Business Times Africa Magazine 2017 /vol 9/ No2 BT2Edition2017_web | Page 52

MAURITIUS
Mauritian banks think
beyond home comforts
IN RECENT YEARS, LOW
DEMAND FOR CREDIT AND
HIGH CAPITAL INFLOWS
HAVE CONTRIBUTED TO AN
EXCESS OF BOTH LOCAL
AND FOREIGN CURRENCY
LIQUIDITY IN THE MAURITIAN
BANKING SECTOR
C
areful cost management and diversification
have yielded solid profits for Mauritius’s banks.
And with the government now focusing on
SMEs, many banks are now developing their services
for this sector while also expanding their footprint
abroad.
Faced with a regional economic slowdown and
a sub-optimal domestic operating environment,
Mauritian banks should be struggling. Instead, the
country's lenders have overcome these challenges to
post solid growth numbers in the past year.
This performance reflects the efforts by most banks
to cut costs, diversify their activities and develop
innovative products and services to support growth.
For a relatively small market, these achievements are
one of the more promising stories emerging from the
region in recent times.
Research by Swan, a Mauritian financial services
provider, puts sector-wide return on equity at 9.3% for
the year ending 2016, while return on assets was about
1.2%. Though these numbers show a decline from
recent years, they nevertheless contain some standout
individual performances, particularly regarding the
country’s largest and most well-established lenders.
Profits up
The MCB Group, of which the Mauritius Commercial
Bank (MCB) is the main constituent, saw its profit
attributable to shareholders expand by 15.8% to
$184m in the 2015/16 financial year. Notably, earnings
from foreign sources and non-banking operations
contributed to about 60% of the group’s results during
this period.
50 Business Times Africa | 2017