Introduction

Brief history of ABC Banking Corporation Ltd and MCB Ltd
The ABC group was founded in 1931 by Sir Moi Lin Jean Ah-Chuen who started with a modest shop in the busiest street in Port Louis the capital of Mauritius. ABC Banking Corporation is the latest arm of the ABC Group of Companies operating in five main diversified sectors of automobile, financial services, Banking, food and shipping logistics. The company was first established in 1997 as a leasing company and has obtained its banking licence on 1 June 2010.

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The bank has been set up with a mix of traditional and modern innovative banking. Created as a full-service commercial bank, the professional and experienced motivated staffs are organised around four main pillars being:
1. Domestic Banking
2. Private Banking
3. International Banking
4. Treasury
5.

ABC Banking is the first Mauritian banking to set up office in China. The bank has an asset base of RS 15.8 billion and actually employs over 100 staff.

The Vision: Be the preferred and trusted bank in our stakeholders’ quest for excellence.

The Mission: We strive to delight our customers whilst delivering on our responsibilities towards the country, community ; environment. We shall also drive the continuous development of the bank as one team whilst catering for
diverse interest, providing development opportunities for individual talents. Furthermore, we commit to uphold the shareholders’ trust in us

On the other side, for MCB Ltd all started in 1838, Old of 180 years the Bank has been set up by a group of traders, led by James Blyth. They Identified the need for a second bank in Mauritius which starts business on 1 September 1838 in premises situated at the Rue de Paris (now Sir Seewoosagur Street) in the capital, Port Louis.
Today, the network consists of 40 strategically located branches and helps assert the Bank’s leadership in the retail market. MCB helps businesses to grow and customers to achieve their personal goals. Innovative in its approach and values MCB has been the pioneers in introducing ATMs, mobile points of sale, junior savings accounts, SWIFT, TCR machines, phone, Internet Banking and mobile Internet Banking among others.
Today, based on its strength it has expanded to regional countries namely Madagascar, Maldives and Seychelles. MCB opened representative offices in Paris (France), Johannesburg (South Africa) and Nairobi (Kenya). During FY 2016/2017, the Bank sharpened its leading banking position locally and pursued its international market diversification strategy.
MCB Ltd Leading Bank in Mauritius employs above 2600 staff, has an asset base of RS 33bn as at 30 December 2017 and some 965,000 client base.
The Vision: Everyday, we will help make something happen.
The Mission: We will keep finding ways to meet the needs of our customers. We will listen to them and help them achieve their goals. We will help people with ideas to be entrepreneurs. We will be worthy of our shareholders’ confidence. We will do what we can to make the world a better, greener place. And we will never go away.

The purpose of this section is to analyse and compare the financial figures of ABC Banking Corporation and MCB Ltd. We shall consider the 3 main categories of ratio analysis, Profitability, liquidity and leverage in order to the story based on figures. Under each category we shall be able to understand which Bank has better performed during the 3 last years.
Comparative table
Income statement Year Jun-17 Jun-16 Jun-15
MCB Ltd (Rs M) Operating income 13,600 12463 11323
Operating profit 8578 7823 6862
Profit before tax 7628 6916 5965
Profit after tax 6237 5620 5004

ABC Banking Cooperation Operating Income 493 435.6 322.9
Operating profit 273.3 247.6 148.1
Profit before tax 250.3 186.2 64.2
Profit after tax 208.5 161.6 58.5
Statement of financial position Year Jun-17 Jun-16 Jun-15

MCB (Rs M) Total assets 314202 286932 251938
Total loans (net) 161721 155938 157422
ABC Banking cooperation (Rs M) Total assets 15,751.80 15,124.40 12,309.60
Net loans and advances portfolio 5,095.70 4,594.50 3,009.40
Performance ratios Year Jun-17 Jun-16 Jun-15
MCB (%) Return on average total assets 2.1 2.1 2.1
Return on average equity 17.8 17.8 19.1
ABC Banking (%) Return on average total assets* 1.3 1.1 0.5
Return on equity* 15.6 13.8 10
Cost to income ratio 44.6 43.2 54.1
Capital adequacy Ratios Year Jun-17 Jun-16 Jun-15
MCB Ltd (%) Capital & reserves/Total assets 11.9 11.5 12
Capital adequacy ratio 16.8 16.1 14.9
of which Tier 1 15.8 14.9 13.9
ABC Banking Corporation Ltd (%) Capital & Reserves/Total assets 8.5 7.8 4.8
Capital adequacy ratio 15.4 14.7 10.7
Tier 1 ratio 14.3 13.2 8.6
Asset quality Year Jun-17 Jun-16 Jun-15
MCB Ltd NPL ratio (%) 5.8 5.9 5.9
ABC Banking Corporation Ltd NPL ratio (%) 1.70% 2.60% 5.40%

Income Statement
MCB Ltd
In 2017, operating income increased by 9.1% and net profit after tax grew by 11% to attain Rs 6,237 million. The result has been attained in a situation of passive demand for bank credit and excess liquidity.
ABC Banking Corporation Ltd
Total Operating Income was at RS 493 million for the year ended 30 June 2017 compared to RS 436 million for 2016 representing an increase of 13.2%. The financial year 2016/2017 successfully with a profit before tax of RS 250 million, representing a stable improvement of 34.4% over the result of the preceding year.

Statement of financial position
MCB Ltd
Total assets reached 43.9% as at June 2017 with the corresponding ratio as a percentage of deposits standing at 52.2%.
ABC Banking Corporation Ltd
Total assets closed at RS 15.8 billion for the year 2017 with loans and advances portfolio reaching RS 5.3 billion, equivalent to a 11% increase on prior year.

Performance ratios
MCB Ltd
ROA was forecast to be close to the 2% mark in 2017. ROA was maintained at 2.1% despite a difficult context and is expected to remain around the 2% level for 2018. Return on average equity increased during the past 3 years and stood at 17.8%. The cost to income ratio declined slightly from 37.2% to 36.9% in FY 2016/17 given the higher growth in operating income. Its cost to income ratio has been brought down to an even more comfortable level.
ABC Banking Corporation Ltd
Return on assets stood at 1.3% in 2017 and has increased during the past 3 years. The aim for 2018 is to keep around same the ROA. For 2017 Return on Equity was expected to be around 10% in view of slow economic restart and a highly competitive local market. ROE for 2017 ended stood at 16% in line with substantial increase in profit. The aim for 2018 is to keep ROE around same level while increasing the loans and advances portfolio and the bank’s capital base.

Capital adequacy ratios
MCB Ltd
The capital adequacy ratio standing at 17.5% as at end-December 2016, of which 15.9% by way of Tier 1 ratio. capital adequacy ratio increasing from 16.1% to 16.8%, with the Tier 1 ratio increasing from 14.9% to 15.8% as at June 2017. The capital adequacy ratios of MCB Ltd improved further in FY 2016/17, Same remains well above stipulated regulatory levels. The overall capital adequacy ratio and Tier 1 ratio went up to 16.8% and 15.8% respectively
ABC Banking Corporation Ltd
The Capital Adequacy Ratio (CAR) raised at 15.4% as at June 2017. The minimum regulatory Tier 1 CAR is 8.625% and CAR including capital conservation buffer is 10.625%. The bank’s Tier 1 and Capital Adequacy ratio have increased to 14.3% and 15.4%. Both ratios are above the minimum regulatory requirement. Tier 1 Capital Adequacy Ratio (Tier 1 CAR) rose from 13.2% as at June 2016 to 14.3% as at June 2017 further to an increase in both Tier 1 capital and risk weighted assets from RS 8.6 billion as at June 2016 to RS 9.2 billion as at June 2017.

Asset quality ratio
MCB Ltd
As for asset quality, a major source of satisfaction is that our gross NPL ratio has dropped by 10 basis points to attain 5.8%, with the ratio standing at 4.3% in net terms whilst asset quality levels somewhat worsened, they remained within manageable levels. Gross and net NPL ratios of the Bank remained at satisfactory levels standing at 5.8% and 4.3% respectively.
ABC Banking Corporation Ltd
The bank’s recovery process has much improved over the past years with current year results showing a stable non-performing loan ratio of 1.7% compared to 2.6% in 2016. Efforts are put forward to ensure that proper processes and policies are maintained to prevent a loan from becoming overdue and subsequently non-performing.

Six capitals – Integrated sustainability report
The six capitals are about financial capital, social and relationship capital, human capital, natural capital, intellectual capital and manufactured capital.
MCB Ltd as a responsible corporate citizen endeavours to make an important and sustained contribution to the economies, environments and communities in which it is collaborating. MCB Ltd nurture to be transparent, impactful and have long lasting relationships with the external stakeholders for mutual benefits for short and long period. Views and concerns are also gathered through surveys and are considered in the decision-making process. Issues are escalated to the board for proper consideration and Strategic initiatives are taken to create value for its stakeholders.
Financial capital
MCB Ltd aim is for the protection and growth of wealth and investment overtime. It works in adherence to relevant laws, codes and guidelines to preserve soundness and efficiency.
Social and relationship capital
Innovative instruments are presented to facilitate the banking requests and expectation of customers. The bank also participates in discussions on topical, regulatory and economics issues. Technical, financial and human support provided to NGOs.
Human Capital
MCB Ltd strikes to create a safe, positive and inspiring working conditions for its employees. Its ambition is to attract, develop, retain talents and prosper its employee’s future.
Natural capital
The bank is engaged in the promotion and awareness among staffs and the general public on the necessity of preserving natural resources and scarce resources of energy.

Intellectual capital
The bank converted its knowledge-based assets into information and invest into building and upgrading technological capabilities.
Manufactured capital
The focus is to continuously develop and refines operational processes for running business more efficiently.

Financial and manufactured capital
ABC Banking Corporation Ltd also managed its business based on integrity, transparency and professionalism and ensures that all its activities are accomplished responsibly and ethically. Code of Conduct and Ethics which clearly reveals the core values which the bank stands for and the standard of dealings that the public.
Natural capital
In the light of recent climate events, the ABC Group has taken on a Going Green Initiative. E-statements for all clients have been introduced to reduce the need for paper statements and allow for instant access to banking information. Systems are in place to ensure compliance with health and safety legislation.
Human capital
As an equal opportunity employer, ABC Banking Corporation Ltd considers individuals for employment or promotion on merit and according to their skills, abilities and experience and strives for equal treatment and respect of all employees at the workplace.

Social and relationship capital
Since 2013, the Corporate Social Responsibility programme of the bank is implemented under the aegis of the Sir Jean Etienne Moilin Ah-Chuen Foundation (referred to as “the Foundation”), ABC Group’s apex body for social and charitable projects. The bank also helps NGOs for Community Empowerment, Education and health and sport activities.

Conclusion
It has been observed that MCB Ltd financial position is well above the ABC Banking Corporation Ltd. The amount of profit and assets of MCB Ltd are incomparable to ABC Banking Corporation Ltd. This is due to the fact that MCB Ltd is a long-established bank as compare to ABC Banking Corporation Ltd.
Within 8 years of operation, the ABC Banking Corporation has positively and constantly improving its financial position and has also established office in China.
It’s important to note that It is the first leasing company in Mauritius to have successfully converted into a Bank.
MCB has adopted the integrated reporting and it’s interesting to discover that although being new as compared to MCB Ltd, ABC Banking also promotes the integrated reporting.
We definitely conclude that MCB Ltd is a comfortable financial position and will continue to progress during forthcoming years based on innovation and strategic plans. It shall be interesting to follow the progression of ABC Banking Corporation Ltd.
Both banks managed to adapt to changes and integrated new technologies and market demand. They both constantly managed to consider the interest of stakeholders and participates in the economic, social and environmental improvement.

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