Despite prevailing economic uncertainties, the PFS business exhibited a robust performance during 2023. Our commitment to prudent risk management and strategic investments facilitated a 10% growth in our Assets Book, coupled with maintaining a low NPA ratio of 1.25% and an impressive 26% increase in our Deposits Book.
PFS remained steadfast on its core priorities:
Domestic business:
Operating in a highly competitive environment, Bank One’s business strategy is rooted in a culture of innovation, challenging market norms and placing the customer journey at its core.
We continued enhancing our value propositions to better meet the evolving needs of our target markets and forged key partnerships to strengthen our one-stop-shop banking ethos. Recognition by the Global Finance Magazine as the “Best SME Bank in Mauritius” for a second consecutive year underscores this commitment to delivering exceptional financial solutions. We strive for high-level service delivery through a well-distributed channel network across the island, consolidating income streams such as lending, bancassurance and foreign exchange.
Offshore Banking:
In 2023, our offshore business witnessed significant growth, expanding more than doubling its customer base of mass affluent clients seeking to benefit from the “Mauritian advantage”. The Elite offshore team expanded, welcoming specialised business development professionals in Mauritius and overseas. Deeper partnerships were also forged with our shareholders’ networks, to expand our reach in the South Southern Africa region.
The Elite experience was refined to enable the smoother onboarding of clients and the value proposition expanded to better cater to the offshore banking needs of mass affluent clients in Africa. These efforts resulted in Elite offering being recognised by the Global Retail Banking Innovation Awards as a “Best Mass Affluent Banking Offering”, validating Bank One’s commitment to excellence.
Digital:
2023 was the year to drive the adoption of the new Internet Banking and Mobile Banking applications that were launched towards the end of previous year. PFS prioritised customer education for the adoption of our state-of-the-art digital channels, which yielded significant results, with over 51% of all transactions and activities now happening through our digital services.
Further innovation came from the introduction of Pop Save, a fully digital savings account featuring an attractive interest rate.
Additionally, we extended our bancassurance capabilities with the release of Pop Insure, which revolutionises the insurance application process. Pop witnessed a phenomenal 376% increase in transaction volume compared to previous year, signalling the continued success of our efforts in fostering a cashless society.
As the world continues to navigate the aftermath of the Covid-19 pandemic, geopolitical tensions and an uncertain economic future, Mauritius emerges as a notable example of resilience and potential, according to the 2024 Maurice Stratégie Economic Review and Outlook.
As we turn into 2024 and, looking into the future, growth remains key to fulfil the country’s ambition. Mauritius, bearing the fifth highest cost of living in Africa, is on a trajectory towards significant economic growth, projecting a GDP increase of 6.5% in 2024. This growth is supported by a dynamic mix of drivers, including a buoyant tourism sector, substantial public and private investments and expected surges in goods and services exports. Notably, strategic hikes in minimum wage and salary compensation are anticipated to spur consumption and further fuel economic expansion.
Mauritius has signed a number of trade agreements, to be effective as from 2022. Leveraging on various trade agreements, Mauritius can increase its trade flow and promote greater cross border investments in African countries.
CBD continues on its strategy to extend its support to existing/new corporate clients on both the Mid-corporate segments and Top 100 companies. 2023 has remained a challenge for the local economy, where various strategies were implemented to boost transactional flows and focus on product cross-selling in terms of trade financing. Additionally, real estate financing and our established presence in the Sub-Saharan African market has helped improve profitability growth on the domestic corporate side. Our focus on the digital transformation journey remains vital to better serve our clients for the daily trade and transactional activities.
Considering the current volatile economic conditions and the low level of visibility on the future, avenues for financing remain low. Bank One’s CBD assets book suffered a contraction compared to December 2023 and the high liquidity level in the economy, coupled with low deployment opportunities following the geopolitical war in Ukraine, shortage of hard currency on the market to accommodate trade growth and the continuous hike in Key Rate. The decline in CBD deposits book is aligned with our strategy to reduce its costs and, in this context, some high-ticket deposits were deliberately allowed to run off.
Africa is set to emerge as the second fastest-growing region in the world, with six SSA countries – Niger, Senegal, Rwanda, the Democratic Republic of Congo (DRC), Côte d’Ivoire and Ethiopia – becoming the top 10 fastest-growing economies in 2024. This is according to the Global Economic Prospects report released by the World Bank. Growth in SSA is projected to be 3.8% in 2024, up from an estimated 2.9% in 2023.
The year 2023 has been a difficult one for the SSA region’s economy, especially in bringing stability to the macroeconomic imbalances. Despite increased conflicts and violence weighing on some of the economies of the SSA, the rising economic fragility arising due to climatic shocks and heightening instability, SSA countries stood firm in pushing growth as the inflationary pressures started to fade and financial conditions eased gradually by the end of the year 2023.
In response to these challenges, Bank One remains firm in pursuing its SSA strategy, as the latter remains one of the most exciting regions in the world embodying potential opportunities for recovery and growth.
IBD’s tailor-made structured lending propositions and trade & cash management solutions are best suited to help Financial Institutions, Sovereigns, Central Banks and African Champions Corporates achieve their strategic growth ambitions.
With the growth trajectory of SSA at the heart of the continent’s development, IBD worked towards its goal to meet our clients’ debts and funding requirements by advising, arranging and structuring, while leveraging our extensive distribution network.
Bank One now stands with a Credit Rating of BB-Stable Outlook by Fitch Ratings since 23 June 2023. It is worth noting that, from a rating perspective, Bank One now ranks amongst the Top 15 Commercial Banks in Sub-Saharan Africa and, ultimately, won the Best International Bank 2023 in Indian Ocean award by Capital Finance International (CFI.CO).
The success of IBD lies in handling its relationship with its clients and in attending the right events and conferences to sustain the network with our partners and clients. For instance, the IBD team attended Global Trade Reviews and Leadership platforms such as the Africa CEO Forum as well as the AFSIC Conference, which have proven very successful in engendering a window to structure transactions by dealing with best-in-class FIs, Lenders and insurance companies, to diffuse risk on
Africa-centric transactions.
As part of its diversification strategy, IBD also introduced two new business lines, to enhance its product suite and generate incremental and diversified revenue streams. The Trade Finance business is expected to grow exponentially in the coming years, to facilitate trade flows within SSA as well as imports of strategic commodities such as energy products, fertilisers and pharmaceuticals, to support Africa’s growth.
In a nutshell, it is not a journey that is paved with overnight success; it is only over time that we can slowly but surely build upwards. We are pleased to continue support the SSA trade flows, with a view to boosting intra-African trade, bridging the SSA trade finance gap and plugging into the new future of client-inspired, innovative and dynamic payment capabilities across SSA.
The Private Banking and Wealth Management & Securities Services (PBWM) clientele includes High Net Worth Individuals (HNWI), external Asset Managers, Financial Institutions, Collective Investment Scheme (CIS) and Pension Funds. To enhance its offering and customer experience, further investments have been made to improve the custody platform.
PBWM continues to grow both its personal and institutional customer base and is positive about the opportunities to grow its business alongside its shareholders in SSA.
During the year, PBWM was recognised as the “Best Private Banking in Mauritius” by Global Finance Magazine.
The year under review has seen a pickup in the economy, with the tourism sector faring much better than pre pandemic levels.
However, currency inflows could not match the demand for hard currency; the shortage persisted and the central bank had to intervene several times to contain the USD/MUR volatility. The Bank of Mauritius interventions, though in smaller lots, totalled an amount of USD 360 million of sales to the local market. This helped theUSD/MUR rate to stabilise and even end the year on a weaker note, at 44.43 compared to 44.70 at the start of 2023.
The BoM MERI2 index, which is based on the currency distribution of the merchandise trade and tourism earnings, showed the local currency appreciated slightly at the end of December 2023, as compared to January 2023.
On the interest rate front, the central bank maintained Key Rate at the 4.50% level throughout the year, despite inflationary pressure subsiding towards the end of the year. With the new monetary policy framework in full swing, the central bank has been able to contain the MUR surplus liquidity by issuing its own securities, together with the issuances of 7-day bills at the key rate. Local banks have been able to access the open market operations at the central bank, by investing surplus MUR on overnight basis.
The treasury department’s focus on the SSA strategy has been gathering momentum, with new counterparties being onboarded; we foresee a pickup in our target base in the years to come. Treasury has achieved a decent performance on both non-funded and interest income during 2023.
The Bank remains committed to enhancing customer experience through its digital transformation journey, with incremental digital deliveries across newly built channels.
In 2023, a new Internet Banking platform for corporate customers was launched, with optimised ergonomics and new features such as bulk payment features.
Workflow capabilities for account opening were extended to our International Banking and Corporate Banking segments, to reduce turnaround time to service our customers.
POP extended its service offerings to Save and Insure, respectively empowering customers to earn interests by saving smartly through rules settings and allowing them to compare insurance offerings at their fingertips.
Quality of service and continuous improvement remain at the core of our values. In 2023, they led to a significant increase in adoption and satisfaction about our digital services across all channels.
The Management Discussions and Analysis report may contain various forward-looking statements with respect to Bank One’s financial position, business strategy, plans and management objectives. By nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances including, but not limited to, domestic market, global economic and business conditions, market risks such as changes in interest and exchange rates, policies and actions of governmental and regulatory authorities. We caution readers of this report not to place undue reliance on our forward-looking statements, as these factors may cause future results to differ materially from the plans, goals, expectations or interest expressed in the forward-looking statements. Bank One Limited does not undertake to update any forward-looking statements that may be made from time to time by the organisation or on its behalf.
Effective risk management is essential in delivering consistent and sustainable performance for all the Bank’s stakeholders. It is a central part of the financial and operational management of the Bank.
The Bank leverages the three lines of defence model (as pictured below) to build and maintain a strong risk culture, where resilience is a priority for the effective management of risk. Focus is placed on multiple drivers to strengthen the risk culture.
Business lines
The first line of defence consists of the management of business lines. It is the responsibility of first line management to identify and manage risks. This includes, at an operational level, the daily effective management of risk in accordance with agreed risk policies, appetite and controls.
Risk Management & Compliance
The second line of defence functions provide independent oversight and assurance and support management in ensuring their specific risks are effectively managed as close to the source as possible.
Internal Audit
The third line of defence provides independent and objective assurance to the Board and Senior Management on the effectiveness of the first and second lines of defence.
École Père Henri Souchon
The Jean Blaise Learning Centre
Support to Ferney Valley Conservation Trust
Collaboration with ACTogether.mu on PRO Workshop series
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