Profits of Rs 20.1 billion for FY 2025/2026

Net interest income increased by 11.7% to Rs 30,229 million, as a result of the growth in interest-earning assets notwithstanding a fall in the overall net interest margin.

In Mauritius, the growth in the Group’s loan book and the reinvestment of liquid assets at higher rates contributed to an increase in rupee-denominated net interest income. Conversely, margins on rupee customer loans and advances declined slightly amidst heightened competition and reflecting preferential rates offered on sustainable finance facilities. In the Group’s overseas banking subsidiaries, net interest income increased in the Maldives and Madagascar but remained relatively flat in the Seychelles.

Foreign currency net interest income increased despite a decline in margins, with growth in customer loans and advances and liquid assets more than offsetting the impact of lower margins. The drop in net interest margins reflected the fall in the USD benchmark rate, heightened competition and a higher proportion of borrowings and foreign currency term deposits in the funding mix.

Non-interest income increased by 11.4% to Rs 16,823 million in FY26, underpinned by the Group’s strategy to grow its non-funded income.

The growth in non-interest income is explained by:

• a 4.8% rise in net fee and commission income supported by payments and wealth management activities;
• a 33.3% increase in trading income reflecting higher volumes of foreign exchange activity and fixed income transactions;
• other operating income increasing by Rs 403 million, benefitting from gains realised on the sale of financial instruments;

The growth was mitigated by fair value losses of Rs 306 million on equity financial instruments linked to investments in the MCB Equity Fund compared to gains of Rs 471 million in the previous year. Of note, most of the gains on financial instruments recorded in FY25 were related to Visa and Mastercard shares. Fair value changes on these shares are no longer recorded in the income statement since November 2024.

Non-interest expenses rose by 13.8% to Rs 17,927 million, in line with continued investment to support the Group’s growth ambitions. The year-on-year increase in non-interest expenses is explained by:

• an increase of 13.1% in staff costs, driven by increased headcount in support of business expansion and adjustments in salaries;
  
• a rise of 19.2% in IT costs due to increased investment in technology as well as higher system costs associated with the Group’s cloudification strategy, cybersecurity initiatives, the deployment of AI and inflation-linked adjustments;
• higher premiums for the Deposit Insurance Scheme in Mauritius of Rs 537 million;
• an increase of 25.6% in legal and professional fees as well as higher consultancy fees related to the implementation of initiatives to support the Group’s strategic ambitions.

As a result, the cost-to-income ratio increased by 75 basis points to 38.1%.

Impairment charges decreased by 33.5%, reflecting strong recoveries made during the first half of FY26. Consequently, the cost of risk for FY26 improved to 0.39% compared to 0.74% in FY25. The specific provision coverage ratio remained robust at 78.1% as at 30 June 2026 compared to 87.6% last year.

The share of profit of associates increased to Rs 798 million compared to Rs 34 million in FY25 driven by stronger performance of BFCOI, as well an improvement in the performance of Fincorp’s associate, namely Promotion and Development Ltd (PAD). Of note, the Group recorded a share of loss from PAD last year due to the one-off write-down of property value linked to damage caused by a cyclone in 2024.

The tax charge increased by 47.6% to Rs 7,282 million in line with the growth in profit before tax and the introduction of new fiscal measures in Mauritius at the start of FY26. The effective tax rate increased from 21.5% last year to 26.4% for FY26.

Profit attributable to ordinary shareholders increased by 11.3% to Rs 20,114 million in FY26, with the share of MCB Ltd’s foreign-sourced income standing at approximately 56% thereof.

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