Ashraf Esmael continued his interview to AfricaMoney by turning his lens from the past achievements of Bramer Bank to the future of the Bank, and that of the Mauritian banking sector overall. Our financial expert stated that the Mauritian banking sector must achieve innovation, regional diversification and constant technological monitoring to retain its competitive edge in the future.
- Bramer Bank recently announced a merger with a major African bank. How is the bank expecting to leverage this development for its Africa strategy?
Indeed, Bramer Bank issued a statement on the 11th February 2014 to announce that it has entered into a Memorandum of Understanding to initiate discussions with an African Bank for a merger or amalgamation of their respective businesses to create a larger banking concern that would operate across Africa.
The Board of Directors of Bramer Bank believes that this represents a formidable opportunity for it to capitalise on the growth potential of the African continent. The merged entity will benefit from its presence both in Mauritius, an international financial jurisdiction, and the African market to offer a wider range of banking services and products, create operational efficiencies and enhance execution capabilities.
Bramer Bank has ambitious plans for growth and development in the region and already has considerable exposure in the region over the past few years. The opportunity to work with a major African bank would mean direct access to a massive market where there is growing demand for robust financial products and services.
- What geographies and segments does Bramer Bank plan to focus on for 2014?
Bramer Bank forms part of a large diversified group, the British American Investment Group, the 3rd biggest conglomerate in Mauritius that has interests in financial services, trade & commerce, and services. The BA Investment Group has an established presence of over 40 years in Mauritius and has operations in Africa, Europe and Asia.
Bramer Bank is set to expand its footprint in the region in line with the country’s vision to transform Mauritius into a regional business and financial services hub. It will leverage on the BA Investment networks to expand its activities across and beyond the continent; starting with the announced merger talks to create a larger banking concern that would operate across Africa.
Currently, Bramer Bank serves four segments: ‘retail’, ‘business’, ‘international’ and ‘private’. It remains a universal bank offering a range of products and services to a selected number of customer segments. However, in recent years, the share of business for International and Private Banking segments is steadily growing as a result of the desire of the Bank to develop these niches and will undoubtedly continue to foster growth in the current year.
[blockquote style=”2″]Margins have been under pressure and with increasing regulations, banking business has become seriously challenging.[/blockquote]
- Please tell us your views of the Mauritian banking sector and the way forward for Mauritius as it becomes an international financial centre.
The banking sector’s performance is closely linked to the Mauritian economy itself which is dependent on our various export markets. Thus, the current sluggish economic climate is reflected in the consolidated profits for the sector, which fell by 8% in 2012.
However, the banking sector in Mauritius remains strong, with good capitalisation, substantial investment and innovation, as emphasized by the World Economic Forum and the latest Global Competiveness Report.
Competition is fierce in the banking sector both on the business and retail fronts with 21 banks for a population of around 1.3 million. Margins have been under pressure and with increasing regulations, banking business has become seriously challenging. However, with the positioning of Mauritius as a regional and international financial centre and increased investment/trade activity in the Africa/Asia corridor, there is scope to grow the business significantly.
On a broader perspective, the financial services sector performance in Mauritius remains respectable in 2013 with an estimated annual growth higher than 4% and contributing to over 10% of the Gross Domestic Product of the country and becoming, in recent years, one of the major economic pillars for the country together with other key sectors like agriculture, manufacturing and tourism.
The Mauritian banking sector requires innovation, regional diversification and constant technology monitoring to remain competitive in the future and to be able to capitalise on the emerging regional markets.
- Finally, could you please share with us your outlook on the Mauritian economy?
The economic outlook for Mauritius remains overall positive, but remains contingent on external conditions and economic reforms. The GDP growth, around 3.7 – 4%, is expected to be driven by financial services and manufacturing sectors amid stagnation in tourism and contraction in construction sectors. The fiscal consolidation programs in advanced economies and the increasing debt and financial worries in Europe continue to affect the Mauritian economy despite recent efforts to diversify our export markets.
We believe a strong performance by the financial sector coupled with sustained growth in the export oriented sectors (manufacturing and tourism) will continue to support economic growth in 2014. The financial services sector of Mauritius remains one of the most important economic pillars of the economy with a sustained GDP contribution of over 10% and an average growth higher than 4% over the last 3 years.
The future of the sector is indeed very promising as a growing number of operators look at establishing footprints locally across various sub-sectors, ranging from global business and investment banking to investment advisory, management and structuring, broking services and international legal services with a view to capitalising on emerging opportunities in the Africa-Asia corridor.
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