Local lender Bank of Kigali has posted 13 per cent year on year rise in its nine months pre-tax profit.

However, BK remained in double digit, reflecting growing competition in the market.

The bank’s profit before tax rose to Rwf22.2 billion from January to September, up from Rwf17.8 billion in the same period last year.

The bank’s chief executive, Dr James Gatera, said the growth was buoyed by all key balance sheet metrics, which made the bank maintain its position as market leader with 30 per cent of the market.

“We are pleased with our third quarter performance,” said Dr Gatera. “Our competitive brand equity and continued dedication to efficiently serve our customers has been worthwhile.”

The growing appetite for loans in the country driven by stable and predictable interest rates resulted in growth of loan book by 26.4 per cent, settling at Rwf295 billion.

Comparatively in the East African Community economies, lending rates in Rwanda have been stable, oscillating between 17 per cent and 18 per cent at a time other lenders in Uganda are pricing their loans at over 20 per cent.

Ugandans are reeling from high interest rates when Bank of Uganda (BoU) increased the central bank rate (CBR) from 16 per cent to 17 per cent as it moved to tame inflation. This forced Ugandan commercial banks to price their lending rates at 27 per cent, up from 19 per cent recorded at the beginning of the year.

The stable interest rates have also resulted in most banks in the country reducing the ratio of non per forming loans with some settling with the acceptable levels benchmarked by the central bank, National Bank of Rwanda (BNR).

“The lending rate volatility only results in high bad debt. Stability of the rates also helps,” said Lawson Naibo, chief operating officer of BK.