Profits of Rs 4.8 billion for first quarter of FY 24/25

Commenting on the results, Jean Michel NG TSEUNG (Group Chief Executive - MCB Group Ltd) said:

“We started the financial year with a robust performance in the first quarter of the financial year 2024/25, with profit attributable to ordinary shareholders increasing by 35.2% to Rs 4,811 million, in line with improved performance within the banking and non-banking financial clusters. This has led to a rise in our return on equity to 18.3%. The Group continues to maintain a robust risk profile with stable asset quality and a strong capital position as evidenced by a Tier 1 ratio of 18.8%. We are well positioned to navigate the dynamic operating context and remain committed to pursuing our strategic priorities with the aim to support our customers and deliver sustainable returns to our shareholders.”

Financial Performance

· Operating income grew by 24.8% driven by a broad-based improvement in core earnings, reflecting the continued expansion of foreign banking operations in particular as well as the enhanced contribution from the non-banking financial cluster.

· Net interest income rose by 21.1% as a result of a year-on-year increase in the average interest-earning assets, driven by the continued growth in the international loan book and investment securities portfolio. This performance was also supported by an improvement in margins on the overall loan book and rupee-denominated investment securities portfolio.

· Net fee and commission income was up by 11.2% reflecting the growth in trade finance and payment activities as well as higher contribution from MCB Capital Markets.

· Other income grew by 68.5% due to an increase in profits from foreign currency dealings and fair value gains on equity financial instruments as compared to a loss on these instruments recorded one year earlier.

· Non-interest expense increased by 14.5% as a result of higher staff cost related to an increase in headcount and provisions made for the introduction of the Deposit Insurance Scheme in Mauri􀆟us. The cost-to-income ratio for the quarter to September 2024 worked out at 33.8% compared to 36.9% in the corresponding period last year.

Impairment charge increased by 17.7% resulting mainly from lower recoveries made during the quarter when compared to the same period last year. This resulted in an annualised cost of risk of 83 basis points.

· The share of profit of associates declined by 5.7% to Rs 148 million with the improved contribution from BFCOI being offset by a dampened performance at the level of Promotion and Development Group.

· The tax charge for the period increased by 21.7% in line with the growth in profits and the introduction of the Corporate Climate Responsibility Levy in Mauritius.

· Profit attributable to ordinary shareholders increased by 35.2% to Rs 4,811 million compared to the corresponding period last year, with the contribution from foreign-sourced activities of MCB Ltd standing at 56%.