Maubank of Mauritius Turns a Profit Just Months After Formationby
Lender targets pretax profit of 200 million rupees in 2017
International banks express interest in acquiring a stake
A Mauritian lender established by merging a mismanaged state-owned bank and a nationalized lender is already in the black just months after its formation and targets a 200 million-rupee ($5.7 million) pretax profit in 2017, Chief Executive Officer Sridhar Nagarajan said.
Eight months ago, authorities in the Indian Ocean island nation amalgamated Mauritius Post Cooperative Bank with Bramer Bank Corp., which was owned by the British American Investment Group, a conglomerate seized by the government in April 2015 over its alleged links to a $690 million Ponzi scheme.
“We didn’t expect to do profit for our first year of operation,” said Nagarajan, who left Standard Chartered Bank Plc to join Maubank. “Even with a break-even situation, I would have been happy.”
Maubank, which began official operations on Jan. 4, now has a capital adequacy ratio of 10.8 percent against a regulatory minimum of 10 percent. Before the merger, Bramer and MPCB held toxic assets of 5 billion rupees and 1.7 billion rupees respectively, Nagarajan said Tuesday in an interview in his office in Ebene Cyber City, near the capital, Port Louis.
The government said both lenders were mismanaged as it injected 3 billion rupees of taxpayer funds to get the new bank going. Maubank deposits now amount to 25 billion rupees, while total assets stand at 32 billion rupees.
The bank plans to build on its retail-product base by shifting its focus to small- and medium-sized companies over the next 15 months, Nagarajan said.
It may sell a 30 percent stake to a strategic investor and offer another 10 percent on the Stock Exchange of Mauritius. While international suitors from places like Hong Kong have already expressed an interest, it’s too early to offload some shareholding, Nagarajan said. The right time would be after financial results show a complete turnaround.
“A bank, which has been turned around, is a great place to invest,” Nagarajan said. “We’re not going to sell cheap.”