Annual Report 2023
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Financial highlights
Financial Performance
Net profit
Rs 14,133 m
+46.7%
Total assets
Rs 830 bn
+14.0%
Shareholder value
Earnings per share
Rs 57.66
+43.7%
Dividend per share*
Rs 20.25
+45.7%
Market positioning
Customer loans
Rs 368 bn
+8.3%
Customer deposits
Rs 587 bn
+13.3%
Efficiency & return ratios
Cost to income
35.4%
-2.99 pp
Return on equity
16.9%
+4.1 pp
Asset quality & capitalisation
Gross NPL ratio
3.2%
-0.5 pp
Capital adequacy ratio
19.2%
+1.1 pp
* Dividends declared for FY 2022/23 and FY 2021/22 are not strictly comparable with those of FY 2020/21. No dividend payment was made in respect of 2020 amidst the uncertain context and the 2021 dividend was based on the results of both years, albeit at a reduced payout rate.
Non-financial highlights
Shareholders & investors
Rs 77.2 billion
Market capitalisation on Stock Exchange of Mauritius (SEM)
First on the local stock market
A
MCB Group MSCI ESG Rating
Baa3/P-3
Long-term / short-term deposit ratings – Moody’s Investors Service*
Customers
~ 1,180,800
Total customers
~ 535,120
MCB Juicesubscribers
40
Net Promoter Score for 2023*
Based on a brand study by Kantar; Compared to a world benchmark of 27
Societies & communities
Rs 73 million
Amount spent by MCB Forward Foundation
65%
of total procurement expenditure sourced from local suppliers*
3,855 tonnes CO2 eq1 10,969 iRECs2
Climate contribution*
1 Amount of carbon credits purchased equivalent to our Scope 1 and 3 emissions for 2021
2 International Renewable Energy Certificates (iRECs) purchased which are equivalent to our grid consumption for 2021
Authorities & economic agents
~ 4.5%
of the total value added generated in Mauritius*
~ 8.5%
of total corporate tax paid in Mauritius*
Inclusive of levies on income
40%
Cash to digital payments ratio*
Employees
~ 4,100
Workforce
31%
Women at middle and senior management level*
~ 93%
Employee retention rate
* Relates to MCB Ltd
Note: Figures are as at 30 June 2023, unless otherwise stated
Reflections from the Chairperson
"We have demonstrated resilience and proven to our stakeholders that we can support them in the midst of external disturbances...”
Didier HAREL
Chairperson
Message from the Group Chief Executive
"In spite of the constantly shifting and volatile landscape, profits attributable to ordinary shareholders have demonstrated remarkable resilience and growth...”
Jean Michel NG TSEUNG
Group Chief Executive
Board of Directors and Committees of the Board
Didier HAREL
Chairperson
Independent Non-Executive Director
(8 years on the Board)
Jean Michel NG TSEUNG
Group Chief Executive – MCB Group Ltd
Executive Director
(7 years on the Board)
Gilbert GNANY
Chief Strategy Officer – MCB Group Ltd
Executive Director
(9 years on the Board)
Jean-Philippe COULIER
Independent Non-Executive Director
(3 years on the Board)
Karuna BHOOJEDHUR–OBEEGADOO
Independent Non-Executive Director
(8 years on the Board)
Constantine CHIKOSI
Independent Non-Executive Director
(4 years on the Board)
Georges Michael David LISING
Independent Non-Executive Director
(5 years on the Board)
Stephen DAVIDSON
Independent Non-Executive Director
(3 years on the Board)
Alain REY
Independent Non-Executive Director
(8 years on the Board)
San T SINGARAVELLOO
Independent Non-Executive Director
(5 years on the Board)
Jayananda NIRSIMLOO
Independent Non-Executive Director
(<1 year on the Board)
Cédric JEANNOT
Independent Non-Executive Director
(<1 year on the Board)
Secretary to the Board:
MCB Group Corporate Services Ltd
(represented by Marivonne OXENHAM)
Changes during the year
Joined the Board
• Jayananda NIRSIMLOO (as from November 2022)
• Cédric JEANNOT (as from June 2023)
Re-elected during the Annual Meeting of Shareholders
held in November 2022
• Constantine CHIKOSI
• Jean-Philippe COULIER
• Gilbert GNANY
• Didier HAREL
• Jean Michel NG TSEUNG
Left the Board
• Jean Jacques DUPONT DE RIVALZ DE ST ANTOINE
• Pierre Guy NOEL
Committees of the Board
Risk Monitoring Committee
Jean-Philippe COULIER (Chairperson)
Constantine CHIKOSI (as from January 2023)
Gilbert GNANY
Didier HAREL
Jean Michel NG TSEUNG (Secretary until May 2023)
Pierre Guy NOEL(until March 2023)
Alain REY(until January 2023)
Secretary:
Frederic PAPOCCHIA (as from September 2023)
Remuneration, Corporate Governance, Ethics and Sustainability Committee
Didier HAREL (Chairperson)
Karuna BHOOJEDHUR-OBEEGADOO
Stephen DAVIDSON
Jean-Jacques DUPONT DE RIVALZ DE ST ANTOINE (until November 2022)
Jean Michel NG TSEUNG (as from March 2023)
Jayananda NIRSIMLOO (as from January 2023)
Pierre Guy NOEL (until March 2023)
Secretary:
MCB Group Corporate Services Ltd
(represented by Marivonne OXENHAM)
Strategy Committee
Didier HAREL (Chairperson)
Constantine CHIKOSI (until January 2023)
Jean-Jacques DUPONT DE RIVALZ DE ST ANTOINE (until November 2022)
Gilbert GNANY (also acts as Secretary)
Cédric JEANNOT (as from July 2023)
Georges Michael David LISING
Jean Michel NG TSEUNG (as from March 2023)
Jayananda NIRSIMLOO (as from January 2023)
Pierre Guy NOEL (until March 2023)
Alain REY (as from January 2023)
Audit Committee
San T SINGARAVELLOO (Chairperson)
Karuna BHOOJEDHUR-OBEEGADOO
Stephen DAVIDSON
Secretary:
MCB Group Corporate Services Ltd
(represented by Marivonne OXENHAM)
Supervisory and Monitoring Committee
Didier HAREL (Chairperson)
Gilbert GNANY (as from March 2023)
(also acts as Secretary)
Jean Michel NG TSEUNG (Secretary until March 2023)
Pierre Guy NOEL(until March 2023)
Our corporate profile
Who we are
MCB Group is an integrated regional banking and financial services provider, with a diversified but synergistic portfolio of businesses.
Credit ratings
Moody's lnvestors Service
Deposit ratings
Baa3/P-3 (Stable)
Relates to MCB Ltd
Care Ratings (Africa) Private Limited
Issuer rating
AAA (Stable)
Pertains to the servicing of financial obligations in Mauritius
Sustainability highlights
Constituent of
SEM Sustainability Index
and awarded an ‘A’ MSCI ESG rating
Domestic market shares of our main subsidiary, MCB Ltd
Stock profile
Market capitalisation
Rs 77.2 billion
31% of SEMDEX1
One of the most traded stocks in Mauritius in FY 2022/23
Rs 4.7 billion value traded
45% of market turnover2
Our strategy
Executing our strategy in a volatile environment
In an environment characterised by persisting uncertainty and volatility, MCB Group has, during FY 2022/23, remained committed to pursuing its strategic objectives. In this respect, we have progressed on the execution of our 3-year rolling plan while positioning ourselves to take advantage of opportunities unfolding from the dynamic operating landscape.
Anchored on our proven business model, our strategy paves the way for delivering sustained earnings and maintaining sound financial metrics, alongside ensuring that we operate within the precinct of our risk appetite. Amidst ongoing endeavours to transform the Group into a simpler and better organisation, we aim to strengthen our positioning by delivering excellent customer service through adapted and innovative customer solutions and grow and diversify our business by tapping into opportunities in areas where we display strategic competencies, with Africa being our main target. Our actions are guided by our purpose, Success Beyond Numbers, with the key objective being to deliver a positive economic, social, environmental and cultural impact.
Our philosophy
The Board of MCB Group Ltd is committed to applying high standards of corporate governance with a view to upholding the organisation’s long-term business sustainability and creating value for all its stakeholders, whilst acting for the good of society. The Board provides purpose-driven and ethical leadership by setting the tone from the top in the way that it conducts itself and oversees the operation and management of the Company and of its subsidiaries. It ensures that good governance principles are adopted throughout the organisation, with the aim to maintain ethical and responsible behaviour by all employees in their dealings with stakeholders. Principles of accountability, strong risk management, transparency, and integrity are thus inherent to the Group’s values, culture, processes and operating structures. The Group’s governance framework is also guided by major developments arising in the dynamic market place, whose implications are constantly assessed by the Board, and which, during the year, pertained to the ongoing macroeconomic uncertainty, increased competition and regulatory requirements, heightened prominence of ESG considerations, cyber threats and digital disruption, as well as workplace transformations and employee expectations. MCB Group’s strong performance in the ‘Corporate Governance Scorecard Assessment’ exercise of listed companies conducted by the National Committee on Corporate Governance (NCCG) in 2022 is a testimony to the purposeful commitment to the application of the principles set out in the Code. The Group’s Corporate Governance Framework is anchored on the four pillars highlighted hereunder.
Risk and capital management report
The year in review from a risk perspective
The operating context across markets we are exposed to has been subject to high uncertainty levels during FY 2022/23, notably related to the high interest rates/high inflation environment coupled with sovereign rating actions in Africa, as described on page 40 to 41 of this Report. As a result, the risk landscape with which we have been confronted has been impacted. That said, our risk profile remained within established limits of our defined risk appetite thanks to the robust policies and processes in place and our proactive risk management across entities. We ensured that we continue to actively identify and assess risks arising from both external and internal environments, enabling us to comprehensively analyse potential threats and identify opportunities. Our Enterprise Risk Heat Map plays a pivotal role to this end. Through this exercise, we systematically pinpoint, assess, and keep a close watch on risks that have the potential to significantly influence our operations, financial performance, solvency, or strategy. On another note, with a view to enhancing our approach to risk management and compliance across all our subsidiaries, the Chief Risk Officer and Head of Compliance functions of MCB Ltd have been elevated at Group level. While the oversight will be carried out by the Group Chief Risk Officer and Group Head of Compliance and their respective teams, each subsidiary of the Group will continue to take ownership of the risks of its operations and the management of its respective risk and compliance functions.
During the year under review, the most prominent themes influencing our risk landscape related to ongoing macroeconomic uncertainties, increased competition and regulatory requirements, heightened prominence of ESG considerations, cyber threats and digital disruptions as well as continued workplace transformations and employee expectations. These factors have been identified as part of our materiality determination process detailed on page 39. Accordingly, we have defined 13 key risks that impact our business, which are classified in three risk categories, known as financial principal, non-financial principal and ESG risks, for adequate risk coverage. Of note, these risks represent only the major risks to the Group and are not exhaustive.
Our key risks
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