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BANK OF KIGALI INVESTOR PRESENTATION 2011

Year End 2011

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-looking statements represent our judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, (1) general market, macroeconomic, governmental policies, legislative and regulatory trends, (2) movements in local and international currency exchange rates, interest rates and securities markets, (3) competitive pressures, (4) technological developments, (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties and developments in the markets in which they operate, (6) management changes and changes to the Banks structure and (7) other key factors that we have indicated could adversely affect our business and financial performance, which are contained elsewhere in this presentation and in our past and future filings and reports, including those filed with the National Bank of Rwanda and the Rwanda Stock Exchange. We are under no obligation (and expressly disclaim any such obligations to) update or alter our forwardlooking statements whether as a result of new information, future events, or otherwise.

Presentation Team
Lado Gurgenidze Chairman of the Board Email: lgurgenidze@bk.rw Mobile: +995 599 477 272 lado.gurgenidze.2008

James Gatera Chief Executive Officer Email: jgatera@bk.rw Te l : + 2 5 0 2 5 2 5 9 3 1 2 1

Lawson Naibo Chief Operating Officer Email: lnaibo@bk.rw Mobile: +250 78 830 2076

John Bugunya Chief Finance Officer Email: jbugunya@bk.rw Mobile: +250 78 830 6100

Agenda
1. Country Overview Information 2. Banking Sector Overview 3. Bank Overview 4. Corporate governance 5. Business Overview 6. Review of Financial Performance 2011 7. Strategic Outlook 8. Contact Information
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CO U N T RY OV E RV I E W I N FO R M AT I O N

Rwanda Country Profile


National Facts Business Environment

Area Population (2010) Official Languages Capital Currency Credit Rating

26,338 sq km 10.7 million Kinyarwanda, French, English Kigali Rwandan Franc (RWF) B/Stable (Fitch Ratings) B/B (Standard & Poors)
Macro Economic Indicators

Rwanda has been recognized by the World Bank as the second most active reformer globally 2005-2011 Since 2005, Rwanda has implemented over 22 business regulation reforms in the areas measured by the World Bank Doing Business Index Today, entrepreneurs can register a new business in 24 hours as well as online

Nominal GDP (2011) Nominal GDP Per Capita (2011) Real GDP Growth Rate 2011 Real GDP Growth Rate 2012E Inflation Rate (Feb 2012) Private Sector Credit Growth (2011) External Debt to GDP (2010) Currency Depreciation (2011) FDI as % of GDP (2011E)

US$ 6.4 billion US$595 8.6% 7.6% 7.9% 28.4% 14.9% 1.6% 1.9%
6

Source: IMF, CIA World Factbook, Ministry of Finance and Economic Planning, National Institute of Statistics Rwanda, National Bank of Rwanda,

Sound Macro Fundamentals


GDP per Capita continues to grow Mln 12 10 479 8 333 6 4 2 9.2 0 2006 2007 2008 2009 2010 2011 9.6 9.8 10.1 10.4 10.7 391 519 540 US $ 700 600 500 400 300 200 100 0 20-39 40-59 60 and above Population Pyramid for Rwanda, 2011 595

Population

Nominal GDP Per Capita

Healthy GDP growth with moderating inflation US$ Bn 7 6 5 4 3 2 1 0 2006 2007 2008 2009 2010 2011
Inflation (%) Source: National Institute of Statistics Rwanda
7

0-19
15.4% 18.0% 16.0% 14.0% 8.8% 9.1% 10.3% 12.0% 8.3% 7.5% 10.0% 8.0% 6.0% 2.3% 4.0%

30.0%

20.0%

10.0%

0.0%

10.0%
Male %

20.0%

30.0%

Female %

54% of the population is under 19 years. 83% of the population is under 40 years. 3% of the population over 65 years.

3.1

3.7

4.7

5.2

5.6

6.4

6.6 2012E

2.0% 0.0%

Nominal GDP (US$ Bn)


Source: Ministry of Finance and Economic Planning, IMF

Macroeconomic Indicators
GDP Breakdown by Economic Activity
Finance, insurance, 2.8% Transport, storage, communication, 7.5% Education, 5.5% Manufacturing, 6.6% Transport, storage, communication, 7.5% Real estate, business services, 8.0% Mining and quarrying, 1.3%

Trade Structure Rwandas exports are dominated by coffee, tea and minerals(tin, coltan and wolfram). The country remains a net importer. Major imports include

Agriculture, 31.9%

intermediary goods especially construction materials, consumer goods, energy and lubricants and capital goods. Informal cross-border trade is a significant component of Rwandan external trade (approx. 18% of total exports). More than 78% of these exports are destined to DRC. Official reserves were estimated at 7.7 months of goods

Construction, 8.3%

Wholesale and retail trade, 12.9%

imports for Dec 2011


Source: NBR Monetary Policy Statement

Source: National Institute of Statistics Rwanda

Trade Deficit as a % of GDP


20% 14% 15% 10% 5% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 12% 11% 10% 15% 11% 14% 15% 13%
20% 15% 10%

Current Account as a % of GDP


17% 12% 9% 4%
5% 0%

13%

2007

2008 2009 2010 Current Account Deficit as a % of GDP

2011

Source: Ministry of Finance and Economic Planning, IMF

Source: National Institute of Statistics Rwanda

B A N K I N G S EC TO R OV E RV I E W

Significant Banking Sector Potential


2011 Banking Assets/GDP 2010 Banking Assets Per Capita5
(US$)

Large Unbanked Population

Economy is still cash based with bank accounts being used mostly for cash deposits and withdrawals
534

Kenya*

66%

Kenya

Approximately 20% of the population is banked 90% of banked adults have a product with UBPR or credit unions

Tanzania*

50%

Tanzania

Source: Finscope Rwanda 2008

274

Prudential Regulations

CAR (Tier One)


Uganda* 33%
Uganda 165

10%

Total CAR Liquidity Ratio


Rwanda 23%
Rwanda 124

15% 20% 5% of total deposits

Reserve Requirement

(1) Source: Central Bank of Kenya and Economic Survey 2011 (2) Source: IMF and Tanzania Banking Survey 2011 (Serengeti Advisers) (3) Source: IMF and Bank of Uganda Joint Annual Supervision & Financial Stability Report December 2010 (4) Source: NISR, National Bank of Rwanda Monetary Policy review (5) Source: population stats by IMF *2010 figures are used for Kenya Tanzania and Uganda

Lending in foreign currency

Restricted to exporters

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Banking Sector Overview


Rwanda Banking System Growth (Total Assets)
Rwf bn

Interest Rate Analysis 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Dec Jan Feb Mar Apr May Jun 2010 Jul Aug Sep Oct Nov Dec

1,000 900 800 700 600 500 400 300 200 100 0

CAGR -19.7%
728.5 468.7 360.8 516.2 579.5

888.4

2011 T-Bills Rate Deposit Rate Lending Rate

2006

2007

2008

2009

2010

2011

Key Repo Rate

Source: NBR Monetary Policy & Financial Stability Report 2011

Branch Coverage The total number of branches and outlet networks in the banking industry as at FY 2011 was 683 with Bank of Kigali having 44 branches and outlets.
Source: National Bank of Rwanda, Bank of Kigali Data

Recent Regulatory Reforms to improve Access to Credit

Enactment of Law on Mortgages, requiring the registration of mortgages and enabling lenders to foreclose on defaulters Establishment of Commercial Courts dealing solely with commercial disputes Reorganization of the Land Centre which has computerized records and operations in addition to timely issuance of property titles Reorganization of the Office of the Registrar General to enhance and fast track registration of mortgages and foreclosures Establishment of Credit Reference Bureau to enhance information sharing among banks and other financial institutions in order to assist with credit risk assessment
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Timeline of Foreign Investment

80% stake in BCR

40% stake in Cogebanque

2004

2006

2007

2008

2009

2010

2011

30% stake in BPR

Source: NBR Supervision Department, BK Audited Full Year 2011 Results

12

Banking Sector Overview Contd


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

Five foreigncontrolled banks, 48.3%

Top three local banks, 51.7%

Six foreign-controlled banks, 47.7%

Top three local banks, 52.3%

BANK OF KIGALI

BANK OF KIGALI

BPR

UBPR

Source: the National Bank of Rwanda, company estimates

Page 13

www.libertycapital.ge

March 2012

Competitive Landscape
Market Share Dynamics as at 31 December 2011
45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

Banking Sector Growth Vs Bank of Kigali Growth


42.2% 32.2% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

2009
32.3% 27.4% 26.4%

2010

2011
28.1% 25.9% 25.7%

93.2%

31.5% 29.4% 26.8%

26.7%

45.6% 23.0% 29.9% 21.4% 33.4% 23.8%

52.4%

Assets

Net Loans

Client Deposits

Shareholders' Equity

Total Assets Growth

Net Loan Book Growth

Client Deposits Growth

Shareholders' Equity

Source: NBR Supervision Department, BK Audited Full Year 2011 Results

Bank of Kigali Growth in 2011

The Rwandan Banking Sector Growth in 2011

Performance Indicators YE 2011 20.0% 15.0% 10.0% 5.0% 0.0% NPLs/Gross Loans Return on Average Return on Average Assets Equity Profitability ratios BK 7.0% 8.3% 2.2% 3.6% 10.6% 18.6%
Others, 21.3%

Concentration of Banking Sector Assets


31 December 2011 Others , 21.5% 31 December 2010

Asset Quality Banking Sector

Top 5 Banks, 78.7%


Source: NBR Supervision Department, BK Audited Full Year 2011 Results

Top 5 Banks, 78.4%

Source: NBR Supervision Department, BK Audited Full Year 2011 Results

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Bank of Kigali is the Market Leader


Rank Total Assets Loans Deposits Equity 1
BANK OF KIGALI

32.3%
BANK OF KIGALI

29.4%
BANK OF KIGALI

28.1%
BANK OF KIGALI

42.2%

2
BPR

17.6%
BPR

23.5%
BPR

18.9%
BPR

14.9%

3
ECOBANK

10.5%
ECOBANK

10.0%
ECOBANK

11.0%
BCR

8.5%

4
BCR

10.4%
COGEBANQUE

9.3%
BCR

11.0%
KCB

7.1%

5
COGEBANQUE

7.9%
BCR

9.0%
COGEBANQUE

7.9%
ECOBANK

6.8%

6
ACCESS BANK

7.1%
KCB

8.4%
KCB

7.7%
COGEBANQUE

6.6%

7
FINA BANK

6.6%
FINA BANK

7.5%
ACCESS BANK

7.5%
FINA BANK

4.8%

8
KCB

6.3%
ACCESS BANK

2.9%
FINA BANK

7.3%
EQUITY BANK

4.6%

9
EQUITY BANK

1.3%
EQUITY BANK

0.1%
EQUITY BANK

0.7%
ACCESS BANK

4.5%
15

Source: National Bank of Rwanda as at 31 December 2011

B A N K OV E RV I E W

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Background and History


Established in 1967 as J.V with Belgolaise S.A Current management team assembled Supervisory Board enhanced & internationalised A+ credit rating by GCR (Global Credit Rating) US$62.5 mln Initial Public Offering of 45% of its shares and listing on RSE

1967

2006

2007 2007

2009

2010 2010

2011

Government of Rwanda acquired 50% stake from Belgolaise becoming 100% shareholder

New strategy focusing on the universal banking business model and profitable growth adopted

AFD loan signed: EIB loan signed: EUR 5 MM 7 years


US$ 20 MM 10 years

AfDB loan signed:


-US$12 MM -10 years

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A Snapshot of Bank of Kigali


Key Facts The leading bank in Rwanda (32.3% market share by total assets as of December 31, 2011), offering a wide spectrum of commercial banking services to corporate, SME and retail customers As of 31 December 2011 the Bank had: Over 13,000 corporate accounts Over 73,000 retail current accounts 44 branches (29 of these outside of Kigali) 26 ATMs 602 employees 19,321 debit cards in issue Western Union Agent for International Transfers One of two Banks in Rwanda that offer International VISA cards. On average, the break-even period for new branches is less than 24 months

US$ MM 2007 2008 2009 Total Assets 225.1 216.1 265.9 Net Loans 89.4 129.0 135.0 Client Deposits 187.2 167.9 191.7 Shareholders' Equity 23.5 28.4 32.5 Net Income 7.8 10.3 9.3 Growth figures are calculated on RwF Values MARKET SHARE Total Assets 29.0% 23.4% 26.3% Net Loans 25.3% 24.4% 26.8% Client Deposits 30.6% 24.6% 25.8% Shareholders' Equity 28.3% 22.3% 26.8%
Source: Bank of Kigali Audited Financials 2007-2011

2010 332.5 170.6 228.2 53.6 10.4

2011 476.3 203.7 299.5 101.9 14.4

CAGR 20072011* 24.1% 26.1% 15.5% 48.1% 19.5%

27.4% 31.5% 25.9% 32.2%

32.4% 29.4% 28.0% 40.8%

Branch Network Evolution 60 40 20 0 11


2007

602 453 267 295 14


2008

800 600 400 200 0

303 18
2009

33
2010

44
2011

Number of Branches

Number of Employees

Growth in ATMs, POS Terminals and # of retail accounts


400 200

ATMs

POS

Retail Accounts Number ('000') 97 26 202 139 65 26 2011


18

6 0 27
0

40 30 6 2008

52 41 2009

2007

2010

CO R P O R AT E G OV E R N A N C E

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S h a re h o l d i n g S t r u c t u re
Shareholding Structure Other State Owned Entities, 0.1% Government of Rwanda, 29.8% Employees and Directors, 1.1% International Institutional Investors, 18.4%

Report date Current price, RwF Market Cap, US$ mln Free float Free float in US$ mln Average daily traded volume in US$ mln Common shares outstanding, mln shares 12-month high 12-month low P/E YE 2011 P/BV YE 2011 Ticker Code

11-May-12 125 137 45% 67 0.12 667.3 200 118 8.0 1.13 BOK

Rwanda Social Security Board, 27.6%

Retail Investors, 15.4% Regional Institutional Investors, 4.8%

Local Institutional Investors, 2.8%

Rwf/USD Exchange Rate (e-o-p) of 607.552 as at 25 April 2012 *Capital gains on the RSE transactions are exempted from Capital Gains Tax
Share Price Performance since start of trading

Price 200 175 150 125


11-Sep- 16-Sep- 21-Sep- 26-Sep-

Closing Price

Volume Weighted Average Price

Initial Price

10-Nov-

15-Nov-

20-Nov-

25-Nov-

30-Nov-

10-Dec-

15-Dec-

20-Dec-

25-Dec-

30-Dec-

13-Feb-

18-Feb-

23-Feb-

28-Feb-

14-Mar-

19-Mar-

24-Mar-

29-Mar-

100
1-Sep-11 6-Sep-11

13-Apr-12

18-Apr-12

23-Apr-12

28-Apr-12

3-Feb-12

8-Feb-12

3-Apr-12

8-Apr-12

3-May-12

11-Oct-11

16-Oct-11

21-Oct-11

26-Oct-11

31-Oct-11

14-Jan-12

19-Jan-12

24-Jan-12

29-Jan-12

20

8-May-12

1-Oct-11

6-Oct-11

5-Nov-11

5-Dec-11

4-Jan-12

9-Jan-12

4-Mar-12

9-Mar-12

C o r p o ra te G o ve r n a n c e
The Board of Directors is composed of seven independent non-executive directors (including two nonresident directors with extensive expertise in international banking practices)

The Board of Directors is approved by the Central Bank and meet on a quarterly basis or more frequently as the business demands

The Board retains full responsibility for the direction and control of the Bank as spelled out in the Memorandum and Articles of Association, the Board Charter and the corporate governance guidelines

The Board sub-committees have clear TORs which underscore the scope and context of their performance as approved by the Board & corporate governance regulation

The Board receives detailed financial information and regular presentations from the management on the Banks business performance. This enables the Directors to make informed decisions on governance, strategic, financials and operational issues
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B U S I N E S S OV E RV I E W

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Overview of the Loan Book


Gross Loan Portfolio Rwf Bn
140 120 100 80 60 40 20 0 2007 2008 2009 Corporate Retail 2010 2011 Corporate Loans Retail Loans Corporate Loans Retail Loans 45.9

Loan Book Segmentation


130.7

CAGR 23.3%
105.5 78.8 56.6
10.8 65.2 66.9 13.6

31 December 2011

31 December 2010

80.9
20.7 14.0 84.8

41.2 31.5%

19.7%

89.5 68.5% 80.3%

Source: Bank of Kigali Corporate Loan Book, 31st December 2011


Others 9% Transport & Communic ation 7% Manufactu ring 10% 0-50 million, 9.8%
Top 10 Corporate Loan, 25.5%

50M100Million , 8.2%

Over 1 Billion, 36.0%

Commerce, restaurants & hotels 45% Source: Bank of Kigali

Constructio n 29%

100M-500 Million, 34.2%

500M-1 Billion, 11.8%

Other Corporate Loan, 74.5%

Top 10 Corporate Loan

Other Corporate Loan

Corporate Loans: RWF 89.5 Bn

Customer Deposit Base


Customer Deposits Growth RwF Bn 200.0 180.0 160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 Customer Deposit Segmentation
31 December 2011 31 December 2010

CAGR= 15.5% 135.7 101.9


23.9 78.0

181.0
54.2 29.9% 36.4 99.3 126.8 70.1% 26.8% 73.2%

93.8
24.2 69.6

109.5
27.8 81.6

2007
Source: Bank of Kigali

2008

2009 Retail

2010

2011 Corporate Deposits Retail Deposits Corporate Deposits Retail Deposits

Corporate

Structure of Deposits, 31st December 2011


CB Term Deposit s, 27.1% RB Term Deposit s, 12.6% RB Savings Deposit s, 1.5%

Customer Deposits Concentration


31 December 2011 31 December 2010 Large depositors* 22.4%

CB Deman d Deposit s, 69.2%

Large Deposi tors*, 14%

CB Collate ral Deposit s, 3.7%

RB Deman d Deposit s, 85.8%

Other, 86%

Other 77.6%

Corporate: RWF 126.8 Bn

Retail: RWF 54.2 Bn

Notes: * depositors with total balances above 5% of shareholders equity of BoK Source: Bank of Kigali
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Corporate Banking
Description Clients include corporate, SMEs and NBAs* Interest rates were in the 15.0%-17.25% range as of December 2011 Key products: CAPEX loans: long-term loans for investment or expansion of the business Commercial mortgage loans: typical customer participation at 30% of property value, typical tenor of up to 10 years Working capital loans: financing business needs to an agreed limit for a short period (usually <1yr) Overdrafts
Tolirwa

Key Segments
Corporate Loans: RWF 89.5 Bn 4.1% 10% 11% Corporate Deposits: Rwf 126.8

24.6%

71.4% 79%

Corporate

SMEs

NBAs

Corporate

SMEs

NBAs

Strategy Introduce new services, integrate client coverage Grow and consolidate market share Leverage superior lending capacity Focus on payroll services
*NBAs (Non Business Associations) includes Non-Profit Organizations, Charities, Religious institutions, Educational Institutions, Cooperatives,etc

Number of Corporate Accounts 12,000 10,000 8,000 6,000 4,000 2,000 2007 2008 Loans Accounts 2009 2010 Deposits Accounts 2011 1,619 1,823 1,567 4,813 5,236 4,968 5,873 4,234 2,757 9,921

Merez Petroleum

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Executing the Retail Strategy

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Retail Banking
Description The Banks retail business is primarily focused on mortgages and consumer loans with notable share of overdrafts Key products: Mortgage loan: up to 10 years with typical customer participation at 30% of property value Consumer loan: up to 12x monthly salary and 48 months Overdraft: up to 50% of monthly salary (normally repaid in 30 days) Other products include credit cards and asset leasing Strategy: Build a ubiquitous branch footprint throughout the country Build sufficient channel capacity to be able to service 500,000+ clients by 2015 Build out the retail product lineup to achieve relevance to the daily lives of the banked population Expand credit card/debit card offering to other providers (MasterCard, Amex etc) Our Products 100,000 80,000 60,000 40,000 20,000 Source: Bank of Kigali

Key Segments Retail Loans: RWF 41.2 Bn 5.1% Retail Deposits: RWF 54.2 Bn

12.6%

1.5%

40.1%

44.3%

85.8%

10.5%

Consumer loans Mortgages

Overdrafts Other

RB Term Deposits RB Demand Deposits

RB Savings Deposits

Number of Retail Accounts

76,810 61,919 49,712 18,419 8,199 2007 20,579 9,145 2008 Loans 29,081 11,524 15,131

2009 Deposits Accounts


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2010

2011

Growing our Distribution Network


Ubiquitous footprint Increasing functionalities of our delivery channels

Branches
150 100 50 0 2011 2012P 2013P 2014P 2015P 2016P 44 56 77 89 101

2012 Targets
Cash out and Cash in at Point of sale merchants Deposit taking ATMs Card less Transactions at ATMs through our mobile banking and mobile wallet

65

Agency Banking Recruitment of 400 existing businesses as agents in underway

200 150 100 50 0 2011 2012P 26 86

ATMs
115 125 145

165

Agents will be able to perform cash in and cash out transactions, account opening and micro loan applications and disbursement. Introduce 20 BK owned agent kiosks in high traffic areas

2013P

2014P

2015P

2016P

Partnership with Telecos for our clients to transact at their agents

5000 4000 3000 2000 1,000 1000 0 202

POS
3,400 2,650 1,850

4,100

Other Initiatives Launch of mobile vans. So far 5 mobile vans have been ordered for 2012 Become super agents for mobile telecos to attract their customers to BK and increase cross selling opportunities
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2011

2012P

2013P

2014P

2015P

2016P

Expanding our self service products


Growing our Card Business Increasing our Mobile product offering Attractive Products

2011 Achievements
Issuing of approximately 40,000 VISA Electron cards Interoperability of our ATMs with VISA Electron and local proprietary Cards

1. Enhancing our mobile banking service


In 2011, the Bank upgraded its SMS banking service to a mobile banking service allowing customers to perform the following transactions: Purchasing prepaid TV, airtime and electricity Check Balances and Bank information

2012 Targets
AMEX acquiring. (CUP and Diners Club acquiring have already been completed) Launch of three new card products VISA Prepaid VISA Classic (Credit Card) VISA Gold (Credit Card) Launch of E-commerce

Order cheque books

2. Launching our mobile payment platform


This platform will enable our clients to make purchases at selected merchants using their mobile phones Expected Launch Date: June 2012

3. Launch of mobile wallet


Issuing of a mobile wallet that is either linked to a current account or not linked to a current account Wallet will enable our customers to store cash and transact at our ATMs and agents
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Refreshing Product and Service Line Up


New Business Lines

1. Teleco mobile money agency Super agent for the two telcos and expect to sign with 3rd operator after they launch All the 46 branches will be agent for the telco mobile money Virtual money customers can deposit, withdraw and transfer at any of the BK branches countrywide 2. Establishing BK Securities subsidiary BK custody has over 60% of the local investors The securities brokerage services will offer our investors seamless services
Grow Retail Product Offering

1. Loan Products Top Up Mortgages Leisure loans to tap the growing middle class Payroll Loans: Leveraging our corporate clients payrolls 2. Remittances Grow our Western Union market share from 36% to 40% Increase functionality of Western Union to enable direct transfers to current accounts and mobile wallets Harmonize BK tariff structure with the region to increase competitiveness
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REVIEW OF FINANCIAL P E R FO R M A N C E 2 0 1 1

Balance Sheet Highlights


Total Assets Total Liabilities Rwf bn

Rwf bn
350.0 300.0 250.0 197.7 200.0 151.9 150.0 100.0 50.0 0.0 2007 2008 2009 2010 2011 121.5 120.8

CAGR - 24.1%

250.0 287.9 200.0 150.0 100.0 50.0 0.0 2007

CAGR- 20.1%
165.8 133.3 108.7 104.9

226.3

2008

2009 Net Loans

2010

2011

Shareholders Equity Rwf bn Rwf bn 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 2007 2008 2009 2010 2011 12.8 15.9 18.5 40.0 20.0 0.0 2007 2008 31.9 140.0

CAGR- 26.1%
101.4 72.1 48.7 77.1

123.1

CAGR - 48.1%

61.6

120.0 100.0 80.0 60.0

2009

2010

2011

Asset Quality
NPLs Coverage Rwf Bn 12.0 10.0 8.0 6.0 4.0 2.0 0.0 7.5 2007 9.2 2008 5.8 2009 8.1 2010 10.1 2011 72.6% 55.3% NPLs 57.1% Coverage ratio 69.1% 45.8% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2007 2008 2009 2010 2011
Notes: * LLP charge / Average gross loans for period

Cost of Risk*, % 3.8%

2.5% 1.9% 1.1% 0.4%

Loan Book Quality (NPLs %) 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2007 2008 2009 2010 2011
Source: Bank of Kigali Audited IFRS Statements 2007-2010, Bank of Kigali Unaudited IFRS Statements 2011

NPLs by segment
31 December 2011 31 December 2010

Collateral Structure
Cash Cover 7% Guaran tees 9%

19.4% 15.4%
Retail , 16%

Unsecu red 20%

Retail , 25%

8.3%

8.5%

8.3%
Corpo rate, 75% Corpo rate, 84%

Unregi stered 12%

Real Estate 52%

33

Funding
Funding Structure, %
31 December 2011 31 December 2010

Liquidity Ratios

Ratios
Net Loans/Customer Deposits Net Loans /Total Assets

2007
47.8%

2008
76.8%

2009
70.4%

2010
74.7%

2011
68.0%

9.1% 21.4% 62.9% 9.6% 6.6%

5.7%

16.1%

40.1% 35.9%

59.7% 34.7%

50.8% 42.1%

51.3% 43.9%

42.8% 60.8%

68.6%

Liquidity Ratio

Deposits Due to Banks Shareholders Equity

Deposits Shareholders Equity

Due to Banks Other

CAR, %
30.0% 25.0%

Highlights 29.1%

Deposits are the primary source of funding with share of deposits exceeding 60% as at December 2011.

19.9%
20.0%

20.1%

The Bank has also signed two long-term credit lines with the European Investment Bank and the French Development Agency worth 5 million for 7 years and $20 million for 10 years respectively. In 2011, a third credit line was signed with the African Development Bank worth $12 million for 10 years. The Bank had drawn down EUR 2.6m & USD 5.0m on the EIB & AFD

14.0%
15.0% 10.0% 5.0% 0.0%

14.9%

2007

2008

2009

2010

2011

loans respectively by December 2011

Source: Bank of Kigali audited IFRS Statements


34

2011 Performance Highlights


Net Interest Income
RwF bn 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0
-

Net Non-Interest Income


RwF bn

Total Operating Income


RwF bn 35.0 30.0

+36%

16.6

14.0 12.0

+43%

12.9

+39% 29.5 21.2

12.2

10.0 8.0 6.0 4.0 2.0


-

9.0

25.0 20.0 15.0 10.0 5.0

2010

2011

2010

2011

2010 2011

Total Recurring Operating Costs


RwF bn 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 2010 2011 10.1 +42% 14.3 RwF bn 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 -

Profit Before Provisions


RwF bn +37% 11.1 15.2 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 -

Net Income
+40%

8.7

6.2

2010

2011

2010

2011

Income Statement Highlights


Total Operating Income 35.0 30.0 25.0 20.0 14.3 15.0 11.1 10.0 5.0 0.0 2007 2008 2009 2010 2011
Net interest income Fees & Commisions FX gains Other non- interest income Net interest income Fees & Commisions FX gains Other non- interest income

Composition of Total Operating Income


31 December 2011 31 December 2010

CAGR- 27.5%

29.5 21.1 16.0

3.0%

6.7%

26.0% 56.3% 14.7%

24.8% 55.1% 13.3%

Total Operating Costs 16.0 14.2 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2007 2008 2009 2010 2011 4.4 17.1% 5.7 7.1

Composition of Total Operating Expenses


31 December 2011 31 December 2010

CAGR- 34.1%
10.0 33.1% 49.8% 34.5% 50.2%

15.3%
Personnel expenses Depreciation and amortization Other operating expenses
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Personnel expenses Depreciation and amortization Other operating expenses

Profitability
Net Interest Margin, % 10.0% 9.5% 9.5% 9.0% 9.0% 8.5% 8.0% 7.5% 2007 2008 2009 RoAE, % 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 37.5% 39.4% 30.7% 24.5% 18.6%
SA average: 14.4% Nigeria average: 10.4% Nigeria average: 6.8% SA average: 6.8%

Cost / Income, %
Nigeria average: 67.3% SA average: 59.1%

60.0% 50.0% 40.0% 39.5% 44.1% 39.8%

47.5%

48.4%

8.4% 8.2% 8.3%

30.0% 20.0% 10.0% 0.0%

2010

2011

2007

2008

2009 RoAA, %

2010

2011

Nigeria average: 1.5%

5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0%

4.7% 4.1% 3.9% 3.5%

SA average: 1.1%

3.6%

2007

2008

2009

2010

2011

Source: Bank of Kigali Audited IFRS Statements 2007-2010, Bank of Kigali audited IFRS Statements 2011, African Alliance Research 2012

2007

2008

2009

2010

2011

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ST R AT EG I C O U T LO O K

Strategic Outlook
Objectives Strategies
Build a ubiquitous branch footprint throughout the country Build sufficient channel capacity

Action
Expand the branch network to 60+ branches by YE 2013 Increase the number of ATMs, POS terminals and cards outstanding Build a modern and scalable mobile banking and Internet banking platforms Alternative client acquisition & service channels (retail chains, cobranded cards, utilities, etc) Flexible, offset, variable-rate, etc mortgages Full range of consumer loan products Revolving credit cards Payroll & pension-backed loans & overdrafts Microfinance Modern, multi-currency current accounts with debit cards Ubiquity of ATMs and POS terminals in urban centers and reasonable proximity elsewhere Payment & e-wallet solutions Full range of deposit products

Outcomes
Benefit from first-mover advantage outside the capital city, making it more difficult for the competitors to follow suit Reach out to the unbanked (but bankable) population Become the bank of choice and convenience for the middle class and youth entering the employment sector Create capacity to service 500,000+ clients Maximize the product-to-client ratio Grow with clients Valuable source of retail clients through payroll programs Growth of loan book and F&C income

Customer Growth in terms of current accounts

Expand retail product offering

Increase the loan to deposit ratio to 60% Increase retail loans penetration

Asset Growth of 30%

Consolidate the leading position in corporate banking Increase the maturing profile of liabilities Create a universal banking platform

Integrated client coverage Leverage the superior lending capacity Cross-selling opportunities Documentary opps & trade finance, FX, other solutions Rep offices in EAC from 2012 Leverage the superior access to wholesale funding to complement the deposit funding base

Diversification of funding base Expand the share of higher-margin lending Maximize the cross-sell opportunities Grow the share of retail in the loan book up to 30%-40% in the medium term

Reduce maturity gap Enable further expansion of long-term lending Further diversification of revenue streams

Private Banking, Securities, Insurance

Return on Average Equity > 20%

Maintain profitable growth

Continuous improvement of risk management policies & procedures Disciplined capital management, medium term target CAR of 15%-17% and ROE of 20%+, implying ROA in the 3.5% range

No profitability sacrifices for the sake of market share gains Sensible dividend policy as the growth curve flattens out over time

Management Targets 2012


Total Assets Growth 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 2011 2012P 10% 0% 2011 Branch expansion 60 50 40 19% 19% 18% 18% 2011 2012P 30 20 10 0 2011 2012P
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Gross Loans/Total Assets 70% 60% 60% 30% 50% 40% 30% 20% 45%

Other Management targets

46%

Launch representative offices within the EAC region

Launch agency banking

Launch Premier Banking - targeting 500 clients by YE 2013


2012P

Return on Average Equity 21% 20% 20% 20% 19%

Revamp the existing digital wallet/mobile banking


56

distribution channel

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Key Investment Highlights


Politically stable country with sound governance Very attractive demographic profile: population of 10.8million with 83% below the age of 40 Sound Macro Fundamentals Robust economic growth of 4.1%-11.2% between 2006-2010 and 8.8% expected for 2011 Moderate inflation: Maintained single digit inflation at 8.3% in 2011 vis--vis East African Community Partners Very friendly business environment, recognized as the 2nd most reformer globally 2005-2011 in World Bank Doing Business Report Significant headroom for growth given low banking penetration Significant Banking Sector Potential Total assets/GDP of 23% Large unbanked population of approximately 80% Well regulated banking sector: fairly conservative regulator relative to regulators in the East Africa region Market leadership by Total assets (RWF 287,900 million as of 31 Dec 2011) 32.4% market share Market Leadership Net Loans (RWF 123,131 million as of 31 Dec 2011) 29.4% market share Deposits (RWF 181,020 million as of 31 Dec 2011) 28.0% market share Shareholders equity (RWF 61,584 million as of 31 Dec 2011) 40.8% market share Conservative Business Model Relatively high capital adequacy ratios ranging from 14.0% - 28.1% between 2007 and 2011 Manageable level of non-performing loans 8.3% of gross loans in December 2011, down from 19.4% in 2007 Loans to deposit ratio range of 54.8% - 72.7% between 2007 and December 2011. Experienced Management Team Management team with combined banking sector experience of 79 years Complemented by an experienced and diversified Board of Directors Track record of producing stellar results Profitable Growth Robust asset growth at a CAGR of 24.4% to RWF 287,900 million (2007-2011) ROAA ranging from 3.0% - 4.1% between 2006 and 2011
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Contact Information
For information please contact: Lado Gurgenidze Chairman of the Board Email: lgurgenidze@bk.rw Mobile: +995 599 477 272 Lawson Naibo Chief Operating Officer Email: lnaibo@bk.rw Mobile: +250 78 830 2076 Shivon Byamukama Company Secretary Email: sbyamukama@bk.rw Mobile: +250 78 838 4547 James Gatera Chief Executive Officer Email: jgatera@bk.rw Mobile: +250 78 814 3000 John Bugunya Chief Finance Officer Email: jbugunya@bk.rw Mobile: +250 78 830 6100 Linda Rusagara Investor Relations Officer Email: lrusagara@bk.rw Mobile: +250 784 300 334

Visit our website, www.bk.rw, or follow us on Scribd to access our Investor Presentations, Press Releases and Annual Reports.
Telephone number: +250 252 593100. Address: Plot 6112, Avenue de la Paix, Kigali Rwanda

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