Mauritius Commercial Bank sees stable profits in 2013-14 despite challenges
The group has successfully diversified, both in terms of geography and segments, with international activities and the non banking segment now representing half the group results. (Image: SBD 2050)
Mauritius financial services major MCB earned stable profits at Rs 4.3 billion for fiscal year 2013-14, which was more or less the same as the profitability witnessed in the previous financial year, despite a challenging business environment.
The board of directors of the Mauritius Commercial Bank Group (MCB) met yesterday, September 30, 2014, to approve the financial results for the year 2013-2014.
The management noted that the group has performed well despite a persistent decline in private investments, weak return on Treasury Bills and excess liquidity in the market.
For the fiscal ended 30 June 2014, the MCB group saw it operating profits increase by 11.4%, spurred by steady growth of the banking segment, a greater contribution by the non-banking segment (which now accounts for 8% of the group’s results) and an exceptional profit of Rs 400 million on the sale of securities by MCB Ltd.
The group has successfully diversified, both in terms of geography and segments, with international activities and the non banking segment now representing half the group results.
Incomes derived from overseas banking subsidiaries grew by more than 20%, mainly due to the good performance of Banque Française Commerciale Océan Indien (BFCOI).
Besides, income was also boosted by good results declared by investment firm Promotion and Development (PAD), which is an associate of MCB.
While group expenses are under control, the results indicate that a high level of provisions for doubtful accounts were mainly attributed to an Indian customer in the Global Business segment.
The income tax paid by the group also went up by 12.9% further to an increase in Special Levy imposed on banks.
Finally, the environment in which the MCB is operating is not likely to witness any major improvements in the current financial year, where slow global economic recovery, dampened private investment and excess liquidity in Mauritius are some issues which remain of concern.
However, the MCB group will maintain its strategy to improve its results during the financial year 2014-2015 by boosting its banking activities through an increase in income and reduction of provisions for bad debts, even as it diversifies more into non-banking activities.
About the MCB Group:
MCB is an integrated financial services provider. It constantly adapts to the ever-changing operating environment through innovation and the provision of state-of-the-art and comprehensive solutions to its retail, corporate and institutional clients.
Alongside consolidating its leading banking position in Mauritius where it has played an important role in the socio-economic development, MCB has diversified its activities into the non-banking field and acts as an increasingly prominent financial services player in the region, with expansion beyond domestic presence initiated since the early 1990s.
Leveraging its sound business model, MCB pursues ambitious, yet prudent, strategic orientations across markets, while duly adhering to good corporate governance and risk management principles. Reflecting its stakeholder engagement, MCB is actively involved in promoting society’s welfare.
In order to support its growth ambitions, MCB has implemented a restructuring plan aimed at separating its banking and non-banking operations.