{"id":51952,"date":"2024-11-19T12:54:01","date_gmt":"2024-11-19T12:54:01","guid":{"rendered":"https:\/\/new.igihe.com\/rwandan-banks-maintain-profitability-despite-increase-in-non-performing-loans\/"},"modified":"2024-11-20T15:50:15","modified_gmt":"2024-11-20T15:50:15","slug":"rwandan-banks-maintain-profitability-despite-increase-in-non-performing-loans","status":"publish","type":"post","link":"https:\/\/new.igihe.com\/english\/rwandan-banks-maintain-profitability-despite-increase-in-non-performing-loans\/","title":{"rendered":"Rwandan banks maintain profitability despite increase in non-performing loans to Frw 267 billion"},"content":{"rendered":"<p>In the same fiscal year, loan approvals surged by 33%, amounting to Frw 2,162.9 billion. <\/p>\n<p>The BNR\u2019s report, presented to both chambers of Parliament on November 18, 2024, highlighted notable changes in the banking sector. <\/p>\n<p>Deposit interest rates in commercial banks rose to an average of 10%, driven by long-term savings, while loan interest rates declined by 15.97%, spurred by the growth of short-term loans.<\/p>\n<p>The increase in the NPL ratio, from 3.6% to 5%, was largely attributed to repayment challenges faced by some large companies. Nevertheless, the banking sector demonstrated resilience, with net profits rising by 36.7% to Frw 132.5 billion in the first half of 2024.<\/p>\n<p>BNR Governor John Rwangombwa explained that the 5% NPL ratio does not threaten the profitability of banks. <\/p>\n<p>He remarked, \u201cEven with this 5%, there are amounts already written off as unrecoverable, which are closely monitored over time.\u201d <\/p>\n<p>Rwangombwa also emphasized that BNR maintains strict oversight to ensure banks can issue loans prudently or recover collateral when necessary.<\/p>\n<p>Despite a strong financial position, the sector faces structural challenges. In 2024, 67% of total deposits were demand deposits, which can be withdrawn at any time, while only 33% were time deposits with maturities of less than a year. This limits banks\u2019 capacity to issue long-term loans.<\/p>\n<p>As of June 2024, the Net Stable Funding Ratio (NSFR) stood at 135.6%, well above the regulatory minimum of 100%. This indicates a robust liquidity position, bolstered by a 23.1% increase in customer deposits, which accounted for 78.5% of total bank liabilities.<\/p>\n<figure class=\"spip-document spip-document-77273\"><img decoding=\"async\" src=\"https:\/\/en-images.igihe.com\/jpg\/loans.jpg\" alt=\"Rwandan banks have maintained profitability despite increase in non-performing loans to Frw 267 billion. \" \/><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>The National Bank of Rwanda (BNR) has reported that non-performing loans (NPLs) in Rwandan banks reached Frw 267 billion during the 2023\/2024 fiscal year, representing 5% of total loans. Despite this increase, BNR assured that the ratio remains within a manageable range and does not significantly affect the profitability or stability of the banking sector.<\/p>\n","protected":false},"author":62,"featured_media":2000077272,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[75],"byline":[636],"hashtag":[],"class_list":["post-51952","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-homenews","byline-ighe"],"bylines":[{"id":636,"name":"IGHE","slug":"ighe","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":null}],"contributors":[{"id":636,"name":"IGHE","slug":"ighe","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":null}],"featured_image":{"id":2000077272,"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/loans.jpg","alt":"","caption":"","mime_type":"image\/jpeg","width":0,"height":0,"sizes":{"thumbnail":{"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/loans.jpg","width":1,"height":1},"medium":{"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/loans.jpg","width":1,"height":1},"medium_large":{"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/loans.jpg","width":1,"height":1},"large":{"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/loans.jpg","width":1,"height":1},"full":{"url":"https:\/\/en-images.igihe.com\/IMG\/logo\/loans.jpg","width":0,"height":0}}},"_links":{"self":[{"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/posts\/51952","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\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/comments?post=51952"}],"version-history":[{"count":0,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/posts\/51952\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/media\/2000077272"}],"wp:attachment":[{"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/media?parent=51952"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/categories?post=51952"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/tags?post=51952"},{"taxonomy":"byline","embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/byline?post=51952"},{"taxonomy":"hashtag","embeddable":true,"href":"https:\/\/new.igihe.com\/english\/wp-json\/wp\/v2\/hashtag?post=51952"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}