BK Group PLC · NSEKE:BKG
BK — Bank of Kigali — FY2012 Earnings Presentation
44 slides from BK's earnings presentation, 2013
Slide 1: Bank of Kigali Investor Presentation Full Year 2012
Bank of Kigali Investor Presentation Full Year 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 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 10.5 million with 83% below the age of 40 Sound Macro Robust economic growth of 4.1%-11.2% between 2006-2010 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 ,Storage and administration communication minerals(tin, coltan and wolfram). 5% 8% Agriculture The country remains a net importer. Major imports include
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 The Rwandan economy continued to perform well despite the 9.0% 8.3% 7.8% 7.9% 8.2% 8.0% 7.0% uncertainties presented by the slow down in the global economy 7.3% 7.0% 5.8% 5.6% GD
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 still cash based with bank accounts being used mostly for cash deposits and withdrawals Kenya 72% Kenya 700 Approximately 23% of the population is banked 49 % 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 2200 18.0% 1,978 2000 16.0% 1800 14.0% 12.0% 1600 1474 10.0% 1400 1226 8.0% 6.0% 1200 1011 4.0% 1000 922 2.0% 800 0.0% Dec Feb Sep July August Jan Nov Jan Oc
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 Bank of Kigali Market Share by Total Assets 23.4% 26.4% 27.4% 32.3% 31.7% B
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 In 2012 Five foreign-
Slide 16: Competitive Landscape
Competitive Landscape Market Share Dynamics Banking Sector Growth Vs Bank of Kigali Growth 2012 45% % 41.9%41.9% 40% 2009 2010 2011 2012 60.0% The Rwanda Banking Sector Growth Bank of Kigali Growth 50.4% 35% 32.2% 50.0% 32.3%31.7% 31.5%29.4%31.5% 30% 27.4% 26.8% 28.0%28.1% 26.7% 40.1% 26.4% 25.8%25.
Slide 17: Bank Of Kigali Is The Market Leader
Bank Of Kigali Is The Market Leader Rank Total Assets Net Loans Customer Deposits Equity 31.7% 28.1% 41.9% 1 31.5% BANK OF KIGALI BANK OF KIGALI BANK OF KIGALI BANK OF KIGALI 2 17.0% * 21.5% * 17.4% * 11.6% * BPR BPR BPR BPR 3 11.8% 10.7% 10.3% 12.7% BCR ECOBANK ECOBANK ECOBANK 4 8.8% 10.8% 8.8% 11.
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$62.5 mln as a JV with management team enhanced & GCR (Global Credit Initial Public Belgolaise S.A assembled internationalized Rating) Offering of 45% of its shares and listing on the RSE 1967 2006 2007 2009 2
Slide 20: A Snapshot Of Bank Of Kigali
A Snapshot Of Bank Of Kigali Key Facts CAGR 2008- The leading bank in Rwanda (30% market share by total assets as at 31 US$ million 2008 2009 2010 2011 2012 2012 December 2012), offering a wide spectrum of commercial banking services Rwf/USD Period End rate 560.0 573.2 594.4 604.4 630.6 Total Assets
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 December 2012 Corporate Governance The Board of Directors has nine independent non-executive Other State Owned directors (including two non-resident directors with extensive Government Entitie
Slide 23: Share Price Performance and Trading Data
100 110 120 130 140 150 160 170 180 190 200 Price 2-Jan-2012 9-Jan-2012 Free float P/E 2013F 16-Jan-2012 Bloomberg Ticker Code P/BV 2013F 23-Jan-2012 12-month low 30-Jan-2012 12-month high 6-Feb-2012 Current price, RwF 13-Feb-2012 Dividend yield, 2012 Free float in US$ mln Market Cap, US$ mln Divide
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 2012 2011 Corporate Loans Retail Loans 250.0 194.0 200.0 CAGR 25.3% 31.5% 61.5 31.7% 150.0 130.7 105.5 68.3% 32.5 68.5% 100.0 78.8 80.9 20.7 13.6 14.4 132.5 50.0 84.8 98.2 65.2 66.5 0.0 2008 2009 2010 2011 2012 Corporate Lo
Slide 27: Customer Deposit Base
Customer Deposit Base Customer Deposits Growth Customer Deposit Segmentation 31 December 2012 31 December 2011 RwF Bn 250.0 CAGR* 22.1% 208.4 200.0 181.0 62.9 30.2% 28.5% 150.0 135.7 52.3 109.7 36.4 69.8% 100.0 93.8 27.8 24.2 71.5% 50.0 69.6 81.6 99.3 128.7 145.5 0.0 2008 2009 2010 2011 2012 Corpora
Slide 28: Corporate Banking
Corporate Banking Description Key Segments as at 31 December 2012 2.8% Clients include corporate, SMEs and NBAs* Interest rates are in the 16-18.5% range. Key 25.6% products: CAPEX loans: long-term loans for investment or 37.6% expansion of the business 59.6% 59.3% Commercial mortgage loans: typical
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 Savings deposits consumer loans with notable share of salary backed overdrafts Other, 4.3% 2.0% Key products: Term Mortgage loan: up to 15 years with typical customer participat
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 1. Enhancing our mobile banking service 2012 Achievements In 2011, the Bank upgraded its SMS banking service to a Launch of Visa Classic and Visa Gold Credit mobile banking servic
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 2012 & 2011
REVIEW OF FINANCIAL P E R FO R M A N C E I N 2 0 1 2 Bank of Kigali Investor Presentation Page 34
Slide 35: Balance Sheet Highlights
Balance Sheet Highlights Total Assets Customer Deposits Rwf bn Rwf bn 350.0 250.0 322.8 CAGR 22.1% CAGR 27.9% 300.0 287.9 208.4 200.0 250.0 181.0 197.7 150.0 200.0 135.7 151.9 109.5 150.0 120.8 100.0 93.8 100.0 50.0 50.0 0.0 0.0 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Shareholders’ Equity
Slide 36: Asset Quality
Asset Quality Cost of Risk**, % Manageable NPL Ratio Improving Coverage Ratio % 18.0% Rwf Bn % 4.5% NPLs Coverage ratio 16.0% 15.4% 14.0 70.3% 80.0% 4.0% 3.8% 69.1% 14.0% 12.0 70.0% 3.5% 55.3% 57.1% 12.0% 10.0 60.0% 3.0% 45.8% 2.5% 10.0% 50.0% 2.5% 2.2% 8.3% 8.5% 8.3% 8.0 2.0% 1.9% 8.0% 6.5% 40.0% 6
Slide 37: Funding
Funding Funding Structure, % Significant Potential For Growth In Higher Yielding Assets 2012 2011 Net Loans/Customer Deposits Net Loans/Assets 100.0% 90.0% 88.8% 10.2% 9.1% 76.8% 80.0% 74.7% 70.0% 70.4% 68.0% 59.7% 57.3% 19.6% 21.4% 60.0% 50.8% 51.3% 50.0% 62.9% 42.8% 40.0% 5.7% 64.6% 6.6% 30.0% 20.
Slide 38: 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 39: Income Statement Highlights
Income Statement Highlights Total Operating Income Composition Of Total Operating Income 2012 2011 Rwf bn 44.0 31.0% 38.5 3.0% 3.0% 40.0 36.0 18.3% 32.0 29.5 26.0% 28.0 24.0 61.8% 20.0 16.9% 56.3% 16.0 12.0 14.7% 8.0 4.0 0.0 2011 2012 Net interest income Fees & Commisions FX gains Other non- interes
Slide 40: 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% 60.0% SA average: 59.1% 12.0% 52.8% 9.6% 50.0% 47.5% 48.4% 10.0% 9.0% 44.1% 8.2% 8.3% 8.4% 39.8% 8.0% 40.0% 6.0% 30.0% 4.0% 20.0% 2.0% 10.0%
Slide 41: Strategic Outlook
ST R AT EG I C O U T LO O K Bank of Kigali Investor Presentation Page 41
Slide 42: 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 43: Management Targets
Management Targets Return on Average Equity Gross Loans/Total Assets Other Selected Management targets % % 20.8% 65.0% 64.6% 21.0% 64.0% • Grow Net Income by 25% Y-o-Y 20.5% 63.0% • Grow Total Assets by 20% Y-o-Y 20.0% 62.0% • Gross Loans/Assets to 60% 19.5% 61.0% 18.9% 60.1% • Lower NPL ratio to le
Slide 44: 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