The Corporate Banking sector: Gearing up for 2023

February 21, 2023

Notwithstanding the challenges brought about by the global trade tensions and a slowdown in world economic growth, the banking sector remains resilient and able to fulfil its role in supporting economic development. In an interview published in Business Magazine on 22 February 2023, Fareed Soobadar, Head of Corporate Banking, speaks of the evolving business needs in response to changes in the domestic and regional markets, namely the need for accelerated digitization, supply chain transformation, and expansion into new markets and sectors.


Bank One remains firmly committed to supporting its corporate clients in facing new challenges and exploiting new opportunities in a rapidly changing domestic and regional business environment. Read the English version of the interview below.


  1. We are currently in a period of economic recovery with exports rising above Rs 100 billion in 2022. Is this recovery being felt at the corporate banking level?


Mauritius has faced numerous challenges in the course of 2022 as a result of the prevailing global economic conditions, mostly due to supply chain disruptions, higher freight costs, a stronger US dollar and soaring energy and commodity prices. The notable increase in export performance is explained by a sharp rise in exports of goods and services, even exceeding the performance of 2019.


Indeed, exports are largely driven by the growth in the textile, sugar and medical sectors, among others, as operators take advantage of new opportunities gained in the context of the agreements recently signed with China, India and the African continent. Exports of services, on the other hand, is recovering strongly, benefitting from the re-opening of our borders, which has led to tourist arrivals of nearly 1 million in 2022. In addition, tourists are spending more and staying longer in Mauritius.


At the level of Bank One, we note with great satisfaction that most our domestic corporate clients have bounced back from the crisis and are benefiting from the improved business climate. We continue to maintain close relationships with them through tailored products and services that suit their evolving needs.


  1. Are companies still turning to banks to meet their cash flow needs?


Foreign currency cash management is a major consideration for companies engaged in import-export business. The volatility of the US dollar and the management of exchange rate risks remains critical to such businesses and the banking sector remains a key player in assisting companies in this process.


Since the beginning of 2022, the Central Bank has intervened on the domestic foreign exchange market to cater for the demand in hard currencies. However, there has also been a sustained recovery in foreign exchange inflows into the country since the full reopening of our borders in October 2021, led by strong export and tourism activities. BOM continues to closely monitor the foreign exchange market and is ready to intervene on the market as and when needed.


In this regard, the BOM Governor has held regular meetings with commercial bank treasurers to keep abreast of the latest prevailing conditions in the foreign exchange market and to ensure that customers are adequately supplied by commercial banks with treasury products.

At Bank One, we have noted a growing demand from local companies to accompany them in meeting their liquidity needs in terms of foreign currency supply.


3. With rising interest rates, many companies face the risk of falling into over-indebtedness. How do you support them?


Our Corporate Banking team is made up of experienced managers who act as financial advisors and work alongside our clients to meet their needs by offering them products that best suit their unique business requirements, including short-term facilities such as working capital finance and tailor-made trade finance to ease their cash flow.


It is worth mentioning that during the pandemic, Bank One has also provided support to its clients in terms of moratoriums to enable them to pursue their activities, and we will continue to be supportive and attentive to their changing needs. In this context, we have put in place a permanent restructuring framework to help businesses that are facing financial difficulties as a result of the pandemic or the sharp rise in interest rates more recently.


4.  The competition in the Investment Banking segment is increasingly tough with banks specializing specifically in this niche. How would you describe this competition?


In the face of fierce competition on the market, commercial banks are revamping their business model and enhancing their product offering with FinTech solutions to maintain their domestic market share. In addition, there is a growing trend to look for other opportunities in the region, particularly in Africa.


At Bank One, through the physical presence of our shareholders, the I&M and CIEL groups, in sub-Saharan Africa, we support large and mid-cap African corporates looking to raise dollars funding through local debt offerings or by going public on the Mauritius Stock Exchange. We also provide support to GBCs doing business from Mauritius for their trade and transactional needs.


Bank One serves the African market in three key areas: a financial institution strategy targeting Tier 1 and Tier 2 banks in sub-Saharan Africa, a central bank and government strategy where we provide structured finance solutions, and support to long-term corporate clients with US dollar liquidity needs.


Our Corporate Banking division is comprised of a team of senior professionals with expertise in a variety of sectors. We have a reputation for being close to our clients and being trusted advisors. This reputation has proven to be highly beneficial thanks to the hard work and continued efforts of our dedicated relationship teams and their commitment to always provide the best services to an increasingly demanding and sophisticated clientele. Moreover, Bank One has a continuous training program to upskill its workforce and keep pace with the evolution of the market.