Market Structure for Retail Banking Services in Mauritius.docx

8/16/2019 Market Structure for Retail Banking Services in Mauritius.docx

1/19

SCHOOL OF BUSINESS AND MANAGEMENT & FINANCE

Economics for Managers Group Assignment

Market Structure for Retail Banking Services in Mauritius

SUPERVISOR: Dr Nowbutsin

!" t# No$% b%r '(!)

Table of Contents

!* O$%r$i%w o+ t#% B,n-in S%.tor*******************************************************

!*! M,uritius B,n-in s%.tor P%r+or ,n.%*************************************************


2/19

!*' Fin,n.i,/ Soun0n%ss In0i.,tors*********************************************************

!*'*! Pro+it,bi/it1********************************************************************

!*'*' R% u/,tor1 C,2it,/***************************************************************

!*'*3 Ass%t 4u,/it1*******************************************************************!*'*" B,n-s5 For%i n E6.#,n % O2%n Positions******************************************

!*'*) B,n-s5 Li7ui0it1 Positions*********************************************************

!*'*8 Con.%ntr,tion o+ Cr%0it*********************************************************

'* Hous% Lo,n**************************************************************************

B,n-s*****************************************************************************

'*! Sur$%1 on Ho % Lo,n T,-%rs*********************************************************

'*' B,n-s ,n0 Insur,n.% Co 2,n1 wit# Ho % /o,n S.#% %*************************************M,uritius Co %r.i,/ B,n- Lt0**********************************************************

St,t% B,n- o+ M,uritius Lt0***********************************************************

R%+%r%n.%s**************************************************************************

1. Overview of the Banking Sector

T#% M,uriti,n b,n-in in0ustr1 .o 2ris%s o+ '3 b,n-s; o+ w#i.# 8 /o.,/ b,n-s; !(

+or%i n


3/19

tr,0% +in,n.%? int%rn,tion,/ 2ort+o/io ,n, % %nt; in$%st %nt b,n-in ; 2ri$,t% ./i%nt

,.ti$iti%s; tr%,sur1 ,n0 s2%.i,/i>%0 +in,n.% ,r% ,/so o++%r%0 b1 b,n-s* T#% int%rn,tion,/

b,n-s o++%r , wi0% r,n % o+ /ob,/ b,n-in ,n0 +in,n.i,/ s%r$i.%s to .or2or,t%;

institution,/ ,n0 2ri$,t% ./i%nts* So % o+ t#% bi %st ,n0 ost r%2ut,b/% int%rn,tion,/

b,n-s ,r% 2r%s%nt in M,uritius ,n0 ,.ti$%/1 .,rr1 out int%rn,tion,/ .ross bor0%r

,.ti$iti%s*

In s2it% o+ t#% $,rious s#o.-s +,.in t#% int%rn,tion,/ b,n-in /,n0s.,2% o$%r t#% r%.%nt

1%,rs; t#% 0o %sti. b,n-in s%.tor #,s s#own s,tis+,.tor1 2%r+or ,n.%*

1.1 Mauritius Banking sector Performance

O$%r t#% 1%,r %n0%0 M,r.# '(!); tot,/ ,ss%ts o+ t#% b,n-in s%.tor r%w ,t , r,2i0

2,.%; ,n0 wit# b,n-s5 +or%i n ,ss%ts in.r%,sin u.# +,st%r t#,n 0o %sti. ,ss%ts* Tot,/

,ss%ts o+ t#% b,n-in s%.tor ros% b1 '!*@ 2%r .%nt ,t %n0


4/19

b,n- #,$% %n%r,//1 r% ist%r%0 2ositi$% rowt# in r%.%nt 1%,rs* Gross +or%i n ,ss%t

2ositions ,$%r, %0 US ') bi//ion 0urin '(!(


5/19

E7uit1 Ti%r ! CET! .,2it,/ to tot,/ ris- w%i #t%0 ,ss%ts b%in .o 2ut%0 ,t !3*@ 2%r

.%nt* Fro t#% own%rs#i2 2%rs2%.ti$%; br,n.#%s o+ +or%i n


6/19

s#%%t %6#ibit +,ir/1 /ow .urr%n.1 is ,t.#%s ,n0 n%t %62osur% to +or%i n %6.#,n % ris-;

t#% ris- o+ /oss +ro ,0$%rs% o$% %nts in +or%i n %6.#,n % r,t%s ,r% ,ss%ss%0 to b%

r%/,ti$%/1 insi ni+i.,nt*

1. ., Banks* -i ui"it% Positions

B1 t#% %n0 o+ M,r.# '(!); t#% r,tio o+ /i7ui0 ,ss%ts to tot,/ ,ss%ts in t#% b,n-in s%.tor

stoo0 ,t '8*( 2%r .%nt; w#i/% t#% r,tio o+ /i7ui0 ,ss%ts to s#ort


7/19


8/19

8* B,n7u% Pri$ % 0% F/%ur1 Li it%0 Con0u.ts 2ri$,t% b,n-in busin%ss %6./usi$%/1

9* B,n1,nTr%% B,n- Li it%0

@* B,r./,1s B,n- M,uritius Li it%0

* C%ntur1 B,n-in Cor2or,tion Lt0 Con0u.ts Is/, i. b,n-in busin%ss %6./usi$%/1

!(* D%uts.#% B,n- M,uritius Li it%0

!!* H,bib B,n- Li it%0

!'* HSBC B,n- M,uritius Li it%0

!3* In$%st%. B,n- M,uritius Li it%0

!"* M,uritius Post ,n0 Coo2%r,ti$% B,n- Lt0!)* N,tion,/ Co %r.i,/ B,n- Lt0

!8* P*T B,n- Int%rn,sion,/ In0on%si,

!9* SBI M,uritius Lt0

!@* St,n0,r0 B,n- M,uritius Li it%0

! * St,n0,r0 C#,rt%r%0 B,n- M,uritius Li it%0

'(* SBM B,n- M,uritius Lt0

'!* T#% Hon -on ,n0 S#,n #,i B,n-in Cor2or,tion Li it%0

''* T#% M,uritius Co %r.i,/ B,n- Li it%0

'3* ,rw1.- Pri$,t% B,n- Lt0 Con0u.ts 2ri$,t% b,n-in busin%ss %6./usi$%/1

on2Bank 3eposit 4aking #nstitutions

M,uritius Housin Co 2,n1 Lt0

SICOM Fin,n.i,/ S%r$i.%s Lt0

9


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.1 Surve% on 0ome -oan 4akers

For t#% 2ur2os% o+ t#is stu01; w% s#,// +irst t,-% , sur$%1 on , rou2 o+ 3( 2%rson ,n0

s%% #ow ,n1 o+ t#% ,r% r%,01 or #,$% ,/r%,01 t,-%n , #o % /o,n ,n0 #ow ,n1 wi//

not t,-% , #o % /o,n* To not% t#,t 0u% to r%/i ious b%/i%+; so % ,r% not ,//ow to t,-%

,n1 -in0 o+ /o,n wit# ,n1 institutions*

Pur2os% o+ t,-in t#% #o % Lo,n w#o wi// 2ur.#,s%

wit# , #o % /o,n

w#o wi// not 2ur.#,s%

wit# , /o,nL,n0 Pur.#,s% 98*89 '3 '3*33 9Hous% Pur.#,s% 88*89 '( 33*33 !(Hous% Constru.tion 3*33 '@ 8*89 'Hous% r%no$,tion & E6t%nsion )8*89 !9 "3*33 !3

4a$le 15 Surve% on home loan takers

Fro t,b/% ! ,bo$% w% .,n r%,0 t#,t ,bout 93*33 o+ t#% 2%o2/% w#o too- t#% sur$%1

wi// t,-% , #o % /o,n ,n0 t#,t on/1 '8*89 wi// not t,-% , #o % /o,n* H%n.% t#%

2ur2os% o+ t#% #o % ,n0 its ,r-%t is , 2r,.ti.,/ %,n o+ r%$%nu% +or t#% b,n-in ,n0

+in,n.i,/ s%.tor*

T#% #o % /o,n s.#% % ,r-%t #,s ost/1 %6ist%0 sin.% .%nturi%s w#%r% t#% +in,n.i,/

institution wi// /%n0 to t#% 2%o2/% in n%%0 wit# , r%2,1 %nt int%r%st r,t%* In t#% 2,st

#ous%s w%r% bui/t b1 t#%ir own%rs t#% s%/$%s or wit# t#% #%/2 o+ t#%ir +, i/i%s wit# r,w

,t%ri,/s r%,0i/1 ,$,i/,b/% su.# ,s woo0; soi/ ,n0 b,/% o+ str,w* But in , tro2i.,/

.ountr1 /i-% M,uritius w#%r% ost/1 %,.# 1%,r t#%r% is #%,$1 r,in+,// ,n0 .1./oni.

w%,t#%r .on0itions; , .on.r%t% #ous% is , ust #,$% +or ,// M,uriti,n F, i/i%s*

T#% +o//owin .#%.-/ist ,n0 %sti ,t%0 .ost #,$% b%%n 2r%2,r%0 +or 2%o2/% w#o n%%0 to

.onstru.t , #ous% o+ ,bout !'( ' on , !8( ' 2/ot o+ /,n0:

, Pur.#,s% o+ , /,n0 ini u o+ ,bout Rs@((;((( outsi0% rur,/ ,r%,s

b Hous% P/,n ,n0 Bui/0in 2%r it ini u o+ ,bout Rs3((((

. Hous% Constru.tion ,n0 .o 2/%tion Mini u o+ ,bout Rs!;)((;(((

@


10/19

H%n.% , ini u tot,/ o+ ,bout Rs'*33 i//ion wi// b% n%%0%0 +or ,n in0i$i0u,/ to

bui/0 , #ous% on , 2/ot o+ /,n0* A..or0in to St,tisti. M,uritius t#% ,$%r, % ont#/1

%,rnin o+ ,n in0i$i0u,/ in M,uritius is Rs '")39 ,n0 wit#out t,-in into .onsi0%r,tion

t#% in.r%,s% o+ t#% $,/u% o+ on%1 o$%r ti %; it wi// t,-% , ini u o+ or% t#,n 9

1%,rs +or ,n ,$%r, % in.o % in0i$i0u,/ to #,$% su++i.i%nt +un0s in #is b,n- ,..ount to

b% ,b/% to bui/0 , #ous%*

B%/ow C#,rt ! s#ows t#% %$o/ution o+ t#% .onstru.tion 2ri.% in0%6 +ro O.tob%r '(!"

to S%2t% b%r '(!)* % .,n ,n,/1s% +ro t#% .#,rt t#,t sin.% D%.% b%r '(!" t#%r% #,s

b%%n , ris% in t#% .onstru.tion 2ri.% in0%6* H%n.% t#is wi// r%su/ts in t#% n%%0 to #,$% ,

r%,t%r ont#/1 in.o % +or ,n in0i$i0u,/ +ro , i00/% ./,ss +, i/1 in or0%r to bui/0 ,

#ous%*

419134194441974420054203642064420954212542156421864221742248111

111.5

112

112.5

113

113.5

114

114.5

Index

!igure 1 5 &onstruction Price #n"e+ Oct 1) to Sep 1,

An0 wit# .onstru.tion 2ri.%s in.r%,sin %$%r1 ont# ,s 2%r +i ur% ! ,bo$%; t#% ,r-%t

+or #o % /o,n is bi in , 0%$%/o2in .ountr1 /i-% M,uritius*

Un0%r t#is stu01 w% s#,// .onsi0%r on/1 two ,in Co %r.i,/ b,n-s; T#,t is:

! M,uritius Co %r.i,/ B,n- Lt0


11/19

' St,t% B,n- o+ M,uritius Lt0

T#% 2ri$,t% s%.tor; o$%rn %nt,/ institutions ,n0 Co %r.i,/ b,n-s #,$% b%%n 2/,1in

,n i 2ort,nt ro/% in t#% #o % /o,n in0ustr1 ,n0 wit# t#% in.r%,s% in 0% ,n0 +or

#ousin /o,ns; ,// .o %r.i,/ b,n-s; insur,n.% .o 2,ni%s ,n0 o$%rn %nt,/

.o 2,ni%s ,r% % %r in ,s /%n0%rs in t#% s% %nt* To not% t#,t ,// /%n0%rs in M,uritius

wi// n%%0 to 2ro$i0% in+or ,tion ,bout t#% .r%0it +,.i/iti%s r,nt%0 to bot# in0i$i0u,/

,n0 +ir s su.# ,s /o,ns; o$%r0r,+t; .r%0it .,r0s; /%,sin +,.i/iti%s; to t#% M,uritius

Cr%0it In+or ,tion Bur%,u MCIB * T#% ob=%.ti$% o+ MCIB is to %nsur% t#%

0%$%/o2 %nt o+ ,n o$%r,// soun0 .r%0it %n$iron %nt b1 2r%$%ntin o$%r


12/19

2ro$i0%0 s.#% %* A// b,n-s r%7uir% , bui/0in insur,n.% +ir%; .1./on%; ,n0 ot#%r

2%ri/s *

Int%r%st R,t% 9* ( 8* 8*!) )*Lo,n A ountin Ru2%%s

As +ro'((;((( to

;

As +ro! i//ion to' i/ion

As +ro' i/ion to3 i/ion

As +ro3 i//ion to" i//ion

Lo,nr%2,1 %ntt%r

Mini u !ont# ,n0,6i u 3((ont#s




T#% ,bo$% two b,n-s 2ro$i0%s , r%/,ti$%/1 s, % int%r%st r,t%s* T#is is b%.,us% Ho %

Lo,n b,n-in in M,uritius is or% /i-% ,n o/i o2o/isti. t12% o+ ,r-%t w#%r% t#% B,n-

o+ M,uritius ,++%.t ,// ot#%r b,n-s int%r%st r,t%s +or #o % /o,n b1 $,r1in its R%2o r,t%*

it# , #i # 0% r%% o+ int%r0%2%n0%n.% w#%r% i+ on% b,n-s o++%rs , /ow%r int%r%st r,t%

on s,$in s or +i6%0 t%r 0%2osit; t#is wi// r%su/ts in , /,r % , ount o+ b,n- ,..ounts

./osur% w#%r% t#% st,bi/it1 o+ t#% ot#%r b,n-s wi// b% ,t ris-*

Ho % /o,n ,/so .onsist o+ , /,r % 2ortion o+ ont#/1 %62%n0itur% ,n0 r% ,ins t#%

2ri ,r1 ,ss%ts in #o %own%r5s 2ort+o/ios* In M,uritius %,.# 1%,r #o %own%rs#i2

-%%2s on in.r%,sin ,n0 wit# #o % /o,n w% .,n %62%.t to #,$% , +,$our,b/% t,6

tr%,t %nt b1 t#% MRA ,t t#% %n0 o+ %,.# s% %st%r*

!!


13/19

'.6 &onclusion

Growt# o+ #ous%#o/0 in0%bt%0n%ss; ,s %,sur%0 b1 t#% rowt# o+ b,n- .r%0it to#ous%#o/0s; 0%.%/%r,t%0 r,2i0/1 0urin t#% s%.on0 #,/+ o+ '(!"* B,n- .r%0it to#ous%#o/0s; 2,rti.u/,r/1 .onsu 2tion .r%0it r%w ,t r%/,ti$%/1 #i # 0oub/% 0i it rowt#r,t%s 0urin '(!3; b%+or% r% ist%rin , ,r-%0 s/ow0own in r%.%nt ont#s* Growt#r,t%s o+ .onsu 2tion .r%0it ,r% ,bout t#os% r% ist%r%0 in i0


14/19

Fi ur% !: Growt# o+ Housin ,n0 .onsu 2tion .r%0it

Hous%#o/0 in0%bt%0n%ss #,s r% ,in%0 bro,0/1 .onst,nt ,s , s#,r% o+ #ous%#o/00is2os,b/% in.o % o$%r t#% !'< ont# 2%rio0 to %n0 S%2t% b%r '(!"; ,/t#ou # it

r,0u,//1 in.r%,s%0 b%tw%%n '(( ,n0 '(!'*

Fi ur% ': Hous%#o/0 0%bt to 0is2os,b/% in.o %

!3


15/19

T#% r%.%nt st,bi/it1 o+ t#% #ous%#o/0 in0%bt%0n%ss r,tio is .onsist%nt wit# ,n ,$%r, %rowt# r,t% o+ 0is2os,b/% in.o % o+ ,bout 9 2%r .%nt 0urin t#% 2%rio0; ,n0 t#%

r%2ort%0 s/ow0own in t#% rowt# o+ .onsu 2tion ,n0 #ousin /o,ns to #ous%#o/0s*Bro,0%nin t#% 0%+inition o+ #ous%#o/05s 0%bt to in./u0% borrowin +ro b,n-s ,n0non


16/19

T#% bro,0%r 0%+inition o+ #ous%#o/0 0%bt to 0is2os,b/% in.o % in.r%,s%0 ,r in,//1+ro )8*@ 2%r .%nt ,s ,t %n0


17/19

Fi ur% ): Hous%#o/0 0%bt s%r$i.% .ost ,n0 int%r%st r,t%s

Fi ur% 8: Hous%#o/0 0%bt s%r$i.% .ost in s%/%.t%0 .ountri%s

!8


18/19

T#% +in,n.i,/ bur0%n in.r%,s%0 +ro ,n %7ui$,/%nt o+ ,bout " 2%r .%nt o+ 0is2os,b/%in.o % in %,r/1 '(( to ,bout "*) 2%r .%nt b1 %n0


19/19

References

Fi ur%s; r,2#s ,n0 .#,rts w%r% 0r,wn on Mi.roso+t or0 '(!3 +ro s.r,t.# b1 t#%

,ut#or o+ t#is r%2ort*

#tt2: www* .b* u %n in0i$i0u,/ /o,ns #ousin

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Market Structure for Retail Banking Services in Mauritius.docx

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