Bank of Kigali is the largest subsidiary of BK Group, a holding company with three other subsidiaries, namely BK General Insurance, BK TecHouse and BK Capital Ltd. The smaller subsidiaries are growing revenue contributions and represented 4.9% of the net profit before tax (‘NPBT’) to the group in FY21. We opine that Bank of Kigali will continue to be the most significant subsidiary of the group for the foreseeable future and will therefore continue to drive the rating accorded to the group.
I&M Bank Rwanda Plc (IMBR) was incorporated 1963 as Banque Commerciale du Rwanda, which was subsequently privatised and recapitalised by Actis, a pan-emerging markets private equity firm. The bank was renamed to IMBR after the 80% Actis stake was acquired by a consortium comprising I&M Bank Kenya, DEG and Proparco. The bank is a subsidiary of the I&M Holdings group and was publicly listed on the Rwanda Stock Exchange in 2017 post-acquisition, with the largest shareholder being BCR Investment Company Limited.
Family Bank Limited is a is a fully-fledged commercial bank, licensed and operating under the provisions of the Banking Act (Cap 488 Laws of Kenya) and the Central Bank of Kenya (“CBK”) Prudential Guidelines. The bank was licensed by the CBK as a commercial bank in 2007, after operating as a building society for thirty-eight years, to offer a broader range of products and services to its customers. The bank has a subsidiary, Family Bank Insurance Agency Limited, that provides insurance services to customers and together with the bank they consolidate into Family Bank Group.
FBC Building Society (“the company”,” the society”) is a wholly owned subsidiary of FBC Holdings Limited (“the Group”), which is domiciled in Zimbabwe, listed on the Zimbabwe Stock Exchange. The company engages in mortgage lending, retail banking, property development and treasury investments. The society has a network of 6 branches across the country hosting a staffing contingent of 105 employees.
The society is not a material asset or revenue contributor to the Group. As a result, the analysis was based on a mixture of the bank’s standalone credit analysis and group support characteristics.
Zimbabwe is a hyperinflationary economy, and the financial results were prepared in accordance with IAS 29. Only the inflation adjusted results are audited, and as such, GCR does not use historical figures in its analysis.
FCMB AM's earnings evidenced an upward trajectory over the last five years, with gross revenue registering a CAGR of 35.4% on the back of the strong AUM growth and operational scale. Typical of an asset management company, the relatively stable management fees, and commission remained the major components of the revenue base, accounting for a sizeable 92.4% of gross revenue at FY21. Growth in this revenue stream is likely to be sustained over the rating horizon due to the strong AUM growth prospects, in line with the outlined strategy. Further supporting profitability is the historically lean cost structure, which benefits from the shared services within the Group. As such, the cost to income ratio remains competitive at 37.4% at FY21 (FY20: 36.8%).
The Capricorn Group is a leading Namibian-owned financial services group listed on the Namibian Stock Exchange. Its subsidiaries include two banks (Bank Windhoek and Bank Gaborone), a micro-lender (Entrepo) and an asset manager (Capricorn Asset Management), while its associates operate in insurance (Santam and Sanlam) and telecommunications (Paratus group).
Zimbabwe has faced tough economic challenges and extraordinary shocks caused by the protracted drought, cyclone Idai, and the COVID-19 pandemic, which led to sharp contractions in economic growth in 2019 (-6.1%) and 2020 (-4.1%), while inflation reached 837% (YoY) by July 2020. According to the International Monetary Fund (“IMF”), real GDP growth rebounded to 6.3% in 2021. Due to better rainfall in the 2020/21 season which boosted agricultural production (through a bumper maize harvest) and electricity generation, assisted by improved capacity utilisation in industry; increased mining activity; buoyant construction; and the stabilisation of prices and exchange rates. A tighter policy stance since mid-2020 relative to 2019 contributed to lowering inflation to 60.7% (YoY) at end-2021.
South Africa’s banking sector is advanced and highly sophisticated relative to its regional peers. As at 31 December 2021, South Africa’s banking sector comprised 18 commercial banks, 4 mutual banks, 5 co-operative banks, 13 local branches of foreign banks and 29 foreign banks with approved local representative offices.
As of 31 December 2021, the number of licensed commercial banks remained at seven, with one branch of a foreign bank and one representative office. The banking sector is comparatively small and highly concentrated with four large banks, of which three are subsidiaries of South African banks and one is locally owned . The four large banks are designated as domestic systemically important banks (“DSIBs”) by the BON and hold the largest share of the sector’s asset base. The sector’s branch network decreased in 2021, as the number of branches contracted to 137 (2020: 145) at the end of 2021, following a preference for digital channels and the need to cut costs.
 First National Bank Namibia Limited, Standard Bank Namibia Limited, and Nedbank Namibia Limited.
 Bank Windhoek Limited.
As at 31 December 2021, Lesotho’s financial sector comprised four commercial banks, 10 insurance companies, 46 insurance brokers, 118 microfinance institutions, two asset management firms, six stockbrokers and two money transfer institutions. There are no secondary financial markets (stocks, bonds, options, and futures) in the country. The financial sector is dominated by the banking industry with total assets constituting 67.1% of the total financial sectors assets and 58.2% of GDP at end-2021.