MCB net profits up 4.9% year-on-year
The green office which serves as the headquarters of the Mauritius Commercial Bank at Ebene, Mauritius (Source: www.arup.com)
MCB Group’s profits for the financial year ended June 30, 2013 rose 4.9% on a year-on-year basis to reach Rs 4.32 billion against Rs 4.1 billion in 2011-12, spurred by continued growth in the loan portfolio, especially outside Mauritius. Consequently, earnings per share stood at Rs 18.15 as compared to Rs 17.32 in the year-ago period.
Mauritius Commercial Bank (MCB), the biggest bank in east Africa and the Indian Ocean region by assets, saw its net interest income increase by around 10% to reach Rs 7.05 billion. These results beat market expectation given low domestic demand for credit, pressures on margins due to heightened competition and low yields on Treasury Bills.
Boosted by a significant rise in revenues associated with cross-border trade finance activity, net fee and commission income went up around 18% to Rs 2.63 billion.
However, foreign exchange profits were down vis-à-vis the year-ago period on account of unfavourable market conditions. While operating costs were fairly well contained, impairment charges doubled, owing essentially to MCB’s Global Business exposures. Despite the latter’s adverse impact, the overall share of foreign-sourced income to group profits stood at 46% for the year.
The Mauritius-based financial services major does not foresee a material improvement in its operating profits in the period ahead. In particular, it states that operations in Mauritius are expected to be dampened by restrained growth and sluggishness in private investment unless far-reaching measures are adopted to boost the island nation’s competitiveness.
Whilst endeavouring to promptly implement the new Group structure as a basis for sustained growth, MCB is resolutely geared to further expand overseas business with a key focus on strengthening its market positioning in sub-Saharan Africa. With foreign-sourced activities expected to underpin growth in operating income, an improvement in results is foreseeable for FY 2013-14.
MCB shares closed ahead of the results at Rs 192.5 on Thursday, higher than the previous close of Rs 192.
Source: Company Website