“Group profits for the nine months to 31 March 2018 increased by 5.0% to reach Rs 5,447.8 million, with earnings from foreign sources and non-banking operations contributing 56% thereof.

Operating income rose by 6.6% to reach Rs 12,536.5 million. This performance was driven by an increase of 8.8% in net interest income, reflecting a strong growth in the overseas activities of MCB Ltd and, to a lesser extent, higher investments in Government securities amidst a still high liquidity situation in Mauritius. Net interest margin as a percentage of average earnings assets increased during this financial year after several years of contraction. Net fee and commission income went up by 7%, underpinned mainly by higher revenues from lending, regional trade financing and payment activities in the banking cluster as well as continued growth within the non-banking segment. ‘Other income’ fell by 1.1% for the period under review despite profit on exchange increasing by 1.4%.

Operating expenses grew by 8.0% in line with the ongoing capacity-building projects currently in progress across the Group. This contributed to a rise in the cost to income ratio which stood at 41.3% as compared to 40.8% for the corresponding period in the previous year.

Net impairment charges rose by Rs 194 million to Rs 1.0 billion, representing an annualised rate of 65 basis points of gross loans and advances, of which 7 basis points relate to portfolio provisions built-up during the period as a result of the increase in the loans and advances portfolio. The gross non-performing loan ratio stood at 4.9%.

In spite of an improved performance from BFCOI, our share of profit of associates remained flat, principally reflecting losses incurred at the level of PAD Group.

Shareholders’ funds increased to Rs 50.7 billion, contributing to a capital adequacy ratio of 17.8%, of which 15.7% in the form of Tier 1 ratio.

On current trends, Group results for the financial year ending 30 June 2018 are expected to improve compared to last year. Prospects beyond are encouraging in view of our business pipeline and signs of strengthening economic activity at the global, regional and domestic levels.”