BK Group PLC · NSEKE:BKG
BK — Bank of Kigali — Investor Presentation (June 2012)
43 slides from BK's investor presentation, June 2012
Slide 1: Bank of Kigali Investor Presentation
BANK OF KIGALI INVESTOR PRESENTATION June 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: [email protected] Mobile: +995 599 477 272 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 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 Q1 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 Politically stable country with sound governance 2012 Very attractive demographic profile: population of 10.7 million with 83% below the age of 40 Robust economic growth of 4.1%-11.2% between 2006-2010 and 8.8% expected for 2011 Sound Macro Fundame
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 (2010) 10.7 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 40-59 200 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 Finance, Mining and Rwanda’s exports are dominated by coffee, tea and Transport, insurance, 2.8% quarrying, 1.3% storage, communication, minerals(tin, coltan and wolfram). 7.5% The country remains a net importer. Major
Slide 10: Banking Sector Overview
B A N K I N G S EC TO R OV E RV I E W Bank of Kigali Investor Presentation Page 10
Slide 11: Significant Banking Sector Potential
Significant Banking Sector Potential 2011 Banking Assets/GDP 2011 Banking Assets Per Capita5 Large Unbanked Population (US$) Economy is still cash based with bank accounts being used Kenya* 70% mostly for cash deposits and withdrawals Kenya 534 Approximately 20% of the population is banked 90% of ba
Slide 12: Banking Sector Overview
Banking Sector Overview Rwanda Banking System Total Assets Interest Rate Analysis US$ MM 18.0% 1,520 16.0% 1,600 1,475 14.0% 1,400 12.0% 1,226 10.0% 1,200 8.0% 1,011 922 6.0% 1,000 856 4.0% 800 2.0% 0.0% 600 Nov Aug Apr Jul April Feb May Sep Dec Dec Mar Oct Jan Jun Jan Feb March 400 200 0 2010 2011
Slide 13: 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 2004 2006 2007 2008 2009 2010 2011 30% stake in BPR 2008 2009 2010 2011 Q1 2012 Bank of Kigali Market Share by Total Assets 23.4% 26.4% 27.4% 32.3% 32.8% Bank of Kigali Investor Presentation Page 13
Slide 14: 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 bank 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 In Q1 2012 Five foreign
Slide 15: Competitive Landscape
Competitive Landscape Market Share Dynamics Banking Sector Growth Vs Bank of Kigali Growth 45% 41.9% 42.8% 100% 93.2% 2009 2010 2011 Q1 2012 90% 40% 80% 35% 32.3% 32.8% 31.5% 30.2% 32.2% 27.4% 29.4% 70% 30% 28.2% 28.2% 26.8% 25.9% 26.7% 60% 52.4% 26.4% 25.8% 45.6% 25% 50% 20% 40% 29.9% 33.4% 30% 23.
Slide 16: Bank Of Kigali Is The Market Leader
Bank Of Kigali Is The Market Leader Rank Total Assets Loans Deposits Equity 32.8% 30.2% 42.8% 1 28.2% BANK OF KIGALI BANK OF KIGALI BANK OF KIGALI BANK OF KIGALI 2 17.7% 23.6% 18.8% 14.3% BPR BPR BPR BPR 11.3% 11.2% 11.5% 8.6% 3 BCR ECOBANK ECOBANK ECOBANK 10.9% 8.0% 4 10.4% 9.3% COGEBANQUE BCR BCR
Slide 17: Bank Overview
B A N K OV E RV I E W Bank of Kigali Investor Presentation Page 17
Slide 18: Background And History
Background And History Established in 1967 Current Supervisory Board A+ credit rating by US$62.5 mln as a JV with management team enhanced & GCR (Global Credit Initial Public Belgolaise S.A assembled internationalised Rating) Offering of 45% of its shares and listing on the RSE 1967 2006 2007 2007 2
Slide 19: A Snapshot Of Bank Of Kigali
A Snapshot Of Bank Of Kigali Key Facts CAGR 2007- The leading bank in Rwanda (32.8% market share by total assets as of 31 US$ million 2007 2008 2009 2010 2011 Q1 2012 2011* March 2011), offering a wide spectrum of commercial banking services to Rwf/USD Period End rate 547.7 560.0 573.2 594.4 604.4 6
Slide 20: Corporate Governance
CO R P O R AT E G OV E R N A N C E Bank of Kigali Investor Presentation Page 20
Slide 21: Shareholding Structure
S h a re h o l d i n g S t r u c t u re Shareholding Structure 31 May 2012 Current price, RwF 125 Free float 45% Market Cap, US$ mln 136.9 Free float 45% Employees & Retail Investors, Directors, 1.1% 15.4% Free float in US$ mln 61.6 Government of Average daily traded volume in US$ mln 0.12 Rwanda, 2
Slide 22: Corporate Governance
C o r p o ra te G o ve r n a n c e The Board of Directors is comprised of nine independent non-executive directors (including two non- resident directors with extensive expertise in international banking practices) The Board of Directors is approved by the Central Bank and meets on a quarterly basis
Slide 23: Business Overview
B U S I N E S S OV E RV I E W Bank of Kigali Investor Presentation Page 23
Slide 24: Overview Of The Loan Book
Overview Of The Loan Book Gross Loan Portfolio Loan Book Segmentation RwF Bn Corporate Loans Retail Loans 31 March 2012 31 December 2011 160.0 137.8 140.0 130.7 120.0 105.5 48.5 41.2 31.5% 100.0 78.8 80.9 35.2% 20.7 80.0 56.6 13.6 14.4 60.0 68.5% 10.8 64.8% 40.0 84.8 89.5 89.3 65.2 66.5 20.0 45.9 -
Slide 25: Customer Deposit Base
Customer Deposit Base Customer Deposits Growth Customer Deposit Segmentation RwF bn 31 March 2012 31 December 2011 Corporate Deposits Retail Deposits 250 203.5 181.0 200 135.7 109.7 58.6 101.9 93.8 28.8% 29.9% 150 54.2 36.4 100 27.8 70.1% 23.9 24.2 71.2% 50 78.0 69.6 81.6 99.3 126.8 145.0 0 2007 200
Slide 26: Corporate Banking
Corporate Banking Description Key Segments as at 31 March 2012 Clients include corporate, SMEs and NBAs* Corporate Loans: RWF 89.3 Bn Corporate Deposits: Rwf 144.8 Bn Interest rates were in the 15.0%-17.25% range as of 3.7% December 2011 Key products: 10.2% CAPEX loans: long-term loans for investmen
Slide 27: Executing The Retail Strategy
Executing The Retail Strategy Bank of Kigali Investor Presentation Page 27
Slide 28: Retail Banking
Retail Banking Description Key Segments as at 31 March 2012 The Bank’s retail business is primarily focused on mortgages and Retail Loans: RWF 48.5 Bn Retail Deposits: RWF 58.6 Bn consumer loans with notable share of overdrafts Key products: 7.8% 13.4% Mortgage loan: up to 10 years with typical cust
Slide 29: Growing Our Distribution Network
Growing Our Distribution Network Ubiquitous footprint Increasing functionalities of our delivery channels Branches 2012 Targets 120 101 89 Cash out and Cash in at Point of sale merchants 100 77 80 65 Deposit taking ATMs 56 60 44 Cardless Transactions at ATMs through our mobile banking and mobile wal
Slide 30: 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 31: 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 the 47 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 32: Review Of Financial Performance In Q1 2012 & 2011
REVIEW OF FINANCIAL PERFORMANCE IN Q1 2012 & 2011 Bank of Kigali Investor Presentation Page 32
Slide 33: Balance Sheet Highlights
Balance Sheet Highlights Total Assets Total Liabilities RwF bn RwF bn 350.0 300.0 303.0 238.2 287.9 226.3 300.0 250.0 250.0 197.7 200.0 165.8 151.9 133.3 200.0 150.0 108.7 104.9 121.5 120.8 150.0 100.0 100.0 50.0 50.0 0.0 0.0 2007 2008 2009 2010 2011 Q1 2012 2007 2008 2009 2010 2011 Q1 2012 Sharehol
Slide 34: Asset Quality
Asset Quality Manageable NPL Ratio Improving Coverage Ratio Cost of Risk**, % 25.0% NPLs Coverage ratio Rwf Bn 4.5% 12.0 72.6% 80.0% 3.8% 69.1% 4.0% 20.0% 19.4% 64.3% 55.3% 70.0% 3.5% 10.0 57.1% 15.4% 60.0% 3.0% 15.0% 45.8% 2.5% 8.0 2.5% 2.2% 50.0% 2.0% 1.9% 6.0 40.0% 10.0% 8.3% 1.5% 8.3% 8.5% 1.1%
Slide 35: Funding
Funding Funding Structure, % Significant Potential For Growth In Higher Yielding Assets 31 March 2012 31 December 2011 90.0% Net Loans/Customer Deposits Net Loans/Assets 5.7% 9.1% 76.8% 80.0% 74.7% 70.4% 70.0% 68.0% 65.0% 59.7% 21.4% 60.0% 21.4% 50.8% 51.3% 47.8% 50.0% 43.7% 40.1% 42.8% 67.2% 40.0%
Slide 36: Q1 2012 Performance Highlights
Q1 2012 Performance Highlights Net Interest Income Net Non-Interest Income Total Operating Income Rwf bn Rwf bn Rwf bn 4.0 10.0 6.0 +40% 5.1 +31% 3.6 8.7 9.0 +36% 3.5 5.0 8.0 3.0 2.7 6.4 7.0 4.0 3.6 2.5 6.0 3.0 2.0 5.0 1.5 4.0 2.0 3.0 1.0 1.0 2.0 0.5 1.0 0.0 0.0 0.0 Q1 2011 Q1 2012 Q1 2011 Q1 2012 Q
Slide 37: 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 38: Income Statement Highlights
Income Statement Highlights Total Operating Income Composition Of Total Operating Income 31 March 2012 31 December 2011 RwF bn 10.0 4.1% 3.0% 9.0 36.2% 8.7 8.0 21.7% 7.0 6.4 26.0% 6.0 58.6% 56.3% 5.0 15.6% 14.7% 4.0 3.0 2.0 Net interest income Fees & Commisions Net interest income 1.0 FX gains Fees
Slide 39: Consistent Profitable Growth
Consistent Profitable Growth Sustainable Net Interest Margin, % Attractive Cost/Income ratio Nigeria average: 67.3% 12.0% Nigeria average: 6.8% SA average: 6.8% 60.0% SA average: 59.1% 9.5% 9.0% 8.4% 47.5% 48.2% 9.0% 8.2% 8.3% 8.2% 50.0% 44.7% 44.1% 39.5% 39.8% 40.0% 6.0% 30.0% 20.0% 3.0% 10.0% 0.0%
Slide 40: Strategic Outlook
ST R AT EG I C O U T LO O K Bank of Kigali Investor Presentation Page 40
Slide 41: 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 42: Management Targets
Management Targets Total TotalAssets Growth Assets Growth Gross Loans/Total Assets Other Selected Management Other targets Management targets 50% 46% 70% 60% Launch representative offices within the EAC region 45% 60% 40% 35% 30% 50% 45% Q1 2012: 45% 30% 40% 25% Kampala Nairobi 20% 30% Launch agency
Slide 43: 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