Rwanda: BK Approves Dividends for Investors Despite COVID-19 Crisis

Bank of Kigali (BK) Group has approved shareholders' dividends to the tune of Rwf14.4 per share in dividend payout for the year 2019.

The dividend was approved by at least 69 members of the bank on Wednesday.

Despite the approval however, the payout is not likely to occur in 2020 and will have to first get a nod from the industry regulator, the National Bank of Rwanda (BNR).

Financial institutions globally are undergoing economic stress due to the impact of the COVID-19 pandemic, making it hard for some banks to return capital to their shareholders.

BK Group's chief executive, Diane Karusisi touted the BK's capital position, saying it's strong and that shareholders will be able to receive payouts once BNR approves.

"We entered the crisis with a strong capital position. We believe we shall be in position to distribute dividends," she told shareholders at the bank's annual general meeting.

"We hope at the AGM next year, the board will present a motion to shareholders to approve the distribution of dividends," she added.

BK registered Rwf37.3 billion profit for the year 2019, a 36 per cent growth from the previous year.

Karusisi highlighted at a virtual meeting that the board of directors have reviewed their growth focus for 2020 and 2021, and concluded that the bank will remain profitable.

"We believe that our book will be affected and will take heavy impairments for expected losses on our credit facilities. But all in all, we believe the bank will be profitable," she noted.

The bank chief executive admits that the bank will record relatively reduced profitability compared to 2019 and to historical profitability the bank has seen.

Meanwhile, the board on Wednesday approved the dividend re-investment of Rwf255 at 2 per cent discounted share price.

Turnaround strategy

BK says its clients have been affected, forcing some to close operations, and Karusisi indicated that the bank was ready to avail more capital to facilitate struggling businesses.

"Because of our strong capital position, we shall be able to deploy more capital to companies that are showing us signs of recovery," she said.

This, they say, will go a long way to support businesses and complement the Government's intervention plans and relief measures.

Karusisi noted that the Government's economic recovery funds of $200 million will also support the bank's clients who have been affected to recover, particularly those in the tourism and hospitality sector.

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