: BK. FYE10 % 66.3 33.7 0.1 100.0 Post IPO % 29.8 25.3 0.0 18.0 16.9 4.5 2.5 1.1 100.0

National Bank of Rwanda (NBR) as a regulatory requirement. The board composition is expected to change following shareholder changes after the IPO. In line with NBRs corporate governance guidelines four board committees are in place, namely: Audit & Risk Management, Credit Risk Management, Asset & Liability Management (ALCO) and the Nominations & Remuneration committees. Financial reporting BKs financial statements are prepared in accordance with IFRS and in the manner required by the Companies Act of Rwanda. Ernst & Young have audited the Banks annual financial statements for the past 3 years, all of which were unqualified. Capital requirements are calculated using Central Bank guidelines, which are in line with Basel I. Given that a Basel III is under discussion internationally, it is likely that the Central Bank will delay this until the revised guidelines are finalised. Operating environment Economic review After contracting sharply to 4.1% in 2009, real GDP growth strengthened to an estimated 7.5% in 2010. Economic activity was boosted by government spending, strong growth in services (mainly telecom) improvements in financial services, higher commodity prices (coffee, tea and minerals) and a recovery in tourism.
Macroeconomic indicators Real GDP growth (annual % change) Inflation (annual average) Current account balance (% of GDP) 2009 4.1 10.3 (7.3) 2010 7.5 2.3 (6.0) 2011f 7.0 3.9 (5.2) (1.5)

Strategy & operations Having primarily targeted the corporate and SME markets in the past, BKs strategy is now to grow its retail presence. The Bank further intends to build on its position as a leading SME player in the market. A large proportion of the Rwandan population, particularly in rural areas, is financially excluded. Only an estimated 20% of the population has access to formal banking products, with bank branches concentrated in Kigali. As part of a drive to enhance banking penetration to consumers and SMEs in Rwanda, BK has accelerated its national footprint in recent years, opening 4 branches in 2008, 5 in 2009 and a further 15 in 2010 (most of them outside Kigali). As at FYE10 the Bank had a total of 33 branches, with an additional 13 branches planned for 2011. In addition to branch expansion, BK has also made substantial investments in IT infrastructure to modernise its processes, thus facilitating electronic banking products, such as internet and mobile banking services. As at FYE10, the Bank had grown its ATM footprint to 26 from 6, and increased merchant Point of Sale Facilities to 97 from 52. Corporate governance structure1 The Banks directorate, as at 31 December 2010, consisted of 8 independent non-executive directors, appointed by the shareholders on recommendation from the Minister of Finance and approved by the
Given the intricacies associated with good corporate governance (and the fact that these issues fall outside the scope of this report), GCR recommends an independent assessment to test true compliance.
1

Fiscal/Budget balance (% of GDP) 0.3 0.4 Source: IMF World Economic Outlook September 2011

The average annual inflation rate was low at less than 1% in 2010, due to unexpectedly low domestic food prices and a generally benign external environment. The Rwandan Franc remained relatively stable, depreciating by only 4.1% against the US dollar during 2010. However, inflation has picked up since December 2010 to 4.5% in May 2011, reflecting rising global food and fuel prices. A real GDP growth of 8.8% is projected for 2011. However, sustaining the growth momentum would depend on securing financing for key growth catalytic investments, a favourable external environment, and a strong recovery in credit to the private sector. Banking sector overview As at 31 December 2010, the Rwandan financial sector comprised of 8 commercial banks2, 4 specialised institutions (including a microfinance
2

There has been significant foreign bank entry in recent years. Five of the eight banks have majority foreign ownership. Three others have minority foreign ownership i.e. Bank of Kigali (BK), Banque Populaire du Rwanda (UBPR) and Commercial Bank of Rwanda (BCR). Government holds a majority stake in BK. In 2010, the foreign share of assets stood at 49% (2004: 30%) and Government maintained a 30% stake (2004:22%). Rwanda banks have no operations abroad.

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bank, discount house, development bank and housing bank) and 104 microfinance institutions. Commercial banks dominate the sector accounting for roughly 89% of total industry assets. Furthermore, commercial banks are highly concentrated with the four largest banks accounting for over 65% of the industrys assets, loans and deposits. The table below provides a snapshot of the most recent years key performance metrics.
Table 2: Industry indicators * (RwFbn) Total balance sheet assets Net loans & advances Customer deposit liabilities Paid up capital NPAT Ratios (%) Capital adequacy ratio Gross NPLs / Gross Loans Provisions / NPLs ROaA ROaE Cost of deposits Liquid assets/total deposits *Commercial banks. 2009 579 291 425 54 4 21.0 13.1 55.2 0.7 5.0 2.4 65.3 2010 729 326 542 57 13 22.3 11.3 53.1 1.9 13.7 2.4 55.6 Source: NBR.

broadening access to banking products in Rwanda, Government support is highly likely. Furthermore, BKs size and market presence poses significant systemic risk should the institution fail. Funding Total funding (excluding equity) grew by 23.9% (FYE09: 16.7%) to RwF154.6bn as at FYE10, on the back of successful liability mobilisation initiatives.
Table 4: Funding base By type Deposits from banks Due to local banks Term deposits Finance borrowings Customer deposits Demand accounts Term accounts Other accounts Total Maturity profile < 1 month 13 months 36 months 612 months > 1 year Total Source: AFS. F09 RWF'm % 15,104 12.1 4,543 3.6 8,061 6.5 2,500 2.0 109,483 87.9 76,261 61.2 29,916 24.0 3,306 2.7 124,587 100.0 93,077 9,627 9,493 10,676 1,714 124,587 74.7 7.7 7.6 8.6 1.4 100.0 F10 RWF'm % 18,921 12.2 9,302 7.5 9,324 7.5 295 0.2 135,678 87.8 97,437 63.0 33,180 21.5 5,061 3.3 154,598 100.0 117,219 6,315 17,134 13,801 130 154,598 75.8 4.1 11.1 8.9 0.1 100.0

To improve market liquidity, ensure price stability, stimulate lending and maintain positive interest rates, the Monetary Policy Committee has gradually raised the Key Repo Rate to 7% as at November 2011, from 6% in November 2010, 7% in June 2010, 7.5% in March 2010 and 9% in December 2009. The reserve ratio was revised downwards from 8% to 5% in February 2009. Bank lending rates in Rwanda remain high and fluctuated between 16.9% and 17.5% in 2010, whilst deposit rates ranged between 6-8% in 2010. Treasury-bill rates declined from 9% in January to 7.3% in December 2010. Competitive position BK dominates the market increasing its market share in terms of assets from roughly 26.3% as at FYE09 to 27.4% as at FYE10, while deposit market share remained stable at 26%.
Table 3: Peer analysis (RWFm) Total assets Market share Net customer loans Market share Customer deposits Market share Shareholders funds Market share Ratios (%) Capital/assets ROaE ROaA Excluding contingencies. BK 197,677 27.2 101,403 31.1 135,678 25.5 31,870 31.9 16.1 24.5 3.5 UBPR 138.048 19.0 78,159 24.2 103.413 19.3 19,359 19.8 Ecobank 88,798 12.2 32,778 10.1 68,179 12.6 9,417 8.6 BCR 84.617 11.7 28,400 8.7 64,377 11.9 10,829 11.4

Deposits from corporates, constituted a higher 56% of the book as at FYE10, while retail deposits reflected a slight increase to 27%. Deposits are fairly diversified, with the 20 largest depositors representing 22.4% of the book as at FYE10, while the single largest depositor accounted for 6%.
Table 5: Customer deposits deposits by segment* Retail Corporates SMEs Non Business Associations (NBAs) Total *As a percentage of total customer deposits. F09 F10 % % 25.4% 26.8% 53.6% 56.4% 11.1% 8.4% 9.8% 8.3% 100.0% 100.0% Source: BK.

14.5 10.6 13.5 13.6 19.7 30.4 2.0 1.9 4.1 Source: BK & company financials.

Commercial banks are undertaking strategies to improve their core deposit base by tapping into the retail sector, which could possibly lead to greater competition and have an impact on earnings. Table 3 above provides an analysis of Rwandas 4 largest banks as at 31 December 2010. Financial flexibility Likelihood of support With Government holding a majority stake, together with the developmental role of the institution in
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Deposits remain primarily short dated, with 76% maturing within one month. The paucity of longdated term deposits in the country has limited the Banks ability to build a stable pool of fixed rate funding. However, as part of its efforts to mobilise long-term financing for the real economy, BK successfully raised additional capital via the IPO. In addition, the Bank has a 7 year off-shore facility for EUR5m with the EIB, and recently signed a 10 year facility for US$20m with the AFD as well as a 10 year facility for US$12m with AfDB to provide long term financing to the private sector. Shareholders funds Supported by retained earnings (RwF6bn), reserves (RwF13.5bn) and property revaluations (RwF7bn), BKs total capital & reserves increased by 72% (FYE09: 17%) to RwF32bn as at FYE10. Resultantly, the ratio of total capital/assets increased to 16.1%, from 12.2% previously. The total risk weighted capital adequacy ratio increased by a smaller margin to 20.1% from 17.4% as at FYE09, with only 25% of revaluation reserves eligible as Tier

II capital. In order to sustain BKs liquidity position and support growth strategy, no dividend was proposed for F10. Shown below is a snapshot of the banks regulatory capital (note all ratios are well above statutory thresholds).
Table 6: Regulatory capital Tier I capital (primary) Tier II capital (secondary) Eligible capital Total risk weighted assets (RWA) Key capitalisation ratios Core capital : RWA Statutory requirement Eligible capital : RWA Statutory requirement Source: AFS. F09 RwF'm 18,541 18,541 106,506 17.4% 10% 17.4% 10% F10 RwF'm 24,719 1,788 26,507 131,992 18.7% 10% 20.1% 15%

Loan portfolio Accelerating from a growth of 7% as at FYE09, net loans & advances grew by 32% to RwF101bn as at FYE10, which was well above the industry average of 12%. The increase was supported by strong deposit growth and improving macro-economic conditions. The loan/deposit ratio at 75% was well above the industry average of roughly 60% as at FYE10, thus raising BKs risk profile. With a client base which remains predominantly wholesale, loans to corporates accounted for 80% of the book (FYE09: 83%).
Table 9: Gross loan book characteristics (as at year end F10) By sector (%): Manufacturing Construction Others By product (%): Corporates Capital expenditure Commercial Mortgages Working capital Overdrafts By maturity (%): < 1 month 13 months 36 months 612 months 15 years > 5 years Source: AFS 10.9 29.2 7.1 41.4 17.2 14.1 7.7 16.6 5.0 2.3 5.0 36.6 34.4 Transport & comm. Commerce & & hotels Retail Mortgages Consumer Loans Overdrafts Other By segment (%): Corporate SMEs NBAs Retail 7.0 45.8

Risk management Credit risk Total assets (including contingencies) grew by 26% (FYE09: 19.9 %) to RwF223bn as at FYE10. There was a notable increase (187%) in fixed assets, which constituted a higher 8.2% (FYE09: 3.6%) of total assets as at FYE10, on the back of property revaluations. Liquid assets accounted for a lower 37% (FYE09: 43%) of total assets as at FYE10, due to a comparatively lower (13%) growth.
Table 7: Asset mix Cash & liquid assets Cash Balances with central bank Balances with local banks Balances with foreign banks Government securities Customer advances Fixed assets Other assets Contingencies Total Source: AFS. F09 RwF'm % 65,105 36.7 4,624 2.6 19,099 10.8 98 0.1 28,657 16.2 12,628 7.1 77,096 43.5 6,375 3.6 3,295 1.9 25,475 14.4 177,346 100.0 F10 RwF'm % 73,389 33.0 6,882 3.1 22,563 10.1 251 0.1 38,201 17.2 5,493 2.5 101,403 45.6 18,313 8.2 4,571 2.1 24,938 11.2 222,614 100.0

9.5 7.8 1.9 0.4 58.7 19.5 2.2 19.6

Exposure to credit risk, without taking into account any collateral held or any other credit enhancements, amounted to a lower 87% of total assets as at FYE10.
Table 8: Credit risk exposure Interbank placements Balances with central bank Balances with local banks Balances with foreign banks Customer advances Local currency Foreign currency Other instruments Treasury bills Contingencies Acceptances & letters of Guarantees Other Total credit risk Total assets Source: AFS. F09 RwF'm 47,854 19,099 98 28,657 77,096 76,806 290 12,628 12,628 25,475 12,267 12,242 966 163,053 177,346 % 27.0 10.8 0.1 16.2 43.5 43.3 0.2 7.1 7.1 14.4 6.9 6.9 0.5 91.9 100.0 F10 RwF'm 61,015 22,563 251 38,201 101,403 100,963 440 5,493 5,493 24,938 8,710 15,360 868 192,848 222,614 % 27.4 10.1 0.1 17.2 45.6 45.4 0.2 2.5 2.5 11.2 3.9 6.9 0.4 86.6 100.0

Corporate lending is concentrated to the commerce, restaurant & hotels and the construction sectors, while a large share of retail lending also goes to mortgages and salary-backed loans. With the loan book skewed towards the real estate sector, 71% of the loan portfolio had a maturity profile of over 12 months, up from 62% in F09. The large concentration of credit in a specific economic sector makes BK vulnerable to adverse developments in that sector. In terms of size, the loan portfolio is fairly diversified, with the largest 20 loans accounting for roughly 31% of total gross loans (106% of capital). The single largest exposure accounted for 4.5% of total loans (15% of capital) as at FYE10. The exposures were well within prudential guidelines which limit exposures to a single borrower to 25% of capital. Asset quality Gross impaired loans grew by 35% to RwF9bn as at FYE10, representing 7.7% (FYE09: 7.2%) of gross loans.
Table 10: Asset quality Gross advances Less interest in suspense Total Performing Nonperforming Substandard Doubtful Loss Interest in suspense Less : Provisions Individually assessed Net NPLs Recoveries Writeoffs Gross NPLs ratio (%) Net NPL ratio (%) Net NPLs/Total Capital (%) Excluding interest in suspense. F09 RwF'm 80,914 (916) 79,998 74,229 6,685 2,173 1,218 2,378 916 (3,818) (3,818) 2,867 2,609 2,359 7.2 3.7 15.5 F10 RwF'm 105,527 (973) 104,553 96,524 9,003 2,111 2,561 3,358 973 (4,124) (4,124) 4,879 3,698 2,111 7.7 4.8 15.3 Source: AFS.

The decline follows a 57% decrease in the Treasury bill portfolio to 2.5% (FYE09: 7.1%) of total assets. Excluding government securities and Central Bank balances (considered risk free), the credit risk exposure remained relatively stable at 74%. Placements are predominantly with correspondent banks, which have high credit ratings and are considered low risk.
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Although considered high, the gross NPL ratio of 7.7% compares favourably to the industry average of 11.3% as at FYE10. A focus on bad debt recovery saw a 41% increase in collections to RwF3.7bn. This was enhanced by the recent establishment of specialised commercial courts, a credit reference bureau, enactment of the Mortgage Law and the reorganisation of the Land Registry and the Registrar Generals Office. Write-offs declined 11% to RwF2.1bn as at FYE10. Provisions are made in line with the NBR Instruction No. 03/2000, as follows:
Normal Watch list Substandard 0% 0% 20% Doubtful Loss 50% 100%

higher 41% of total operating income. Gains on foreign exchange dealings, which can be volatile, grew by 56% to account for a higher 25% (F09: 21%) of total operating income. Overall total operating income grew by 32% (F09: 13%) to RwF21bn.
Table 11: Income statement Interest income Interest expense Net interest income Fees & commission income Trading Income Other Income Total operating income Bad debt charge Operating expenditure NPBT Source: AFS & management. Actual F10 16,572 (4,183) 12,389 2,819 5,201 691 21,100 (2,376) (10,043) 8,681 Budget F10 16,969 (4,176) 12,793 3,368 5,440 21,601 (1,470) (11,274) 8,857 Variance % (2.3) 0.2 (3.2) (16.3) (4.4) n.a. (2.3) 61.7 (10.9) (2.0)

No general provision is therefore required, although higher provisioning requirements are used in neighbouring countries. A number of regulations are being revised, including the framework on minimum prudential standards, which is expected to incorporate stricter loan classification and provisioning standards. Arrears coverage declined to 46% (F09: 57%), resulting in the net NPL ratio increasing to 4.8% of net loans (although decreasing slightly to 15.3% of capital). Liquidity risk From a systemic point of view, most emerging market banks tend to have a particularly pronounced negative (contractual) short-term liquidity gap due to the short-term nature of deposits, largely as a result of volatile interest rates, the lack of an extended savings culture and low financial intermediation. For BK, liquidity risk is further exacerbated by the wholesale nature of deposits, which can be volatile. A liquidity gap analysis reflects large cumulative gaps in all maturity buckets as at FYE10. The gap was equivalent to 112% (F09: 140%) of capital for maturities up to 1 month. Liquidity risk is partly ameliorated through maintaining a liquid balance sheet, with liquid assets amounting to 37% of total assets as at FYE10 (FYE09: 43%) as lending activities picked up. The liquidity ratio was well above the prudential minimum of 20%, although well below the industry average of 56% as at FYE10. Financial performance A 5-year financial synopsis is reflected at the back of this report and is briefly discussed below. After contracting by 9.7% in the previous period, due to sharp increases in impairment charges and cost of funds, NPBT grew by 16.7% in F10, which was slightly below (2%) budget. The improved performance was driven by strong advances growth, significant growth in fee income and gains on foreign exchange trading. Net interest income grew by 19% in F10 (F09: 8.3%), albeit contributing a lower 59% (F09: 65%) of total operating income. Non-interest income (mainly fees & commissions and foreign exchange dealing) grew by 55% to contribute a
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A more than proportionate growth in operating costs saw the cost ratio climb to 48% from 44% in F09. Driven mainly by branch roll-out, increased head count and training costs, operating expenses grew by 42% (F09: 24%) to RwF10bn. The bad debt charge increased from 9.4% to 11.3% of total operating income. Overall, profitability indicators weakened, with the ROaE and ROaA ratios declining to 24.5% and 3.5%, although remaining well above the industry average of 13.7% and 1.9% respectively. Future prospects The actual unaudited results for the 6 months to June 2011, together with the F11 budget, are reflected in Table 12 below.
Table 12: Income Actual statement IHF10 Interest income 7,515 Interest expense (1,960) Net interest income 5,555 Other Income 4,099 Total operating 9,654 Bad debt charge (1,721) Operating (4,727) NPBT 3,207 Selected balance sheet indicators Cash & liquid assets 70,525 Loans & advances 89,151 Customer deposits 125,838 Bank deposits 15,341 Shareholders funds 20,751 Total assets 174,901 * Income statement annualised. Actual 1HF11 9,912 (2,530) 7,382 6,106 13,488 (1,145) (6,597) 5,747 107,540 110,299 176,135 16,857 34,759 245,466 Budget FYE11 23,231 (5,124) 18,107 10,203 28,310 (1,400) (15,910) 11,000 % of budget 42.7 49.4 40.8 59.8 47.6 81.8 41.5 52.2

75,459 142.5 153,990 71.6 173,066 101.8 12,307 137.0 56,735 61.3 256,393 95.7 Source: BK.

BKs interim results were well ahead of expectations, with a NPBT of RwF5.7bn, and 79% up from 1HF10. The performance was driven by net interest income contributing 55% of total operating income, (IHF10: 58%). Buoyed by deposit growth, the Banks asset base registered a 40% growth to RwF246bn as at 1HF11 year on year. Looking ahead, BK will focus on growing low cost and stable funding, low cost products and channels to penetrate the un-banked, loan growth and branch and ATM network expansion on the back of an enhanced funding base following the IPO and lines of credit. BK will also continue to focus on prudent risk management, quality service delivery and product development in an attempt to improve efficiency levels.

Bank of Kigali Limited


(Rwanda Francs in millions except as noted)
Year end: 31 December Income Statement Analysis Interest income Interest expense Net interest income Fees & commisisions Trading income Other income Total operating income Impairment charge Operating expenditure Exceptional items Net profit before tax Tax Net profit after tax Other after-tax income / (expenses) Net income Balance Sheet Analysis Subscribed capital Reserves (incl. net income for the year) Preference shares Hybrid capital (incl. eligible portion of subordinated term debt Minority interest Less: Intangible assets Total capital and reserves Bank borrowings (incl. deposits, placements & REPOs) Customer deposits Other borrowings Short-term funding (< 1 year) Bank borrowings (incl. deposits, placements & REPOs) Customer deposits Other borrowings Other funding (> 1 year) Payables/Deferred liabilities Other liabilities Total capital and liabilities Cash in hand Balances with central bank Fixed assets Receivables/Deferred assets (incl. zero rate loans) Non-earnings assets Loans & advances (net of provisions) Bank placements Marketable/Trading securities Investments Investments in subsidiaries/associates Total earning assets Total assets Contingencies Ratio Analysis (%) Capitalisation Internal capital generation Total capital / Net advances + net equity invest. + guarantees Total capital / Total assets Liquidity Net advances / Customer deposits Net advances / Customer deposits + other short-term funding Net advances / Total funding (excl. equity portion) Liquid & trading assets / Total assets Liquid & trading assets / Total short-term funding Liquid & trading assets / Total funding (excl. equity portion) Asset quality Total loan loss reserves / Gross advances Bad debt charge (income statement) / Gross advances (avg.) Bad debt charge (income statement) / Total operating income Profitability Net income / Total capital (avg.) Net income / Total assets (avg.) Net interest margin Non-interest income / Total operating income Non-interest income / Total operating expenses (or burden ratio) Cost ratio OEaA (or overhead ratio) ROaE ROaA Nominal growth indicators Total assets Net advances Shareholders funds Total capital and reserves Customer deposits Total funding (excl. equity portion) Net income
Please note that for these ratios, liquid assets exclude the statutory reserve balance

2006 7,202 (1,046) 6,155 906 1,995 9,056 194 (4,629) 4,621 (1,658) 2,963 2,963 1,500 8,475 9,975 4,147 69,027 73,174

2007 8,720 (1,735) 6,985 980 3,166 11,131 (536) (4,394) 6,201 (1,935) 4,266 4,266 5,005 7,798 12,803 4,525 101,853 106,378

2008 11,452 (1,860) 9,592 1,176 2,585 821 14,174 (255) (5,673) 8,246 (2,591) 5,654 5,654 5,005 10,892 15,897 7,299 93,838 101,138 3,736 3,736 120,771 3,817 6,184 5,559 3,232 18,792 72,094 25,051 4,835 101,980 120,771 27,129

2009 13,798 (3,409) 10,389 1,678 3,335 599 16,000 (1,500) (7,059) 7,442 (2,155) 5,287 5,287 5,005 13,536 18,541 15,104 107,769 122,873 1,714 1,714 8,743 8,743 151,871 4,624 19,099 6,375 3,295 33,393 77,096 28,755 12,628 118,478 151,871 25,475

2010 16,572 (4,183) 12,389 2,819 5,201 691 21,100 (2,376) (10,043) 8,681 (2,503) 6,179 6,179 5,005 26,865 31,870 18,921 135,548 154,468 130 130 11,208 11,208 197,677 6,882 22,563 18,313 4,571 52,329 101,403 38,452 5,493 145,348 197,677 24,938

4,552 4,552 87,701 4,702 5,119 3,500 2,051 15,371 37,841 18,250 16,063 176 72,330 87,701 -

3,322 3,322 122,503 4,967 10,067 5,217 4,139 24,390 48,659 23,199 26,079 176 98,112 122,503 -

29.7 26.2 11.4 54.8 51.7 51.7 50.3 60.3 60.3 10.2 n.a. (2.1) n.a. n.a. n.a. 32.0 62.7 51.1 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

33.3 26.2 10.5 47.8 45.7 45.7 52.5 60.5 60.5 (7.1) 1.2 4.8 37.5 4.1 7.8 37.3 94.4 39.5 4.2 37.5 4.1 39.7 28.6 28.3 28.3 47.6 45.4 44.0

35.6 17.6 13.2 76.8 71.3 71.3 33.0 39.4 39.4 4.8 0.4 1.8 39.4 4.6 9.1 32.3 80.8 40.0 4.7 39.4 4.6 (1.4) 48.2 24.2 24.2 (7.9) (4.9) 32.5

28.5 20.7 12.2 70.4 61.9 61.9 42.9 53.0 52.3 3.6 2.0 9.4 30.7 3.9 9.0 35.1 79.5 44.1 5.2 30.7 3.9 25.8 6.9 16.6 16.6 16.7 23.2 (6.5)

19.4 28.9 16.1 74.7 65.6 65.6 37.1 47.5 47.5 3.0 2.6 11.3 24.5 3.5 9.1 41.3 86.7 47.6 5.7 24.5 3.5 30.2 31.5 71.9 71.9 23.9 24.1 16.9