Bank joint venture investments and profitability of commercial banks in Rwanda: a case of the people’s bank of Rwanda limited (PBR LTD)
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Date
2012
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Publisher
Kampala International University
Abstract
The study was about the low profitability and joint venture investments of banks in Rwanda. The study was carried out to analyze and investigate the causes of low profitability of bank joint venture investments in Rwanda. The study took place in People’s Bank of Rwanda Limited (PBR Ltd) head quarters in Kigali city, where branches are represented in management team; the objectives of the study were to get knowledge of cooperative bank transformation into commercial bank, to analyze the reasons behind low profitability of People’s Bank of Rwanda despite its largest network and share capital, the focus was after its joint venture with the Nederland bank " Rabobank” and to provide recommendations on how to overcome the challenges to achieve expected profitability.
The reviewed information was collected by stratified sampling technique to determine the number of respondents from target population within the entire population of 1,609 people. The sample was 60 respondents from staffs and management within 97 people of target population. Along with the research, financial indicators were used to convert data collected from financial reports into meaningful information for PBR’s profitability analysis, and then researcher came up with major findings via answered key questions.
The validity and reliability of the study was ensured by a quantitative and qualitative analysis of data from the published and audit financial reports provided by the right departments of BPR Ltd, while the information from questionnaires was provided by the administratively informed managers and staffs.
Findings indicated that PBR’s profitability was not sustainable; transformation undergone and new investor were not adding expected value to PBR’s profitability. PBR’s sustainability and profitability are highly dependent on credit. As recommendations, it should improve the credit risk management and create new products by strict monitoring of operating and other costs.
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Abstract is currently available in soft copy
Keywords
Venture investments, Profitability, Rwanda