BK Group Plc Investor Presentation Page 1 Agenda 1. Key Investment Highlights 2. Country Overview Information 3. Banking Sector Overview 4. Bank Overview 5. Corporate Governance 6. Business Overview 7. Review of Financial Performance 8. Strategic Outlook 9. Contact Information Page2 2 Key Investment Highlights 1. Best Bank in Rwanda 2013, Politically stable country with sound governance 2015 & 2016 Very attractive demographic profile: population of 12 Million Sound Macro Robust economic growth averaging 8% pa in the last 5 years, expecting a sustainable high GDP growth into 2020 Fundamentals th 2. Best East African Bank 2012 Moderate inflation with rate of 0.8% as at 30 June 2019 & 2015,2016 The 2018 World Bank Doing Business Report ranked Rwanda as the 29th out of 190 economies in terms of ease of doing business and 2nd in Africa Well regulated banking sector: fairly conservative regulator relative to other regulators in the EAC Significant 3. Bank of the Year 2009- Significant headroom for growth given under-banked and excluded population 2012,2014,2015,2016 Banking Sector Potential Number of financially excluded population reduced from 28% in 2012 to only 11% in 2016 Total assets/GDP of 47.6% as at 31st, March 2019. Strong Market positioning & sustainable leadership 4. Best Bank in Rwanda 2009- Total assets FRw 893.2 billion, 27.5% market share as at June 30th, 2019; 2014,2016 Market th Leadership Net Loans FRw 650.2 billion, 29.2% market share as at June 30 , 2019; Customer Deposits FRw 551.7 billion, 26.8% market share as at June 30th, 2019; Shareholders’ Equity FRw 204.0 billion, 36.2% market share as at June 30th, 2019. 5. Best African Listing 2011 6. AA-/A1+ Credit Rating Conservative Relatively high capital adequacy ratios since 2010 averaging > 20% Business Manageable level of non-performing 6.4% of gross loans as at 30th June 2019 Model The rating reflects the Bank’s established Liquid assets holding of 31.2% (minimum requirement 20%) domestic franchise value, strong capital position, its systemic importance, strong asset quality and financial performance. Experienced Management team with significant banking sector experience Management Complemented by an experienced and diversified Board of Directors Team Track record of producing stellar results 7. Best Financial Reporting Company Rwanda 2012 & Profitable Robust asset growth at a CAGR of 16.6% (2014 - 1H 2019) - FRw 893.2 billion as 30th June 2019 2015 Growth ROAA ranging from 3.3% - 4.0% between 2014 and 1H 2019 Page3 3 COUNTRY OVERVIEW INFORMATION Page4 4 Rwanda - Country Profile National Facts Business Environment Area 26,338 sq km Population 12 million Ranked Second after Mauritius as the best destination to do business in Official Languages Kinyarwanda, French, English Africa in the World Bank 2018 Doing Business Report. Capital Kigali Rwanda has implemented over 22 business regulation reforms in the Rwandan Franc (FRw) 898.3 FRw = 1 US$ as of areas measured by the World Bank Doing Business Index. Today, Currency 28th June 2019 entrepreneurs can register a new business online in 6 hours. Credit Rating B+ S&P Global Ratings August 2019 Nominal GDP 2018 US $10 Bn Rwanda maintains its position as East Africa’s most competitive economy Nominal GDP Per Capita 2018 US $800 and second in Africa by Global Competitiveness Index Report 2017/18. Nominal GDP 2019P US $10 Bn Rwanda has championed the establishment of the Single Africa Nominal GDP Per Capita 2019P US $800 Air Transport. To this effect, the construction Macro Economic Indicators of Bugesera International Airport has been prioritized.​ Other key projects, are the construction of four ports on Lake Real GDP Growth rate - Q1 2019 8.4% Kivu, expansion and support to RwandAir operations, Hakan Peat Power Real GDP Growth rate - 2020P 8.8% Plant, promoting MICE tourism by attracting over 140 international Inflation Rate - Q2 2019 0.8% events and conferences, and improving and sustaining a quality road Private Sector Growth - 2019P 29.5% network throughout the country. Private Sector Credit % GDP - 2019P 20.2% Net External Debt %GDP - 2019P 11.8% Currency Depreciation against USD June 2019 2.2% Foreign Reserves 2018 4-4.5 Months of Imports Source: MINECOFIN, BNR, NISR, WEF, IMF, S&P Report Page5 5 Sound Macro Fundamentals GDP per Capita continues to grow Population Pyramid for Rwanda Healthy GDP growth with moderating inflation 60% of the population is under 24 years. 93% of the population is under 54 years. 2.4% of the population over 65 years. Source: Finscope Rwanda Report Source: Ministry of Finance and Economic Planning, S&P Rating, IMF Page6 6 Macroeconomic Indicators GDP Breakdown By Economic Activity Q1 2019 Trade Structure Taxes less Rwanda’s exports are dominated by coffee, tea and minerals (tin, Subsidies on coltan and wolfram). products , 7% The country remains a net importer. Major imports include fuel and oils, intermediary goods especially construction materials, consumer goods, and capital goods driven by ongoing Agriculture, 28% infrastructure projects. Other services, 36% Other services include Real estate activities 8%, administration Industry, 17% 10%, financial service 3% to mention but a few “Made in Rwanda” has sought to improve the perceptions of Rwandan products within Rwanda, promote nascent industries, Trade and Transport, 12% and boost the productivity of exporting sectors. Source: BNR Monetary Policy Statement, NISR, International Growth Centre/MINEACOM Trade Deficit as a % of GDP Current Account Deficit as a % of GDP Source: BNR, IMF, Page7 7 Review of the Macro Economic Environment Macro Economic Review Q1 2019 Inflationary Environment In the First quarter of 2019, GDP at current market prices was estimated to be Frw 2.1 trillion, up from Frw 2.0 trillion in Q1 2018. In this quarter, services sector contributed 48 percent of GDP while agriculture sector contributed 28 percent of the GDP. Industry sector contributed 17 percent of the GDP and 7 percent was attributed to adjustment for taxes and subsidies on products The industry sector grew by 18 percent and contributed 2.9 percentage points to overall GDP growth. The growth in industry sector was mainly attributed to growth of 30 percent and 8 percent in construction and manufacturing activities respectively. Mining & quarrying activities increased by 12% boosted by quarrying activities which increased by 20%. Within manufacturing, Beverages and Tobacco increased by 9 Exchange Rate Developments percent, Wood & paper; printing by 38%, Textiles clothes and leather goods by 15 percent. In addition production of construction materials such as non-metallic mineral products increased by 21 percent and metallic products by 11%. The service sector grew by 8 percent and contributed 3.7 percentage points to overall GDP growth. The growth in Service sector was due to growth of several activities. Within this sector, wholesale and retail trade increased by 7 percent due to an increase in tradable manufactured products; transport activities increased by 11 percent boosted by air transport that increased by 21 percent, financial services increased by 14 percent and Professional scientific and technical activities by 25%. Source: National Institute of Statistics of Rwanda, BNR Monetary Policy & Research Department African Economic outlook Page8 8 BANKING SECTOR OVERVIEW Page9 9 Significant Banking Sector Potential Banking Assets/GDP Banking Assets Per Capita5 Large Unbanked Population (US$) Economy is moving away from being cash-based through the various financial inclusion initiatives being undertaken by financial institutions including the launch of agency banking and mobile money transfer services. Approximately 70% of the population have or use financial products or mechanisms including those offered by non- bank formal financial institutions such as SACCOs Source: Finscope Rwanda Prudential Regulations CAR (Tier One) 12.5% Total CAR 15% Liquidity Coverage Ratio > 100% Cash Reserve Ratio 5% of total deposits (1) Source: Exotic Frontier Equities (2) Source: National Bank of Rwanda Monetary Policy Statement Lending in foreign currency Restricted to legal (3) Source: Population stats by World Bank entities - exporters or non residents with FX inflows 10Page 10 Banking Sector Overview Rwanda Banking System Total Assets Interest Rate Analysis Source: BNR Supervision Department Banking Sector Review Recent Regulatory Reforms To Improve Access To Credit Total assets of the industry registered annual growth rate of 5.2% in H1, from 3.2 trillion in December 2018 to FRw 3.3 trillion in June 2019. The capital adequacy ratio (CAR) stood at 24.1% in March 2019; well above Basel committee benchmark of 12.5% and the BNR regulatory minimum requirement of 15% Profitability indicators in June 2019 stood at 1.6% and 9.3% for Return on assets (ROA) and return on equity (ROE). The asset quality of the industry is generally improving; non-performing loan ratio (NPL ratio) stood at 5.6% as at June 2019. Source : BNR Supervision Department 11Page 11 Timeline of Foreign Investment In The Rwandan Banking Sector 80% stake in BCR I &M Bank acquires 40% stake in Cogebanque 80% stake in BCR 2004 2007 2008 2009 2010 2011 2012 2014 2015 2016 2017 30% 70% stake in stake in 90% stake in CBA Acquires 100% Agaseke Bank C Crane Bank Rwanda BPR FINA Bank 2014 2015 2016 2017 2018 1H 2019 Bank of Kigali Market Share by Total Assets 26.8% 26.3% 26.8% 27.1% 28.4% 27.5% * Market share among banking sector 12Page 12 Market Share Dynamics Market Share for Banking Sector Bank of Kigali