State Bank of Mauritius to set up shop in Seychelles
But does the banking sector really need another commercial bank?
Mauritius’ second largest bank, the State Bank of Mauritius (SBM), looks set to become the tenth bank on the block. Indeed, the Mauritian Finance Minister, Vishnu Lutchmeenaraidoo, on Wednesday announced on his Facebook page that the financial institution is well on its way to obtaining a banking licence. The Governor of the Central Bank of Seychelles (CBS), Caroline Abel, is currently in Mauritius to conduct an exercise of due diligence of the applicant. Ms Abel also took part in a working session with the Mauritian financial authorities on Wednesday. SBM applied for a licence in October 2015 during the visit of a Mauritian delegation to Seychelles which was part of the Seychelles-Mauritius Joint Management Commission.
“SBM will soon be present in Seychelles. Procedures in view of this are going smoothly. The decision to implant SBM in the archipelago follows an important mission to Seychelles which I led in October for the 11th session of the Joint Management Commission. This project is part of the strategy of regional integration that we are promoting. We are grateful for the support of the Central Bank of Seychelles in this regard. Seychelles and Mauritius have embarked on an ambitious project of economic integration, namely with the output of the Joint Management Commission”, Mr Lutchmeenaraidoo revealed on his Facebook page.
If the SBM does go on to begin operations in Seychelles, it will become the country’s tenth bank (bearing in mind that Nibur International also obtained a banking licence last year but it is unclear what its plans are). Given that the local banking sector is already somewhat saturated, its decision to set up shop in Seychelles is a little baffling. On the face of things, its chances of success will hinge on the range of services it offers. If it intends to compete with the already established financial institutions in vanilla banking it might find the going tough, unless of course it adopts a more open policy to granting loans, especially to Small and Medium Enterprises. Indeed, the reluctance of local banks to fully play their role in this regard has long been a bugbear of the authorities who seem to be at a loss at how to unblock the situation.
SBM, which is the country’s second largest bank after the MCB, began operations in 1973 and was listed on the Stock Exchange of Mauritius in 1995. According to its website, “SBM has more than 1 100 employees and services over 450 000 customers through its network of 50 service units and counters in Mauritius, Madagascar and India with a representative office in Myanmar. Going forward, the Group is laying greater emphasis on international operations as well as non-banking activities”. In September 2015, it posted nine-month pretax profits of USD48 million, a 40% decrease from the previous year. It attributed this lackluster performance to credit impairment losses caused by the going into administration of a major local conglomerate.
Source: Today.sc 1-158-16