Net Interest Income
The Bank’s commitment to customer lending grew the Bank’s net interest income by 80%, equivalent to an approximate MUR 293m as compared to last year. The growth was primarily driven by interest income on customer loans and current accounts. This reflects a satisfactory achievement, indicating the Bank’s ability to deploy its available funds to higher generating interest rate assets along with its ability to grow its client base with attractive deposits campaigns across various currencies. Overall, interest income of MUR 1.4bn and interest expense of MUR 694m were recorded.
The Bank’s performance in the area of non-interest income was satisfactory with MUR 518m being achieved for the year ended 30 June 2014 despite some softness due to a volatile and excess liquid environment. The main drivers include net fees and commission income of MUR 159m and foreign currencies dealing profits including swap transactions and held-for-trading financial investments income of MUR 246m.
While continuing to invest in capacity building and preparing itself for the future, the Bank maintained tight cost control. The cost to income ratio remained as low as 42%, reflecting its efficiency efforts.
As such, there has been continued investment in human resources, technology, premises, customer service and branding. Staff costs and employee benefits stood at MUR 289m, an increase of 46% compared to previous year. The Bank has a well-defined strategy to retain and attract professional staff across all layers of the Bank.
The core of its other non-interest expenses of MUR 206m is reflected in its marketing strategy to secure market share and gain greater visibility locally and internationally.
The total assets increased by 50% to MUR 47bn over the year under review. The assets mix remained well diversified, maintaining an acceptable risk return profile and focusing on the quality of the portfolio. The main components of total assets are securities at MUR8.7bn, loans and advances to customers at MUR 17.4bn and cash and balances due from banks at MUR 20.3bn and other assets at MUR 773m.
The Bank’s deposit base exceeded the targets to reach MUR 41bn as at 30 June 2014, an increase of 51% or MUR 14bn over the year. This solid customer deposit growth reflected the privileged and collaborative relationship with customers, with a healthy split between 36% to Segment A and 64% to Segment B, in line with its deposits growth strategy.
The Bank closed the year with Class A shares and Tier II Core Capital including reserves of MUR 3.5bn. This represents a risk-weighted capital adequacy ratio (calculated under Basel II requirements) of 13.1%, a ratio above the minimum recommended level set by the Bank of Mauritius in terms of risks taken with depositors’ monies. The Bank remained well capitalised with share capital and reserves of MUR 3.3bn. Additional MUR 1.56bn share capital was raised during the year under review.