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CURRENT YEAR PERFORMANCE AGAINST OBJECTIVES AND FUTURE GROWTH
KPI
OUTCOME
TARGET FOR NEXT FY
Due to challenging market conditions, the Bank is expected to achieve a marginal growth in its total operating income for FY20 at MUR 3.9bn.
The Bank achieved a total operating income of MUR 3.8bn, that is, 3% under budget.
Due to impact of COVID-19 and growing uncertainty on the market, the Bank is expected to achieve a lower total operating income for FY21 standing at MUR 2.4bn vis-à-vis last year.
Statement of Profit or Loss and Other Comprehensive Income – Total Operating Expenses
The Bank will further its IT strategy plan which will be reflected in an increase in overall IT costs (maintenance and amortization costs)
as a major contributor to the increase in total operating expenses of the Bank at MUR1.4bn in FY20.
The Bank’s total operating expenses was MUR 1.3bn, consistently investing in its human capital, Information Technology and Infrastructure.
With the current pressures on its revenue the Bank has been applying a cost containment strategy for FY21 to ensure its total operating expenses be kept at par compared to FY20 at MUR 1.3bn.
Statement of Financial Position – Loans and Advances
The Bank’s gross loans and advances is expected to grow by 18% targeting to reach MUR 35.4bn by end of FY20, with customer deposits
continuing to increase and reach MUR 156.5bn – this is expected to result in a loans-to-deposits ratio of 21%.
In line with its conservative approach towards lending, the Bank’s gross loans and advances was MUR 30.7bn while customer deposits
of MUR 150.9bn as at end of FY20, resulting in a lower than budgeted loans-to-deposits ratio of 19%.
A lower loans-to-deposits ratio of 17% is expected as a result of gross loans and advances dropping to MUR 28.0bn due to the growing uncertainty
around COVID-19 impact in FY21. Growth in customer deposits is expected to be a mere MUR 2.3bn
Statement of Financial Position – Deposits from Customers
With total liabilities of MUR 157.6bn, customer deposits are expected to reach MUR 156.5bn.
Total customer deposits achieved a growth of 15% compared to last FY to reach MUR 150.9bn whilst still 4% under budget.
Customer deposits are expected to reach MUR 153.2bn
Statement of Financial Position – Asset Quality
We expect our ratio of non-performing loans and advances as a percentage of gross loans to be around to 6%.
The Bank’s non-performing loans and advances as a percentage of gross loans stood at 8% as at the end of FY20.
Due to increased uncertainty regarding COVID-19 impact which has a direct impact on loan book, NPA ratio is expected to reach 11%.
Statement of Financial Position – Capital Management
Capital adequacy ratio will be maintained in conformity with the limits set under the regulatory framework.
The Bank’s capital adequacy ratio stood at 15.15% at the end of June 2020, compared to a limit of 12.88% set by the regulators.
Capital adequacy ratio will be maintained in conformity with the limits set under the regulatory framework.
Performance Ratio – Return on Average Equity
The Bank aims to attain a return on average equity of 25% for FY20.
The Bank achieved a return on average equity of 21% which is below the budgeted 25%.
Return on average equity is expected to be of 8% for FY21.
Performance Ratio – Cost to Income
The cost-to-income ratio is targeted at 35% for the next FY due to more pressures on the Bank’s total operating income and an increase in its total operating expenses.
With a disciplined approach towards spending along with a higher total operating income, the Bank achieved a lower cost-to-income ratio of 33%.
The cost to income ratio is expected to be around 55% due to a contraction in the total operating income of the bank.
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