Kigali, Rwanda -- (SBWIRE) -- 07/23/2014 -- Rwanda’s banking sector recorded increased profits in the first quarter of 2014, thanks to a cash-hungry economy recovering from the 2013 slump.

The sector recorded Rwf700m in total profits during the first three months to hit Rwf8.8 billion (approx. $10m) measured against last year’s Rwf8.1b, Rwanda’s central bank announced two weeks ago.

While there was a slump, caused by aid suspension, the industry registered Rwf1.06 trillion (approx. $1.5b) deposits from Rwf866.4billion (approx. $1.2b) of same period 2013.

The loan book propelled banks to increase profits to Rwf269.8 billion (approx. $384m) in the first five months from Rwf185.1 billion (approx. $264m) of 2013 due to a slight decline on lending rates.

Total assets in the industry increased to Rwf1.5 trillion (approx. $2.1b) from Rwf1.3trillion (approx. $1.8b) of same period, 2013. The economy grew by 7.4%.

Central Bank Governor, John Rwangombwa, attributed the recovery to his monetary and fiscal stimulus policies. He temporarily allowed banks to raise funds at friendly rates, on conditioned they would lend at relatively reasonable rates too.

As a result, deposit rate declined to 10.1% from 10.61 % while lending rates dropped to 17.23 % from 17.65%. Bank of Kigali (BK) is experiencing an exponential reflected in its healthy profits.

Indeed, Rwanda’s leading bank, Bank of Kigali, announced 40% profits in the first quarter. It had Rwf3.5 billion (about $5million) profits in the first quarter, 2013.

The bank’s Chief Operating Officer, Lawson Naibo said he expects, though, to make 25% at the end of 2014. “The market is picking up, liquidity is increasing and we are looking at recording up to 50% increase in deposits.”

Bank of Kigali, valued at $670m and listed on the Rwanda Stock Exchange (RSE), is the largest bank in terms of assets and market share. Ecobank, Access Bank, and Guaranty Trust Bank (GT Bank) all from West Africa and three Kenyan banks, Kenya Commercial Bank, Equity Bank and I&M Bank, with growing presence in other East African countries, are now pushing to cover for the retail segment. Uganda’s Crane Bank has also opened a subsidiary in Kigali City.

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