BK Group PLC · NSEKE:BKG
BK — Bank of Kigali — Investor Presentation (September 2013)
45 slides from BK's investor presentation, September 2013
Slide 1: Bank of Kigali Investor Presentation 1H 2013
Bank of Kigali Investor Presentation 1H 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 1H 2013 & 2012 8. Strategic Outlook 9. Contact Information Bank of Kigali Investor Presentation Page 4
Slide 5: Key Investment Highlights
Key Investment Highlights Politically stable country with sound governance 1. Best Bank in Rwanda 2013 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 Fundamenta
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 1H 2013
Review of the Macro Economic Environment 1H 2013 Macro Economic Review Inflationary Environment June 2012- August 2013 8.0% 7.3% Real GDP growth stood at 5.9% in the first quarter of 2013 on an 7.0% 5.9% 5.8%5.6% annual basis . The growth was driven by growth in the industry 6.0% 5.4% 5.7% 5.0% 4.6%
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 2400 20.0% 2,136 2200 1,978 18.0% 2000 16.0% 14.0% 1800 12.0% 1600 1474 10.0% 1400 8.0% 1226 6.0% 1200 1011 4.0% 922 2.0% 1000 0.0% 800 July August Jan Octob
Slide 14: Timeline of Foreign Investment In The Rwandan Banking Sector
Timeline of Foreign Investment In The Rwandan Banking Sector 80% stake in BCR Actis sells 80% stake in 40% stake in Cogebanque BCR to I&M Bank 2004 2006 2007 2008 2009 2010 2011 2012 30% 70% stake in stake in Fina Bank BPR 2008 2009 2010 2011 2012 1H 2013 Bank of Kigali Market Share by Total Assets
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 1H 2013 Five foreig
Slide 16: Competitive Landscape
Competitive Landscape Market Share Dynamics Banking Sector Growth Vs Bank of Kigali Growth 1H 2013 % 2010 2011 2012 1H 2013 14.0% 45% 41.9% 41.3%41.9% The Rwanda Banking Sector Growth Bank of Kigali Growth 11.7% 40% 12.0% 10.4% 35% 9.6% 32.3%31.7% 31.7% 31.5% 31.5% 31.3% 32.2% 10.0% 9.1% 9.1% 9.4% 3
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 31.3% BANK OF KIGALI BANK OF KIGALI BANK OF KIGALI BANK OF KIGALI 2 15.3% * 20.2% * 15.8% * 12.8% * BPR BPR BPR BPR 3 11.4% 10.6% 9.9% 12.4% I & M Bank ECOBANK I & M Bank I & M Bank 4 8.5% 10
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 US$62.5 mln PTA loan signed: as a JV with management team enhanced & ‒ US$ 10 Mn Initial Public Belgolaise S.A assembled ‒ 5 years internationalized Offering of 45% of its shares and OFID loan signed: listing on the RSE ‒ US$ 10 Mn
Slide 20: A Snapshot Of Bank Of Kigali
A Snapshot Of Bank Of Kigali Key Facts CAGR 2008- The leading bank in Rwanda (31.7% market share by total assets as at 30 US$ million 2008 2009 2010 2011 2012 1H 2013 2012 Rwf/USD Period End 560.0 573.2 594.4 604.4 630.6 646.7 June 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 30 June 2013 Corporate Governance Other State Owned The Board of Directors has nine independent non-executive Government of Entities, 0.1% directors (including two non-resident directors with ext
Slide 23: Share Price Performance and Trading Data
100 110 120 130 140 160 170 180 190 200 150 Price 5-Jun-2012 11-Jun-2012 Free float P/E 2013F 17-Jun-2012 Bloomberg Ticker Code P/BV 2013F 23-Jun-2012 12-month low 12-month high 29-Jun-2012 5-Jul-2012 Current price, RwF 11-Jul-2012 Dividend yield, 2012 Free float in US$ mln 17-Jul-2012 Market Cap, U
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 30 June 2013 31 December 2012 Corporate Loans Retail Loans 250.0 *CAGR 25.3% 206.7 200.0 194.0 67.6 32.7% 31.7% 61.5 150.0 130.7 68.3% 105.5 32.5 67.3% 100.0 80.9 20.7 78.8 13.6 14.4 132.5 139.1 50.0 84.8 98.2 65.2 66.5 0.0
Slide 27: Customer Deposit Base
Customer Deposit Base Customer Deposits Growth Customer Deposit Segmentation RwF Bn Corporate Deposits Retail Deposits 30 June 2013 31 December 2012 250.0 227.9 CAGR 22.1* 208.4 200.0 181.0 73.0 62.9 32% 30.2% 150.0 135.7 52.3 68% 69.8% 109.7 36.4 100.0 93.8 27.8 24.2 50.0 69.6 81.6 99.3 128.7 145.5
Slide 28: Corporate Banking
Corporate Banking Description Key Segments as at 30 June 2013 2.4% Clients include corporate, SMEs and NBAs* Interest rates are in the 16-18.5% range. Key 23.4% products: CAPEX loans: long-term loans for investment or 39.2% expansion of the business 11.4% Commercial mortgage loans: typical customer
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 3.6% Savings consumer loans with notable share of salary backed overdrafts Deposits Term 2.2% Key products: Deposits 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 Card less 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 20
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 Our mobile banking service allows customers to perform the Cards following tr
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 1H 2013 & 2012
REVIEW OF FINANCIAL P E R FO R M A N C E I N 1 H 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 250.0 227.9 400.0 CAGR 22.1%* 208.4 CAGR 27.9%* 356.3 350.0 200.0 181.0 322.8 300.0 287.9 250.0 150.0 135.7 197.7 109.5 200.0 93.8 100.0 150.0 151.9 120.8 100.0 50.0 50.0 0.0 0.0 2008 2009 2010 2011 2012 1H 2013 2008 2009 2010 201
Slide 36: Asset Quality
Asset Quality Cost of Risk**, % Manageable NPL Ratio Improving Coverage Ratio % 16.0% 15.4% NPLs Coverage ratio Rwf Bn % 4.5% 16.0 90.0% 14.0% 76.4% 4.0% 3.8% 3.7% 14.0 70.3% 80.0% 3.5% 12.0% 69.1% 12.0 70.0% 3.0% 10.0% 55.3% 57.1% 60.0% 2.5% 8.3% 8.5% 8.3% 10.0 45.8% 2.5% 8.0% 50.0% 2.2% 7.1% 1.9%
Slide 37: Funding
Funding Funding Structure, % Significant Potential For Growth In Higher Yielding Assets 30 June 2013 31 December 2012 100.0% Net Loans/Customer Deposits Net Loans/Assets 90.0% 88.8% 85.8% 10.2% 80.0% 76.8% 11% 74.7% 70.0% 70.4% 68.0% 59.7% 57.3% 19.6% 60.0% 54.9% 20% 50.8% 51.3% 50.0% 63.9% 42.8% 64
Slide 38: 1H 2013 Performance Highlights
1H 2013 Performance Highlights Net Interest Income Net Non-Interest Income Total Operating Income Rwf bn Rwf bn Rwf bn 18.0 10.0 57.1% 16.1 33.4% 9.3 30.0 16.0 9.0 47.5% 25.4 14.0 8.0 25.0 7.0 7.0 12.0 20.0 10.3 6.0 17.3 10.0 5.0 15.0 8.0 4.0 6.0 3.0 10.0 4.0 2.0 5.0 2.0 1.0 0.0 0.0 0.0 1H 2012 1H 2
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 30 June 2013 2012 Rwf bn 30.0 2% 3.0% 47.5% 25.4 15% 18.3% 25.0 20.0 61.8% 17.3 20% 16.9% 15.0 63% 10.0 5.0 Net interest income Fees & Commisions 0.0 FX gains Other non- interest income 1H 2012 1H 2013 Total Ope
Slide 41: Consistent Profitable Growth
Consistent Profitable Growth Sustainable Net Interest Margin, % Attractive Cost/Income ratio Nigeria average: 60% Nigeria average: 7.8% 60.0% SA average: 6.8% SA average: 59.1% 15.0% 52.8% 50.0% 48.2% 48.9% 11.7% 47.5% 12.0% 44.1% 39.8% 9.6% 40.0% 9.0% 8.4% 9.0% 8.3% 8.2% 30.0% 6.0% 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 Selected Management targets % 1H 2013 70.0% 64.6% 25.0% 21.8%* 60.1% • Grow Net Income by 25% Y-o-Y 20.8% 60.0% 18.9% 20.0% • Grow Total Assets by 20% Y-o-Y 50.0% 58.0% 15.0% 1H 2013 • Gross Loans/Assets to 60% 40.0% • Lower
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
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