FINANCIAL HIGHLIGHTS – YEAR UNDER REVIEW
AfrAsia Bank Limited (the ‘Bank’) recorded satisfactory operating profits of MUR 506m in its seventh financial cycle. This financial performance of the Bank was achieved by strengthening its local market share through its market differentiation strategy. The Bank has also secured steady growth in operating revenue from interest and non-interest sources by a sustained expansion across its core lines of businesses of Corporate Banking, Corporate Finance, Private Banking and Wealth Management. The operating profit represents a net increase of 49% from last year.
The Bank recognised interest income of MUR 1.4bn for the year under review. Interest income continues to be the main source of revenue for the Bank. An increase of 37% as compared to previous year was reported. This was primarily driven by loans and advances to customers.
Interest expense of the Bank grew by 12% during the year under review, with increase of 13% in Segment A and 8% in Segment B. This was due to stickiness of customers.
Net interest income improved to MUR 659m, showing growth of 42% in Segment A and 125% in Segment B.
Non-interest income amounted to MUR 518m for the financial year 2014 (2013: MUR 297m), an increase of 74% mainly due to fees and commission, net trading income and other operating income. Net fees and commission income increased by 2% to MUR 159m. Net trading income increased by 86% which is in line with new treasury products. New products like XtraMiles have been introduced giving more advantages to customers.
Non-interest expense increased by 52% in line with business volumes. There has been continued investment in human resources, technology, customer service and branding. The cost to income ratio was 42% as at 30 June 2014. Personnel expenses grew as expected by 46% mainly due to the recruitment of key experienced people during the year.
Total assets of the Bank amounted to MUR 47bn, representing an increase of 50%.
LOANS AND ADVANCES
AfrAsia Bank Limited pursued its strategy of geographical diversification, which resulted in advances to non-resident and Global Business Licence Holders progressing year-on-year. Total advances grew by 24% to MUR 17.4bn with strong growth in personal and corporate. Impaired advances at 30 June 2014, amounted to MUR 176m representing 1% of total gross advances.
Total deposit base grew by 51% contributed by all business lines resulting in an increase of MUR 13.9bn. This allowed to maintain a conservative loan-to-deposit ratio of 42%. The Bank raised MUR 14bn deposits during the year with MUR 2.5bn and MUR 11.5bn from Segment A and Segment B respectively, showing the strength of the global business flows.
The Bank is very adequately capitalised with a Capital Adequacy Ratio of 13.1% as at 30 June 2014. MUR 159m of Tier II debts were raised during the year under review. Class A shares capital amounting to MUR 1.4bn was also raised during the year. Going forward, with Basel III in effect as of 1 July 2014, Capital Adequacy Ratio analysis will be supplemented with Tier I minimum requirements and numerous other capital buffers to be monitored.
AfrAsia Bank pursued its strategy of geographical diversification, which resulted in advances to non-resident and Global Business Licence Holders progressing year-on-year.