Rwanda: Banking assets grew 18.8% in H1

Rwanda's banking sector is demonstrating resilience and growth, according to the recent Financial Stability Report released by the National Bank of Rwanda. The report reveals that banking assets increased by an impressive 18.8% in the first half of 2022, reaching a total of 5.5 trillion Rwandan francs. To further delve into the state of the banking sector, Edward Gasore, the Director of Banking Supervision at the Rwanda Central Bank, provided insights in an exclusive interview with CNBC Africa. Gasore highlighted the steady and robust growth of the banking industry, emphasizing that the sector's performance remains strong and promising. He noted that the growth in assets and loans is primarily driven by lending activities, with total loans to the public and private sectors increasing by approximately 17%. Furthermore, the total deposits in banks have also seen a significant rise of around 19%, suggesting a high level of consumer confidence in the banking sector. Gasore attributed this confidence to the culture of saving in Rwanda, where customers continue to trust banks with their deposits. The growth in lending to the private sector has been a focal point for the banking industry. Gasore revealed that outstanding loans to corporates and individuals have risen by almost 17%, with private sector lending increasing from 2.7 trillion to 3.1 trillion Rwandan francs in just a year. This expansion in lending indicates a strong commitment from banks to support financing for businesses, further driving economic growth in the country. The capital adequacy ratio, standing at a healthy 23.1% compared to the minimum requirement of 15%, reflects the stability and risk management capabilities of Rwandan banks. Gasore emphasized that the ratio provides banks with a substantial buffer to absorb risks and continue lending, essential for fulfilling their core function of supporting economic activities. Despite the high capital buffer, Gasore clarified that there are no immediate plans to revise the minimum requirement of 15%, ensuring a balance between risk-taking and financial stability. The strong performance and prudent risk management practices in Rwanda's banking sector indicate a positive outlook for the industry, with ample room for growth and continued support for private sector development. The sector's ability to navigate challenges while maintaining profitability and stability bodes well for Rwanda's overall economic resilience.