Profits of Rs 4.9 billion for first quarter of Financial Year 2025/26

“Despite the improvement in our operating results with a solid increase in profit before tax of 14.6%, bottom-line performance has been impacted by the new fiscal measures announced in the last national budget. Profit attributable to ordinary shareholders increased by 2.6%, lower than what we had reported in previous quarters.

Our balance sheet grew by 13.1% compared to the corresponding period of last year, reflecting sustained business growth. The Group’s risk profile remains robust with stable asset quality and a lower cost of risk whilst our strong capital buffers provide us with ample headroom for future growth.

Despite the prevailing headwinds, the Group remains resilient and committed to the execution of the strategic initiatives that will enable us to deliver on Vision 2030. ”

Financial Performance

• The Group’s operating income increased by 9.2% with an improvement in core earnings across all the operating clusters.

• Net interest income rose by 4.6% driven by the growth in interest-earning assets whilst margins contracted as a result of lower margins derived on the foreign currency loan book despite improved yields on rupee liquid assets.

• Net fee and commission income grew by 11.3% supported by higher revenues from payments and wealth management activities as well as increased loan arrangement fees. 

• Net trading income increased by 33.8% mainly reflecting higher income from dealing in foreign exchange and fixed income securities. 

• Non-interest expenses increased by 15.2% resulting from higher staff costs linked to an increase in headcount to support the Group’s business activities. The continued investment in technology and higher contribution to the deposit insurance scheme in Mauritius also contributed to the increase in operational expenses. The cost-to-income ratio increased to 35.9% from 34.0% for the first quarter of the last financial year, in line with our investment plans. 

• Impairment charges decreased by 41.0% reflecting mainly the impact of successful recoveries made during the quarter. The annualised cost of risk dropped to 0.5% as a result, ending 41 basis points lower than last year. The Gross NPL stood at 3.0%.

• The share of profit of associates increased by 18.9% to Rs 176 million on account of the improved performance of Promotion and Development Ltd. 

• In line with the rise in profit before tax and the new fiscal measures announced in Mauritius, tax charges increased by 65.2% to Rs 1,880 million resulting in an overall effective tax rate of 27.4%.

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