BK investor presentation 1H 2024

1. Economic Outlook
2. Group Overview

03 BK Group Financial Results

1. Strategy Growth
2. ESG updates

pg. 04

pg. 09

pg. 14

pg. 16

pg. 23

06

Appendix

pg. 26

The Global Market

The Global Economy in a sticky spot

Global growth is projected to be in line with the April 2024 World Economic Outlook forecast, at 3.2 % in 2024 and 3.3 % in 2025.

• Services price inflation is holding up progress on disinflation, which is complicating monetary policy normalization.
• Upside risks to inflation have thus increased, raising the prospect of higher-for-even-longer interest rates, in the context of escalating trade tensions and increased policy uncertainty.

Emerging Markets & Developing

Economies Growth Projections

4.4% 4.3% 4.3%

Global Economy Growth Projections

Geopolitical Tension

Middle East Conflict (Israel-Palestine)

The ongoing conflict in the Middle East, particularly the recent escalation in Israel and Palestine, has significant implications for global oil markets. Any disruption in oil supply from this region could lead to a spike in energy prices, which in turn could cause inflationary pressures worldwide.

Eastern Europe ( Ukraine- Russia war)

The war in Ukraine continues to disrupt global supply chains, especially in food and energy. Ukraine and Russia are major exporters of grain and energy, and the conflict has caused volatility in global commodity markets.

Global Inflation rate, average consumer prices (Annual percent change)

Rwanda's Consumer Price Index(CPI) main gauge of inflation increased by 4.9% YoY in July 2024 down from 5% in June 2024.​

Outlook

For 2024 and 2025,

• headline inflation is projected to remain close to 5.0% due to easing food inflation as domestic agriculture returns to normal levels.
• Core inflation is expected to increase in 2024, driven by import costs, but anticipated to decrease in Q2 2025.
• Energy inflation is likely to lightly increase in 2024 in line with international oil price projections

The overall unemployment rate in May 2024 was 16.8%, showing little change from the previous year. This rate was higher among females 19.8% compared to males 14.1% and more pronounced among the youth 20.5% than adults 14.1%.

Rural areas experienced a higher unemployment rate 17.3% than urban areas 15.7%.

Labor underutilization, which includes unemployment, time-related underemployment, and potential labor force, was estimated at 53.9%.

Real GDP

2.0%

0.0%

2023Q1 2023Q2 2023Q3 2023Q4 2024Q1

In 2024 Q1, GDP growth was 9.7%. Sector performed as follows;

• Agriculture increased by 7%
• Industry increased by 10%
• Services increased by 11%

Main economic drivers;

• Tourism
• Trade
• Telecommunication
• Manufacturing
• Construction

The Monetary Policy Committee reduced the

CBR Rate

The interbank rate decreased to an average

Fiscal Stability Ratios

CBR rate by 50 basis points based on the current inflation forecast that's expected to be manageable around 5% over policy horizon.

6.5%

Q2 2024

8.14% in Q2 2024 down

15 basis points from

8.29% in Q1 2024. This reduction follows a cut in CBR rate.

Total assets in financial sector

↑20.8% to FRW

11.641B.

In the banking sector, total assets

The Solvency ratio of private

Insurance improved to

269%

in June 2024 from 256% in June 2023.

$

$

$

Trade deficit has expanded by 9.5% Q2 2024

•Rwanda merchandise export increased by 0.9% Q2 2024 due weak coffee performance and declining global commodity pricing and seasonal factors.

•Merchandise imports increased by 6.4% largely driven by strong demand for core food items, energy products and some capital goods.

As of August 2024, the exchange rate for the RWF against US dollar stands at approximately

1 USD = 1,318.85 and 1,321.3 USD, showing slight volatility. The Rwandan Franc had depreciated by 3.70% against the US dollar.

grew by 21.2% driven

primarily by growth in deposits and capital.

The aggregated total Capital Adequacy Ratio stood at

21.5% and 30.5%

for banks and Microfinance, respectively.

Credit risk in banks remains at a benchmark of 5%.

Outstanding loans by banks

increased by 16%.

The net outstanding loans of The bank are representing 52%

of the sectors total assets at end June 2024.

New authorized loans grew by 25% in 1H 2024.

FinScope Survey 2024

96% (7.8 million)

Financial Inclusion overview

Overview of Financial product/services

Figure 1: Financial Inclusion overlaps

financially included up from 93% in 2020, getting closer to the universal access of 100% set target.

(%)

Banked

Other formal

at 84%.

Drivers of the banking sector;

There has been an increase in people with bank accounts from 1.6 million to 1.8 million.

Drivers of other formal (non-bank) products and services;

• Mobile money: has been the main driver, 86% of adults use mobile money in 2024.
• Insurance: the number of Rwandans insured has doubled to 27% from 7%
• Pension: the uptake of pension products has doubled to

26% from 7%.

Drivers of informal products/services

There has been a drop in the proportion of adults using informal mechanisms from 78% in 2020 to 72% in 2024 driven by the reduced utilization of shop credit.

6% (non-bank)

0%

18%

16%

0% 52%

Informal

4%

Around 22% (1.8 million people) of Rwandans are banked or have bank accounts in their name. The percentage of adults who are not banked but use non-bank formal financial services increased significantly to 70% (5.7million) in 2024 from 55% (3.8 million) in 2020, driven largely by mobile money usage.

Sources: AFR 2024

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