Bank One actively supports companies that are expanding in Africa.

After 15 years, Bank One has a solid foundation. Its success is largely due to a close-knit team composed of 400 collaborators. In addition, the bank has made major investments and mobilised its resources to develop its private banking service and its international activities focused on cross-border transactions. In terms of innovation, it has developed POP, a universal payment solution that is a pioneer in the local market. Business Magazine met its CEO, Mark Watkinson, who looks back at the bank’s journey, the challenges related to inflation and currency management, and the opportunities

You have recently been appointed Chairman of the Mauritius Bankers Association Limited (MBA). How did you feel about this new responsibility?

I am extremely honoured. It is a great privilege to have been chosen. I am taking over from Bonnie Qiu, CEO of HSBC Mauritius, who has done a remarkable job for the MBA. So, I have big shoes to fill. I also feel this as an exciting time to be taking over as Chair of the MBA, because the market is undergoing a lot of change and there are a lot of opportunities. We are coming out of a very difficult period marked by Covid-19. Mauritius showed incredible resilience during that period, but having just recovered from the health crisis, we now face global economic challenges resulting from inflation, among other things.

But that being said, Mauritius is well positioned to take advantage of new opportunities both domestically and internationally, particularly in Africa and Asia.

What are the main challenges linked to regional integration and Bank One’s expansion into international markets?

Inflation is one of the real problems in the market, both locally and internationally, and represents a real challenge. I think the Bank of Mauritius is doing a commendable job in trying to keep inflation under control, but it’s proving very difficult, because our economy imports a lot of the inflation from the rest of the world. It is clear that the tensions arising from the conflict between Russia and Ukraine have caused food prices to rise considerably, contributing to inflation. This remains a major challenge.

Across the region, there is a shortage of foreign currency and Mauritius also faced this challenge during the Covid period. However, I am delighted to see a marked improvement in the domestic market in this regard. This is mainly due to our thriving tourism sector, which is recovering rapidly and helping bring back foreign exchange into the country.

These two areas are key aspects that we need to manage on a daily basis: inflation and foreign exchange. However, in terms of challenges, I also believe that if we are to make Mauritius a platform to access other markets in the region, we must continue to invest in the skills of our people, particularly in the financial sector. This is where the MBA can help, in conjunction with the Bank of Mauritius, by sponsoring graduates and supporting the community to attract top talent to the financial sector.

What opportunities do you see in this context?

I think there are great opportunities for Mauritius, both on the local market and abroad. As far as the local market is concerned, in terms of tourism, there is an increase in arrivals from Europe and South Africa. I believe there’s a growing market for developing a tourism offering focused on Africa. With the increase in wealth in the sub-Saharan African region, Mauritius has the opportunity to position itself in this market.

Furthermore, I firmly believe that there is an excellent opportunity for Mauritian companies to invest in Africa, and we are already seeing major deals in sectors such as retail and logistics. I am also convinced that there is a tremendous opportunity to attract some of the best African companies to Mauritius, whether to list them on the stock exchange or to help them raise funds on the Mauritian capital markets.

We have encountered some challenges, particularly in relation to the new tax regime between Mauritius and India, which presented difficulties for our business community. However, as the saying goes, when one door closes, another opens. I firmly believe that we still have a lot to achieve with India, but I am also convinced that we have a lot of potential to exploit in Africa.

You mentioned earlier that inflation is the biggest challenge facing the country. How do you see the situation evolving?

If we look at the current global situation, we see that the central banks are all raising their interest rates and that inflation in Mauritius has come down significantly. However, it is unlikely that the situation will be resolved quickly. Central banks in Europe and the US are aiming to keep inflation at around 2%, but it will be a while before this threshold is reached again. This is likely to take around 18 months to two years. Meanwhile, central banks around the world are likely to continue raising interest rates. Although the future is unpredictable, it is also probable that interest rates will continue to rise in Mauritius, in a bid to combat inflation.

As a result of the crisis, banks have been obliged to comply strictly with the macro-prudential measures prescribed by the Bank of Mauritius. As a result, they have been restricted in their ability to extend credit to economic players. Is the sector now in a better position to support the real economy?

There is no doubt about it. Covid-19 was a very difficult period, not only in Mauritius but around the world, for customers, banks, and regulators alike. We were all hoping to bounce back after the health crisis, but we had to face other challenges such as inflation. However, I believe we are heading for more stable times. Although it’s not without its challenges, banks have the resources and capacity to support the economy and help Mauritius grow. As the situation improves further, they will be in a better position to provide more support.

The recent half-yearly financial statements of the banks show outstanding performances. This is mainly attributed to offshore activities and corporate banking. What are your comments on this observation?

This is a major positive reflection of the robustness of Mauritius as a financial platform to serve other markets. We have the advantage of a stable government, an essentially stable economy, a favourable credit rating and lower dollar costs. This clearly positions Mauritius as a strong player allowing us to develop our business activities and attract companies to Mauritius.

It is a growing trend among all banks in Mauritius, including Bank One. The growing share of revenue generated by Mauritian banks outside of Mauritius bears testimony to the quality of Mauritius as a financial centre to serve other markets. At Bank One, we have a well-defined strategy for expanding our activities in sub-Saharan Africa. Our competitive edge lies in the fact that both our shareholders, the CIEL and I&M groups, have a presence in this region, which gives us added support to expand our activities in SSA.

What about Bank One’s financial performance? Which segments delivered the best performances?

Overall, we recorded very good performances across all segments. Our best results came from the International Banking segment, which focuses on 14 markets in sub-Saharan Africa. For the most part, we supported other banks in these markets by providing loans in hard currencies such as the US dollar and the euro. We also supported them through treasury products and other services. It is an activity that has been very beneficial to Bank One over the last 12 to 18 months.

As part of our Private Banking & Wealth Management business, we offer custody services, which have also enabled us to achieve good financial results, in addition to our activities with banks in sub-Saharan Africa. Within our Personal Financial Services segment, we achieved good results in providing cross-border banking services to individuals. Several other business lines also contributed to our robust overall performance.

So, you’re optimistic…

African markets are not without difficulties. They face challenges such as inflation, foreign currency availability and growth. However, if we look at these markets as a whole, we see that overall growth is still happening. Moreover, relative growth in Africa is significantly higher than in Europe. Even though, as a bank, we have to be cautious and navigate carefully through these complex times, there are nevertheless many interesting opportunities in Africa, as it is a continent that continues to grow and has considerable potential for the future.

Bank One is celebrating its 15th anniversary this year. How would you assess the bank’s track record?

Our journey has been particularly remarkable. The institution is the result of the merger of several banks throughout its history, but in its current form it is owned equally by the Mauritian conglomerate, CIEL Group, and Kenya-based I&M Group PLC. We were just 200 employees back then, and now we’re over 400. However, the journey has not been without its challenges. If we look back to 2008 and 2009, during the global financial crisis, the bank had to go through a difficult period. Today, I am convinced that we are in a very solid position. We have a clear strategy and an exceptional team focused on implementing that strategy.

What have been the key milestones along the way, and what are the bank’s main successes to date?

When we look at the milestones, I believe that our people have been our most valuable asset. We now have over 400 team members, three of them based in Kenya. We made sure that we put together a solid team, with adequate and ongoing training. This is an increasingly important feature in markets around the world, and we strive to be ahead of the curve.

In the last 15 years, we have invested heavily in new systems and successfully launched a brand-new private banking business. In addition, we have established an international business focused on cross-border transactions. Among our most exciting and innovative achievements was the introduction of POP, a universal payment solution that has pioneered the Mauritian market. It is based on the Bank of Mauritius’ MauCAS instant payment network and is open to all banks. Customers of any bank can use POP to make payments to all banks in Mauritius. This is a major step forward and a testament to our spirit of innovation.

What is Bank One’s position in the Mauritian banking market?

In the Mauritian market, we offer personal financial services, corporate banking and private banking. Within our retail business, our aim is to become an undisputed leader thanks to our mortgage offering, which represents a key part of our services. At the same time, delivering innovation through POP is a cornerstone of our strategy for the retail segment. We are also developing an interesting cross-border business by offering wealth management services from Mauritius itself.

As far as our corporate banking business is concerned, we focus on medium-sized enterprises and serve various market sectors, such as tourism, public transport services and food suppliers. Our corporate banking business also plays an active role in the property sector, providing construction guarantees (GFA/VEFA) to protect buyers. As for our private banking business, we focus on solid, open-architecture wealth management solutions through our network of third-party managers.

What values guide the bank’s activities?

Integrity, trust, respect, innovation, and courage are fundamental values to which we firmly adhere at Bank One. We also strive to adopt the Ubuntu principle, which means “I am because we are”. It’s a principle we’re actively pursuing at Bank One. Two years ago, we set up a cultural programme within the bank called ‘Ensam’. Its main objective is to remind everyone of the behaviours we want to promote within our teams.

What are the main initiatives and innovations that the bank plans to implement to remain competitive in the market?

We are currently actively involved in a number of projects. Just recently, we launched a brand new version of our Internet Banking and Mobile Banking for both individual and business customers. We will continue to roll out new functionalities on this front. Speaking of progress, POP, which started out as a primarily payments-focused proposition, has very recently added two new features, Pop Save and Pop Insure, of which we are very proud.

One of the exciting things about POP is that anyone, regardless of their primary bank, can open a POP account. And as soon as they open such an account, they can have access to Pop Save. It’s a service that allows you to adopt different saving strategies, because we know how difficult it can be to put money aside. In other words, it’s a mechanism that encourages users to save. We are extremely proud of these innovations at Bank One.

What are the key sectors that the bank is focusing on to support the growth of the local economy?

What is really exciting for the local economy, in my opinion, is the support we are providing to Mauritian companies that are expanding into Africa, while at the same time encouraging African companies to come to Mauritius. Our main objective is to use Mauritius as an attractive platform for foreign investment. If we can stimulate global investment flows into Mauritius and then nurture them to flow into Africa, that would play a crucial role that would benefit Mauritius.

When we look at the commercial sector, Mauritius could be an ideal location for a business hub. If you operate in several African countries or in the broader region, and you want to import products, for example, as a buyer of wheat, Mauritius could be used as a treasury centre to support your trading activities. The wheat could then be imported into Tanzania or South Africa using Mauritian connectivity. I see this as a very interesting opportunity.

What measures has Bank One taken to safeguard customer confidence and the security of banking transactions in the digital age?

At Bank One, we place the utmost importance on the trust of our customers and the security of banking transactions in the digital age. Data security is one of the most complex threats we face in the digital age, due to the sheer volume and physical location of stored data. It is essential to protect this data from malicious actors and to take into account new risks associated with the cloud.

We have made significant investments to ensure that we have robust defences against malicious actors. We also work with third-party experts who are ready to support us in this area. We regularly carry out penetration tests in collaboration with external partners, who continually assess our systems to ensure they are robust. Our team is also working on obtaining data security certifications to ensure that our customers’ data is well protected. This is a critical aspect on which we are very focused.

Since March 2022, the Bank of Mauritius has increased its key rate by 1.85%. Which means that banks can offer better returns on savings. As we know, Bank One pays particular attention to retail banking. That being the case, how have you adjusted your savings rates?

One of the most significant innovations we have introduced recently is POP Save. With POP Save, anyone can open an account earning an interest rate of 4%. Customers can access their money at any time, and they don’t have to block it. This is one of the major initiatives we have undertaken with regards to savings.

What has been the feedback from your customers on the technological innovations you have recently introduced?

It’s still too early to draw definitive conclusions about our new online and mobile banking service, but initial feedback has been very encouraging, particularly for our personal banking offering. Customers appreciate its user-friendliness, intuitiveness and ease of use. We have also had very positive feedback on POP.

Are you planning to add more services to your mobile application?

We plan to gradually add new services to our mobile applications. For example, we have already set up a payment infrastructure with POP. One of the things we’re now looking at is the possibility of making cross-border payments using POP. There are also a number of interesting innovations that could gradually be integrated into the POP application.

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