Business Success: BCR’s story!
Coming up from near collapse, BCR suffered very poor performance following the 1994 genocide. In quick genius, the government of Rwanda offered it for privatization. The outcome is arguably the most successful privatization deal so far.
At privatization, government aimed to improve BCR’s financial performance and attract an internationally recognized shareholder. Actis, a private equity investor took on the challenge seeing the business potential in BCR. By the end of 2004, Actis had sealed a deal that saw it walk off with 80% controlling interest in the bank. This ground breaking investment was the first major privatization deal in post genocide Rwanda. This year as BCR celebrated a registered 101% profit from Frw 1.04 billion in 2005 to Frw 2.1 billion, the benefits of privatization are clear.
Under Actis, BCR went on to introduce new management and board with extensive international banking and investment experience. What followed was a major facelift that saw the bank’s corporate identity change. The phase after the re branding has been even more pleasant to the Rwandan banker: credit and compliance policies, improving systems and operational controls are some of what BCR has introduced to attract new clients and increase deposits. Indeed by the close of the first quarter this year, customer deposits had shot up to Frw 54.7bn francs while loan portfolio had grown by 53%.
From Golf tournaments, music extravaganzas to sports events and fireworks bashes, BCR has become directly involved with the community. The organization revealed recently that it spends about 100,000,000 Frw on Corporate Social Responsibility (CSR) every year. This represents about 1.2 % of the banks annual revenues of 8.4bn.
It is not just the clients and the community benefiting from BCR’s success. The company recently disclosed that Earning Per Share (EPS) had doubled from Frw 299.8 per share to Frw 608.
This successful partnership between bank and client has not gone unnoticed by the prestigious Banker Magazine. At the close of last year, BCR was named Bank of the Year 2006 at an annual ceremony held at the Dorchester Hotel in London. At the event, it was made clear that the award was in recognition for BCR’s success in turning around the institution to become a market leader.
“BCR is now richer by 27 per cent because her net worth increased from Frw 4.6bn to Frw 6.3bn and total assets up by 49 per cent standing at Frw 74.2bn,” Moyo Nkhosana, Managing Partner of Actis Group revealed at a press conference.
BCR has gone on to sign major deals such as such as the seven year loan agreement signed with the European Investment Bank (EIB) to strengthen the bank’s lending capacity and a credit guarantee deal signed with USAID to promote agribusiness in Rwanda.
Whereas they continue to branch out within the city by opening two branches in Nyabugogo and Remera, BCR continues to tread carefully upcountry. Asked why it has been slow to extend its facilities to the rural areas despite impressive performance, Moyo comments, “We have built the bank from a pretty bad history. Extending to rural areas is a long term target. We can not expand where it doesn’t make a lot of economic sense’
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