The key features of 2023 remained elevated inflation and interest rates. Both global and local interest rates were at decades highs as central banks around the world battled to contain inflation. This naturally had an impact on our business and our clients both in and outside Mauritius. From a credit risk perspective, despite higher rates, non-performing loans (NPLs) have remained relatively benign. Our own NPLs rose during the year but this related to a single medium sized account outside Mauritius that is over 90% credit insured. Insurance payments are being received in line with the underlying policy.

Our business in Africa continued to be the key driver of growth during the year.

Bank One Strategy

While not neglecting local opportunities, the focus remains Sub Saharan Africa. The offshore sectors are primarily served by our international corporate and our private banking businesses. While Africa is not without its challenges, the region continues to offer significant potential for growth. The demand for financial services particularly hard currency facilities, trade lines, treasury, payments and wealth management remains strong. Risk, however, needs to be carefully managed and the businesses and footprint of the Bank’s two shareholders, I&M and CIEL, provide invaluable insight into countries and customers. This is a significant competitive advantage and allows Bank One to service customers across the region and in particular East Africa.

The Bank One domestic business is served by our Corporate Banking and Personal Financial Services businesses. Increasingly, however, both businesses are acting as a bridge between Mauritius and Africa and vice versa. Supporting and financing Mauritian customers looking to invest in Africa and African businesses and customers looking to leverage the Mauritian advantages of stability, ease of doing business, frictionless trade and strong regulation.

Progress during 2023

The business made excellent progress in its international business during the year. Asset growth was positive, particularly in the financial institution space where Bank One led a number of important syndications. Client growth was strong on the liabilities side with the highest number of new businesses being on-boarded for several years.

International payments growth was robust and the trade opportunity is very encouraging with strong support from a number of key development finance institutions, such as the African Development Bank.

The Bank’s international securities and custody business continues to strengthen and there are good synergies with the financial institutions client base.

The domestic corporate business was profitable but experienced some challenges around market conditions and in particular the cost of local currency funding that remains elevated.

On the retail side, the business has seen impressive growth in its cross border business and its digital application, POP, while still a challenger proposition in the domestic market has made significant progress on the merchant payments side. POP offers exciting opportunities for growth both domestically and internationally.

The Bank continues to invest across its platform. The key investments have been with the corporate Internet Banking (IB) proposition and workflow. The new IB offering has allowed the Bank to step up materially its market services and there is exciting potential to grow international payments with a high degree of straight through processing. On the workflow front, this is focused on driving internal efficiencies and freeing staff up to serve clients. We have been very pleased with the initial results.

All in all, good progress in 2023 as the Bank looks to build and scale its model.

Financial performance

As noted, the Bank produced a robust set of financial in 2023.

• Total assets grew by 11% and deposits by some 17%.
• Revenue was up 19% year on year.
• Profit before impairment grew by 35%
• PAT increased by 53% after net impairment reversals of MUR 132m
• NPLs increased to 4.20% but excluding the credit insured exposure noted above would have been 2.24%.
• Overall capital remains strong at 16.85%.

15th Year Anniversary

While the organisation has roots further in the past, August 2023 was the Bank’s 15th anniversary as Bank One. Over the past 15 years, there have been huge changes to the organisation as the company grew its business.

Assets have grown 11 fold in the past 15 years and our team has doubled in size. Total revenue has improved 43 times. The capital position of the Bank has strengthened from 10% to just below 17% and the business now generates a return on equity of 19.50% for its shareholders.

Thank you to all those who have contributed to this amazing journey.

2024 – the year ahead

The Chair noted a number of significant global trends in her comments. Of these the shorter dated impact is likely to come from declining inflation and interest rates. While rate cuts are not expected before the second half of the year (despite an initial period of euphoria at the beginning of the year in relation to earlier cut expectations) this is expected to play out positively in many of the Bank’s international markets and alleviate pressure on a number of African sovereigns.

Food prices have moderated significantly as markets have adapted to the Ukraine/ Russia war. Again this is positive for Africa. Care, however, needs to be taken in relation to oil prices that could see a spike in the event that the Middle East conflict expands materially.

The Africa Continental Free Trade Agreement is starting to gain some momentum and this remains enormously exciting for the region. Businesses are increasingly looking to work intra Africa,

While firmly based in Mauritius, our business and future as a financial services organisation remains Africa centric. This is where we believe Bank One working closely with its shareholders can achieve significant positive growth and add the greatest value.

Concluding remarks

I would like to reiterate my thanks to the Bank One team, Board of Directors, shareholders, regulators and our customers.

2023 has been another tough year but collectively we have achieved growth in the business and the Sub Saharan African strategy and investment in our capabilities is beginning to show real dividends.

Thank you again for your support in 2023.