Bloomberg News

Mauritius Bank Ownership May Create Risk, Central Bank Says

September 06, 2011

(Update with comment from Bheenick in third paragraph.)

Sept. 6 (Bloomberg) -- A concentration of ownership among Mauritius’s banks may create a risk of contagion in the industry, said Rundheersing Bheenick, governor of the Bank of Mauritius.

Some of the lenders have become “too large and too diversified” for the central bank to supervise them effectively, Bheenick said in a speech today in Port Louis, the capital.

“The top two banks, both local, have total combined assets which exceed by more than 30 percent the combined assets of all other 15 banks which have domestic operations,” he said. “This may become a source of vulnerability and undermine financial stability.”

The total assets of banks were 1.1 trillion rupees ($39 billion) by the end of July, according to data published on the central bank’s website.

Mauritius Commercial Bank and State Bank of Mauritius Ltd. are the country’s largest local lenders by market value, with a total weight of almost 40 percent in the 38-member SEMDEX index gauge of stocks, according to data compiled by Bloomberg.

The Bank of Mauritius plans to ring-fence the domestic- banking operations of the biggest commercial banks and subject them to full supervision, he said.

“To achieve that, we shall move away from the current bank-holding model to bank-subsidiary model. This will require some re-structuring and re-engineering,” he said, without providing details.

--Editors: Emily Bowers, Alastair Reed.

To contact the reporter on this story: Kamlesh Bhuckory in Port Louis at

To contact the editor responsible for this story: Gordon Bell at

The Aging of Abercrombie & Fitch
blog comments powered by Disqus