Banks are the most important institutions which are responsible in managing and securing the wealth of the common man. The banking industry, whether public banks or private banks, are the most trusted business entities, where people deposit their hard earned money for safety. However, there are other institutions which are gradually making its presence felt in this field-Non-Bank Financial Institutions.
Under the Banking Act 2004, "non-bank deposit taking institution" means an institution other than a bank that has been authorized by the central bank to conduct deposit taking business. According to the Bank of Mauritius, the Non-Bank Deposit Taking (NBDT) Sector comprises institutions licensed by the Bank to raise deposits from the public to fund leasing and lending activities. They are governed by the same legislations and regulations as banks. NBDT institutions play an equally important role in financial intermediation by financing households and corporate institutions operating in key economic sectors.
3.2 Regulator of Non-Bank Financial Sector
The Financial Services Commission (FSC) of Mauritius was established as the integrated regulator for the Non-Bank Financial Services Sector under the Financial Services Development Act 2001. With the enactment of the Financial Services Act 2007, investment in Mauritius has been facilitated and the legal framework regulating the non-banking financial services sector has been modernized. The FSC is the integrated regulator for the industry and its remit encompasses those of the former regulatory bodies for securities (Stock Exchange Commission), insurance (Insurance Division of the Ministry of Economic Development, Financial Services and Corporate Affairs) and global business (Mauritius Offshore Business Activities Authority).
The Commission thus licenses, regulates and supervises Non-Bank Financial Institutions in Mauritius. The Non-Bank Financial sector includes institutions involved in Insurance & Pensions, Capital Market operations, Leasing & Credit Finance as well as Global Business activities.
The FSC is also committed to the sustained development of Mauritius as a sound, stable and competitive international financial services Centre. Consequently, the Commission promotes the development, fairness, efficiency and transparency of Non-Bank Financial Institutions and capital markets in Mauritius whilst ensuring the protection of investors.
3.3 Review of Trends
In 2011, the FSC licensed 16 NBFI's under the Financial Services Act (FSA), 19 under the Securities Act (SA) and 694 under the Insurance Act (IA), bringing the total number of other NBFI's to 729, representing an increase of 7% as compared to 2010.
The Non-Bank Deposit-Taking (NBDT) sector is relatively small, representing around 5.6 per cent of banking sector assets at end-March 2012 compared to 5.7 per cent a year earlier. Total assets in that sector represented 16.8 per cent of GDP. The main activities of Non-Bank Deposit-Taking Institutions (NBDTIs) comprise raising deposits and extending leasing and loan facilities. Congruent to trends in the banking sector, activity of NBDTIs slowed down in the first months of 2012 partly as a result of subdued economic conditions.
On 8 February 2012, the number of NBDTIs in operation in Mauritius has come down to nine. With the promulgation of section 12(5) of the Banking Act 2004 in June 2007, NBDTIs are subject to the same prudential regulations as banks. As such, over and above maintaining a minimum capital of Rs200 million, they also have to comply with the guidelines on Credit Concentration Risk and on Related Party Transactions. Furthermore, with effect from 1 October 2009, they also have to comply with the Guidelines on Capital Adequacy Ratio (CAR) for NBDTIs by maintaining a minimum CAR of 10 per cent. As at end of 2009, one NBDTI was yet to meet the minimum required capital of Rs200 million.
Regulatory Credit Concentration Limits
According to the Banking Act 2004, the credit exposure of a NBDTI shall be within the following limits:
Credit exposure to any single customer shall not exceed 25 per cent of the NBDTI's capital base;
(b) Credit exposure to any group of closely-related customers shall not exceed 40 per cent of the NBDTI's capital base; and
(c) Aggregate large credit exposures to all customers and groups of closely-related customers shall not exceed 800 per cent of the NBDTI's capital base.
Mauritius Leasing Company Limited
The Mauritius Leasing Company Limited (ML), the only leasing company listed on the Stock Exchange of Mauritius, provides leases for equipment, machinery, plant, motor vehicles, tools, and other assets to industrial, agricultural, commercial, service sectors, the self-employed, professionals and individuals.
ML lays strong emphasis on quality products, a dynamic marketing strategy and efficiency and competitiveness, which has allowed the company to capture 25% of the leasing market.
The company is one of the most innovative leasing and investment businesses in Mauritius, with an impressive record which includes being:
The first leasing company in Mauritius;
The first leasing company to be granted a deposit-taking licence;
The first leasing company to issue debenture stocks in Mauritius, and
The first leasing company listed on the Stock Exchange of Mauritius.
Historical Timeline of Events of Mauritius Leasing Company Limited
Since its creation, Mauritius Leasing has led the field in Mauritius and developed a strong reputation as an innovative, efficient and competitive company that focuses on delivering quality service to its clients.
1987 - The company incorporated as a joint venture between the Government of Mauritius and the local private sector, becoming the first company offering leasing facilities to businesses.
1990 - ML became the first leasing company to issue debenture stocks on the Stock Exchange of Mauritius.
1995 - Bank of Mauritius issued a licence in 1995 authorising ML to conduct deposit-taking business.
1997 -A new chapter unfolded in the history of ML when 75% of the company was acquired by British American Insurance Co. (Mtius) Ltd.
2003 -ML pioneered the introduction of the pre-approved leasing scheme, which received many accolades and confirmed the company's status as market leader. In December of the same year, ML offered 75, 000,000 ordinary shares for sale to the public. This decision was made by the Board of Directors to fulfill the company's future financial and operational aspirations, in particular to consolidate its capital structure, repay outstanding debentures, widen the shareholder base and increase overall competitiveness.
2004 -In January, the offer was oversubscribed and a month later Mauritius Leasing shares were successfully listed on the Stock Exchange of Mauritius - making it the first publicly listed leasing company in the country.
Financial Highlights of Mauritius Leasing Company Ltd
SICOM Financial Services Ltd
SICOM Financial Services Ltd (SFSL) is a wholly-owned subsidiary and member of the SICOM Group. It is a public company incorporated in Mauritius on the 28th December 1999 and it started its operations on 26th April 2000.
SFSL is engaged in depository business, investment business and finance lease activities and holds a deposit taking licence as a Non-Bank Financial Institution.
SICOM Financial Services Ltd accepts deposits from both Individuals and Corporates.
GROUP STRUCTURE
STATE INSURANCE COMPANY OF MAURITIUS LTD
(Insurance, Pension, Investment Management, Trustee Services, Actuarial Services)
SICOM Financial Services Ltd (Deposit taking, Leasing, Investment Management) (99%)
SICOM General Insurance Ltd (General Insurance Business) (100%)
SICOM Global Fund Ltd (Global Business Activity) (100%)
SICOM Management Limited (Global Business Activity) (100%)
SICOM Registry & Secretarial Services Ltd (Registrar and Transfer Agent) (100%)
SICOM General Fund (Unit Trust)
SICOM Overseas Diversified Fund (Unit Trust)
BACKGROUND
The State Insurance Company of Mauritius Ltd (SICOM) was incorporated as a public company in 1988 but its roots can be traced back as far as 1975 where its business operations started with insurance services such as Actuarial Valuations and Management of Pension Schemes. In view of new diversification opportunities, the State Insurance Corporation of Mauritius started underwriting General Insurance in 1978 and Life Assurance and Motor Insurance in 1980.
In 1998-1999, SICOM Global Fund Ltd, SICOM Management Ltd and SICOM Financial Services Ltd (SFSL) were created to consolidate the SICOM Group financial position and open new avenues towards globalization.
In 2010, SICOM has incorporated a new company, SICOM General Insurance Ltd (SICOM GIN) to transact General Insurance business only, in conformity with the Insurance Act 2005. SICOM GIN is a wholly-owned subsidiary and member of the SICOM Group and has started its operations on 1st July 2010.
The Group's activities consist of Long Term (Life & Pensions) and General Insurance for both individual and corporate markets, Actuarial Services, Group Medical, Loans, Deposit Taking, Leasing, Unit Trust as well as Investment Management.
Financial Highlights of SICOM Financial Services Ltd
Total Assets and Net Assets Value
The total assets and net assets of the Company increased by 2.4% and 10% to reach Rs 11.2 billion and Rs 2.8 billion respectively as at 30 June 2011.
Turnover
The company's turnover increased by 6.7% for the financial year ended 30 june 2011 to reach Rs 1.6 billion compared to Rs 1.5 billion registered last year.
Directors' responsibilities for the financial statements
The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in compliance with the requirements of the Mauritius Companies Act 2001 and the Financial Reporting Act 2004. They are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
