Bk Group Plc · NSEKE:BKG
Bk — Bank of Kigali — Q1 2015 Earnings Presentation
47 slides from Bk's earnings presentation, 2015
Slide 1: Bank of Kigali Investor Presentation Q1 2015
Bank of Kigali Investor Presentation Q1 2015 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 Q1 2015 & YE 2014 8. Strategic Outlook 9. Contact Information Bank of Kigali Investor Presentation Page 4
Slide 5: Key Investment Highlights
Key Investment Highlights 1. Best Bank in Rwanda 2013 Politically stable country with sound governance &2014 Very attractive demographic profile: population of 10.5 million with 83% below the age of 40 Sound Macro Robust economic growth of an average of 8% pa with the aim of reaching 11.5% by 2018 F
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 Area 26,338 sq km Ranked Third after Mauritius and South Africa as the best destination to Population 10.5 million do business in Africa in the World Bank 2015 Doing Business Report. Official Languages Kinyarwanda, French, English Since 20
Slide 8: Sound Macro Fundamentals
Sound Macro Fundamentals GDP per Capita continues to grow Population Pyramid for Rwanda Mln Population Nominal GDP per capita US $ 14 800 730 12 700 540 595 644 693 724 10 600 500 8 400 6 300 4 200 2 100 10.4 10.5 10.5 10.5 10.9 12.6 0 0 2010 2011 2012 2013 2014 2015E Healthy GDP growth with moderat
Slide 9: Macroeconomic Indicators
Macroeconomic Indicators GDP Breakdown By Economic Activity Q1 2015 Trade Structure Taxes less Rwanda’s exports are dominated by coffee, tea and minerals subsidies on products, 5% (tin, coltan and wolfram). The country remains a net importer. Major imports include Agriculture, forestry & fuel and oi
Slide 10: Review of the Macro Economic Environment
Review of the Macro Economic Environment Macro Economic Review Inflationary Environment Q1 2015 7.0% GDP in Q1 2015 was 7.6% higher in real terms compared to the 6.0% same period in 2014 5.0% The Services sector contributed 48% of GDP while the 4.0% 4.0% 3.8%3.9% 3.6% Agriculture sector contributed
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 3200 2,941 20.00% 3000 2800 2,592 18.00% 2600 16.00% 2400 2,252 14.00% 2200 1,976 12.00% 2000 10.00% 1800 8.00% 1600 1,474 6.00% 1400 1,226 4.00% 1200 1,011
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 2010 2011 2012 2013 2014 Q1 2015 Bank of Kigali Market Share by Total Assets* 27.4
Slide 15: Banking Sector Overview Cont'd
Banking Sector Overview Cont’d Case study: Rwanda– seven out of ten 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 2014 Market Share By Total Assets in Q1 2015 Five forei
Slide 16: Competitive Landscape
Competitive Landscape Market Share Dynamics Bank of Kigali Growth vs. Commercial Banks’ Growth, CAGR YE 2010 – Q12015 50% 2013 2014 Q1 2015 Commercial Banks Bank of Kigali 45% 44.3% 42.9% 43.8% 30.0% 40% 35.8% 33.9% 25.0% 24.1% 35% 33.7% 32.2% 32.0% 31.5% 30.2% 31.2% 30.8% 20.2% 21.1% 20.0% 30% 20.1
Slide 17: Strong Market Leadership
Strong Market Leadership Rank Total Assets Net Loans Customer Deposits Equity 1 33.9% 31.2% 32.0% 43.8% 2 10.5% 10.7% 13.2% 11.9% 3 8.7% 11.5% 11.1% 10.9% 4 10.7% 7.3% 11.9% 10.5% 5 9.3% 10.0% 8.6% 6.5% 6 8.7% 9.2% 7.7% 6.2% 7 6.1% 6.7% 5.8% 5.4% 8 5.3% 5.3% 6.2% 4.2% 9 3.7% 2.7% 4.2% 4.0% 10 0.7% 0
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 CAGR 2010- Key Facts US$ million 2010 2011 2012 2013 2014 Q1 2015 YE 2014 FRw/USD Period End The leading bank in Rwanda (33.9% market share by Total Assets as at 31st 594.4 604.4 630.6 670.2 686.1 688.1 rate March 2015), offering a wide spectrum of commercial banking ser
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 31st March 2015 Corporate Governance Other State The Board has eight independent non-executive directors Owned Entities 0.1% (including two non-resident directors with extensive expertise in Empl
Slide 23: Share Trading Performance
S h a re Tra d i n g Pe r fo r m a n c e 8 May 2015 Analyst Coverage Current price, FRw 296 Market Cap, US$ mln 282 Recommendation: HOLD Free float 45% Target Price: FRw 325 Free float in US$ mln 127.4 Last coverage report: 10 March 2015 Average daily traded volume in US$ mln 0.13 Common shares outs
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 FRw Bn Q1 2015 YE 2014 300.0 Corporate Loans Retail Loans 263.6 250.0 246.7 59.1 211.9 59.0 194.0 22.4% 24.1% 200.0 65.5 61.5 150.0 130.7 105.5 32.5 100.0 20.7 187.7 204.5 77.6% 75.9% 132.5 146.4 50.0 84.8 98.2 0.0 2010 2011 2012
Slide 27: Customer Deposit Base
Customer Deposit Base Total Deposits Growth Customer Deposit Segmentation Q1 2015 2014 Corporate Deposits Retail Deposits Bank's and OFIs Deposits FRw Bn 400 355.5 350 339.8 23.7% 297.8 95.1 26.8% 300 80.5 243.1 61.2 250 31.3 73.4 77.6 200 68.2 51.4% 62.9 54.7% 150 185.9 182.8 21.6% 168.4 148.9 21.8
Slide 28: Corporate Banking
Corporate Banking Description Key Segments at Q1 2015 Clients include corporate, SMEs and NBAs* 2.6% Interest rates are in the 16-18.5% range. Key products: CAPEX loans: long-term loans for investment or 21.9% 24.5% expansion of the business Commercial mortgage loans: typical customer 17.7% 60.4% pa
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 0.2% consumer loans with notable share of salary backed overdrafts 11.5% Key products: 5.9% Mortgage loan: up to 15 years with typical customer participation at 30% of property
Slide 31: Growing Our Distribution Network
Growing Our Distribution Network Ubiquitous footprint Agency Banking 90 Branch Expansion 85 Agency Banking platform BK Yacu began 80 80 70 75 operating in Nov 2012. 70 65 60 59 Expanded the agency banking network to 909 50 operational agents as at 31st March 2015 40 30 Agents are able to perform cas
Slide 32: Expanding Our Self Service Products
Expanding Our Self Service Products Growing our Card Business Increasing our Mobile Product Offering Key Achievements 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: Ov
Slide 33: Review of Financial Performance
REVIEW OF FINANCIAL P E R FO R M A N C E Bank of Kigali Investor Presentation Page 33
Slide 34: Balance Sheet Highlights
Balance Sheet Highlights Total Assets Net Loans FRw Bn FRw Bn 600.0 300.0 498.0 500.0 482.6 252.3 250.0 233.4 422.4 400.0 200.0 199.0 185.1 322.8 300.0 287.9 150.0 123.1 197.7 200.0 100.0 101.4 100.0 50.0 0.0 0.0 2010 2011 2012 2013 2014 Q1 2015 2010 2011 2012 2013 2014 Q1 2015 Customer Deposits Sha
Slide 35: Maturity Profile
Maturity Profile Loans On demand 1 - 3 months 3 – 12 months 1-5 years over 5 years Years FRw Bn Period (yrs) 120.0 6.0 5.2 100.0 4.8 5.0 4.7 80.0 3.7 3.6 3.5 4.0 60.0 3.0 40.0 2.0 20.0 1.0 - - 2010 2011 2012 2013 2014 Q1-15 Customer Deposits On demand 1 - 3 months 3 – 12 months 1-5 years Days FRw Bn
Slide 36: Asset Quality
Asset Quality Cost of Risk**, % Improving Coverage Ratio % FRw Bn NPLs Coverage ratio % 5.0% 18.0 100.0% 4.5% 4.5% 3.8% 16.0 87.4% 90.0% 4.0% 81.8% 3.3% 14.0 80.0% 3.5% 69.1% 70.3% 70.0% 3.0% 2.7% 12.0 66.5% 2.5% 2.5% 2.2% 60.0% 1.9% 10.0 2.0% 45.8% 50.0% 1.5% 8.0 40.0% 1.0% 6.0 30.0% 0.5% 4.0 20.0%
Slide 37: Asset Quality
Asset Quality Gross loan Yield by Segment 25.0% Retail Corporate 20.8% 20.8% 21.1% 19.9% 20.4% 19.7% 20.0% 15.0% 10.0% 5.0% 0.0% 2013 2014 Q1 2015 Cost of Risk by Segment 9.0% 8.5% Retail Corporate 8.0% 7.0% 6.0% 5.0% 4.4% 4.0% 3.5% 2.5% 2.8% 2.5% 3.0% 2.0% 1.0% 0.0% 2013 2014 Q1 2015 Bank of Kigali
Slide 38: Funding
Funding Funding Structure, % Significant Potential For Growth In Higher Yielding Assets Q1 2015 YE 2014 % Net Loans/Customer Deposits Net Loans/Assets 9.5% 11.1% 100.0% 87.4% 90.0% 80.0% 74.7% 74.4% 19.1% 71.0% 72.1% 18.5% 70.0% 68.0% 60.0% 57.3% 51.3% 50.7% 50.0% 47.1% 48.4% 3.3% 3.2% 42.8% 68.1% 6
Slide 39: Q1 2015 Performance Highlights
Q1 2015 Performance Highlights Net Interest Income Net Non-Interest Income Total Operating Income FRw Bn FRw Bn FRw Bn 11.0 6.0 16.0 2.0% 15.1 14.5% 5.2 21.3% 14.8 10.0 9.6 5.0 14.0 4.1 12.0 8.0 4.0 10.0 6.0 3.0 8.0 6.0 4.0 2.0 4.0 2.0 1.0 2.0 0.0 0.0 0.0 Q1-14 Q1-15 Q1-14 Q1-15 Q1-14 Q1-15 Total Re
Slide 40: 2014 Performance Highlights
2014 Performance Highlights Net Interest Income Net Non-Interest Income Total Operating Income FRw Bn FRw Bn FRw Bn 40.0 11.5% 39.3 20.0 2.0% 18.9 60.0 8.2% 58.2 18.6 35.2 18.0 53.8 35.0 16.0 50.0 30.0 14.0 25.0 40.0 12.0 20.0 10.0 30.0 15.0 8.0 6.0 20.0 10.0 4.0 5.0 10.0 2.0 0.0 0.0 0.0 YE 2013 YE
Slide 41: Income Statement Highlights
Income Statement Highlights Total Operating Income Composition of Total Operating Income 1% Q1 2015 YE 2014 FRw Bn 1.4% 16.0 2.0% 15.1 14.8 10% 14.0 13.3% 12.0 14% 10.0 8.0 18.1% 67.2% 75% 6.0 4.0 2.0 0.0 Net interest income Fees & Commissions Q1-14 Q1-15 FX related income Other non- interest income
Slide 42: Fees & Commission Income
Fees & Commission Income Q1 2015 Other fees from services 13% Commissions from Commissions on transactions with other operations of banks accounts 12% 22% Commissions received from financing Commissions on commitments Commission on payment facility 2% loans services 28% 23% YE 2014 Other fees from s
Slide 43: Consistent Profitable Growth
Consistent Profitable Growth Sustainable Net Interest Margin % Attractive Cost/Income ratio 60.0% 12.0% 11.1% 52.8% 9.9% 10.2% 50.0% 47.5% 48.4% 48.4% 47.9% 9.6% 43.7% 9.0% 8.3% 8.4% 40.0% 30.0% 6.0% 20.0% 3.0% 10.0% 0.0% 0.0% 2010 2011 2012 2013 2014 Q1 2015 2010 2011 2012 2013 2014 Q1 2015 Stable
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 75+ branches by YE 2015 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 2015 targets 30.0 80.0 75 Growth in net income >20% Y-o-Y 70 25.0 70.0 Growth in total assets +20% Y-o-Y 22.9 23.1 60.0 Non funded income ratio : 40% of the total 20.0 52.4% 50.0 9M 2013 operating income 15.0 40.0
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 Nathalie Mpaka Chief Operating Officer Chief Finance Off