Bank of Kigali 22 June 2011

For internal use only

Offer Statistics
Price range: Rwf107.00-137.00 (Ksh16.70-21.35)

Shares on offer: 300,304,400 Retail EAC 27% - 82,591,440 Institutional EAC 15% - 45,045,600 Institutional Rwanda 15% - 45,045,600 International 40% - 120,121,760

Rwanda overview
Real GDP 2011 expected GDP 6.5% (Kenya between 4%-5%)
Population of 10m expected to 10.4m by 2012 Low banked population, only 10% is banked Banking system has experienced 19% annual growth last 5yrs Banking assets are only 22% of GDP compared to 66% in Kenya, 50% in Tanzania and 33% in Uganda large potential for growth

Bank of Kigali overview

Leading bank in Rwanda with 27% market share total assets - 32% market share in loans - 26% market share in deposits The bank has 33 branches and 4000 corporate accounts, 74,000 retail accounts

Loan book Rwf105bn Majority loans are corporate 73% and retail is 27% Retail includes: Mortgages (41%) and Consumer loans (36%) Main sectors: Consumer, restaurants and hotels (31%), Construction 29% and Manufacturing (11%)

Bank of Kigali overview

Deposits Rwf108bn Deposit annual growth of 22% last 3yrs Majority deposits are corporate at 73% and retail at 27% Loans to deposits stands at 71% in March 2011 still room for growth Structure of deposits : 71% are demand deposits that attract little interest (similar to current account)

Corporate and Retail Banking Corporate lending rates between 15%-17.25% Retail lending rate average 17.25%

Financials overview
Profitability measures Return on Equity (ROE): In 2010 it was 25%. Below Kenyan average of 26% but above SA at 14% and Nigeria at 10%
ROE = PAT / Total Equity

Return on Assets: Evaluates management performance. In 2010 3.5%, which is above Kenya, Nigeria and SA (3.4%, 1.5%, 1.1% respectively)
ROA = PAT/ Total Assets Cost to income :At 48% in 2010 it is below Kenya, Nigeria and SA

Asset quality Non performing loans in 2010 were Rwf9bn representing 8.4% of total loans was 15% in 2008

Strategy overview
Expand branch network to 60+ branches by 2012 - first mover advantage outside capital city - reach out to the unbanked Expand retail product offering - Diversify its revenue streams and funding base - Grow retail in loan book to 30%-40% in medium term Create universal banking model - Securities and Insurance

Key investment highlights

Sound macro economic fundamentals - 6.5% GDP growth for 2011 with moderate inflation Good banking sector potential - Room for growth given low penetration at 10% - Well regulated banking sector Bank of Kigali is a market leader by assets, loans and deposits Conservative business model - High capital adequacy ratios - Decrease in non performing loans to 8% in 2010 from 15% in 2008 Good asset growth of 28% annual between 2008-2010