Bank One: Supporting Mauritius’ Efforts to Emerge as a Private Wealth Hub for Africa

Author: Guillaume Passebecq Head of Private Banking & Wealth Management

The last few years have been characterised by a number of initiatives to identify new areas of activity to allow Mauritius’ financial services sector to move up the value chain and increase its contribution from 12 to 15% of the GDP as well as double, in actual terms, its contribution to US$1.9bn by 2030.

The most noteworthy exercise in this space was the Blueprint for the Financial Services Sector commissioned by the Ministry of Financial Services and the Financial Services Commission (FSC), which highlighted Mauritius’ potential as a private wealth structuring jurisdiction. Published in June 2018, the Blueprint by global consulting firm McKinsey noted that offshore private banking and wealth management is the IFC’s third-largest sector, with a banking revenue pool of US$94 million, Assets under Management (AuM) of US$8.2 billion, and approximately 300 full-time employees.

Within this, offshore private banking and wealth management for Africans was identified as a major opportunity, offering potential growth of 7 to 8% per annum to create a US$20 billion revenue pool by 2030. Indeed, the Blueprint found that the compelling value proposition offered by the island economy for private banks, wealth managers and High Net Worth Individuals (HNWIs) places Mauritius in an ideal position to capture a significant share of this market.

Evolving Private Wealth Landscape in Mauritius

Against this backdrop, the private wealth industry in Mauritius continues to experience significant transformation, driven by greater exposure to international standards both in terms of pure banking products and services as well as more sophisticated investment solutions, and also by the increasing trend towards digitalisation in a post-pandemic world.

When it comes to sophisticated investment solutions, the fact that Mauritius has historically attracted, and continues to attract, foreign investors is a key element of our business model at Bank One. We believe that such savvy investors look for a more holistic advisory solution that addresses their needs across a wide range of financial products and services.

In addition, alignment with international laws and standards has also contributed to making the Mauritian financial services sector more transparent and robust. Recent EU decisions are forcing Mauritius to reinvent itself as the industry’s development relies even more on internationalisation and its ability to adapt to these standards.

Last, but not least, the local private wealth landscape has also experienced significant digitalisation efforts in recent years, with the introduction of real-time digital access and a strong custody services offer. HNW customers are, in particular, looking for a hybrid approach as they expect both the personal touch from their relationship managers as well as a digital banking experience where advisory services can be provided remotely.

Changing Customer Expectations in a Post-pandemic World

Indeed, from a pure banking perspective, customer behaviour and expectations are constantly evolving. The pandemic has accelerated this evolution, with customers now demanding a seamless digital banking experience using mobile applications, as well as a digital-first communication model, from their financial service providers.

Furthermore, in every crisis, clients expect greater proximity from their banks and a close follow-up of their investments. The current period of financial stress has brought forward the resilience of Bank One’s Open Architecture model, as a multi-management investment solution for reducing performance volatility and providing best-of-breed products from multiple global providers.

The crisis has also placed greater emphasis on the security of clients’ assets amidst greater risk and volatility. At Bank One, our primary focus is the protection and growth of our clients’ wealth, and we make sure that their investments are kept off-balance sheet with a trusted depository like Euroclear – rated AA+ by Fitch Ratings and AA by Standard & Poor’s – acting as the provider for securities settlements. Thus, we support our clients to preserve, manage and grow their wealth optimally.

Bank One: Head Office

Staying at the Forefront of Digital Innovation at Bank One

At Bank One, we have been able to navigate through the crisis and ensure business as usual thanks to the digitalisation of our internal processes. We have invested in digital channels such as a revamped Internet Banking platform, a new Mobile Banking application and a full-fledged Custody platform.

Staying ahead in an ever-evolving landscape, we also founded the Investor’s Circle, a biannual networking event that brings together private investors, institutions, asset managers and service providers. Launched as the island’s first B2B platform for finance professionals, it allows players from our industry to connect, exchange ideas and address shared challenges.

We are also proud to be the first bank to have successfully on-boarded a Mauritian Rupee Fund on the Euroclear platform and executed a subscription order – an endeavour that has greatly benefited local fund management firms that can now target a wider range of investors across geographical locations who are keen to leverage Mauritius as a private wealth hub.

Africa Rising in the Private Wealth Space

If we look at opportunities in the private wealth landscape in Africa, it is extremely encouraging to note that, according to Knight Frank’s Wealth Report 2021, the African private wealth boom is second only to Asia. Indeed, the report forecasts that Africa will see the second biggest regional five-year UHNWI growth rate – 33% – led by Zambia (40%) and South Africa (32%). Furthermore, the outlook for households earning more than US$100,000 a year is even more positive according to Oxford Economics, which is forecasting 139% growth over the same period. Meanwhile, the Global Wealth Report 2021 by Credit Suisse foresees Africa growing robustly, and at roughly the same rate as the leading economies of China and India, when it comes to wealth gain by emerging economies.

As a local Mauritian bank with two key shareholders, CIEL Finance Limited and I&M Group PLC, with both entities owning sizeable banking operations in Madagascar, Kenya, Tanzania, Rwanda, and Uganda, Bank One is among only a handful of banks in Mauritius to have a tangible presence in Africa. We aim to offer the Mauritius advantage to clients looking to invest or establish a foothold in Africa and have noticed increasing interest from African Institutions in using Mauritius as a global hub for their investment.

This, in turn, has spurred Bank One to launch a dedicated offer for institutional clients. Our innovative portfolio management services for institutional and private clients make it possible for investors to select the best Asset Management companies and investment funds, both local and international. Moreover, through our Securities & Custody Services team, we offer such clients core banking services and the security of a global custodian. We play an important role in enabling institutional investors and pension funds to give their members confidence that their assets are being kept safe, with our industry stringently regulated by the Financial Services Commission and the Bank of Mauritius. Finally, thanks to our vast proprietary network and I&M Group’s strong footing, our clients can leverage our negotiation skills and local market expertise to gain access to fast-growing economies in Africa such as Kenya and Rwanda.

Bringing the Best of Both Worlds to Africa: Personal Touch with an Innovative Mindset

Ultimately, when it comes to private wealth management, the importance of a personalised approach cannot be emphasised enough. As a boutique bank, we have relationship managers who take the time to understand our clients’ ambitions and risk appetite, before defining their strategy and creating a customised roadmap to achieve their goals.

Moreover, our Open Architecture model for Wealth Management and state-of-the-art Custody platform, coupled with a clear vision and a team of accomplished professionals, have allowed us to remain true to our commitment to customer delight, which underpins the strength of our operations.

Finally, our main shareholders – CIEL Finance and I&M Group – provide us with the added opportunity to diversify our client base even further, and we leverage on their sizeable banking operations in Madagascar, Kenya, Tanzania, Rwanda and Uganda towards positioning Mauritius as a private wealth hub for growing African economies.

About the Author

Guillaume is an International School of Management (IDRAC) graduate who has spent his entire career in the banking sector. He started off as a Portfolio Manager at B* capital Paris, the BNP Paribas brokerage house in 1999. In 2007, he was appointed as Head of Sales at BNP Paribas Personal Investors Luxembourg. He joined AfrAsia Bank in 2014 and was subsequently appointed as Head of Private Banking. Guillaume joined Bank One as the new Head of Private Banking in March 2017. He brought along the needed expertise to uplift the Private Banking offer. Following the setting up of an International Custody platform, Securities Services and External Wealth Managers Desk, our clients, both high-net-worth and institutional, now have access to the required tools for an optimal wealth management experience. The Bank’s array of clients has also been widened to accommodate Asset Managers, Financial Institutions, Investment Funds, Pension Funds and Family Offices through a one-stop shop and Open Architecture model.