Bk Group Plc · NSEKE:BKG
Bk — Bank of Kigali — Investor Presentation (November 2012)
45 slides from Bk's investor presentation, November 2012
Slide 1: Bank of Kigali Investor Presentation Year to September 2012
Bank of Kigali Investor Presentation Year to September 2012 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: Presentation Team
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
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 9M 2012 & 2011 8. Strategic Outlook 9. Contact Information Bank of Kigali Investor Presentation Page 4
Slide 5: Key Investment Highlights
Key Investment Highlights 1. Best East African Bank 2012 Politically stable country with sound governance Very attractive demographic profile: population of 10.7 million with 83% below the age of 40 Sound Macro Robust economic growth of 4.1%-11.2% between 2006-2010 and 7.6% expected for 2012 2. Bank
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 Rwanda has been recognized by the World Bank as the second Population (2011) 10.5 million most active reformer globally 2005-2011 Official Languages Kinyarwanda, French, English Since 2005, Rwanda has implemented over 22
Slide 8: Sound Macro Fundamentals
Sound Macro Fundamentals GDP per Capita continues to grow Population Pyramid for Rwanda, 2011 Mln US $ 12 700 595 10 600 479 519 540 60 and above 500 8 391 333 400 6 300 4 200 40-59 2 100 9.2 9.6 9.8 10.1 10.4 10.7 0 0 2006 2007 2008 2009 2010 2011 20-39 Population Nominal GDP Per Capita Healthy GDP
Slide 9: Macroeconomic Indicators
Macroeconomic Indicators GDP Breakdown By Economic Activity 2011 Trade Structure Rwanda’s exports are dominated by coffee, tea and Finance, insurance, Mining and Transport, minerals(tin, coltan and wolfram). 2.8% quarrying, 1.3% storage, communication, The country remains a net importer. Major impor
Slide 10: Review of the Macro Economic Environment Year to Sept 2012
Review of the Macro Economic Environment Year to Sept 2012 Macro Economic Review Inflationary Environment Year to September 2012 The country’s GDP continues to perform well, in line with the 9.0% 7.9% 8.0% 8.3% 8.2% 8.3% annual real GDP growth projections. 7.3% 7.0% 7.8% 7.0% 5.8% In Q1 2012, real G
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 2011 Banking Assets/GDP 2011 Banking Assets Per Capita5 Large Unbanked Population (US$) Economy is still cash based with bank accounts being used Kenya* mostly for cash deposits and withdrawals 70% Kenya 534 Approximately 23% of the population is banked 42% of th
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 1,800.0 18.0% 1,559 16.0% 1,600.0 1,474 14.0% 1,400.0 1,226 12.0% 1,200.0 10.0% 1,011 8.0% 1,000.0 922 6.0% 856 4.0% 800.0 2.0% 600.0 0.0% Dec Feb Sep Dec Ju
Slide 14: Timeline Of Foreign Investment In The Rwandan Banking Sector
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 2009 2010 2011 Sept 2012 Bank of Kigali Market Share by Total Assets 23.4% 26.4% 27.4% 32.3% 31
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 2011 Market Share By Total Assets as at Sept 2012 Five f
Slide 16: Competitive Landscape
Competitive Landscape Market Share Dynamics Banking Sector Growth Vs Bank of Kigali Growth Year to Sept 2012 45% % The Rwanda Banking Sector Growth Bank of Kigali Growth 41.9% 41.9% 40.0% 2009 2010 2011 9M 2012 40% 33.6% 33.8% 35.0% 35% 32.3% 31.5% 32.2% 31.9% 30.0% 29.4%29.4% 28.9% 30% 27.4% 25.9%2
Slide 17: Bank Of Kigali Is The Market Leader
Bank Of Kigali Is The Market Leader Rank Total Assets Net Loans Customer Deposits Equity 31.9% 28.9% 41.1% 1 29.4% BANK OF KIGALI BANK OF KIGALI BANK OF KIGALI BANK OF KIGALI 2 17.8% 22.5% 18.4% 14.3% BPR BPR BPR BPR 10.8% 8.7% 3 11% 10.3% BCR BCR BCR ECOBANK 10.2% 12.4% 6.6% 4 8.9% ECOBANK BCR ECOB
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 1967 Current Supervisory Board A+ credit rating by US$62.5 mln as a JV with management team enhanced & GCR (Global Credit Initial Public Belgolaise S.A assembled internationalised Rating) Offering of 45% of its shares and listing on the RSE 1967 2006 2007 2009 2
Slide 20: A Snapshot Of Bank Of Kigali
A Snapshot Of Bank Of Kigali Key Facts CAGR 2007- The leading bank in Rwanda (32.0% market share by total assets as of 30 US$ million 2007 2008 2009 2010 2011 9M 2012 2011* September 2012), offering a wide spectrum of commercial banking services Rwf/USD Period End rate 547.7 560.0 573.2 594.4 604.4
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 September 2012 Corporate Governance Other State The Board of Directors is comprised of nine independent non- Owned executive directors (including two non-resident directors with Entities, Gove
Slide 23: Share Trading Performance
S h a re Tra d i n g Pe r fo r m a n c e 30 November 2012 Analyst Coverage Current price, RwF 130 Market Cap, US$ mln 138 Free float 45% Recommendation: BUY Free float in US$ mln 66.5 Target Price: Rwf 180 Average daily traded volume in US$ mln 0.1 Common shares outstanding, mln shares 667.3 12-mont
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 RwF Bn Corporate Loans Retail Loans 30 September 2012 31 December 2011 200.0 172.0 180.0 CAGR* 23.2% 160.0 130.7 55.4 140.0 105.5 31.5% 32.2% 120.0 80.9 34.1 100.0 78.8 20.7 68.5% 80.0 56.6 13.6 14.4 60.0 116.6 67.8% 10.8 96.6 40.
Slide 27: Customer Deposit Base
Customer Deposit Base Customer Deposits Growth Customer Deposit Segmentation RwF Bn 30 September 2012 31 December 2011 250.0 CAGR* - 15.5% 203.0 181.0 200.0 135.7 109.7 93.8 61.2 30.1% 29.9% 150.0 101.9 54.2 36.4 69.9% 100.0 27.8 23.9 24.2 70.1% 50.0 78.0 69.6 81.6 99.3 126.8 141.8 0.0 2007 2008 200
Slide 28: Corporate Banking
Corporate Banking Description Key Segments as at 30 September2012 Clients include corporate, SMEs and NBAs* 3.2% Interest rates are in the 15.0%-17.25% range Key products: 27.9% CAPEX loans: long-term loans for investment or 33.6% 58.9% expansion of the business 63.2% Commercial mortgage loans: typi
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 Micro Other, consumer loans with notable share of overdrafts loans, 3.2% Key products: 6.0% Savings Term Deposits Mortgage loan: up to 10 years with typical customer participati
Slide 31: Growing Our Distribution Network
Growing Our Distribution Network Ubiquitous footprint Increasing functionalities of our delivery channels Branches 2012 Targets 120 101 Cash out and Cash in at Point of sale merchants 100 89 77 Deposit taking ATMs 80 65 58 60 44 Cardless Transactions at ATMs through our mobile 40 banking and mobile
Slide 32: Expanding Our Self Service Products
Expanding Our Self Service Products Growing our Card Business Increasing our Mobile product offering Attractive Products 2011 Achievements 1. Enhancing our mobile banking service Issuing of approximately 40,000 VISA In 2011, the Bank upgraded its SMS banking service to a Electron cards mobile bankin
Slide 33: Refreshing Product And Service Line Up
Refreshing Product And Service Line Up New Business Lines 1. Teleco mobile money agency Super agent for the two telcos All our 56 branches 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 subs
Slide 34: Review Of Financial Performance In 9M 2012 & 2011
REVIEW OF FINANCIAL PERFORMANCE IN 9M 2012 & 2011 Bank of Kigali Investor Presentation Page 34
Slide 35: Balance Sheet Highlights
Balance Sheet Highlights Total Assets Customer Deposits Rwf bn YTD growth-8.2% Rwf bn 350.0 YTD growth-12.1% 250.0 311.6 300.0 287.9 203.0 200.0 181.0 250.0 197.7 135.7 200.0 150.0 151.9 109.5 101.9 150.0 121.5 120.8 93.8 100.0 100.0 50.0 50.0 0.0 0.0 2007 2008 2009 2010 2011 9M 2012 2007 2008 2009
Slide 36: Asset Quality
Asset Quality Cost of Risk**, % Manageable NPL Ratio Improving Coverage Ratio % % 25.0% Rwf Bn NPLs Coverage ratio 4.5% % 3.8% 72.6% 4.0% 20.0% 19.4% 14.0 69.1% 80.0% 62.8% 3.5% 55.3% 70.0% 12.0 57.1% 3.0% 15.4% 2.5% 15.0% 60.0% 10.0 45.8% 2.5% 50.0% 1.9% 8.0 2.0% 10.0% 8.3% 8.5% 8.3% 40.0% 1.5% 1.1
Slide 37: Funding
Funding Funding Structure, % Significant Potential For Growth In Higher Yielding Assets 30 September2012 31 December 2011 % Net Loans/Customer Deposits Net Loans/Assets 7.3% 9.1% 81.1% 90.0% 76.8% 70.4% 74.7% 80.0% 68.0% 70.0% 59.7% 21.2% 60.0% 47.8% 52.9% 21.4% 50.8% 51.3% 50.0% 42.8% 40.1% 62.9% 4
Slide 38: 9M 2012 Performance Highlights
9M 2012 Performance Highlights Net Interest Income Net Non-Interest Income Total Operating Income Rwf bn Rwf bn 18.0 Rwf bn 10.8 30.0 15.8 11.8% 25.5% 26.7 16.0 36.9% 10.0 9.7 25.0 14.0 21.2 11.6 8.0 12.0 20.0 10.0 6.0 15.0 8.0 6.0 4.0 10.0 4.0 2.0 5.0 2.0 0.0 0.0 0.0 9M 2011 9M 2012 9M 2011 9M 2012
Slide 39: 2011 Performance Highlights
2011 Performance Highlights Net Interest Income Net Non-Interest Income Total Operating Income RwF bn RwF bn RwF bn 18.0 +36% 16.6 14.0 +43% 12.9 35.0 +39% 29.5 16.0 12.0 30.0 14.0 12.2 10.0 9.0 25.0 12.0 21.2 10.0 8.0 20.0 8.0 6.0 15.0 6.0 4.0 10.0 4.0 2.0 2.0 5.0 - - - 2010 2011 2010 2011 2010 201
Slide 40: Income Statement Highlights
Income Statement Highlights Total Operating Income Composition Of Total Operating Income 30 September 2012 31 December 2011 Rwf bn 2.4% 30.0 3.0% 25.5% 26.7 18.3% 25.0 21.2 26.0% 20.0 53.8% 15.0 56.3% 15.9% 14.7% 10.0 5.0 0.0 Net interest income Fees & Commisions FX gains Other non- interest income
Slide 41: Consistent Profitable Growth
Consistent Profitable Growth Sustainable Net Interest Margin, % Attractive Cost/Income ratio % Nigeria average: 67.3% Nigeria average: 6.8% % SA average: 6.8% SA average: 59.1% 12.0% 60.0% 52.5% 9.5% 48.2% 9.0% 8.6% 50.0% 47.5% 9.0% 8.2% 8.3% 8.4% 39.5% 44.1% 39.8% 40.0% 6.0% 30.0% 20.0% 3.0% 10.0%
Slide 42: Strategic Outlook
ST R AT EG I C O U T LO O K Bank of Kigali Investor Presentation Page 42
Slide 43: Strategic Outlook
Strategic Outlook Objectives Strategies Action Outcomes Build a ubiquitous branch footprint Expand the branch network to 60+ branches by YE 2013 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 44: Management Targets
Management Targets Return on Average Equity Gross Loans/Total Assets Other Other Management Selected targets Management targets 20.5% % 70% Launch representative offices within the EAC region 20% 60% 20.0% 60% 50% 45% 9M 2012: 19.5% 55% 40% Kampala Nairobi 19.0% 19% 30% 9M 2012*: Launch agency banki
Slide 45: Contact Information
Contact Information For 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 78 814 3000 Lawson Naibo John Bugunya Chief Operating Officer Chief Finance Officer Email
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