The Bank of Kigali (BK), Rwanda’s largest local bank by assets, is set to increase dividend payout to its shareholders by 70.7 per cent, rallied by a jump in profits in 2013.

On Wednesday, the bank announced a Rwf11.1 ($0.02) per share payout to the shareholders, compared with Rwf6.5 ($0.009) last year.  

In total, the bank will dish out Rwf7.4 billion ($11.1 million) at the current exchange rate in dividends to the shareholders.

BK’s shares have rallied 28 per cent since January to hit an all-time high of Rwf323 ($0.55) as investors took strategic positions ahead of publication of full-year results.

“Our performance during the year remained consistent with our position as the market leader in the banking sector, with our share of the sector’s profits increasing from 43 per cent to 65 per cent in 2013. We made significant investments in the delivery of innovative and inclusive financial services to customers across all our distribution channels,” said James Gatera, the chief executive officer of BK, while releasing the results.

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The bank’s net income rose by 25.4 per cent to Rwf14.8 billion ($22 million) from Rwf11.8 billion ($18.6 million), largely driven by expansion of its loan book, increase in interest fees and commissions.

As of December 31, 2013, the bank’s total assets increased by 30.9 per cent to Rwf422.4 billion ($630.2 million), from Rwf322.8 billion ($512.0 million), while its net interest income grew by 47.9 per cent to Rwf35.2 billion ($52.5 million), from Rwf23.8 billion ($37.7 million) in 2012. 

Its loan book expanded by 7.5 per cent to Rwf199 billion ($297 million) from Rwf185.1 billion ($293.6 million) in 2012.

“In 2014, we intend to grow our loan book considerably through mobilisation of deposits and additional long-term lines of credit, which will complement our deposit base and enable us continue providing long term financing to the market,” Mr Gatera said.

The dividend is expected to be paid on June 27 while the shareholder’s register will close on June 13.

The industry’s consolidated balance sheet, measured by changes in total assets, grew by 21.0 per cent to Rwf1.509 billion ($2.2 million) as at the end of December 2013, from Rwf1.247 billion ($1.8 million) as at the end of December 2012. This growth is attributed to increase in loans to the private sector.

Early this year, the bank launched its representative office in Nairobi, making it the first lender from the East African Community to set up operations in Kenya. It plans to open a similar office in Uganda this year.

READ: Bank of Kigali gets licence to open office in Kenya

BK has entered into a partnership with the Commercial Bank of Africa to allow its customers to make over-the-counter transactions.

BK currently has 67 branches in Rwanda. Competition in the country’s banking sector has been growing recently following the entry of new regional banks, as shown by the Herfindahl Index, the most used indicator to measure industry competition.

Despite growing competition, analysts say BK is expected to maintain its lead due to the confidence it has built in the local market.

“Looking at their investment in the expansion of their network, growth is likely to be sustained. The risk is always around the quality of the assets as they expand their loan book,” said Eric Rutabana, chief investment officer of Business Partners International (BPI) Rwanda Ltd, the local arm of an international investment fund.