Bk Group Plc · NSEKE:BKG
Bk — Bank of Kigali — Investor Presentation (2014)
47 slides from Bk's investor presentation, Dec 12, 2014
Slide 1: Bank of Kigali Investor Presentation 1H 2014
Bank of Kigali Investor Presentation 1H 2014 Bank of Kigali Investor Presentation Page 1
Slide 2: Disclaimer
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-lo
Slide 3: Key Executives
Key Executives Lado Gurgenidze Chairman of the Board Email: lgurgenidze@bk.rw Mobile: +995 599 477 272 Skype: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: +250 788 302 0
Slide 4: Agenda
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 2014 & 2013 8. Strategic Outlook 9. Contact Information Bank of Kigali Investor Presentation Page 4
Slide 5: Key Investment Highlights
Key Investment Highlights Politically stable country with sound governance 1. Best Bank in Rwanda 2013 Very attractive demographic profile: population of 10.5 million with 83% below the age of 40 &2014 Sound Macro Robust economic growth of 4.1% - 8 % between 2006-2012 and 5.7% expected for 2014 Fund
Slide 6: Country Overview Information
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
Slide 7: Rwanda – Country Profile
Rwanda – Country Profile National Facts Business Environment Ranked second only to Mauritius as the best destination to do business in Area 26,338 sq km Africa in the World Bank 2014 Doing Business Report. Population 10.5 million Official Languages Kinyarwanda, French, English Since 2005, Rwanda has
Slide 8: Sound Macro Fundamentals
Sound Macro Fundamentals GDP per Capita continues to grow Population Pyramid for Rwanda Mln US $ 12 Population Nominal GDP per capita 800 724 700 10 693 60 and above 644 600 8 595 540 500 519 6 400 40-59 300 4 200 2 100 10.1 10.4 10.5 10.5 10.5 10.5 20-39 0 0 2009 2010 2011 2012 2013 2104E Healthy G
Slide 9: Macroeconomic Indicators
Macroeconomic Indicators GDP Breakdown By Economic Activity Q1 2014 Trade Structure Information and Public Communication Administration Rwanda’s exports are dominated by coffee, tea and minerals Education2% 3% (tin, coltan and wolfram). 4% Real Estate and The country remains a net importer. Major im
Slide 10: Review of the Macro Economic Environment 1H 2014
Review of the Macro Economic Environment 1H 2014 Macro Economic Review Inflationary Environment June 2013- June 2014 7.0% GDP was 7.4 percent higher in real terms in Q1 2014 compared 6.0% to the same quarter of 2013. 5.1% 5.1% 5.0% 4.6% Activities in the industry sector grew by 9 percent and 4.0% 4.
Slide 11: Banking Sector Overview
BA N K I N G S EC TO R OV E RV I E W Bank of Kigali Investor Presentation Page 11
Slide 12: Significant Banking Sector Potential
Significant Banking Sector Potential 2013 Banking Assets/GDP 2013 Banking Assets Per Capita5 Large Unbanked Population (US$) Economy is moving away from being cash based through the various financial inclusion initiatives being undertaken by financial Kenya 71% Kenya 705 institutions including the l
Slide 13: Banking Sector Overview
Banking Sector Overview Rwanda Banking System Total Assets Interest Rate Analysis USD Mln Key Repo Rate T-Bills Rate Deposit Rate Lending Rate 2800 20.0% 2,590 18.0% 2400 16.0% 2,252 14.0% 2000 1,976 12.0% 10.0% 8.0% 1600 1474 6.0% 1226 4.0% 1200 1011 2.0% 0.0% 800 November July Jan January June Aug
Slide 14: Timeline of Foreign Investment In The Rwandan Banking Sector
Timeline of Foreign Investment In The Rwandan Banking Sector 80% stake in BCR I &M Bank acquires 40% stake in Cogebanque 80% stake in BCR 2004 2007 2008 2009 2010 2011 2012 2014 30% 70% stake in stake in BPR Fina Bank 2008 2009 2010 2011 2012 2013 1H 2014 Bank of Kigali Market Share by Total Assets*
Slide 15: Banking Sector Overview Cont’d
Banking Sector Overview Cont’d Case study: Rwanda– six out of nine banks in Rwanda are owned by regional and Pan African banks and have lost market share to locally-run banks Market Share By Total Assets in 2008 Market Share By Total Assets in 2012 Market Share By Total Assets in 1H 2014 Five foreig
Slide 16: Competitive Landscape
Competitive Landscape Market Share Dynamics* Banking Sector Growth Vs Bank of Kigali Growth 1H 2014 50% 2012 2013 1H 2014 25.0% Banking Sector Bank of Kigali 45% 44.1%43.7% 41.5% 20.6% 40% 20.0% 36.1% 17.0% 35% 32.0% 33.3% 32.1% 15.1% 14.3% 32.0% 31.5%31.0% 30.4% 15.0% 13.0% 30% 28.3% 25% 10.0% 20%
Slide 17: Market Leader
Market Leader Rank Total Assets Net Loans Customer Deposits Equity 33.3% 30.4% 43.7% 1 31.0% BANK OF KIGALI BANK OF KIGALI BANK OF KIGALI BANK OF KIGALI 2 12.3% * 14.2% * 13.8% 14.3*% BPR BPR ECOBANK BPR 3 12.0% 11.7% 10.4% 12.8% I & M Bank I & M Bank I & M Bank I & M Bank 4 7.1% 11.9% 10.7% 10.6%*
Slide 18: Bank Overview
BA N K OV E RV I E W Bank of Kigali Investor Presentation Page 18
Slide 19: Background and History
Background and History Established in 1966 Current Supervisory Board US$62.5 mln as a JV with management enhanced & Initial Public Signed lines of credit Belgolaise S.A with: team assembled internationalized Offering of 45% • PTA Bank- US$ 10 mln of its shares and • OFID- US$ 10 mln listing on the R
Slide 20: A Snapshot of Bank of Kigali
A Snapshot of Bank of Kigali Key Facts CAGR 2009- The leading bank in Rwanda (33.3% market share by total assets as at 30 US$ million 2009 2010 2011 2012 2013 1H 2014 2013 Rwf/USD Period End rate 573.2 594.4 604.4 630.6 670.2 677.4 June 2014), offering a wide spectrum of commercial banking services
Slide 21: Corporate Governance
CO R P O R AT E G OV E R N A N C E Bank of Kigali Investor Presentation Page 21
Slide 22: Shareholding Structure & Corporate Governance
S h a re h o l d i n g S t r u c t u re & C o r p o rate G o ve r n a n c e Shareholding Structure as at 30 June 2014 Corporate Governance The Board of Directors has eight independent non-executive Other State directors (including two non-resident directors with extensive Owned Entities, expertise i
Slide 23: Share Trading Performance and Analyst Coverage
S h a re Tra d i n g Pe r fo r m a n c e 29 August 2014 Analyst Coverage Current price, RwF 260 Market Cap, US$ mln 255 Recommendation: BUY Free float 45% Target Price: Rwf 390 Free float in US$ mln 115 Last coverage report: March 2014 Average daily traded volume in US$ mln 0.1 Common shares outstan
Slide 24: Custodial Service Chain
Custodial Service Chain State Street Bank BNP Paribus Pictet CIE (Africa) Brown Brothers Chase Manhattan Harriman Bank Mutual Northern Trust Citibank Company HSBC Bank PLC Client Safe Custody Credit Suisse RBC Investor Services Kenya Standard Trust CFC Stanbic Commercial Chartered Standard Chartered
Slide 25: Business Overview
B U S I N ES S OV E RV I E W Bank of Kigali Investor Presentation Page 25
Slide 26: Overview of the Loan Book
Overview of the Loan Book Gross Loan Portfolio Loan Book Segmentation 250.0 1H 2014 YE 2013 Corporate Loans Retail Loans 224.7 211.9 200.0 194.0 58.8 CAGR*26.8% 66.7 26.2% 61.5 31.5% 150.0 130.7 105.5 32.5 68.5% 100.0 20.7 80.9 165.9 14.4 145.2 73.8% 132.5 50.0 98.2 84.8 66.5 0.0 2009 2010 2011 2012
Slide 27: Customer Deposit Base
Customer Deposit Base Customer Deposits Growth Customer Deposit Segmentation RwF Bn YE 2013 Corporate Deposits Retail Deposits 350.0 323.0 300.0 280.5 81.8 250.0 CAGR* 26.5% 74.6 25.3% 211.9 26.6% 200.0 181.0 62.9 73.0% 150.0 52.3 74.4% 135.7 109.5 36.4 100.0 27.8 50.0 81.7 99.3 128.7 149.0 205.9 24
Slide 28: Corporate Banking
Corporate Banking Description Key Segments as at 1H 2014 Clients include corporate, SMEs and NBAs* 2.7% Interest rates are in the 16-18.5% range. Key products: 15.7% CAPEX loans: long-term loans for investment or 34.6% 8.7% expansion of the business Commercial mortgage loans: typical customer partic
Slide 29: Executing The Retail Strategy
Executing The Retail Strategy Bank of Kigali Investor Presentation Page 29
Slide 30: Retail Banking
Retail Banking Description Retail Lending Retail Deposits The Bank’s retail business is primarily focused on mortgages and Other Loans 0.4% consumer loans with notable share of salary backed overdrafts Key products: Mortgage loan: up to 15 years with typical customer participation 3.6% 12.4% at 30%
Slide 31: Growing Our Distribution Network
Growing Our Distribution Network Ubiquitous footprint Agency Banking Agency Banking platform BK Yacu began Branch Expansion operating in Nov 2012. 100 83 89 77 Expanded the agency banking network to 751 80 65 65 59 60 operational agents as at 30th June 2014 and 40 processed approximately 300,000 tra
Slide 32: Expanding Our Self Service Products
Expanding Our Self Service Products Growing our Card Business Increasing our Mobile product offering Key Achievements 1. Enhancing our mobile banking service Launch of Visa Classic and Visa Gold Credit Our mobile banking service Mobiserve allows customers Cards to perform the following transactions:
Slide 33: Review of Financial Performance in 1H 2014 & 2013
REVIEW OF FINANCIAL P E R FO R M A N C E I N 1 H 2 0 1 4 Bank of Kigali Investor Presentation Page 33
Slide 34: Balance Sheet Highlights
Balance Sheet Highlights Total Assets Customer Deposits Rwf bn Rwf bn 600.0 350.0 323.0 500.0 477.5 300.0 CAGR 26.5% CAGR 29.1% 280.5 422.4 400.0 250.0 322.8 211.9 300.0 287.9 200.0 181.0 197.7 150.0 135.7 200.0 151.9 109.5 100.0 100.0 50.0 0.0 2009 2010 2011 2012 2013 1H 2014 0.0 2009 2010 2011 201
Slide 35: Maturity Profile
Maturity Profile Loans On demand 1 - 3 months 3 – 12 months 1-5 years over 5 years Years Rwf Bn Period (yrs) 90.0 5.0 4.7 80.0 4.5 4.0 70.0 3.6 4.0 3.8 3.7 3.5 3.5 60.0 3.0 50.0 2.5 40.0 2.0 30.0 1.5 20.0 1.0 10.0 0.5 - - 2009 2010 2011 2012 2013 1H 2014 Customer Deposits On demand 1 - 3 months 3 –
Slide 36: Asset Quality
Asset Quality Cost of Risk**, % Improving Coverage Ratio % Rwf Bn 5.0% % 4.4% 4.5% 18.0 NPLs Coverage ratio 100.0% 4.0% 3.8% 16.0 87.4% 90.0% 3.4% 78.3% 3.5% 80.0% 2.2% 14.0 3.0% 69.1% 70.3% 70.0% 2.5% 12.0 2.5% 60.0% 2.0% 1.9% 10.0 57.1% 50.0% 1.5% 8.0 45.8% 40.0% 1.0% 6.0 30.0% 0.5% 4.0 20.0% 0.0%
Slide 37: Asset Quality
Asset Quality Gross loan Yield 25.0% 20.8% 21.1% 21.6% 19.9% 20.0% 17.8% 17.4% 16.0% 14.8% 15.0% 10.0% 5.0% 0.0% 2011 2012 2013 YTD 2014 Corporate Retail Cost of Risk 9.0% 8.5% 8.0% Corporate Retail 7.0% 6.0% 5.0% 4.2% 4.2% 4.0% 3.8% 3.0% 2.5% 2.3% 2.1% 2.0% 1.0% 1.0% 0.0% 2011 2012 2013 YTD 2014 *a
Slide 38: Funding
Funding Funding Structure, % Significant Potential For Growth In Higher Yielding Assets 1H 2014 YE 2013 Net Loans/Customer Deposits Net Loans/Assets 100.0% 11.1% 90.0% 87.4% 12.7% 80.0% 74.7% 70.4% 71.0% 70.0% 68.0% 65.9% 16.9% 60.0% 57.3% 16.8% 50.8% 51.3% 50.0% 47.1% 42.8% 44.6% 40.0% 4.3% 4.1% 66
Slide 39: Q2 2014 Performance Highlights
Q2 2014 Performance Highlights Net Interest Income Net Non-Interest Income Total Operating Income Rwf bn Rwf bn Rwf bn 15.1% 5.9 12.0 6.0 20.0 17.0% 10.0 5.1 10.0 16.3% 15.8 8.6 16.0 13.7 8.0 12.0 6.0 3.0 8.0 4.0 2.0 4.0 0.0 0.0 0.0 Q2 2013 Q2 2014 Q2 2013 Q2 2014 Q2 2013 Q2 2014 Total Recurring Ope
Slide 40: 2013 Performance Highlights
2013 Performance Highlights Net Interest Income Net Non-Interest Income Total Operating Income Rwf bn Rwf bn Rwf bn 40.0 21.0 60.0 47.9% 35.2 26.5% 18.6 39.8% 53.8 35.0 18.0 50.0 30.0 15.0 14.7 40.0 38.5 25.0 23.8 12.0 20.0 30.0 9.0 15.0 20.0 10.0 6.0 3.0 10.0 5.0 0.0 0.0 0.0 YE 2012 YE 2013 YE 2012
Slide 41: Income Statement Highlights
Income Statement Highlights Total Operating Income Composition of Total Operating Income Rwf bn 1H 2014 YE 2013 20.0 3.0% 2.6% 16.3% 15.8 16.1% 13.9% 16.0 13.7 64.1% 12.0 16.8% 18.0% 65.5% 8.0 4.0 0.0 Net interest income Fees & Commisions Q2 2013 Q2 2014 FX related income Other non- interest income
Slide 42: Fees & Commission Income
Fees & Commission Income 1H 2014 Other fees from services Commissions from 7% transactions with other banks 11% Commissions on Commissions received operations of accounts from financing 22% commitments 7% Commissions on Commission on payment facility loans services 19% 34% YE 2013 Other fees from se
Slide 43: Consistent Profitable Growth
Consistent Profitable Growth Sustainable Net Interest Margin % Attractive Cost/Income ratio Nigeria average: 46.32% Nigeria average: 17.04% 11.1% 60.0% 12.0% 52.8% 9.7% 48.2% 48.4% 9.6% 50.0% 47.5% 47.2% 8.2% 8.3% 8.4% 44.1% 9.0% 40.0% 6.0% 30.0% 20.0% 3.0% 10.0% 0.0% 0.0% 2009 2010 2011 2012 2013 1
Slide 44: Strategic Outlook
ST R AT EG I C O U T LO O K Bank of Kigali Investor Presentation Page 44
Slide 45: Strategic Outlook
Strategic Outlook Objectives Strategies Action Outcomes Build a ubiquitous branch footprint Expand the branch network to 70+ branches by YE 2014 Benefit from first-mover advantage throughout the country outside the capital city, making it more difficult for the competitors to follow suit Increase th
Slide 46: Management Targets
Management Targets Return on Average Equity Branch expansion Other Selected Management targets 30.0% 80 1H 2014 71 Grow net income by 20% Y-o-Y 27.0% 26.0% 70 65 24.0% 22.7% 65 branches Grow total assets by 20% Y-o-Y 22.1% 60 1H 2014 21.0% Non funded income ratio - 40% of the total 50 52.4% 18.0% 9M
Slide 47: Contact Information
Contact Information For further information please contact: Lado Gurgenidze James Gatera Chairman of the Board Chief Executive Officer Email: lgurgenidze@bk.rw Email: jgatera@bk.rw Mobile: +995 599 477 272 Mobile: +250 788 143 000 Lawson Naibo John Bugunya Chief Operating Officer Chief Finance Offic