7 December 2017

Rwanda: BK Announces Sweeping Changes at General Meeting

Photo: New Times

At an extraordinary general meeting held yesterday, shareholders of Bank of Kigali agreed to change the bank's name to BK Group PLC and approved an increase in authorised share capital of Rwf3.480bn consisting of 348m ordinary shares valued at Rwf10 per share.

Bank of Kigali is Rwanda's largest commercial bank.

The decision will increase the bank's share capital from current Rwf7 billion to over Rwf10 billion.

According to bank officials, the money will finance the bank's organic growth on the local market, and this would be done through issuing new shares to existing shareholders.

"The bank has been growing by considerable force. But to maintain and expand the growth, we need additional capital. We are expanding our reach in digital banking and in insurance," said Mark Holtzman, the chairman Board of Directors.

The bank, which today operates 79 outlets, enjoys nearly 33 per cent of the total market share.

Its consolidated assets were valued at Rwf761.3 billion as of September 30.

According to the latest financial performance statistics from the bank, the bank has been generating about 20 per cent per annum return on equity for the last five years.

New Structure

With the new name, BK Group Plc, comes a new structure which was also approved by the shareholders.

The bank says that, henceforth, it will operate as an investment company.

The group will mainly be comprised of the three subsidiaries; Bank of Kigali Ltd, BK General Insurance, and BK TecHouse

According to Diane Karusisi, the bank's chief executive officer, the idea is to continue expanding their presence in all business lines and best serve their existing and potential customers in all segments.

"Our shareholders used to be shareholders in the bank, but now they are becoming shareholders in a group of companies. We want to expose them to many lines of business, but are still committed to improving financial services and the bank remains the biggest subsidiary," Karusisi said.

The bank also announced plans to launch mobile products similar to Kenya's M-Pesa and M-Shwari. M-Pesa is Kenya's world-leading mobile payment system operating in about 10 countries. M-Shwari, on the other hand, is a paperless banking service offered through M-Pesa.

Holtzman said that the product will help serve customers in a more effective way.

In other developments, Bank of Kigali is one of the companies which hold government shares and was recently asked to transfer them to Agaciro Development Fund, Rwanda's sovereign wealth fund.

According to the CEO of the Fund, Jack Kayonga, government owns shares in more than 20 companies, all of which will be transferred.

"The reason why the government is doing this is to consolidate its shares in commercial investments in one entity in order to increase efficiency. We are excited because we want to become a fund with significant size that will guarantee Rwandans the Rwanda they want," Kayonga said.

The fund presently has a total asset value of Rwf47 billion which are all contributions from individuals and institutions.

Holtzman said that the government holds about 29.5 per cent of the total shares in the bank and that the transfer won't have a negative impact on the bank's operations.

"We are quite excited for this and, in our view, it won't have any practical ramification in the way the bank operates," he said.

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