Mauritian Banking Industry Sees Record-High Capital Adequacy, Liquidity, and Profitability in 2023
The Mauritian banking industry has achieved a significant milestone, with capital adequacy, liquidity, and profitability reaching record highs in the fourth quarter of 2023.
Capital Adequacy Reaches New Highs
According to data released by the Bank of Mauritius, the country’s central bank, the regulatory tier one capital-to-risk-weighted assets ratio stood at 20.275% in December 2023, up from 19.526% in September 2023. This represents a significant increase from the low point of 13.200% recorded in September 2009.
Liquidity and Profitability Also Reach New Highs
The liquid assets-to-total short-term liabilities ratio improved to 25.500% in December 2018, marking an all-time high since March 2009. The return on assets (ROA) and return on equity (ROE) ratios also reached record highs of 1.700% and 16.000%, respectively, in December 2018.
Factors Contributing to the Improvement
The improvement in the banking sector’s financial soundness indicators is attributed to several factors, including:
- Stricter regulatory requirements
- Better risk management practices
- A more stable macroeconomic environment
“The banking sector has undergone significant reforms in recent years, with the implementation of new regulations and guidelines aimed at enhancing its resilience,” said a senior official at the Bank of Mauritius. “These efforts have paid off, as evident from the improvement in our financial soundness indicators.”
Data Overview
The data is based on quarterly reports submitted by commercial banks to the Bank of Mauritius and covers the period from March 2009 to December 2023.
Evolution of the Banking Sector
The Mauritian banking sector has undergone significant changes in recent years, with several mergers and acquisitions taking place. The sector is now dominated by a few large players, including:
- State Bank of Mauritius
- Barclays Bank Mauritius
- Standard Chartered Bank Mauritius
Conclusion
Despite the challenges facing the sector, the data suggests that the banking industry in Mauritius is well-positioned to withstand potential risks and continue to support economic growth.