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    BKG   KE5000008986

BK GROUP PLC

(BKG)
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BK : Registered Rwf38.4 Billion After Tax Profit in 2020

03/31/2021 | 07:06am EDT

BK Group Plc in 2020 recorded an after-tax profit of Rwf38.4 billion which was a 3 per cent growth compared to the previous year when they registered Rwf37.3 billion.

In 2018, the group had Rwf27.4 billion in profit after tax.

According to the group's financial statement, revenues grew in all four subsidiaries; Bank, BK General Insurance, BK TecHouse and BK Capital.

The banking arm had the largest growth followed by Insurance.

In the banking arm which has over 350,000 retail customers, the loan book grew by 25.5 per cent to Rwf851.1B. Given the economic turbulence, the Non-Performing Loans ratio increased to 6.7 per cent compared to 5.7 per cent in the same period in 2019 with cost of risk increasing to 4.5 per cent.

In an aim to increase financial services access, the lender expanded its agency banking network to 2,341 agents who processed over 1.2M transactions with an estimated value of Rwf134.1 million.

Insurance

The insurance arm raked in a profit of Rwf1.74 Billion in 2020, in comparison to Rwf1.32 Billion registered in the previous year. Growth was propelled by an increase in gross premium from Rwf7.2 Billion in 2019 to Rwf9.1 Billion in 2020.

Tech

BK TecHouse had sales revenue of Rwf1.08B in 2020 compared to Rwf1.07B in the previous year.

The subsidiary has over 2 million digital consumers across their 3 digital platforms, Smart Nkunganire System (Agriculture supply chain management system); Smart Kungahara System (working with coffee farmers) and Urubuto Education System all which work with government agencies.

BK Capital

The group's youngest subsidiary, BK Capital reported a 57 per cent growth in total revenues in 2020 driven by fees from advisory services, fund management service, securities brokerage business and Investment Income.

BK Capital which in 2020 launched a unit Trust Fund "Aguka" grew its assets under management by 32 per cent to Rwf11B.

Reduced operating costs

The Group's operating expenses decreased by 11 per cent to Rwf45.4B from what is termed as 'cost management and improved operating efficiency'. Cost to income ratio reduced to 32.5 per cent from 42.2 per cent in 2019.

Cost-to-income ratio is important for determining the profitability of a bank. A reduction in cost to income ratio is a positive development as it indicates that it takes less cost to generate income.

Commenting on the performance, Dr Diane Karusisi, the Bank of Kigali Chief Executive, said as business activity resumes, the group is hoping to take advantage of opportunities presented by economic recovery.

She noted that like other players, they experienced effects of the lockdown and other measures to curb the spread of the virus including increased credit risk in their banking business, affecting the cost of risk that has soared to 4.5 per cent.

"We have managed operating costs with strict discipline, and our insurance, investment banking and technology businesses have grown healthily, providing much needed diversification for the Group's income," she said.

Marc Holtzman, Chairman of the Board said that with the challenges brought by the pandemic, the usage of digital platforms significantly increased making a case for investments that have been made in digital transformation.

BK Groups total assets grew by 28.0 per cent to about $1.3B.

Copyright The New Times. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English

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Financials
Sales 2021 164 B 165 M 165 M
Net income 2021 - - -
Net Debt 2021 - - -
P/E ratio 2021 -
Yield 2021 16,7%
Capitalization 226 B 228 M 228 M
Capi. / Sales 2021 1,38x
Capi. / Sales 2022 1,21x
Nbr of Employees 1 133
Free-Float -
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Income Statement Evolution
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Mean consensus BUY
Number of Analysts 3
Last Close Price 250,07 RWF
Average target price 366,67 RWF
Spread / Average Target 46,6%
Managers and Directors
Marc L. Holtzman Chairman