Bank of Kigali\u2019s credit worthiness and stability has received a strong boost of approval from South Africa-based agency, Global Credit Rating Company, which has affirmed Rwanda\u2019s largest commercial bank with an AA- rating for long-term credit and A1+ for short-term credit lines. <\/p>\n
The stock market is expected to warm up to the development with a busy BK counter on the bourse, anticipated today on account of eager investors interpreting the bank\u2019s positive rating as a vote of confidence in its operations.<\/p>\n
According to the rating agency, an AA- rating for long-term credit means Bank of Kigali has a very high credit quality outlook and its protection measures are in very strong position.<\/p>\n
However, the negative (-) means that adverse changes in business, economic or financial conditions would increase the bank\u2019s investment risk, although not significantly.<\/p>\n
On the other hand, an A1+ rating for short-term credit lines means the bank enjoys the highest certainty of timely payment to its creditors.<\/p>\n
It also means that the bank\u2019s short-term liquidity, including internal operating factors and\/or access to alternative sources of funds, is outstanding with credit worthiness close to that of risk-free treasury bills.
\n{{
\nWhat it means}}<\/p>\n
As a listed bank, the positive rating will boost confidence of shareholders as it means their bank is in sound position to earn them more dividends.<\/p>\n
The rating is also likely to enhance the bank\u2019s share value on the stock market with a busy counter expected this week.<\/p>\n
The new rating also means that the bank can easily access both long- and short-term credit lines, especially from outside the country, without the need for creditors to worry about risks of default or difficulty to get their money back.<\/p>\n
In its latest financial stability and monetary policy statement released last month, central bank revealed that Rwanda\u2019s financial sector is \u201csound and well capitalised with adequate liquidity levels and good quality assets.\u201d<\/p>\n
The central bank also noted a positive trend of decreasing non-performing-loans at 5.9 per cent from 6.6 per cent and manageable inflation pressures in the near future and decided to keep, unchanged, its key repo rate at 6.5 per cent to encourage commercial banks to lend more to the private sector.<\/p>\n
However, a leading challenge in the country\u2019s financial sector is low deposits due to a weak saving culture and even those who save do so only to withdraw their money in the short-run.<\/p>\n
Such dynamics compel banks to seek external alternative sources of credit lines for short but especially long term lending facilities to finance private sector investments.<\/p>\n
Favourable credit ratings therefore help commercial banks to have it easy with creditors as they (ratings) boost confidence in the bank\u2019s ability to repay the money, in the long and short run.<\/p>\n
A bank with positive short- and long-term credit ratings also enjoys the advantage of borrowing externally at lower interest rates which often translate into lower interest rates on loans for domestic borrowers.<\/p>\n
\u201cWe are very pleased with the credit rating affirmation by GCR. The affirmation serves to give confidence to our customers and investors both at home and internationally,\u201d said Dr James Gatare, BK\u2019s chief executive.<\/p>\n
The NewTimes<\/p>\n","protected":false},"excerpt":{"rendered":"
Bank of Kigali\u2019s credit worthiness and stability has received a strong boost of approval from South Africa-based agency, Global Credit Rating Company, which has affirmed Rwanda\u2019s largest commercial bank with an AA- rating for long-term credit and A1+ for short-term credit lines. The stock market is expected to warm up to the development with a […]<\/p>\n","protected":false},"author":3,"featured_media":2000069700,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[75],"byline":[160],"hashtag":[],"class_list":["post-20691","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-homenews","byline-theophile-niyitegeka"],"bylines":[{"id":160,"name":"Th\u00e9ophile Niyitegeka","slug":"theophile-niyitegeka","description":"","image":{"id":0,"url":"https:\/\/secure.gravatar.com\/avatar\/?s=96&d=mm&f=y&r=g","alt":"Default avatar","title":"Default avatar","caption":"","mime_type":"image\/jpeg","sizes":[]},"user_id":3}],"contributors":[{"id":160,"name":"Th\u00e9ophile Niyitegeka","slug":"theophile-niyitegeka","description":"","image":{"id":0,"url":"https:\/\/secure.gravatar.com\/avatar\/?s=96&d=mm&f=y&r=g","alt":"Default avatar","title":"Default avatar","caption":"","mime_type":"image\/jpeg","sizes":[]},"user_id":3}],"featured_image":{"id":2000069700,"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/arton20691.jpg","alt":"","caption":"","mime_type":"image\/jpeg","width":0,"height":0,"sizes":{"thumbnail":{"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/arton20691.jpg","width":1,"height":1},"medium":{"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/arton20691.jpg","width":1,"height":1},"medium_large":{"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/arton20691.jpg","width":1,"height":1},"large":{"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/arton20691.jpg","width":1,"height":1},"full":{"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/arton20691.jpg","width":0,"height":0}}},"_links":{"self":[{"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/posts\/20691","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/comments?post=20691"}],"version-history":[{"count":0,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/posts\/20691\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/media\/2000069700"}],"wp:attachment":[{"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/media?parent=20691"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/categories?post=20691"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/tags?post=20691"},{"taxonomy":"byline","embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/byline?post=20691"},{"taxonomy":"hashtag","embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/hashtag?post=20691"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}