Bk Group Plc · NSEKE:BKG
Bk — Bank of Kigali — Q1 2013 Earnings Presentation
45 slides from Bk's earnings presentation, June 2013
Slide 1: Bank of Kigali Investor Presentation Q1 2013
Bank of Kigali Investor Presentation Q1 2013 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: [email protected] Mobile: +995 599 477 272 Skype:lado.gurgenidze.2008 James Gatera Chief Executive Officer Email: [email protected] Te l : + 2 5 0 2 5 2 5 9 3 1 2 1 Lawson Naibo Chief Operating Officer Email: [email protected] Mobile: +250 78 830 20
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 2013 & 2012 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 10.5 million with 83% below the age of 40 Sound Macro Robust economic growth of 4.1% - 8 % between 2006-2012 and 7.5% expected for 2013 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 Ranked fifth-best destination for investment in the world according to Population (2012) 10.5 million the 2013 Baseline Profitability Index(BPI) which surveyed 102 Official Languages Kinyarwanda, French, English countries
Slide 8: Sound Macro Fundamentals
Sound Macro Fundamentals GDP per Capita continues to grow Population Pyramid for Rwanda, 2011 Mln US $ 12 700 10 600 595 644 540 60 and above 519 500 8 479 400 6 391 333 300 4 40-59 200 2 100 9.2 9.6 9.8 10.1 10.4 10.5 10.5 0 0 2006 2007 2008 2009 2010 2011 2012 20-39 Population Nominal GDP per capi
Slide 9: Macroeconomic Indicators
Macroeconomic Indicators GDP Breakdown By Economic Activity 2012 Trade Structure Transport Public Rwanda’s exports are dominated by coffee, tea and minerals ,Storage and administration communication (tin, coltan and wolfram). 5% 8% Agriculture The country remains a net importer. Major imports includ
Slide 10: Review of the Macro Economic Environment Full Year 2012
Review of the Macro Economic Environment Full Year 2012 Macro Economic Review Inflationary Environment Jan 2012- Mar 2013 9.0% 7.8% 7.9% 8.2% 8.3% The Rwandan economy continued to perform well despite the 8.0% 7.0% 7.3% uncertainties presented by the slow down in the global economy 7.0% 5.8%5.6% 5.7
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 2012 Banking Assets/GDP 2012 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 Kenya 72% Kenya 700 financial 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 2200 1,978 20.0% 2000 18.0% 1800 16.0% 14.0% 1600 1474 1,520 12.0% 10.0% 1400 1226 8.0% 1200 1011 6.0% 922 4.0% 1000 2.0% 800 0.0% July Feb Apr Sep Jan Mar M
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 2012 Q1 2013 Bank of Kigali Market Share by Total Assets 23.4% 26.4% 27.4% 32.3%
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 Q1 2013 Five foreig
Slide 16: Competitive Landscape
Competitive Landscape Market Share Dynamics Banking Sector Growth Vs Bank of Kigali Growth Q1 2013 % 8.0% 7.2% 2010 2011 2012 Q1 2013 45% 41.9%41.3%41.1% 6.0% 40% 4.2% 35% 32.2% 4.0% 3.0% 2.7% 32.3% 31.5% 30.0% 30.4% 31.1% 2.5% 29.4%29.4% 30% 27.4% 28.0% 26.5% 2.0% 25.9% 26.3% 0.9% 0.8% 25% 0.0% 20%
Slide 17: Bank Of Kigali Is The Market Leader
Bank Of Kigali Is The Market Leader Rank Total Assets Net Loans Customer Deposits Equity 30.4% 26.3% 41.1% 1 31.1% BANK OF KIGALI BANK OF KIGALI BANK OF KIGALI BANK OF KIGALI 2 20.9% * 26.3% * 21.5% * 12.5% * BPR BPR BPR BPR 3 10.8% 9.9% 10.3% 11.3% BCR BCR ECOBANK BCR 4 8.6% 9.1% 8.7% 9.3% ECOBANK
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$62.5 mln as a JV with management team enhanced & GCR (Global Credit Initial Public Belgolaise S.A assembled internationalized Rating) Offering of 45% of its shares and listing on the RSE 1967 2006 2007 2009 2
Slide 20: A Snapshot Of Bank Of Kigali
A Snapshot Of Bank Of Kigali Key Facts CAGR The leading bank in Rwanda (30.4% market share by total assets as at 31 US$ million 2008 2009 2010 2011 2012 Q1 2013 2008-2012 Rwf/USD Period End 560.0 573.2 594.4 604.4 630.6 650.4 March 2013), offering a wide spectrum of commercial banking services to ra
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 31 March 2013 Corporate Governance The Board of Directors has nine independent non-executive Other State Owned Entities, directors (including two non-resident directors with extensive Government
Slide 23: Share Trading Performance & Analyst Coverage
S h a re Tra d i n g Pe r fo r m a n c e 14 June 2013 Analyst Coverage Current price, RwF 199 Market Cap, US$ mln 207 Recommendation: BUY Free float 45% Target Price: Rwf 275 Free float in US$ mln 93.1 Average daily traded volume in US$ mln 0.1 Common shares outstanding, mln shares 667.3 12-month hi
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 31 March 2013 31 December 2012 250.0 208.8 200.0 *CAGR 25.3% 194.0 67.0 61.5 32.1% 150.0 130.7 31.7% 105.5 32.5 68.3% 100.0 80.9 20.7 78.8 67.9% 13.6 14.4 132.5 141.8 50.0 84.8 98.2 65.2 66.5 0.
Slide 27: Customer Deposit Base
Customer Deposit Base Customer Deposits Growth Customer Deposit Segmentation RwF Bn 31 March 2013 31 December 2012 Corporate Deposits Retail Deposits 250.0 CAGR 22.1* 208.4 210.1 200.0 181.0 30.2% 62.9 68.7 32.7% 150.0 135.7 52.3 69.8% 109.7 36.4 100.0 93.8 27.8 67.3% 24.2 50.0 69.6 81.6 99.3 128.7
Slide 28: Corporate Banking
Corporate Banking Description Key Segments as at 31 March 2013 2.6% Clients include corporate, SMEs and NBAs* Interest rates are in the 16-18.5% range. Key 26.3% products: CAPEX loans: long-term loans for investment or 37.7% expansion of the business Commercial mortgage loans: typical customer 59.7%
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 Others 3.1% consumer loans with notable share of salary backed overdrafts Savings Term Deposits Key products: Deposits 2.0% Mortgage loan: up to 15 years with typical customer p
Slide 31: Growing Our Distribution Network
Growing Our Distribution Network Ubiquitous footprint Increasing functionalities of our delivery channels 120 2013 Targets Branches 100 100 89 Cardless transactions at ATMs through our mobile 81 80 73 banking and mobile wallet applications 65 59 60 44 40 20 Agency Banking 0 2011 2012 2013F 2014F 201
Slide 32: Expanding Our Self Service Products
Expanding Our Self Service Products Growing our Card Business Increasing our Mobile product offering Attractive Products 2012 Achievements 1. Enhancing our mobile banking service Launch of Visa Classic and Visa Gold Credit In 2011, the Bank upgraded its SMS banking service to a Cards mobile banking
Slide 33: Refreshing Product And Service Line Up
Refreshing Product And Service Line Up New Business Lines Teleco mobile money agency 2012 Achievements Super agent for the two telcos All MTN and Tigo Mobile Money launched in 59 branches & MobiBanks. Virtual money customers can deposit, withdraw at any of the BK branches countrywide 2013 Targets La
Slide 34: Review of Financial Performance in Q1 2013
REVIEW OF FINANCIAL P E R FO R M A N C E I N Q 1 2 0 1 3 Bank of Kigali Investor Presentation Page 34
Slide 35: Balance Sheet Highlights
Balance Sheet Highlights Total Assets Customer Deposits Rwf bn Rwf bn 400.0 250.0 350.0 CAGR 27.9%* 322.8 336.4 CAGR 22.1%* 208.4 210.1 200.0 300.0 287.9 181.0 250.0 150.0 135.7 200.0 197.7 109.5 151.9 100.0 150.0 93.8 120.8 100.0 50.0 50.0 0.0 0.0 2008 2009 2010 2011 2012 Q1 2013 2008 2009 2010 201
Slide 36: Asset Quality
Asset Quality Cost of Risk**, % Manageable NPL Ratio Improving Coverage Ratio 4.5% Rwf Bn % 9.0% 8.5% 75.3% 8.3% 8.3% 16.0 80.0% 4.0% 3.8% 69.1% 70.3% 8.0% 14.0 70.0% 3.5% 3.4% 7.0% 6.6% 57.1% 6.5% 12.0 60.0% 3.0% 6.0% 2.5% 10.0 45.8% 50.0% 2.5% 2.2% 5.0% 2.0% 1.9% 8.0 40.0% 4.0% 1.5% 3.0% 6.0 30.0%
Slide 37: Funding
Funding Funding Structure, % Significant Potential For Growth In Higher Yielding Assets 31 March 2013 31 December 2012 Net Loans/Customer Deposits Net Loans/Assets 100.0% 94.5% 90.0% 88.8% 12% 10.2% 80.0% 70.4% 74.7% 70.0% 68.0% 19.6% 60.0% 57.3% 59.0% 20% 51.3% 50.0% 50.8% 62% 42.8% 5.7% 64.6% 40.0
Slide 38: Q1 2013 Performance Highlights
Q1 2013 Performance Highlights Net Interest Income Net Non-Interest Income Total Operating Income Rwf bn Rwf bn Rwf bn 18.0% 4.2 14.0 48.3% 4.5 35.8% 8.0 7.6 11.8 4.0 12.0 7.0 3.6 3.5 10.0 6.0 8.7 5.1 3.0 5.0 8.0 2.5 4.0 2.0 6.0 3.0 1.5 4.0 2.0 1.0 2.0 1.0 0.5 0.0 0.0 0.0 Q1 2012 Q1 2013 Q1 2012 Q1
Slide 39: 2012 Performance Highlights
2012 Performance Highlights Net Interest Income Net Non-Interest Income Total Operating Income Rwf bn Rwf bn 27.0 43.4% 23.8 14.7 Rwf bn 14.8% 31.0% 38.5 16.0 44.0 24.0 40.0 14.0 12.8 21.0 36.0 18.0 16.6 12.0 32.0 29.4 10.0 28.0 15.0 24.0 12.0 8.0 20.0 9.0 6.0 16.0 12.0 6.0 4.0 8.0 3.0 2.0 4.0 0.0 0
Slide 40: Income Statement Highlights
Income Statement Highlights Total Operating Income Composition Of Total Operating Income Rwf bn 31 March 2013 2012 14.0 3% 3.0% 35.8% 11.8 12.0 14% 18.3% 10.0 8.7 8.0 19% 64% 61.8% 16.9% 6.0 4.0 2.0 Net interest income Fees & Commisions 0.0 FX gains Other non- interest income Q1 2012 Q1 2013 Total O
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% 60.0% 12.0% 11.2% 52.8% 50.0% 47.5% 48.2% 48% 10.0% 9.6% 44.1% 8.2% 8.3% 8.4% 40.0% 8.0% 30.0% 6.0% 4.0% 20.0% 2.0% 10.0% 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 Selected Management targets % Q1 2013 % 25.0% 64.6% 21.4%* 65.0% • Grow Net Income by 25% Y-o-Y 20.8% 64.0% 18.9% 20.0% • Grow Total Assets by 20% Y-o-Y 63.0% 15.0% 62.0% • Gross Loans/Assets to 60% 62.1% 61.0% Q1 2013 • Lowe
Slide 45: Contact Information
Contact Information For information please contact: Lado Gurgenidze James Gatera Chairman of the Board Chief Executive Officer Email: [email protected] Email: [email protected] Mobile: +995 599 477 272 Mobile: +250 78 814 3000 Lawson Naibo John Bugunya Chief Operating Officer Chief Finance Officer Email