SBM BANK (MAURITIUS) LTD SBM Bank (Mauritius) Ltd (‘the Bank’) is pleased to present its abridged unaudited financial statements for the quarter ended 31 March 2021.
The Bank achieved a higher net profit of MUR 724.92 million for the first quarter of 2021 compared to MUR 592.30 million for quarter March 2020 despite the challenging operating environment characterised by the high level of uncertainty following COVID-19 outbreak.
This increase can be attributed to a mixed performance in the revenue and cost lines. Overall, operating income decreased by MUR 10 million as the Bank experienced the full impact of the decrease in key repo rate, prime lending rate and LIBOR on its operating results for the quarter March 2021 compared to quarter March 2020. This resulted in a drop of MUR 168.29 million in net interest income but is offset by an increase of MUR 158.28 million in non-interest income driven by a higher net trading income and higher gains from financial assets measured at fair value through profit or loss.
A significantly lower impairment charge of MUR 390.13 million for the quarter ended 31 March 2021, from MUR 864.46 million for the quarter ended 31 March 2020 evidences the fact that the historical problem loans have been largely addressed and/or provisioned.
On the non-interest expenses side, the higher personnel costs is the result of the Bank’s continued efforts to invest in its human capital as it thrives to remain an Employer of Choice. Higher amortisation charges on the IT systems were recognised during the quarter March 2021 as the Bank gears up towards its transformation project. These were the main drivers for the higher non-interest expense of MUR 985.43 million for quarter March 2021 compared to MUR 772.42 million for March 2020.
Total assets grew to MUR 232.03 billion as at 31 March 2021 from MUR 229.28 billion as at 31 December 2020, registering an increase of MUR 2.75 billion or 1.20%. This growth was mainly on account of maintaining a higher portfolio of investment securities at the reporting date from MUR 93.34 billion as at 31 December 2020 to MUR 97.59 billion at 31 March 2021 whilst net loans and advances dropped by MUR 416.96 million, to reach MUR 98.93 billion at March 2021. The Bank’s strategy in the short to medium term remains to raise cheaper sources of funding by increasing its deposits book which stood at MUR 193.05 billion at 31 March 2021 compared to MUR 191.12 billion as at 31 December 2020.
Capital
The Bank comfortably met the regulatory capital requirements for Domestic-Systemically Important Banks. Shareholder’s equity increased to MUR 20.14 billion as at 31 March 2021 from MUR 19.80 billion as at 31 December 2020. With a tier 1 capital base of MUR 16.32 billion, the Capital Adequacy Ratio (CAR) stood at 16.30% and the tier 1 capital to risk weighted assets ratio moved to 14.65%. Return on equity for the first quarter of 2021 improved to 14.72% compared to 7.68% for FY2020.
Economic Outlook
The Mauritian economy is expected to recover during 2021. The easing of the lockdown measures as from May 2021, roll out of the vaccination campaign and phase reopening of our boundaries will be beneficial to economic operators. For the forthcoming quarters, while continuing to monitor the impact of the economic situation on its activities, the Bank remains focused to execute its revamped strategy around technology, innovation and customer service and prepare for a potential recovery.
