Bank of Kigali (BK) is heading for yet another healthy balance sheet at the end of the year if the momentum that has enabled it post net income of Frw 3.2 billion in the first quarter of this year is sustained.

Adequately capitalized by millions of dollars from last year's IPO, a half of the Frw 8.7 billion in net profit made last year plus the long-term credit lines from development agencies like the French Development Agency and European Investment Bank, BK appears on course to consolidate its market dominance.

The chief executive officer, James Gatera, is confident the bank will achieve this year's hugely ambitious targets that include increasing the loan book by 60% from the current 44.9%, grow total assets by 30% and expand out rich by opening new branches and agency banking. The target for this rollout is to grow the bank's customer base to over 500,000 active accounts.

"To put things in perspective, BK has [in just one quarter] already made the profit that the second largest bank in Rwanda aspires to make in a whole year," Gatera said during the release of the bank's performance results of the first quarter of 2012 in Kigali last week.

As further evidence of positive a move towards achieving targets, Gatera said that the BK had added more than 22,000 new retail current accounts, opened three new branches and launched its premier banking services at Kigali City Tower during the quarter under review. He promised to open 10 more branches by the June 30.

Currently with 46 branches, BK plans to expand its branch network to 60 by the end of next year, install modern deposit-taking ATMs and rollout several other non-cash payment systems.

Those areas where opening branches may not be the most viable option will be serviced by mobile tills and agencies. Orders have already been placed for bullion vans that will do this job and some are on the way to Rwanda, Gatera said.

At the core of this ambitious plan is the bank's desire to saturate the unbanked areas with banking services and make it "more difficult for competitors to follow."

BK's plan that also targets to expand its retail segment seems to be on course already with retail loans in the first quarter of 2012 up by 17% compared with the same quarter in 2011 to reach 48.5 billion. At the same time, retail deposits topped 58.6 billion--8.2% growth from the previous quarter. Corporate deposits grew by 14.4% to 145.1 billion--an indication that the banking industry in general still derives most of the business from corporate clients.

As of 31 March, total assets Frw 303 billion having grown by 5.3 during the quarter and 43.5 year-on-year.

Mobile money

BK chief operating officers Lawson Naibo said the bank has already signed contracts with telecommunications companies, MTN and Togo to offer mobile money services at all BK outlets. Under the deal that is expected to boost the bank's non-interest incomes, MTN and Togo clients will be able to reload their mobile money accounts as well as withdraw cash from any BK branch or agency.

He said the bank will also launch its Mpay profile during the second quarter of the year. This profile enables customers to pay for goods and services from selected places using their mobile phones.

"To put things in perspective, BK has [in just one quarter] already made the profit that the second largest bank in Rwanda aspires to make in a whole year," James Gatera

"We are pleased with the bank's performance year to date. In [the first quarter of 2012] we began laying the ground work to execute our ambitious retail strategy. We have launched our premier banking service and concluded the pilot phase of our Mpay product. This product will complement our current debt VISA card and enable our customers to transact without cash," said Gatera.

He said the BK had also started issuing its own VISA credit cards.

"The market should also look forward to our launch of agency banking as well as deployment of our Notes Acceptor deposit-taking ATMs in the next quarter," he added.

BK's 2011 financial results showed the bank consolidated its dominant position in Rwanda's banking sector posting a net profit of Frw 8.7 billion--taking home about half of the profit made by the entire industry during the year.

This was 40.6% rise in profit realized after the bank lent out Frw 123.1 billion--a 21.4% increase from 2010. This increase in lending was driven by more loans to the retail segment that went up by 98.5%, almost double the previous year.

Basing on this good performance, BK shareholders pocketed Frw 4.3 billion in dividends after they approved a 50% dividend pay plan for three years.