MCB : Time of Restructuring

Thus, the Cluster Banking, the most important aspect of operations will be under the management of a new company, MCB Holding Limited. On the other hand, the first quarter of the fiscal year resulted with improved profitability around 13%, or Rs 1.3 billion and an increase of 13.6% of gross loans MCB.

The restructuring exercise is to break the banking and non-banking of the MCB to ensure its future development. Thus, the new structure adopted is based on the creation of a holding company (MCB Group Limited), whose shares are listed on the Stock Exchange of Mauritius. This new legal entity will encompass all activities divided into three distinct segments Group: Banking, Non-Banking Financial and Other Investments.

Banking Cluster will be managed by MCB Investment Holding Limited, which has under its supervision of banking in Mauritius (grouped in MCB Limited), and abroad through subsidiaries (Seychelles, Madagascar, Mozambique and Maldives) and the French Indian Ocean Commercial Bank. The other two clusters or Non-Banking Financial and Other Investments will be placed under the responsibility of MCB Group Limited.

Competent authorities have been approached for the necessary approvals. Once the restructuring plan approved by the Bank of Mauritius, the Financial Services Commission and the Stock Exchange of Mauritius, the MCB will seek permission from the Supreme Court to convene a special general meeting to submit a Scheme of Arrangement to the shareholders, by the MCB shareholders of the holders of shares of MCB Group Limited. The new entity will be the sole shareholder of MCB Investment Holding Limited. MCB Limited become the property of MCB Investment Holding Limited.

For the purposes of this restructuring, the MCB group has strengthened its capital injection of funds of around Rs 5.4 billion. The issuance of Floating Rate Subordinated Notes in July 2013 helped to raise Rs 4.5 billion in new capital, which is the highest amount ever made by a company listed on the Stock Exchange of Mauritius company. In October 2013, the MCB has received 30 million U.S. dollars (about Rs 900 million) of the African Development Bank in the form of subordinated debt over a period of ten years.

On the balance sheet for the first quarter, the Group Chief Executive Pierre-Guy Noël, expressed his satisfaction with the performance achieved. From July to September 2013, the MCB Group achieved a net profit of Rs 1.28 billion, which represents an increase of 12.9% compared to the same period in 2012. This performance takes into account the increase in the Special Levy applicable to banks in the wake of the 2014 budget.

Positive spinoffs

A press release indicates that the MCB has seen its Net Interest Income to grow by 9.5% or Rs 1.9 billion in three months. The bank says that the performance of subsidiaries and associated companies contributed positively to the results of the first quarter. The activities of the MCB abroad, particularly in Africa and in the region continue to be carriers.

Continuous boost in trade finance activities abroad have had a positive impact on revenue related to fees and commissions of approximately 19% in the first half, totaling Rs 691 million, while expanding the loan portfolio. Moreover, the MCB continues to provide cost control operations to 7.7%. For cons, the provision for doubtful debts rose Rs 77 million to reach Rs 183 million at the end of the first quarter of fiscal year 2013-2014.

Based on current trends and the ongoing development of the group to abroad, the Board of Directors believes that the MCB should achieve satisfactory growth December 31, 2013, at the end of the first half of the current financial year. Note that an interim dividend of Rs 3 per share be paid to shareholders of the MCB recorded December 3, 2013.

Commenting on the quarterly results, the Group Chief Executive, who wants to see implemented fast and effective fiscal measures, says that "while gearing up icts operations to Effectively cope with Evolving market conditions, and the implications of Regulatory Developments, MCB icts is intent on sustaining growth momentum, with a key focus on tapping into Opportunities on the regional front."