Mauritius financial sector looks up
Industry bell-weathers Mauritius Commercial Bank (MCB) and State Bank of Mauritius (SBM) both declared strong results for the period ended September, 2013. (Image: Peter Kuchar)
The financial sector, a mainstay of the island economy with a contribution of 10.3% to the GDP, is looking up and how. Industry bell-weathers Mauritius Commercial Bank (MCB) and State Bank of Mauritius (SBM) both declared strong results for the period ended September, 2013.
While the MCB is ranked the biggest bank by capitalization in the Indian Ocean region and East Africa, SBM is the second largest bank in Mauritius.
For MCB, boosted by a strong contribution from subsidiaries and associates, group profits (pretax) are estimated to have grown by 16.4% for the three months to September 2013 to reach Rs 1.56 billion, compared to the corresponding period in 2012.
Despite a higher effective tax rate being provided for, in the wake of the rise in the special charge on banks under Budget 2014, a corresponding increase of 6.1 % was recorded at bank level.
Across main business segments, an extension in the loan portfolio supports the growth in net interest income, which increased by 9.5 % to Rs 1.9 billion. Due to growth in revenues supported by loan financing, particularly outside Mauritius, regional trade finance and card related activities, there was an increase of 19.1% in the net fee and commission income to reach Rs 691 million.
Whilst growth in operating expenses was limited to 7.7% for the quarter, allowance for credit impairment rose by around Rs 77 million to stand at Rs 183 million, showing a concern that debts may turn bad in the coming quarters.
Finally, the board noted that MCB was expected to achieve suitable growth in its results for the half year to December 31, 2013, in view of sustained development of international business.
Turning to the State Bank of Mauritius, the financial major also pulled in a strong performance, with a 13.6% increase in pre-tax profits at Rs 4.70 billion for the fifteen months ended September 2013 compared to Rs 4.14 billion obtained for the corresponding period ended September 2012. The bank is changing its financial year end to December 31 from June 30, and the current reporting period will run for 18 months.
An increase of 15.1% was notched up in the pre-provision income compared to the corresponding period last year. Net interest income zoomed up 18.9 % for the period, arising from continued intensive and robust balance sheet management.
SBM’s interest income grew by 4.8%, and the interest expenses decreased by 13.0% because of the liability management. Gross advances grew to Rs 70.5 billion while deposits increased to Rs 76.9bn at 30 September 2013.
While looking for enhancing its revenue generation capabilities in its current markets in Mauritius, India and Madagascar, and discovering a diversification into other countries in Africa and Asia, SBM continues to adopt a prudent approach.
To round up the slew of good news for the financial sector, another key player in the Mauritian banking space, Bramer Bank, declared a 12% rise in quarterly profits over the year-ago period.