Bank of Kigali Investor Presentation 1H2012

BANK OF KIGALI

INVESTOR PRESENTATION

1H 2012

Bank of Kigali Investor Presentation Page 1

1H 2012

DisclaimerThis 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


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 Bank’s 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 forward-

looking statements whether as a result of new information, future events, or otherwise.

Presentation Team

J a m e s G a t e r aC h i e f E x e c u t i v e O f f i c e rE m a i l : j g a t e r a @ b k . r wT e l : + 2 5 0 2 5 2 5 9 3 1 2 1

L a d o G u r g e n i d z eC h a i r m a n o f t h e B o a r dE m a i l : l g u r g e n i d z e @ b k . r wM o b i l e : + 9 9 5 5 9 9 4 7 7 2 7 2

l a d o . g u r g e n i d z e . 2 0 0 8


L a w s o n N a i b oC h i e f O p e r a t i n g O f f i c e rE m a i l : l n a i b o @ b k . r wM o b i l e : + 2 5 0 7 8 8 3 0 2 0 7 6

J o h n B u g u n y aC h i e f F i n a n c e O f f i c e rE m a i l : j b u g u n y a @ b k . r wM o b i l e : + 2 5 0 7 8 8 3 0 6 1 0 0

Agenda

1. Key Investment Highlights

2. Country Overview Information

3. Banking Sector Overview

4. Bank Overview

5. Corporate Governance


5. Corporate Governance

6. Business Overview

7. Review Of Financial Performance In 1H 2012 & 2011

8. Strategic Outlook

9. Contact Information

Sound Macro

Fundamentals

Politically stable country with sound governance

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

Moderate inflation: Maintained single digit inflation at 8.3% in 2011 vis-à-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

Total assets/GDP of 23%

Large unbanked population of approximately 80%

Well regulated banking sector: fairly conservative regulator relative to regulators in the EAC

Market leadership by

Total assets (RwF 312.8 billion as of 30 June2012) – 31.6% market share

Net Loans (RwF 142.6 billion as of 30 June2012) – 28.0% market share

Significant

Banking Sector

Potential

Market

Leadership

Key Investment Highlights

2. Bank of the Year 2009-

2011

3. Best Bank in Rwanda

2009-2011

1. Best East African Bank

2012


Net Loans (RwF 142.6 billion as of 30 June2012) – 28.0% market share

Customer Deposits (RwF 209.7 billion as of 30 June 2012) – 28.8% market share

Shareholders’ equity (RwF 63.3 billion as of 30 June2012) –41.1% market share

Relatively high capital adequacy ratios ranging from 14.0% - 29.1% between 2007 and YTD 2012

Manageable level of non-performing loans – 6.5% of gross loans in 1H 2012, down from 19.4% in

2007

Loans to deposit ratio range of 54.8% - 72.7% between 2007 and 1H 2012.

Leadership

Conservative

Business

Model

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% (2007-2011) to RWF 312.8 billion in 1H 2012

ROAA ranging from 3.0% - 4.0% between 2006 and 1H 2012

5. A+/A1 Credit Rating

“The rating reflects the Bank’s

established domestic franchise

value, strong capital position, its

systemic importance, strong asset

quality and financial performance.”

GCR

4. Company of the Year

2011 by Kenyan

Institute of

Management


COUNTRY OVERVIEW INFORMATION

Rwanda – Country Profile

Nominal GDP (2011) US$ 6.4 billion

Nominal GDP Per Capita (2011) US$595

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

Area 26,338 sq km

Population (2010) 10.7 million

Official Languages Kinyarwanda, French, English

Capital Kigali

Currency Rwandan Franc (RWF)

Credit Rating B/Stable (Fitch Ratings)

B/B (Standard & Poors)

Business Environment

Macro Economic Indicators

National Facts


7

Real GDP Growth Rate 2011 8.6%

Real GDP Growth Rate 2012E 7.6%

Inflation Rate (July 2012) 7.3%

Private Sector Credit Growth (2011) 28.4%

External Debt to GDP (2011) 15.4%Currency Depreciation against USD (Year to

June 2012) 1.4%

FDI as % of GDP (2011E) 1.9%

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

GDP per Capita continues to grow Population Pyramid for Rwanda, 2011

Sound Macro Fundamentals

20-39

40-59

60 and above

9.2 9.6 9.8 10.1 10.4 10.7

333391

479 519 540

595

0

100

200

300

400

500

600

700

0

2

4

6

8

10

12

2006 2007 2008 2009 2010 2011

US $Mln

Population Nominal GDP Per Capita


3.1 3.7 4.7 5.2 5.6 6.4 6.6

8.8% 9.1%

15.4%

10.3%

2.3%

8.3%7.5%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

0

1

2

3

4

5

6

7

2006 2007 2008 2009 2010 2011 2012E

US$ Bn

Nominal GDP (US$ Bn) Inflation (%)

Healthy GDP growth with moderating inflation

Source: National Institute of Statistics RwandaSource: Ministry of Finance and Economic Planning, IMF

54% of the population is under 19 years.

83% of the population is under 40 years.

3% of the population over 65 years.

30.0% 20.0% 10.0% 0.0% 10.0% 20.0% 30.0%

0-19

Female % Male %

GDP Breakdown By Economic Activity 2011

Macroeconomic Indicators

Rwanda’s exports are dominated by coffee, tea and

minerals(tin, coltan and wolfram).

The country remains a net importer. Major imports include

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

imports for Dec 2011

Agriculture,

31.9%

Real

estate, business

Transport,

storage,

communication,

7.5%

Manufacturing,

6.6%

Education,

5.5%

Transport,

storage,

communication,

7.5%

Finance,

insurance,

2.8%

Mining and

quarrying, 1.3%

Trade Structure


12%11% 10%

14% 15%

11%

14% 15%13%

0%

5%

10%

15%

20%

2003 2004 2005 2006 2007 2008 2009 2010 2011

Current Account As a % of GDPTrade Deficit As A % Of GDP

9

Source: NBR Monetary Policy Statement

Source: Ministry of Finance and Economic Planning, IMF

imports for Dec 2011

4%

9%

12% 13%

17%

0%

5%

10%

15%

20%

2007 2008 2009 2010 2011

Current Account Deficit as a % of GDPSource: National Institute of Statistics Rwanda

Source: National Institute of Statistics Rwanda

Wholesale and

retail

trade, 12.9%

Construction,

8.3%

estate, business

services, 8.0%

Macro Economic Review

Review of the Macro Economic Environment Year to June 2012

The country’s GDP continues to perform well, in line with the

annual real GDP growth projections.

In Q1 2012, real GDP increased by 7.7% boosted by the high

increase in services (+14%) despite moderate performance in

industry (1%) and agriculture (3%).

The annual headline inflation decelerated to 5.92% in June

from 8.18% in March 2012 and 8.34% in December 2011.

However inflation during the period fluctuated around 8% on

annual basis, mainly driven by food and energy prices.

The Central Bank policy rate was increased in May 2012 from

Inflationary Environment Year to Date

8.3%

7.8%

7.9%

8.2%

7.0%

8.3%

5.9%

7.3%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

December

2011

January

2012

February

2012

March

2012

April 2012 May 2012 June 2012 July 2012

Exchange Rate Developments Year to Date

Bank of Kigali Investor Presentation Page 10 10

The Central Bank policy rate was increased in May 2012 from

7.0% to 7.5%.

Exports value increased by 25.1% during the first half of 2012

on annual basis, against 22.1% for imports.

The imports cover improved to 18.7% in the first half of 2012

from 18.2% in the corresponding period of the last year.

Exchange Rate Developments Year to Date

-1.6% -1.5%

0.4%

3.9%

2.0%

5.8%

-1.3%

-2.5%

2.1%

-1.6%

-2.5%-2.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

USD GBP EURO Uganda

Shillings

Kenya

Shillings

Tanzania

Shilling

2011 1H 2012


BANKING SECTOR OVERVIEW

2011 Banking Assets/GDP Large Unbanked Population

Economy is still cash based with bank accounts being used

mostly for cash deposits and withdrawals

Approximately 20% of the population is banked

90% of banked adults have a product with UBPR or credit

unions

2011 Banking Assets Per Capita 5

Significant Banking Sector Potential

(US$)

Source: Finscope Rwanda 2008

Prudential Regulations

CAR (Tier One) 10%

33%

50%

70%

Uganda*

Tanzania*

Kenya* 534

274

165

Kenya

Tanzania

Uganda


(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 Tanzania and Uganda

Total CAR 15%

Liquidity Ratio 20%

Reserve Requirement 5% of total deposits

Lending in foreign currency Restricted to exporters

25%

33%

Rwanda

Uganda* 165

124

Uganda

Rwanda

Banking Sector Overview

Rwanda Banking System Total Assets

Banking Sector Review 1H 2012

Source: NBR Monetary Policy & Financial Stability Report 2011

Interest Rate Analysis

0.0%2.0%4.0%6.0%8.0%

10.0%12.0%14.0%16.0%18.0%

De

c

Jan

Feb

Ma

r

Ap

r

Ma

y

Jun

Jul

Au

g

Sep

Oct

No

v

De

c

Jan

Feb

Ma

rch

Ap

ril

Ma

y

Jun

e

2010 2011 2012

Key Repo Rate T-Bills Rate

Deposit Rate Lending Rate

856 922

1,011

1,226

1,474

1,636

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

1,600.0

1,800.0

2007 2008 2009 2010 2011 1H 2012

USD mln


Banking Sector Review 1H 2012 Recent Regulatory Reforms To Improve Access To Cre dit

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 computerised 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

13

As at end June 2012, Tier 2 ratios stood at 25.4% (YE 2011: 25%) well above

the regulatory minimum of 15%. The sector’s liquidity position stood at 48.3%

in June 2012 (YE 2011: 45.3%).

The sector profitability remained good decreasing slightly by 0.4%, from RWF

13.4 billion in June 2012.

Credit to the private sector increased by 18.1%. The distribution of credit to

private sector is dominated by the construction sector (26.8%), commerce

, restaurants and hotel (31.5%) and retail lending(15.4%)

The quality of assets improved significantly as the Non-performing loans

(NPLs) to total gross loans reduced to 6% in June 2012 (YE 2011: 8%).

Timeline Of Foreign Investment In The Rwandan Banking Sector

2004 2006 2007 2008 2009 2010 2011 2012

80% stake

in BCR

40% stake in Cogebanque Actis sells 80% stake in

BCR to I&M Bank


2008 2009 2010 2011 1H 2012

Bank of Kigali Market Share by Total Assets 23.4% 26.4% 27.4% 32.3% 31.6%

30%

stake in

BPR

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

Top three “local”

banks, 50.5%

Six foreign-

controlled banks,

49.5%


banks, 51.7%

Five foreign-

controlled

banks, 48.3%

Market Share By Total Assets In 1H 2012


banks, 50.4%

Six foreign-

controlled banks,

49.6%


Page 15

Source: the National Bank of Rwanda, company estimates

BANK OF

KIGALI

UBPR

BANK OF

KIGALI

BPR

BANK OF

KIGALI

UBPR

Competitive Landscape

Market Share Dynamics

Source: NBR Supervision Department, BK Company Filings and Published results of Banks

Banking Sector Growth Vs Bank of Kigali Growth

45.6%

21.4%

33.4%

93.2%

23.0%29.9%

23.8%

52.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Total Assets

Growth

Net Loan Book

Growth

Client Deposits

Growth

Shareholders'

Equity

Bank of Kigali Growth in 2011 The Rwandan Banking Sector Growth in 2011

26.4% 26.8%25.8%

26.7%27.4%

31.5%

25.9%

32.2%32.3% 29.4% 28.1%

41.9%

31.6%28.0%

28.8%

41.1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Total Assets Net Loans Customer Deposits Shareholders' Equity

% 2009 2010 2011 1H 2012


16

Concentration of Banking Sector AssetsSelected Indicators 1H 2012

Source: Published Bank Results

31 December 2011

Top 5

Banks,

78.6%

Others,

21.4%

Source: NBR Supervision Department, BK Audited Full Year 2011 Results, BK 1H 2012 Reviewed results

30 June 2012

6.0%

2.3%

10.9%

6.5%4.0%

19.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

NPLs/Gross Loans Return on Average

Assets

Return on Average

Equity

Asset Quality Annualised Profitability ratiosBanking Sector BK

Top 5

Banks,

79.5%

Others,

20.5%

Bank Of Kigali Is The Market LeaderRank Total Assets Net Loans Customer Deposits Equity

31.6%

BANK OF KIGALI

BPR

19.1%

ECOBANK

10.8%

BCR

10.0%

8.0%

1

2

3

4

5

28.0%

BANK OF KIGALI

28.8%

BANK OF KIGALI

41.1%

BANK OF KIGALI

BPR

23.4%

BPR

20.4%

BPR

14.5%

BCR

9.0%

ECOBANK

10.4%

BCR

9.6%

9.2% 8.2% 6.6%

ECOBANK

11.8%

BCR

9.9%

ECOBANK

8.6%


Source: Published 1H 2012 Financial Statements of Commercial Banks reviewed in accordance with BNR guidelines

COGEBANQUE

8.0%

FINA BANK

7.0%

KCB

7.1%

ACCESS BANK

4.3%

5

6

7

8

COGEBANQUE

9.2%

ACCESS BANK

2.5%

KCB

8.5%

ACCESS BANK

4.8%

COGEBANQUE

8.2%

FINA BANK

7.6%

KCB

7.0%

COGEBANQUE

6.6%

FINA BANK

4.9%

KCB

6.6%

ACCESS BANK

4.5%

FINA BANK

7.2%

9

EQUITY BANKEQUITY BANK EQUITY BANK EQUITY BANK

4.0%2.1% 1.1% 1.4%


BANK OVERVIEW

Background And History

A+ credit rating by

GCR (Global Credit

Rating)

20112006

Established in 1967

as a JV with

Belgolaise S.A

1967

Current

management team

assembled

2007 2009

Supervisory Board

enhanced &

internationalised

2010

US$62.5 mln

Initial Public

Offering of 45%

of its shares and

listing on the RSE

2007


2011

Government of

Rwanda acquired

50% stake from

Belgolaise becoming

100% shareholder

20061967 2007

New strategy

focusing on the

universal banking

business model and

profitable growth

adopted

2009 2010

EIB loan signed:

‒ EUR 5 MM

‒ 7 years

AFD loan signed:‒ US$ 20 MM

‒ 10 years

AfDB loan signed:

-US$12 MM

-10 years

2007

Key Facts

A Snapshot Of Bank Of Kigali

The leading bank in Rwanda (31.6% market share by total assets as of 30

June 2012), offering a wide spectrum of commercial banking services to

corporate, SME and retail customers

As of 30 June 2012 the Bank had:

Over 24,000 corporate accounts

Over 163,000 retail current accounts

56 branches

39 ATMs

797 employees

32,724 debit cards in circulation

Western Union Agent for International Transfers

One of two Banks in Rwanda that issue International VISA cards.Branch Network Evolution

Source: Bank of Kigali Audited Financials 2007-2011

US$ million 2007 2008 2009 2010 2011 1H 2012

CAGR

2007-

2011* Rwf/USD Period End rate 547.7 560.0 573.2 594.4 604.4 612.4

Total Assets 221.8 215.7 264.9 332.6 476.3 510.8 24.1%

Net Loans 88.8 128.7 134.5 170.6 203.7 232.9 26.1%

Client Deposits 186.0 167.6 191.0 228.3 299.5 342.4 15.5%

Shareholders' Equity 23.4 28.4 32.3 53.6 101.9 103.3 48.1%

Net Income 7.8 10.1 9.2 10.4 14.4 9.8 19.5%Growth figures are calculated on RwF Values.

MARKET SHARE

Total Assets 29.0% 23.4% 26.4% 27.4% 32.3% 31.6%

Net Loans 25.3% 24.4% 26.8% 31.5% 29.4% 28.0%

Client Deposits 30.6% 24.6% 25.8% 25.9% 28.2% 28.8%

Shareholders' Equity 28.3% 22.3% 26.8% 32.2% 41.9% 41.1%


One of two Banks in Rwanda that issue International VISA cards.

20

Growth in ATMs, POS Terminals and # of Retail Curre nt accounts

11 14 18 33 44 56

267 295 303453

602

797

0

200

400

600

800

1000

0

20

40

60

2007 2008 2009 2010 2011 1H 2012

Number of Branches Number of Employees

6 26 26 3952 97202

292

34 57124 163

0

500

2009 2010 2011 1H 2012

ATMs POS Retail Current Accounts('000')


CORPORATE GOVERNANCE

Sharehold ing Structure & Corporate Governance

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 or more frequently as the business demands

The Board sets the strategy and 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

Shareholding Structure

Government of

Rwanda,

29.8%

Retail

Investors, Local

Institutional

International

Institutional

Investors,

14.0%

Regional

Institutional

Investors,

4.2%

Blackeney

Management,

7.8%

Employees and

Directors, 1.0%

Corporate Governance


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 Bank’s business

performance, this enables the Directors to make informed

decisions on governance, strategic, financials and operational

issues

Investors,

13.5%Rwanda Social

Security

Board, 26.9%

Institutional

Investors,

2.8%

Free float- 45%

Share Trading Performance

3 September 2012

Current price, RwF 130

Market Cap, US$ mln 141

Free float 45%

Free float in US$ mln 66.5

Average daily traded volume in US$ mln 0.13

Common shares outstanding, mln shares 667.3

12-month high 191

12-month low 118

P/E YE 2012F 7.2x

P/BV YE 2012F 1.4x

Dividend yield, 2011A 5.2%

Dividend yield, 2012F 7.7%

Ticker Code BOK

Bloomberg BOK. RW

Recommendation: BUY

Target Price: Rwf 180

Recommendation: ACCUMULATE

Fair value: Rwf 134

Analyst Coverage

Bank of Kigali Investor Presentation Page 23 23

Share Price Performance since start of trading

Rwf/USD Exchange Rate (e-o-p) of 614.6 as at 3 September 2012

*Capital gains on the RSE transactions are exempted from Capital Gains Tax

100115130145160175190

1-S

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-12

31

-Au

g-1

2

Price

Closing Price Rwf Volume Weighted Average Price Rwf Initial Price Rwf


BUSINESS OVERVIEW

45.965.2 66.5

84.8 89.5 102.310.8

13.6 14.4

20.741.2

47.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

2007 2008 2009 2010 2011 1H 2012

Corporate Loans Retail Loans

56.6

78.880.9

105.5

130.7CAGR 23.2% 149.2

68.5%

31.5%

Corporate Loans Retail Loans

Gross Loan Portfolio Loan Book Segmentation

Overview Of The Loan Book

RwF Bn

Corporate Loan Book, 30 June2012

Source: Bank of Kigali

31 December 201130 June2012

68.5%

31.5%


Corporate Loan Book, 30 June2012

Source: Bank of KigaliCorporate Loans: RWF 102.3 Bn

Top 10

Corporate

Loan,

21.2%

Other

Corporate

Loan,

78.8%

Over 1

Billion,

25.7%

500M-1

Billion,

12.2%

100M-

500

Million,

39.5%

50M-

100Millio

n, 10.1%

0-50

million,

12.5%

Construction

, 40.1%

Manufacturi

ng

Industries,

4.6%

Commerce,

32.6%

Education,

1.1%

Hotels and

Restaurants,

11.2%

Transport,

Warehousin

g and

Communicat

ion, 4.9%

Agriculture,

3.6%Others

, 1.9%

78.0 69.6 81.6 99.3 126.8 146.8

23.924.2

27.8

36.4

54.2

62.9

0.0

50.0

100.0

150.0

200.0

250.0

2007 2008 2009 2010 2011 1H 2012

RwF bn

181.0

135.7109.793.8101.9

CAGR - 15.5%209.7

Customer Deposits Growth

Customer Deposit Base


Customer Deposit Segmentation

70.1%

29.9%

31 December 201130 June 2012

70.0%

30.0%

Corporate Deposits Retail Deposits


Structure of Deposits, 30 June 2012 Customer Deposits Concentration

26

Corporate: RWF 146.8 Bn Retail: RWF 62.9 Bn

Notes: * depositors with total balances above 5% of shareholders’ equity of BoK


Large

Deposit

ors*,

14%

Other,

86%


71.3%

2.2%

26.5%

CB Demand Deposits

CB Collateral Deposits

CB Term Deposits

12.8%1.7%

85.5%

RB Term Deposits

RB Savings Deposits

RB Demand Deposits

Large

Deposito

rs*,

18.3%

Other,

81.7%

Corporate Deposits: Rwf 146.8 Bn

Description Key Segments as at 30 June2012

Clients include corporate, SMEs and NBAs*

Interest rates are in the 15.0%-17.25% range 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)

Corporate Banking

Corporate Loans: RWF 102.3 Bn

62.5%

33.8%

3.7%

78.4%

11.0%

10.6%

Corporate SMEs NBAs


Number of Corporate Accounts

<1yr)

Overdrafts

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

27

Merez

Petroleum

Tolirwa

Corporate SMEs NBAs Corporate SMEs NBAs

5,679 9,941 12,782 15,351

6,535

12,114

15,648

18,385

0

5,000

10,000

15,000

20,000

2009 2010 2011 1H 2012

Corporate Current Accounts Total Corporate Accounts

Executing The Retail Strategy


Description Key Segments as at 30 June 2012

Retail Banking

The Bank’s 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+

Retail Loans: RWF 47.0 Bn Retail Deposits: RWF 62.9 Bn

12.8%1.7%

85.5%

RB Term Deposits

RB Savings Deposits

RB Demand Deposits

Consumer

loans,

45.9%

Overdraft

Mortgage

s, 35.2%

Micro

loans,

4.7%

Other,

7.3%


Number of Retail Accounts

29


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

RB Demand Deposits

33,504 57,297 125,245 163,005

41,900

72,182

125,245

199,155

0

50,000

100,000

150,000

200,000

250,000

2009 2010 2011 1H 2012

Retail Current Accounts Total Retail Accounts

Overdraft

s, 6.8%

Ubiquitous footprint

Agency Banking

Growing Our Distribution Network

Increasing functionalities of our delivery channels

2012 Targets

Cash out and Cash in at Point of sale merchants

Deposit taking ATMs

Cardless Transactions at ATMs through our mobile

banking and mobile wallet

Recruitment of 400 existing businesses as agents in

underway

Agents will be able to perform cash in and cash out

transactions, account opening and micro loan

44 56

6577

89101

0

20

40

60

80

100

120

2011 2012F 2013F 2014F 2015F 2016F

Branches

86

115 125

145 165

80100120140160180 ATMs


transactions, account opening and micro loan

applications and disbursement.

Introduce 20 BK owned agent kiosks in high traffic

areas

Partnership with mobile telcos for our clients to

transact at their agents

Other Initiatives

Launch of mobile branches: so far 5 mobile vans have been ordered for

2012

Become super agents for mobile telcos to attract their customers to BK

and increase cross selling opportunities

26

020406080

2011 2012F 2013F 2014F 2015F 2016F

202

1,000

1,850

2,650

3,400

4,100

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2011 2012F 2013F 2014F 2015F 2016F

POS

Growing our Card Business Increasing our Mobile product offering

Expanding Our Self Service Products

2011 Achievements

Issuing of approximately 40,000 VISA

Electron cards

Interoperability of our ATMs with VISA

Electron and local proprietary Cards

2012 Targets

AMEX acquiring.)

Launch of three new card products

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

Order cheque books

2. Launching our mobile payment platform

Attractive Products


Launch of three new card products

VISA Prepaid

VISA Classic (Credit Card)

VISA Gold (Credit Card)

Launch of E-commerce

Achievements Year to Date

CUP and Diners Club Card Acquiring

Launch of Visa Prepaid and VISA Gold

Credit Card

This platform will enable our clients to make purchases

at selected merchants using their mobile phones

mPay was launched in the 1H 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

Expected launch date: November 2012

Refreshing Product And Service Line UpNew Business Lines

Grow Retail Product Offering

1. Teleco mobile money agency

Super agent for the two telcos

All our 56branches 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 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

Consumer loans to tap the growing middle class

Credit cards

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

Harmonise BK tariff structure with the region to increase competitiveness

R E V I E W O F F I N A N C I AL


R E V I E W O F F I N A N C I AL P E R FO R M A NC E I N 1 H 2 0 1 2 & 2 0 1 1

Balance Sheet HighlightsTotal Assets Total Liabilities

121.5 120.8151.9

197.7

287.9312.8

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

2007 2008 2009 2010 2011 1H 2012

Rwf bn

108.7 104.9133.3

165.8

226.3

249.6

0.0

50.0

100.0

150.0

200.0

250.0

300.0

2007 2008 2009 2010 2011 1H 2012

RwF bnYTD growth-10.3%

YTD growth-8.7%


Shareholders’ Equity Net Loans

2007 2008 2009 2010 2011 1H 2012 2007 2008 2009 2010 2011 1H 2012

48.7

72.177.1

101.4

123.1

142.6

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

2007 2008 2009 2010 2011 1H 2012

RwF bn YTD growth-15.8%

12.815.9 18.5

31.9

61.663.3

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

2007 2008 2009 2010 2011 1H 2012

Rwf bn YTD growth-2.7%

1.1%

0.4%

1.9%

2.5%

3.8%

1.0%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

2007 2008 2009 2010 2011 1H 2012

%

Cost of Risk**, %

Asset Quality

Notes: * 1H2012 figure is annualized

Manageable NPL Ratio Improving Coverage Ratio

19.4%

15.4%

8.3% 8.5% 8.3%

6.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2007 2008 2009 2010 2011 1H 2012

%

11.0 12.1 6.7 9.0 10.9 9.7

72.6%

55.3%57.1%

45.8%

69.1% 67.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2007 2008 2009 2010 2011 1H 2012

%Rwf Bn NPLs Coverage ratio


Corporat

e NPLs,

79.3%

Retail

NPLs,

20.7%Corpor

ate

NPLs,

68.3%

Retail

NPLs,

31.7%

Collateral Structure

Source: Bank of Kigali Audited IFRS Statements 2007-2010, Bank of Kigali Unaudited IFRS Statements 2011

Notes: * 1H2012 figure is annualized

** LLP charge / Average gross loans for period

NPLs by segment

30 June 2012 31 December 2011 Cash

Cover, 1.5%Guarantees,

1.8%

Real

Estate, 56.2%

Unregistered,

19.3%

Unsecured,

21.2%

62.9%

6.6%

21.4%

9.1%

Funding Structure, % Significant Potential For Growth In Higher Yielding Assets

Strong Capital And Liquidity Position Highlights

Funding

31 December 201130 June2012

47.8%

76.8%70.4%

74.7%

68.0% 68.0%

40%

60%

51% 51%

43% 46%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

2007 2008 2009 2010 2011 1H 2012

Net Loans/Customer Deposits Net Loans/Assets

67.0%6.0%

20.2%

6.8%

Deposits Due to Banks Shareholders Equity Other


Strong Capital And Liquidity Position Highlights

Deposits are the primary source of funding with share of deposits

exceeding 65% as at June2012

Strong growth in deposits has been driven by our branch expansion

The Bank has also signed 3 long-term credit lines with the European

Investment Bank worth € 5 million for 7 years, US$20 million for 10

years with the French Development Agency and US$12 million for 10

years with the African Development Bank,

The Bank had drawn down EUR 4.5 m & US$5.0 million on the EIB &

AFD loans respectively by 30 June 2012

Source: Bank of Kigali audited IFRS Statements

14.0% 14.9%19.9% 20.1%

29.1% 27.4%

35.9% 34.7%

42.1%47.3%

64.9%

58.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

2007 2008 2009 2010 2011 1H 2012

CAR,% Liquidity Ratio, %

1H 2012 Performance Highlights

Net Interest Income Net Non-Interest Income Total Operating Income

Total Operating Costs Profit Before Provisions Net Income

13.5

17.3

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

1H 2011 1H 2012

Rwf bn

27.9%

7.7

10.3

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1H 2011 1H 2012

Rwf bn

32.4%

5.7

7.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

1H 2011 1H 2012

Rwf bn

21.8%



ROAA* 4.4%

ROAE* 20.5%

*Annualized

6.6

8.9

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

1H 2011 1H 2012

Rwf bn

35.2%

3.9

6.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

1H 2011 1H 2012

Rwf bn

54.5%

6.9

8.3

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

1H 2011 1H 2012

Rwf bn

45.3%

2011 Performance Highlights

Net Interest Income Net Non-Interest Income Total Operating Income

12.2

16.6

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

2010 2011

RwF bn

+36%

9.0

12.9

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2010 2011

RwF bn

+43%

21.2

29.5

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2010 2011

RwF bn

+39%



10.1

14.3

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

2010 2011

RwF bn

+42%

11.1

15.2

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

2010 2011

RwF bn

+37%

6.2

8.7

-

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2010 2011

RwF bn

+40%

ROAA 3.6%

ROAE 18.6%

56.3%

14.7%

26.0%

3.0%

Total Operating Income Composition Of Total Operating Income

Income Statement Highlights


13.5

17.3

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

1H 2011 1H 2012

Rwf bn

27.9%

59.4%

17.2%

20.8%

2.6%

Net interest income Fees & Commisions FX gains Other non- interest income


54.6%

14.3%

31.1%

Personnel expenses Depreciation and amortization

Other operating expenses

Total Operating Costs Composition Of Total Operating Expenses

31 December 2011

49.8%

17.1%

33.1%

30 June 2012

6.6

8.9

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

1H 2011 1H 2012

Rwf bn

35.2%

39.5% 39.8% 44.1%47.5% 48.2%

51.7%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2007 2008 2009 2010 2011 1H 2012

9.5%9.0%

8.2% 8.3%8.4% 8.3%

0.0%

3.0%

6.0%

9.0%

12.0%

2007 2008 2009 2010 2011 1H 2012

Sustainable Net Interest Margin, % Attractive Cost/Income ratio

Consistent Profitable Growth

Nigeria average: 6.8%

SA average: 6.8%


SA average: 59.1%

* *


4.1%

4.7%

3.9%3.5% 3.6%

4.0%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

2007 2008 2009 2010 2011 1H 2012

37.5%39.4%

30.7%

24.5%

18.6% 19.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

2007 2008 2009 2010 2011 1H 2012


SA average: 1.1%

Consistent Returns To Shareholders, % Strong Return on Average Assets, %

*1H 2012 figures are annualized

Source: Bank of Kigali Audited IFRS Statements 2007-2011

Bank of Kigali reviewed results 1H 2012, African Alliance Research 2012


SA average: 14.4%

**


STRATEGIC OUTLOOK

Strategic OutlookObjectives Strategies Action Outcomes

Customer growth in

terms of current

accounts

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

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, co-

branded cards, utilities, etc)

Expand the branch network to 60+ branches by YE 2013

“Grow with clients”

Valuable source of retail clients through

payroll programs

Growth of loan book and F&C income

Maximize the product-to-client ratio

Expand retail product offering

Build sufficient channel capacity

Build a ubiquitous branch footprint

throughout the country

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

Integrated client coverageIncrease the loan to deposit ratio to

Diversification of funding base


Earnings growth ~30%

Return on Average Equity

> 20%

Continuous improvement of risk management policies &

procedures

Disciplined capital management, medium term target CAR of

15%-17% and ROAE of 20%+, implying ROAA 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

Maintain profitable growth

Healthy structure &

growth of balance sheet

Integrated client coverage

Leverage the superior lending capacity

Cross-selling opportunities

Documentary operations & trade finance, FX, other solutions

Rep offices in EAC from 2012

Private Banking, Securities, Insurance

Leverage the superior access to wholesale funding to

complement the deposit funding base Reduce maturity gap

Enable further expansion of long-term

lending

Increase the maturing profile of

liabilities

Create a universal banking platform

Consolidate the leading position in

corporate banking

Further diversification of revenue streams

Increase retail loans penetration

Increase the loan to deposit ratio to

60% Diversification of funding base

Expand the share of higher-margin lending

Maximise the cross-sell opportunities

Grow the share of retail in the loan book up to

30%-40% in the medium term

46%

30%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2011 2012P

1H 2012:

+9% YTD

Management Targets

Total Assets Growth

Branch expansionReturn on Average Equity

Launch representative offices within the EAC region

Kampala Nairobi

Launch agency banking

Launch Premier Banking - targeting 500 clients by YE

2013

Other Management targetsTotal Assets Growth Gross Loans/Total Assets Selected Other Management targets

45%

60%

0%

10%

20%

30%

40%

50%

60%

70%

2011 2012P

1H 2012: 48%


Branch expansionReturn on Average Equity

Revamp the existing digital wallet/mobile banking

distribution channel

19%

20%

18%

18%

19%

19%

20%

20%

21%

2011 2012P

1H 2012*:

19.3%

44

56

0

10

20

30

40

50

60

2011 2012P

1H 2012: 56

* Annualised

For information please contact:

Lado Gurgenidze

Chairman of the Board

Email: [email protected]

Mobile: +995 599 477 272

James Gatera

Chief Executive Officer


Mobile: +250 78 814 3000

Lawson Naibo

Chief Operating Officer


Mobile: +250 78 830 2076

Contact Information

John Bugunya

Chief Finance Officer


Mobile: +250 78 830 6100


Linda Rusagara

Investor Relations Officer


Mobile: +250 784 300 334

Mobile: +250 78 830 2076

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

Mobile: +250 78 830 6100

Shivon Byamukama

Company Secretary


Mobile: +250 78 838 4547

Date post:	27-Oct-2014
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Bank of Kigali Investor Presentation 1H2012

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