Reflections from the Chairperson

Foreword

As I write to you for the last time in my capacity as Chairperson of this distinguished Group, I am filled with immense pride in all that we have achieved together. Our journey has been marked by resilience, growth and innovation. Through the highs and the challenges, our commitment to delivering sustainable value to our shareholders has remained unwavering.

In a volatile and often unpredictable operating environment, the Group delivered a strong set of financial results in FY 2023/24. Profit attributable to shareholders grew by 13.5% to stand at Rs 16,045 million, driven by the continued growth in operating income. Net interest income rose by 22.5%, on the back of growth in interest-earning assets and improved foreign currency margins amidst the high global interest rate environment. Non-interest income was supported by higher transaction volumes across entities, notably in terms of trade finance and payments activities as well as improved trading income. Moreover, we preserved our financial soundness in support of our growth strategy. The Group remained well capitalised with Tier 1 and capital adequacy ratios standing at 18.0% and 20.5% respectively as at 30 June 2024. We also maintained healthy liquidity and funding positions while our asset quality metrics have improved.

The success of the Group's efforts during the year under review have been widely recognised. MCB Group Ltd has consolidated its standing as the strongest blue-chip company on the Official Market of the Stock Exchange of Mauritius with a market capitalisation of around Rs 96 billion as at 30 June 2024, representing a market share of 36%. Our share price witnessed a notable year-on-year increase of around 21.3% during the period under review, thus largely outperforming the market index. It achieved an all-time high closing price of Rs 450.00 in September 2024. Further, reflecting our enduring success, the Group has been ranked 581st worldwide and is positioned at the 13th spot within Africa while being the top banking institution in East Africa as per the July 2024 edition of The Banker Top 1000 World Banks rankings. With regard specifically to MCB Ltd, it upheld its investment-grade credit rating assigned to it by Moody's Ratings. It has also been named the 'Best Bank in Mauritius' by Euromoney Awards for Excellence in 2024. Beyond Mauritius, the Bank was awarded the 'Best Regional Bank in Southern Africa' in the context of the African Banker Awards 2024. Testifying to our commitment to creating a positive impact within the community, MCB received the PwC Sustainability Awards 2024 for the financial services industry.

Key drivers of our success

Group entities have made further strides in the execution of their strategic objectives in FY 2023/24. Within the banking cluster, despite competitive pressures, MCB Ltd has reinforced its leadership position in Mauritius by offering a more refined and personalised value proposition, facilitated by enhanced digital solutions, to help its individual customers, entrepreneurs and corporates navigate the unsteady context and pursue their undertakings. On the international front, we continued to drive our diversification efforts, targeting niche segments where our expertise is well-established. We remained committed to supporting African economies through oil and gas financing, alongside accompanying their shift to cleaner energy. A key focus has also been on reinforcing our involvement in infrastructure project financing towards shaping the African energy landscape. Alongside upholding our engagement with other financial institutions, the Group further pushed ahead with its sustainability agenda by securing key funding reflecting commitment to ESG principles. We reinforced our role as a key banking partner for regional and international corporates across African and Asian markets. In doing so, we leveraged the Mauritius IFC and our regional hubs to facilitate cross-border flows and support clients, needs. Furthermore, we strengthened our involvement vis-à-vis overseas high-net-worth customers and external asset managers, backed by a range of tailor-made investment solutions and advisory services as well as enhanced market visibility. Our overseas banking subsidiaries have driven balance sheet growth by adopting a customer-focused strategy and implementing value-adding initiatives, while harnessing Group synergies to deliver distinct value propositions. In the non-banking sector, our entities maintained efforts to uphold market positioning. As a key milestone in the local debt market, MCB Capital Markets advised on the first bond issued to finance a renewable energy project. We also continued our relentless drive to promoting excellence in the workplace, which is the key differentiation-factor for all successful corporates. The four constitutive building-blocks of this ambitious, but absolutely essential objective are outlined hereunder.

a) Charting a path for lasting progress for the future

As illustrated above, the Group is demonstrating an ability to consistently deliver outstanding results - a hallmark of a truly great organisation. Sustaining high performance is a challenge that requires well-considered investment. I remain convinced that the highest yielding investments we can make are not just in financial assets but in something far more foundational - namely our people. Talent, Ieadership, and culture are the key cornerstones upon which organisations that deliver outstanding performance over time are built and they are the key to ensuring the Group's enduring success.

b) Investing in Talent

Over the years, we have attracted some of the brightest minds in the industry - individuals who bring passion and innovation as well as deep subject matter expertise. It is imperative that we continue to invest in nurturing talent at all levels of the organisation. To ensure the very best possible return on this investment, we must boldly reinforce the principles of meritocracy, continue to provide opportunities for growth, foster a culture of continuous learning and empower our people to lead with confidence and creativity. In this respect, I am pleased to observe that our sustained focus on talent development is equipping our teams to excel in a digital and increasingly sophisticated environment, thereby enabling us to continuously improve our service delivery to clients.

c) Cultivating Leadership

Impactful leadership is vital in navigating the complexities of today's financial services landscape. Our leaders must be equipped not just with technical knowledge but also with the vision and integrity to inspire and guide our teams through both opportunities and uncertainties. I have been particularly pleased to see major investments in building our leadership capability over the course of FY 2023/24, with initiatives such as the IMPACT Excellence Program and the IMPACT Accelerate Program, both accredited by Stellenbosch University. We will continue to build a team that is ready to take our Group into the future with courage and conviction. In the same vein, succession planning remains a top priority at both Board and Management levels as it is crucial to ensuring the continuity of leadership and the long-term success of the organisation. At Board level, Maya Makanjee was appointed as Independent Director, in November 2023, in replacement of Alain Rey. Moreover, following the retirement of Gilbert Gnany after a rich career in the organisation, we welcome Dipak Chummun who has been appointed as Group Chief Finance Officer and also joined the Board as Executive Director in September 2024.

I remain convinced that the highest yielding investments we can make are not just in financial assets but in something more foundational - namely our people.

d) Building a Culture of Excellence

Our culture shapes what we care about and what we stand for. The time and energy that have been spent in embedding the values and Shared Ways of Working over the last two years are starting to pay dividends. We must not grow weary in well-doing but continue these efforts with rigour and energy. As we advance, it is crucial that we maintain a culture that promotes diversity, inclusion, collaboration, and a shared sense of purpose. This will enable us to adapt, innovate and excel in an ever-evolving market.

Our collective efforts to invest in talent, Ieadership and culture are bringing about significant changes in the Group's operating philosophy that will serve all stakeholders well. By introducing clear and strategically-aligned performance scorecards, we have created a shared understanding of our priorities and the key metrics that drive success. In addition, we have made significant changes to executive compensation to increase transparency and objectivity in performance assessment and create a much clearer connection between reward and results. These changes have provided a robust framework for accountability and have strengthened our ability to execute our strategy with precision and agility.

Final words

Before I conclude, I wish to pay a special tribute to Mr Pierre Guy Noël, the former Group CEO, who sadly passed away on 27 December 2023. Apart from being a visionary leader and the linchpin of the internationalisation and diversification of MCB Group's Banking and Non-Banking activities, Mr Noël was a charismatic and profoundly humane leader, with a strong personality that left nobody indifferent. I have had the great pleasure of working closely with him, over the first six years of my Chairmanship, to jointly and continuously serve the Group's interest. His name will be written in gold letters, in view of the fact that he undeniably shaped the history of MCB over the years.

Through the highs and the challenges, our commitment to delivering sustainable value to our shareholders has remained unwavering

As I prepare to hand over the reins, I am reassured by the knowledge that the Group is in capable hands. I leave with the confidence that the future is bright, sustained by a strong foundation of talent, leadership, and a culture that truly embodies our values. Thank you for the trust you have placed in me over the last eight years. It has been an honour to serve as your Chairperson. May I also express my sincere thanks to Jean Michel Ng Tseung, with whom I have had the pleasure to work closely and productively over the last two years, and to all the Directors I have worked with at Board and committee levels, over my tenure as Chairperson, for their valuable counsel and continuous support, as well as for their unflinching dedication to upholding and acting in the best interests of the Group and to promote its success for the benefit of our shareholders. My thanks and appreciation also go to all the management teams and staff of the Group at large.

I am confident the Group will continue to embody its purpose, Success Beyond Numbers, with unwavering commitment, driving innovation and excellence in meeting stakeholder expectations.

I would finally like to wish all the very best to my successor as Chairperson, Mr Jayananda (Jay) Nirsimloo who has now served as a member of the MCB Group Board for 2 years and I am absolutely convinced that the Group chairmanship will be in very able hands, going forward.

Didier HAREL

Chairperson