Bank of Kigali, Run by Former Georgia Leader, Sees ‘Runaway’ Profit Growth

By Heather Murdock – Mar 30, 2011

Bank of Kigali Ltd.Rwanda’s biggest lender by assets, expects “runaway” profit growth this year as it opens new branches in a country where only one in 10 people have a bank account, Chairman Lado Gurgenidze said.

The bank yesterday posted a 17 percent increase in profit for the 12 months through December to 6.1 billion Rwandan francs ($10.2 million) as net interest income, the money earned from interest charges on loans, grew 21 percent.

Over the past 18 months, the lender increased its number of branches to 33 from 18, Gurgenidze, the former prime minister of Georgia, said in an interview yesterday in the capital, Kigali. In addition to the 10 new outlets planned this year, the bank is “investing like mad” to increase the number of ATMs, offer debit cards and improve its mobile-phone banking service, he said.

“The ambition has to be to participate in one way or another in every franc that is being earned or saved or spent in the country,” he said.

Rwanda is recovering from a genocide in 1994 that left 800,000 people dead, decimating the East African nation’s economy. Growth this year is forecast at 5.9 percent, compared with 5.4 percent in 2010, according to International Monetary Fund statistics.

Bank of Kigali announced plans in December to sell a 25 percent stake in an initial public offering in the first half of this year. Those plans are on track and the lender plans to sell the stake by July, Gurgenidze said.

In January, Heineken NV (HEIA)’s Rwandan unit, Brassieries et Limonaderies du Rwanda SA listed on the Rwandan Stock Exchange after becoming the first company to hold an IPO in the country.

Georgian Comparison

Gurgenidze compared the growth of the Bank of Kigali to the expansion of the banking industry in Georgia. Banking accounts for 50 percent of GDP in the former Soviet republic, compared with 15 percent in 2003, after assets grew from $600 million to $6 billion, he said.

“The same kind of growth is certainly well within reach of the Rwandan banking sector,” Gurgenidze said. “That is the attraction and the opportunity of banking sectors in well-run and reforming frontier markets.”

Gurgenidze stepped down as Georgia’s prime minister in October 2008, after less than a year in office. He previously was executive chairman of Bank of Georgia, the country’s largest lender, and managing director at ABN Amro Bank NV. Bank of Kigali named him as chairman in October 2009.

Middle Class

Growth in Rwanda’s banking industry may also help create a middle class in the country, which is one of the world’s poorest, Gurgenidze said.

“If they were able to do it in a few years, why can we not do it,” Bank of Kigali Managing Director James Gatera said in a separate interview.

The lender is focusing on expanding its customer base in Rwanda, Gurgenidze said. It currently serves about 70,000 retail customers and wants to be able to accommodate half a million people within two years, he said.

Plans to expand into East African, a market of about 110 million people, are currently not under way, though they may be considered within the next two to five years, Gurgenidze said.

Bank of Kigali’s assets grew 29 percent last year to 197.8 billion francs, the lender said in a statement on its website.

To contact the reporter on this story: Heather Murdock in Kigali via Nairobi at

To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at

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