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FINANCIAL SERVICES
SUPERVISION
ANNUAL REPORT 2010
CENTRAL BANK
OF
SEYCHELLES
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT
The Role and Mission of the Central Bank
The mission of the Central Bank of Seychelles is to contribute towards the sustainable economic
growth of Seychelles through prudent monetary policy and maintenance of a sound financial system.
This mission is achieved through the attainment of the following objectives:
a) promoting price stability;
b) advising the Government on banking, monetary and financial matters, including monetary
implications of proposed fiscal policies or operations of the Government;
c) maintaining a sound financial system.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT
Table of Contents
Message from the Governor 1
Structure and Overview of the Report 3
Chapter 1 – Macroeconomic Conditions 4
Chapter 2 – Structure of the Industry 8
2.1 THE FINANCIAL SECTOR 8
2.2 THE REGULATORY STRUCTURE 8
2.3 SUPERVISORY STRUCTURE 11
2.4 SUPERVISORY FUNCTION 12
2.5 THE BANKING SECTOR 14
2.6 ABANDONED PROPERTY 17
2.7 BDC 18
2.8 INSURANCE SECTOR 19
Chapter 3 – Statutory Compliance and Financial Analysis of the Banking
and Insurance Sectors 23
3.1 BALANCE SHEET OF THE INDUSTRY 23
3.1.1 Assets, Deposits and Advances 23
3.1.2 Capital Adequacy 28
3.1.3 Asset Quality 30
3.1.4 Profitability 32
3.1.5 Liquidity 34
3.1.6 Sensitivity to Market Risk 36
3.2 OVERVIEW OF OTHER FINANCIAL INSTITUTIONS 37
3.2.1 SCU 37
3.2.2 DBS 40
3.2.3 HFC 42
3.3 BALANCE SHEET OF INSURANCE INDUSTRY 43
3.3.1 Assets 43
3.3.2 Liabilities 46
3.3.3 Reinsurance and Technical Reserves 47
3.3.4 Earnings and Profitability 49
3.3.5 Liquidity 53
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT
Chapter 4 – Developments in the Supervisory Framework 55
4.1 DEVELOPMENTS RELATING TO THE SUPERVISORY FRAMEWORK 55
4.1.1 Regulations Prescribed by Central Bank in 2010 55
4.1.2 New Circulars and Pronouncements Issued by Central Bank 57
4.2 FINANCIAL STABILITY ASSESSMENT 59
4.3 CAPACITY BUILDING 59
Chapter 5 – Appendices 61
APPENDIX 1: Location and Contacts of Banks 61
APPENDIX 2: Location of ATMs 64
APPENDIX 3: Location and Contacts of BDCs 65
APPENDIX 4: Location and Contacts of Insurance Companies and
Intermediaries 69
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 1
Once again, it is a pleasure to present to you, the third issue of the Financial Services Supervision
Report for 2010. In last year‟s issue, it was noted that the economy showed more stable market
fundamentals including the disappearance of a parallel market for foreign exchange, stabilization
of the official exchange rates and rapid accumulation of the country‟s external reserves. In 2010
further improvements have been observed by way of a rise in the country‟s gross reserves, increase
in GDP and a reduction in the inflation.
Globally, economies kept up their recovery from the recession with stricter regulations by
respective supervisory institutions especially with regards to improving capital adequacy and
liquidity in financial institutions. In September of 2010, we saw the release of the Proposed Basel
III Guidelines which emphasise the importance of having more stringent capital and liquidity in
institutions.
In accordance with the action plan developed with the International Monetary Fund (IMF) which
started in 2008, in 2010 the Financial Services Supervision Division (FSSD) continued to make
good progress. To this end, two Regulations on Capital Adequacy and Credit Classification and
Provisioning were promulgated incorporating comments from financial institutions. These
regulations which are based on best international practices, impose stricter measures especially on
credit classification and provisioning whereby institutions now have less options in terms of
eligible collateral on loans and the percentage of provisioning for special mention and substandard
categories have been adjusted.
An increase in the number of complaints lodged from the general public with the Central Bank
was observed regarding the charges for services/products and generally unsatisfactory service
levels at banks. In response to this, the Central Bank announced that these issues will be
monitored closely and relevant laws will be reviewed if necessary to safeguard depositors‟ interest.
The policy section of FSSD has been working diligently to handle complaints and intercede
between banks and clients on the diverse issues to help improve banking services.
2010 also saw the incorporation of the Insurance Supervision Section under FSSD. The core
function of the Insurance Supervision Section within FSSD is to regulate and supervise all
insurers, reinsurers and other insurance intermediaries in Seychelles in line with the Insurance Act
Message from the Governor
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 2
2008. Insurance supervision remained with the Central Bank when securities and mutual funds
were allocated to Seychelles International Business Authority (SIBA) in 2010, to tap into the
synergies.
To conclude, the ongoing process of reinforcing the supervisory framework also serves to ensure
that effective vigilance of the financial sector is maintained. With this in mind, one of the
objectives of FSSD is to minimize the risk of adverse consequences resulting from a lack of
oversight, as well as keeping the financial sector safe and sound.
PIERRE LAPORTE
GOVERNOR
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 3
The purpose of this report is to disseminate information about the structure of the financial
sector, the financial status and performance of its constituents and developments in the
supervisory framework. This falls within the scope of Central Bank of Seychelles‟ (hereafter
referred to as Central Bank) intention to promote transparency and disclosure in the financial
system.
After summarising the macroeconomic environment which prevailed during 2010 in Chapter 1,
Chapter 2 goes on to provide a description of the structure of the financial sector. In Chapter 3,
statistics on the banking and insurance sectors‟ performance and position in 2010 are laid out and
analysed. Finally Chapter 4 provides a perspective on developments which occurred in the
supervisory framework during the year under review.
Structure and Overview of the Report
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 4
During 2010, domestic activity remained heavily dependent on the international environment since
Seychelles imports mostly all of what it consumes and what it uses as investment input. For
example, a rise in international commodity prices (including fuel) leads to an increase in prices
domestically. Despite strong concerns over possible downside risks and therefore a fragile global
economic recovery, activity was buoyant during the year. A strong pickup in the economic activity
was observed in 2010 as real GDP growth was recorded at 6.7 per cent compared to 0.5 per cent
in 2009. The main drivers of growth during 2010 were construction, related largely to foreign
direct investment (FDI) projects, and other tourism-related activities. Growths were also recorded
in other sectors such as telecommunication and manufacturing. The year‟s economic growth was
against a backdrop of increased level of confidence in the Seychelles economy as was evident in
the higher level of investment in key sectors by both local and foreign investors.
Foreign exchange inflows from tourism earnings as well as FDI-related projects exceeded the
previous year‟s level. These helped to provide for the financing of the country‟s increase in import
requirements and support the stability of the domestic currency. During 2010, the Seychelles rupee
strengthened against the main traded currencies (refer to Table 1), namely the US dollar, Euro and
Pound Sterling, the maximum appreciation of which was by 14 per cent relative to the Euro. The
average annual appreciation of the rupee against the US dollar was by 11 per cent.
Table 1: Change in average exchange rate from 2009 to 2010
Notwithstanding the above, through a combination of factors such as disbursements by
international organisations as well as bilateral partners in support of the reform programme,
international reserves have accumulated during the year. On a gross basis, official reserves held by
the Central Bank stood at USD238 million at end-2010, equivalent to 2.3 months of import cover.
This compares to USD169 million which denoted 1.6 months of imports end-2009. As for the net
Annual Average 2009 2010 % change
SCR/ EUR 18.6794 16.0316 14
SCR/ USD 13.5814 12.0706 11
SCR/GBP 21.0775 18.6554 11
Chapter 1 – Macroeconomic Conditions
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 5
international reserves, this finished the year at USD207 million, significantly exceeding the target
of USD168 million.
Another key indicator that exceeded its target was the primary fiscal surplus which was set at
7.0 per cent of GDP for the year 2010. Owing mostly to buoyancy in revenue collection, the
realised primary surplus was 8.9 per cent of GDP. This allowed the Government to continue to
repay part of its domestic debt, consistent with its overall debt reduction strategy.
The reduction in domestic debt was primarily through a net maturity of treasury instruments. As
such, the Government reduced its domestic liabilities with commercial banks. To the extent that
this liquidity was not directed to other sectors, commercial banks were highly liquid and held
reserves above the minimum required amount. In the money market, excess liquidity was the main
cause for the reduction in interest rate, especially on the short-term spectrum of the maturity
profile of instruments. On 91-day, 182-day and 365-day treasury bills, the yield fell to 0.48 per
cent, 1.23 per cent and 2.38 per cent at the end of 2010 compared to the previous year‟s 4.29 per
cent, 5.50 per cent and 6.40 per cent, respectively. Consistently, the same trend was observed in
the effective interest rates on banks‟ deposits. The average on fixed-term rupee deposits fell by
2.63 per cent from 5.64 per cent to 3.01 per cent. As for the savings rate, the decline was from
1.85 per cent to 1.58 per cent. With regards to the lending rate, the decrease was less pronounced,
from 13.49 per cent in 2009, it fell to 11.49 per cent in 2010 which is a 2 per cent decline. Table 2
provides the key interest rates on savings, lending and 91 day T-bills from to January to December
2010.
Table 2: Key interest rates for the year
In consideration of the low inflation environment domestically as well as the level of world
interest rates, the average lending rate in Seychelles for the year 2010 may be viewed to be on the
higher end. Given this is a deterrent to credit growth and thus to economic activity, this issue has
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Average saving rate (%)
1.85 1.85 1.85 1.85 1.85 1.85 1.85 1.73 1.73 1.58 1.58 1.58
Average lending rate (%)
14.00 13.46 13.06 12.97 13.11 13.31 12.68 12.29 12.21 12.07 11.87 11.49
Average rate for 91 day T-bills (%)
3.62 3.03 3.68 3.11 2.42 1.85 1.85 1.84 1.53 1.23 0.72 0.48
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 6
been investigated by Central Bank which has identified indicators that suggest a lack of
competition in the domestic banking sector.
In spite of the above backdrop, the year observed an increase in the amount of credit extended by
commercial banks. At the end of 2010, the stock of outstanding claims on the private sector was
22 per cent higher than at the end of the previous year. This represented loans extended to sectors
such as tourism, trade, manufacturing, mortgages and private households.
The Central Bank loosened monetary policy in 2010 through a quarterly increase in the reserve
money ceiling. Consistently, an expansion was recorded in the main monetary aggregates. The
growth in the broadest measure of money supply adopted in Seychelles, M3, was 14 per cent
compared to the previous year. Consistently, in 2010 there was an expansion in both domestic and
external assets compared to 2009 with the increase in external assets (on account of a growth in
the position of the Central Bank) being more prominent.
Price stability remained the foremost focus of monetary policy of the Central Bank and as has
been the case since the adoption of the monetary targeting framework in which reserve money is
the operational target, strong emphasis is placed on liquidity management. Notwithstanding the
increased level of activity, the expansion in liquidity had no adverse effect on domestic prices.
Throughout the year, the rate of inflation remained close to zero and as such, interest rates were
Box 1: Inflation
Inflation measures movement in the general price level in the economy over a specific period in time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects a decline in the purchasing power of money. The Central bank‟s primary objective is price stability and this is attained through the reserve money targeting framework of the monetary policy.
Box 2: Money Supply, M3
M3 is the broadest monetary aggregate or measure of money supply adopted in Seychelles. M3 is composed of M2 plus foreign currency deposits. M2 is M1 plus quasi-money. Quasi Money is savings + term (also known as fixed) deposits. M1 is currency with public + transferable (current account) deposits. That is, M3 is the sum of currency with the public as well as current, savings, fixed and foreign currency deposits.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 7
positive in real terms. An important contributing factor was the stability of the domestic currency
and increased competition in the economy given the liberalised environment.
All the qualitative performance targets as set out under the macroeconomic reform programme
were met during 2010. The performance of the Central Bank against its target is illustrated in
Table 3.
Table 3: Quantitative Performance Criteria
2008 2009 2009 2009 2009 2010 2010 2010 2010
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Reserve Money 1 R million
Target 1151 1146 1266 1311 1480 1537 1592 1676 1753
Actual 1120 1051 1119 1169 1296 1424 1544 1596 1746
Net International Reserves 2
USD million
Target 26 25 66 83 130 133 128 142 168
Actual 50 76 83 122 152 189 162 177 207
1. The stated target is a ceiling 2. The stated target is a floor
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 8
2.1 THE FINANCIAL SECTOR
One of Central Bank‟s core objective is to promote the safety and soundness of the financial
system. This is achieved by the functions of FSSD; a division within the Central Bank which
regulates and supervises financial institutions1, other institutions, insurers and insurance business
intermediaries.
In 2010, 7 banks and 24 BDCs were licenced. With regards to the latter, as per Appendix 3, three
were not yet in operation. Also included in its regulatory and supervisory portfolio is SCU, DBS
and HFC.
Another addition to FSSD‟s function during the year under review was the supervision of
insurance companies and insurance business intermediaries via the setting up of the Insurance
Supervision Section within FSSD. The insurance market in Seychelles at the end of 2010 consisted
of 4 domestic insurance companies, 3 non-domestic insurance companies, along with 43 insurance
intermediaries. Chart 1 shows the institutions supervised by FSSD.
Chart 1: Supervised Institutions
2.2 THE REGULATORY STRUCTURE
1 Financial institutions is defined as banks and bureaux de change by the Financial Institutions Act (FIA) 2004.
Chapter 2 – Structure of the Industry
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 9
The following summarises the main legislations and principles set by international standard setting
bodies that guide the operations of FSSD. The latter include the 25 Core Principles on Bank
Supervision set by the Basel Sub-Committee of Banking Supervisors as well as the 28 Insurance
Core Principles established by International Association of Insurance Supervisors which are
applicable to banking and insurance supervision respectively.
Central Bank Act 2004
Central Bank Act 2004 (as amended) provides the regulatory framework for the establishment,
objectives and functions of the Central Bank. Under the Act, the Central Bank operates as an
autonomous statutory body which upholds the principles of accountability and transparency in the
functions that the institution discharges. The objectives of the Central Bank are (a) to promote
domestic price stability; (b) to advise the Government on banking, monetary and financial matters,
including the monetary implications of proposed fiscal, credit policies or operations of the
Government; and (c) to promote a sound financial system. In addition, the Act also gives Central
Bank supervisory powers over financial institutions.
Financial Institutions Act 2004
In addition to the Central Bank Act, Central Bank also derives its supervisory powers from the
FIA 2004 (as amended in 2008 and 2009) which is administered by FSSD. The FIA 2004 provides
the legal framework for the „cradle to grave‟ (Box 3) supervision of institutions, setting out the
licensing criteria, prudential standards which licensed institutions need to adhere to enforcement
provisions and procedures for closure of financial institutions. Furthermore there are several
regulations and directives which have been issued by Central Bank to supplement the FIA 2004.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 10
Box 3: Supervisory Functions of FSSD
“Cradle to grave” supervision covers the whole process of supervision from the licensing of banks, ongoing onsite and offsite supervision and mechanisms for taking prompt corrective actions where institutions do not comply with regulatory or supervisory requirements. This process also includes exit arrangements for institutions from the industry.
Financial Institutions (Application of Act) Regulations 2010
The above-mentioned regulations were issued in 2010 to make certain sections of the FIA 2004
applicable to DBS and HFC. The applicable sections are principally prudential requirements which
banks adhere to, which have been deemed relevant to the two institutions.
Delegation of Functions (Development Bank of Seychelles Decree) Order, 2009
This Order was issued under the Transfer and Delegation of Statutory Functions Act in 2009. It
delegates to Central Bank certain sections of the DBS Decree 1977 (which governs DBS) for
which the exercise of powers were previously vested in the President and the Minister of Finance.
Insurance Act 2008
The Insurance Act which was promulgated in 2008 governs insurance companies and their
intermediaries. In administering this Act, Central Bank is responsible for maintaining the stability
and efficiency of the insurance market, promoting confidence in the market and protecting
policyholders‟ interest.
Licensing
Ensures that applicants which pose a danger to financial system are not allowed entry
Only institutions which meet the requirements stipulated in the FIA 2004 and the Insurance Act are granted a licence
Onsite Supervision
Addresses aspects which
cannot be monitored offsite including internal control as well as the quality and competence of management
Examiners plan examination using a risk-based approach. It is sometimes necessary to perform adhoc examinations
Examiners physically verify accuracy of returns submitted
Offsite Supervision
Allows for weaknesses
and concerns to be identified in a timely manner and for implementation of corrective measures by licensed institutions
Returns are submitted electronically to FSSD which monitors and analyses the information
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 11
Credit Union Act 2009
The Credit Union Act was issued in 2009 as an initiative of introducing a modern and effective
legislation aimed specifically for credit unions. A set of by-laws as provided by the Credit Union
Act also directs SCU‟s internal operations with its members.
Credit Union (Designation of Authority) Notice, 2009
The formalities for Central Bank to supervise SCU were made in 2005 under the Co-operatives
Act. With the enactment of the Credit Union Act, the delegation of regulatory authority was
provided for under the Credit Union (Designation of Authority) Notice, 2009.
Foreign Exchange Act
The Foreign Exchange Act which was issued in 2009 is geared towards regulating the market to
prevent illegal activities, rather than restricting it.
Core Principles on Banking Supervision
The 25 Core Principles of Banking Supervision is established by the Basel Committee on Banking
Supervision (BCBS). It is a set of standards used by bank supervisors around the world as a
yardstick for assessing the quality of the supervisory process in place and a basis on which areas
for further progress can be identified.
Insurance Core Principles
The Insurance Core Principles and methodology consist of essential principles that need to be in
place for an insurance supervisory system to be effective, explanatory notes that set out the
rationale underlying each principle and criteria to facilitate comprehensive and consistent
assessments.
2.3 SUPERVISORY STRUCTURE
FSSD is organised into two sections, namely Banking Supervision and Foreign Exchange Section
and the Insurance Supervision Section. The Banking Supervision and Foreign Exchange Section in
turn constitutes of four units, Policy, Onsite, Offsite and Foreign Exchange as shown in Chart 2.
Insurance supervision previously fell under the Securities and Financial Markets Division within
the Central Bank which was dissolved when most of its functions were transferred to SIBA in
2010, with Central Bank retaining insurance supervision under its ambit. Consequently, a section
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 12
dedicated to the supervision of insurance companies and insurance intermediaries was added to
FSSD‟s structure.
Whilst staff in Insurance section work as generalists, the intention is to also organise the section
into specialised units in the future.
With an expanded division, the number of staff working in FSSD increased from 15 to 22 during
the year under review with 16 staff working in the Banking Supervision and Foreign Exchange
Section, 4 staff in the Insurance Supervision Section, the Head of Division and the Secretary to the
division.
Chart 2: Structure of FSSD
* F.S.A – Financial Services Analyst ** F.S.A.A - Financial Services Analyst Assistant
2.4 SUPERVISORY FUNCTION
FSSD has three core functions at the heart of its operations which are crucial in the achievement
of its mandate of ensuring a sound financial system. These include the licensing, offsite
supervision and onsite supervision functions which are described in Box 3.
Head of Division
Banking Supervision & Foreign Exchange
Section Director
Insurance Supervision Section
Director
Personal Secretary
Policy/Onsite /Offsite Unit
F.S.A (x2) F.S.A.A (x1)
Onsite Unit
F.S.A* (x4) F.S.A.A** (x1)
Foreign Exchange Unit
F.S.A (x1) F.S.A.A (x1)
Policy Unit
F.S.A (x2) F.S.A.A (x1)
Offsite Unit
F.S.A (x4) F.S.A.A (x1)
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 13
As illustrated in Box 3, these functions are intertwined and complement each other. Nevertheless
effective licensing process which entails thorough screening of applicants facilitates the
supervision of these entities.
In 2010, no new banking licence was granted, although an application for an offshore licence was
rejected on the grounds that it did not fully meet the criteria set out in section 6(1) of the FIA
2004. As regards to BDCs, 4 were licensed during the year under review compared to 15 which
were licensed in the preceding year. With regards to insurance companies and intermediaries, a
Mauritian entity was licensed to become the fourth insurance company in the market. Of note is
that its entire shareholding was acquired by another Mauritian company in 2010. In addition, the
year under review saw the new registrations of 12 insurance intermediaries.
Offsite supervision is mainly conducted by taking a micro-prudential view of the institutions. That
is, looking at their individual status and performance. However, it plans to intensify its analysis on
the macro-prudential perspective of the industry. On the banking side, statistics are compiled into
Financial Soundness Indicators (FSIs) based on definitions issued by the IMF, which are
essentially ratios, on the basis of which further analysis is conducted. FSSD is looking to further
develop its offsite supervision by implementing a software application in the upcoming year which
will further automate data capturing as well as validation from supervised institutions.
Onsite supervision adopts a risk-based methodology with particular focus on areas of weaknesses
which require more supervisory attention. For banks, this is done in line with the CAMELS bank
rating system; the components of CAMELS are Capital adequacy, Asset quality, Management,
Earnings, Liquidity and Sensitivity to market risk. In 2010, onsite examinations were conducted
on 5 banks for which the recommendations from the reports were closely monitored. The year
under review saw the insurance section carrying out its first onsite examinations for which 2
insurance brokers were examined.
In working towards the objective of ensuring a sound financial system, FSSD also aims to protect
depositors‟ and policy holders‟ interest. In this regard, FSSD also carries out other functions
namely complaints handling and administration of abandoned property of banks which are
discussed further under sections 2.5.5 and 2.6 respectively.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 14
2.5 THE BANKING SECTOR
Central Bank issues two types of banking licence under the FIA 2004, namely the banking licence
and the offshore banking licence2. Whilst the holder of a banking license can engage in business
with residents and non-residents in all currencies, an offshore bank is restricted to conduct
business only with non-residents and in foreign currencies.
As illustrated in Chart 3, BMI Offshore Bank is the only bank engaging solely in offshore banking
business whilst Barclays Bank (Seychelles) Ltd holds both licences. Most of the banks however, are
holders of banking licences.
Chart 3: Holders of Licence to do Banking Business
2.5.1 Ownership of Banks
Whilst the Government has majority shareholding in 2 of the banks in Seychelles, the remaining
5 are owned by foreign entities. Three of the foreign owned banks have been incorporated in the
country and are subsidiaries. The other two are by status overseas companies with a branch in
Seychelles. The shareholding of banks is detailed out in Table 4.
2 Central Bank intends to migrate to a single licensing regime for banks in 2011 and as a result amendments will need to be made to the FIA to accommodate this new regime.
BMI Offshore Bank
Seychelles Savings Bank Nouvobanq Mauritius Commercial Bank Habib Bank Bank of Baroda
Barclays Bank
Banking Licence Offshore Banking Licence
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 15
Table 4: Shareholdings of Banks
Shareholder 1 Shareholder 2
Barclays Bank (Seychelles) Ltd
Barclays Bank Plc 99.70% Local Staff/Ex Staff 0.3%
Bank of Baroda Government of India 54% Public 46%
BMI Offshore Bank Bank Muscat International 50%
Nouvobanq 50%
Habib Bank Ltd Aga Khan Foundation for Development 51%
Government of Pakistan 49%
Mauritius Commercial Bank (Seychelles) Ltd
Mauritius Commercial Bank Ltd 99%
Director 1%
Nouvobanq Government of Seychelles 78%
Standard Chartered Bank 22%
Seychelles Savings Bank Government of Seychelles 99.5%
Principal Secretary for Finance 0.5%
2.5.2 Branch Networks
Table 5 shows the number of branches owned by each bank in the country. Compared to the
previous year, the only new development was when Seychelles Savings Bank opened its corporate
branch located at Orion Mall in Victoria in April 2010. Most of the branches are distributed on
the main island in view that 87 per cent of the population resides on Mahe. Four of the banks
have presence on Praslin and La Digue which have around 9 per cent and 4 per cent of Seychelles
residents respectively3. Appendix 1 shows the locations of the branches on the three main islands.
Table 5: Number of Branches in 2010
Mahe Praslin La Digue Total
Barclays Bank (Seychelles) Ltd
4 2 1 7
Bank of Baroda 1 - - 1
BMI Offshore Bank 1 - - 1
Habib Bank Ltd 1 - - 1
Mauritius Commercial Bank (Seychelles) Ltd
3 2 1 6
Nouvobanq 1 1 1 3
Seychelles Savings Bank 3 1 1 5
2.5.3 ATM Network
In 2010, an additional ATM was installed by Barclays Bank at Mont Fleuri bringing the aggregate
to 31 as shown in Table 6. With 4 additional ATMs in 2008, 2 in 2009 and 1 in 2010, banks‟
3 Information on geographical distribution of population obtained from Seychelles in Figures 2010 prepared by National Bureau of Statistics.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 16
efforts to increase outreach to clients over the years can be observed. The locations of the ATMs
are listed in Appendix 2.
Table 6: Number of ATMs in 2010
Mahe Praslin La Digue Total
Barclays Bank (Seychelles) Ltd 10 2 1 13
Mauritius Commercial Bank (Seychelles) Ltd
5 3 1 9
Nouvobanq 3 1 1 5
Seychelles Savings Bank 2 1 1 4
Total 20 7 4 31
2.5.4 Employees
Table 7 shows that there was an increase from 568 to 576 employees in the banking sector
between 2009 and 2010, attributed entirely by recruitment of local employees. Employees in the
banking sector account for approximately 1.4 per cent of total employment in Seychelles which
was 41,891 in 20094. For 2010 employees in the banking sector apportion for approximately 1.3
per cent of total employment in Seychelles which was 44,1595.
Table 7: Number of Employees
2009 2010
Local Expatriates Total Local Expatriates Total
Barclays Bank (Seychelles) Ltd
236 9 245 235 7 242
Bank of Baroda 13 2 15 14 3 17
BMI Offshore Bank 11 0 11 11 0 11
Habib Bank Ltd 10 1 11 10 1 11
Mauritius Commercial Bank (Seychelles) Ltd
109 3 112 118 3 121
Nouvobanq 92 1 93 84 2 86
Seychelles Savings Bank 80 1 81 87 1 88
Total 551 17 568 559 17 576
4 Information on employment figures obtained from Seychelles in Figures 2010 prepared by National Bureau of Statistics. 5 Information on employment figures obtained from Bulletin November 2011 prepared by National Bureau of
Statistics.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 17
2.5.5 Complaints Handling
The year under review saw approximately 40 complaints lodged at the Central Bank. The majority
of complaints were with regards to dissatisfaction with the charges on services/products and also
pertained to poor service level at banks. The Policy Unit has liaised closely with the banks in order
for them to address the complaints.
2.6 ABANDONED PROPERTY
FSSD also administers abandoned property which is funds or other property kept at banks for
which there have been no transaction or written correspondence for a period of at least 10 years.
This aims at protecting depositors‟ interest by removing opportunities for alleged
misappropriation. Money transferred to the Central Bank are kept in non-interest bearing accounts
until such time that the owner of the abandoned property claims the funds. Content of the safe
deposit box transferred to CBS, on the other hand are kept in the vault. The following Box 4
illustrates the procedure as regards administering abandoned property.
Box 4: Abandoned Property Procedures
It is important to note that a bank may have its own internal policy whereby inactive accounts are
classified as dormant. Dormant accounts are bank accounts for which there have been no
transactions effected by the account holder, for example deposit or withdrawal, for a certain
period of time as specified by a bank. In Seychelles this ranges between 6 months to 2 years,
depending on the particular bank‟s policy. Most banks apply a fee or charge on these accounts.
The closing balance of abandoned funds transferred to Central Bank in 2010 amounted to
R9.25 million in comparison to R7.39 million in 2009, representing R1.90 million of transferred
funds and R0.03 million which was refunded.
If no transaction on account or safe deposit box for period of 10 years, e.g. from March 2000 to March 2010, bank to classify account or safe deposit box as abandoned property.
Bank to inform owner of abandoned property by a letter and by publishing in the local newspaper by end of May of the 10th year.
Bank to transfer abandoned property in July of the 11th year. If property was abandoned as at March 2010, this would be transferred to Central Bank in July 2011.
Client needs to contact commercial bank to claim reported or transferred property. Property is released by Central Bank upon satisfaction of person‟s right to claim.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 18
2.7 BDC
The total number of BDCs remained unchanged during the year under review at 24 (see Appendix
3 for the list of bureaux de change) representing the net effect of granting 4 licences and
4 surrendering their licences. Three existing BDCs upgraded their licences to Class A, which in
addition to the buying and selling of foreign currency notes, coins and travelers cheques allowed
for Class B licensees, can also provide money transmission services. As at the end of the year
under review, 21 of the licensed BDCs were operational.
As regards to transactions carried out by bureaux de change, an increase in volume was observed
during the year under review. The total volume of purchases increased from R778.89 million in
2009 to R1.28 billion in 2010, which denotes a growth of 64.6 per cent. Likewise, the total volume
of sales increased from R792.26 million in 2009 to R1.27 billion in 2010, accounting for a
60.7 per cent rise. BDCs transactions accounted for 27.1 per cent of the market in terms of
purchases and 26.5 per cent in terms of sales, representing an increase when compared to
19.5 per cent and 21.2 per cent respectively for the preceding year. A breakdown of the volume of
trading by banks and BDCs is provided in Table 8 and Chart 4.
Table 8: Sales and Purchases of Foreign Currency in 2010
Purchases (R'000s) Sales (R'000s)
Bureaux de Change 1,282,372 1,272,815
Banks 3,449,186 3,528,941
Total 4,731,558 4,801,756
Chart 4: Sales and Purchases of Foreign Currency in 2010
Purchases
Banks 72.90%
Bureaux de Change 27.10%
Sales Bureaux de
Change 26.51%
Banks 73.49%
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 19
2.8 INSURANCE SECTOR
Under the Insurance Act 2008, the Central Bank licenses two types of insurers; namely the
domestic and the non-domestic insurers. Whilst a domestic insurance licence allows for carrying of
insurance business in or from Seychelles, a non-domestic insurance license allows business
transactions in respect of only non-Seychelles policies.
In addition to the above two licences, the Central Bank also licenses and registers insurance
intermediaries; these are insurance managers, principal insurance representatives (PIRs), insurance
brokers, insurance agents and insurance sub-agents.
Box 5: Duties of Insurance Manager, Principal Insurance Representative and
Insurance Broker
Insurance manager is allowed to manage insurance business originating from outside
Seychelles only, and on behalf of any insurer, can manage any part of its business or exercise
managerial functions in the insurer‟s business or be responsible for maintaining accounts or
other records of this insurer.
Principal Insurance Representative (PIR) maintains for an insurer carrying on non-
domestic insurance business, full and proper records of the insurance business of that insurer,
and is not an employee of that insurer.
Insurance broker arranges insurance business with insurers on behalf of prospective
policyholders, thereby being a representative of the policyholder.
Insurance agent under the authority of an insurer and not being an employee of that insurer,
acts on behalf of the insurer in the initiation of the insurance business, receipt of proposals,
issue of policies, collection of premiums or the settlement of claims.
Insurance sub-agent solicits directly or through advertising or other means, domestic
business on behalf of an insurer, insurance agent or insurance broker.
There are currently seven insurance companies licensed in Seychelles; four of which hold domestic
insurer licences and three which hold non-domestic insurer licences. Holders of non-domestic
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 20
insurance licences are limited to underwriting insurance policies in relation to risks situated outside
Seychelles only, whereas licensed domestic insurers may issue insurance contract in relation to
both risks situated inside or outside Seychelles. If the latter are located outside Seychelles, the
company is then represented by a PIR. Of the three non-domestic insurers, one is licensed to carry
out captive insurance business (further clarified in Box 6).
As at the end of 2010 the insurance market had 1 PIR, 10 insurance brokers, 1 insurance agent and
31 insurance sub-agents.
Box 6: Captive Insurer
A captive insurer is an insurance company that has been set up by an organisation to insure its own risks, although some may actually accept risk for profit from other organisations (The Chartered Insurance Institute, 2009). Captives are normally set up not for profit but however, after absorbing yearly expenses, any fund left from premium income generated from contracts are accumulated and carried over yearly in the form of surpluses.
With regards to ownership of the four domestic insurance companies, the Government has
majority stake in two of these whilst the remaining two companies are owned by private
shareholders inclusive of foreign counterparts. All three non-domestic insurance companies are
foreign owned.
Table 9 shows shareholders of insurance companies for which there has been no change
compared to 2009.
Table 9: Shareholdings of Insurance Companies
Shareholder 1 Other shareholders
Domestic Insurance companies
SACOS Life Assurance Co Ltd
State Assurance Co. Ltd - 99.995%
Director of Finance and Corporate Affairs - 0.0005%
SACOS Insurance Co Ltd State Assurance Co. Ltd - 99.995%
Director of Finance and Corporate Affairs - 0.0005%
Harry Savy Insurance Co Ltd Corvina Investment Co. Ltd. - 50%
Mauritian Eagle Ins. Co. Ltd - 20% Harry Savy & Co. Ltd - 18.75% Mahe Shipping Co. Ltd. - 11.25%
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 21
La Prudence Mauricienne Assurance Ltee
Societe de Financement et de Promotion - 21.3848%
Robert de Froberville - 18.77% Dominique Galea - 18.77% Societe Angusdi - 14.49% Maxime Fon Sing - 9.76% Le Residence Ltee - 4.8% Baie du Cap Estate Ltd. - 4.53% Jacques Maurice Jules Felix Maurel - 2.13% Armand Paquiry Lyngon-Apavou - 2.03% The United Mutual Superannuation Fund - 1.72% Rudy Stephane Bruneau Woomed - 1% Sin Cham Foo-Kune - 0.5% The Mauritius Development Investment Trust Co. Ltd. - 0.13%
Non-domestic Insurance companies
SRS Insurance Co Ltd Special Risk Solutions Ltd - 50%
Hamilton Compass Ltd - 50%
EOE P&I Association Ltd Yamagashi Transport Services Ltd - 50%
East Mutual Holdings Ltd - 50%
E&G Insurance Co Ltd Estate and General (International) Ltd. - 100%
2.8.1 Branch Networks
The insurance companies each have one branch where their operations are carried out. With
regards to State Assurance Company Limited (SACL), there is currently an administrative office
which has been set up at Baie Ste Anne Praslin that caters for both life and general insurance
business. Location and contacts of insurance companies can be found in Appendix 4.
2.8.2 Employees
As per Table 10, the number of employees in insurance companies increased from 109 to 132
from 2009 to 2010. Whilst the number of expatriates increased from 2 to 6 during this period, the
number of local staff increased from 107 to 126. These increases in employee numbers were
mainly as a result of an increase in the staffing of SACOS Life Insurance Co. Ltd.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 22
Table 10: Number of employees
2009 2010 Local Expatriates Total Local Expatriates Total
SACL (Holding group)
37 0 37 36 2 38
SACOS Life Insurance Co Ltd
12 0 12 26 0 26
SACOS Insurance Co Ltd
32 0 32 32 1 33
Harry Savy Insurance Co Ltd
24 1 25 30 1 31
La Prudence Mauricienne Assurance Ltee
2 1 3 2 2 4
Total 107 2 109 126 6 132
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 23
3.1 BALANCE SHEET OF THE INDUSTRY
For the purpose of this report, the audited figures of banks from 2009 to 2010 have been used. In
cases where this was not available, the unaudited figures have been used.
3.1.1 Assets, Deposits and Advances
A growth in the industry‟s total assets was observed from 2009 to 2010 as total assets increased by
13 per cent from R12.20 billion to R13.75 billion mainly driven by a 29 per cent increase in
balances with banks abroad. Increases were also observed in deposit liabilities which rose by
15 per cent from R10.24 billion in 2009 to stand at R11.72 billion at the end of 2010. This is
illustrated in Chart 5 and is further discussed in the subsequent sections.
Chart 5: Trend in Assets, Deposits and Advances
Chapter 3 – Statutory Compliance and Financial Analysis of the Banking and Insurance Sectors
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 24
3.1.1.1 Assets Chart 6: Composition of Total Assets
Chart 6 shows the breakdown of total assets depicting larger growth in advances which increased
from R3.03 billion to R3.96 billion between 2009 and 2010. This growth may be attributed to a
reduction in lending rates by commercial banks6 which on average declined from 16.34 per cent to
11.49 per cent from January 2009 to December 2010, in addition to an increased level of
economic activity7.
Growths were also observed in balances with Central Bank8 and commercial banks, which
increased by R0.24 billion9; from R2.07 billion to R2.31 billion.
External assets10 increased from R4.61 billion in 2009 to R5.21 billion in 2010 representing an
increase of 13 per cent. External assets remained the main constituent of total assets in 2009 and
2010 at 37.81 per cent and 37.90 per cent respectively. R4.64 billion out of R5.21 billion of the
external assets were held as balances with financial institutions abroad in 2010. This is an
investment tool whereby local banks have placements with other financial institutions abroad and
earn interest on those deposits. The trend and composition of external assets is further illustrated
in Chart 7 below.
6 The reduction in interest rate on Treasury bills caused the interest rate on banks‟ deposit to decline, which consequently led to the decline in the lending rates. 7 As mentioned in Chapter 1, real GDP grew from 0.5 per cent to 6.7 per cent from 2009 to 2010. 8 Includes statutory reserves with Central Bank and banks‟ investments in Deposit Auction Arrangement (DAA) and Reverse Repurchase Agreement. 9 Balances with Central Bank and commercial banks increased from R2.07 billion to R2.31 billion from 2009 to 2010, respectively. 10 Include cash held in foreign currency, balances with banks abroad, foreign bills purchased and discounted, securities and other investments.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 25
Chart 7: Trend and Composition of External Assets
Overall, investments in Government securities declined by 13 per cent from R1.79 billion in 2009
to R1.57 billion in 2010 as illustrated in Chart 8. Treasury bills which was the main component of
Government securities (contributing to 79 per cent of Government securities as at December
2010), decreased by 19 per cent during the year. The decline is linked to the reduction in
availability of Treasury bills as less was being issued in line with the Government‟s strategy to
reduce its domestic debt. R2.49 billion of Treasury bills was issued in 2010 compared to
R5.13 billion in the previous year. Just to note, R3.01 billion worth of Treasury bills matured
during the year 2010 as opposed to R5.08 billion in 2009. Trends in investments in Government
securities are further illustrated in Chart 8.
Chart 8: Investments in Government Securities
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 26
The Government has not issued any new Treasury bonds to the market since 2009. However in
2010, Ministry of Finance issued a Government bond as part of an agreement between the
Government of Seychelles and to one particular bank11 as part of debt renegotiations. As a
consequence of this, Treasury bonds increased from R172.22 million to R225.17 million from
2009 to 2010.
3.1.1.2 Liabilities
On the liabilities side, the main component of total liabilities was deposits liabilities. Chart 9 shows
the breakdown of total liabilities.
Chart 9: Composition of Total Liabilities
Chart 9 shows that most of the banks‟ funding comes from deposits which represented
85 per cent (R11.72 billion) of total liabilities for the year 2010. This is a slight increase from 2009
where deposits as a percentage of total liabilities stood at 84 per cent.
Equity capital12 on the other hand, stood at R1.22 billion at the end of the period under review.
Chart 10 illustrates the industry‟s breakdown of deposits for 2009 and 2010.
11 An agreement was signed with the bank whereby the portion of foreign currency owed to the bank by Government on behalf of a borrower was converted into a domestic currency bond to be repaid in several tranches. 12 Includes paid-up capital, statutory reserve fund, other reserves, undistributed profit/(loss) and current unaudited profit
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 27
Chart 10: Deposit Structure
Like the previous year, deposits consisted primarily of current accounts. Increases were observed
in current and savings deposits by 30 percent and 12 percent respectively, whilst a decline was
observed in time deposits (by 8 percent).
Box 7: Deposit liabilities
Deposit liabilities are divided into the following categories: Current deposits – These are highly liquid deposits and include all deposits that are freely transferable, withdrawable by cheques and by ATM cards. It also consists of deposits which are directly usable for making payments by draft, direct debit/credit or other direct payment facility. It is not important whether the deposits are interest bearing, as long as no restrictions and penalties are imposed upon the accessibility of the deposits. Savings deposits – These are interest- bearing deposits which may be withdrawn on demand, without penalty, with the exception of transferable deposits which should be classified accordingly, unless specific instructions has been given by the Central Bank. Time deposits – These are interest-bearing deposits placed for a fixed period, and for which there is a penalty for premature withdrawal.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 28
3.1.2 Capital Adequacy13
Banks were subject to the minimum paid-up capital requirement of R10 million although the
Capital Adequacy Regulations which were issued towards the end of 2010 prescribed a higher
requirement of R20 million. Banks which were not currently meeting the higher requirement have
been allowed a transition period of up to December 31st, 2012. During the year under review all
banks were maintaining at least R10 million of unimpaired paid-up capital with the exception of
one bank which corrected its impairment by injecting new capital.
Banks are also required to maintain a minimum regulatory capital to Risk Weighted Assets Ratio
(RWCR) of 12 per cent. The RWCR of the above mentioned bank dropped slightly below the
requirement during the year but was rectified with the capital injection. Of note is that the FIA
2004 provides for the Central Bank to grant an institution up to a period of one year to correct the
deficiency if the RWCR falls below 12 per cent but remains above 8 per cent which is the level
recommended by the Basel Committee14. On the whole, banks were adequately capitalised in 2010
as shown in Chart 11.
Chart 11: Capital Adequacy Ratios
13 Figures used for this section of the report are based on unaudited figures. 14 The BCBS is a committee of banking supervisory authorities which provide a forum for regular cooperation on banking supervisory matters. The Committee frames guidelines and standards in different areas – among which are the international standards on capital adequacy.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 29
No significant change was observed at the industry level in the capital adequacy ratios for the year
2010 compared to the preceding year. Banks remained well capitalised on both the Basel I
capitalisation15 and the net tangible capitalisation basis (refer to Box 8).
The regulatory capital to risk weighted assets ratio and the regulatory tier 116 capital to risk
weighted assets ratio exhibited a slight downward trend from 2009 to 2010. Regulatory capital to
risk weighted assets ratio decreased from 21.43 per cent to 21.10 per cent from 2009 to 2010 while
regulatory tier 1 capital to risk weighted assets ratio decreased from 20.79 per cent to
20.39 per cent. The decline observed was as a result of a 10 per cent increase in risk weighted
assets (from R4.12 billion to R4.54 billion), which in turn mitigated the effect of an increase in the
capital base (from R883.05 million to R956.80 million) on the ratio.
The industry‟s net tangible capitalisation ratio showed a slight increment from 2009 to 2010 (from
8.61 per cent to 8.91 per cent). Overall, banks maintained this ratio above the recommended level
of 6 per cent.
15 According to the Basel Committee, the target standard ratio of capital to risk weighted assets should be 8 per cent (of which the core capital element should be at least 4 per cent). 16 Includes paid-up share capital, statutory reserve fund and retained profits.
Box 8: Net tangible capitalization
As per section 13(f) of the FIA 2004 (as amended), an institution is considered insolvent or apparently insolvent when the capital of the financial institution being its assets less liabilities is 1.5 per cent or less of the financial institution‟s tangible assets on an unweighted basis. This ratio of capital to tangible assets on an unweighted basis is termed the net tangible capitalization ratio. Tangible assets are the total assets of the bank less all provisions for loan losses and interest in suspense. The Central Bank currently recommends that banks maintain a net tangible capitalization ratio of a minimum of 6 per cent. This ratio is simply the ratio of capital to total assets with no risk-weighting of the assets. This serves as an additional test of capital adequacy to serve as a "safety net" to protect against problems with risk weightings.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 30
3.1.3 Asset Quality17
As illustrated in Chart 12, there was an increase of 91 per cent in non-performing loans (from
R112.19 million in 2009 to R213.84 million in 2010). It should be noted that although the
industry‟s non-performing loans almost doubled from 2009 to 2010 this was not as a result of an
industry-wide deterioration in performance of loans. Given that total advances also increased by
31 per cent from R3.03 billion in 2009 to R3.96 billion in 2010, non-performing loans represented
3.7 per cent and 5.4 per cent of total advances in 2009 and 2010 respectively. As regards to total
provisions, this amounted to R64.34 million and R98.57 million in 2009 and 2010 respectively,
accounting for 2.12 per cent and 2.49 per cent of total advances in the respective periods.
Chart 12: Total Provisions and Non-performing Loans to Total Advances
17 Figures used for this section of the report are based on unaudited figures.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 31
New Regulations on Credit Classification and Provisioning were issued in November 2010.
However, as at the end of 2010 they had not yet been made applicable as amendments needed to
be effected to certain regulations. These amendments were subsequently made in the first half of
2011.
From Table 11, it can be derived that similar to 2009, the tourism industry accounted for the bulk
of the banking industry‟s loan portfolio. As at December 2010, loans to the tourism sector
accounted for 23.27 per cent of total loans compared to 27.86 per cent as at December 2009.
Loans to Government amounted to 14.45 per cent of total loans in 2010. To note this is also the
sector whereby the highest increase (R556 million) was observed in the period under review. This
increase in Government loans was mainly as a result of the conversion of Government foreign
Box 9: Credit Classification and Provisioning Regulations
Central Bank‟s Regulations on credit classification and provisioning require banks to be prudent by provisioning for the possibility that the amount loaned out, may not be fully recovered. The criteria used by banks to classify loans as non-performing include non-payment for a certain number of days, significant financial difficulty of the obligor or breach of contract. To note is that, specific provisions on non-performing loans is effected net of eligible collateral. Pass loans – The credit is performing, and is expected to continue to perform, in accordance with the credit contract and secured credits are less than 30 days past-due. At a minimum, banks have to make a general provision of 1 per cent for loans classified in the pass category.
Special Mention loans – Credits, including those that are currently performing and/or secured by unimpaired collateral. However, certain factors are known which could, in the future, impinge on the performance of the credit or impair the value of the collateral. The credit is 30 – 89 days past-due or is not in compliance with any other term or condition of the credit contract. Prior to the enactment of the new Credit Classification and Provisioning Regulations in 2010, no provisioning was required for loans classified as special mention. Special mention loans now attract a provisioning of 5 per cent. Substandard loans – The primary source of repayment of the credit is insufficient to service the debt and the bank is relying on one or more secondary sources of repayment and the credit is 90 – 179 days past-due or is not in compliance with any other term or condition of the credit contract. Substandard loans require a provisioning of 15 per cent. Doubtful loans – Collection of the credit in full is highly questionable or unlikely and the credit is 180 – 364 days past-due. A provisioning of 50 per cent is required for doubtful loans. Loss loans – The credit is regarded as uncollectible or of such little value that its continuance on the bank‟s books of account is not warranted and the credit is 365 days past-due or more. Loans classified as loss need to be 100 per cent provisioned for.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 32
currency denominated loans held in the books of the head office of one local bank into Rupee
loans.
Table 11: Sectoral Distribution of Advances
Dec-09 Dec-10
% of Total loans % of Total loans
Agriculture & horticulture 0.36% 0.35%
Building and Construction 3.95% 2.25%
Financial institutions 6.84% 3.24%
Fishing 0.32% 0.22%
Manufacturing 0.97% 0.47%
Real estate 9.71% 11.12%
Tourism 27.86% 23.27%
Trade 14.40% 7.92%
Transport 3.90% 5.59%
Others 11.77% 10.59%
Private household 11.40% 10.46%
Mortgage loans 8.22% 10.09%
Government 0.30% 14.45%
3.1.4 Profitability
As illustrated in Chart 13, the level of pre-tax profit increased by 42.73 per cent from
R273.64 million in 2009 to R390.57 million in 2010. An increase of 44.53 per cent was also
observed in after-tax profits from R189.87 million to R274.40 million. The increase in profitability
was brought about by a higher decline observed in total expenses in 2010. Interest expense
declined from R238.30 million in 2009 to R100.40 million in 2010 representing a decline of
57.87 per cent. Non-interest expense mainly as other operating expenses, declined from
R244.38 million in 2009 to R164.97 million in 2010, representing a decline of 32.49 per cent.
Chart 13: Level of Profit
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 33
In terms of banks‟ earnings, Table 12 shows that non-interest income, which is made up mainly of
fees, commissions and exchange gains, saw the highest increase of 57 per cent between 2009 and
2010 as a result of higher profitability on exchange dealings. Interest income18, on the other hand,
decreased substantially by 32.65 per cent from R747.94 million to R503.71 million. This can be
linked to a decrease in Treasury bills rate19 and lending rate20.
As mentioned above, the industry incurred lower expenses in the year under review. Interest
expenses which consist of interest paid out on deposits and borrowings from other banks,
declined by 57.87 per cent. This is attributed to a lowering in the savings rate21 offered by banks.
Table 12: Earnings and Profitability
2009 2010 Growth
R'000s Interest Income 747,944 503,705 -32.65%
Interest Expenses 238,298 100,399 -57.87%
Net Interest Income 509,646 403,306 -20.87%
Non-Interest Income 211,601 332,213 57.00%
Operating Expenses 401,167 332,384 -17.15%
Total Expenses 639,465 432,783 -32.32%
Profit Before Tax 273,644 390,568 42.73%
Profit After Tax 189,865 274,404 44.53%
Table 13 depicts that in the year under review, the industry‟s ROA and ROE increased to
3.01 per cent and 34.54 per cent respectively in 2010. This was attributed to a considerable
increase in profit before tax of 42.73 per cent.
18 Comprise mainly of interest earned on loans and advances, Government securities and balances with Central Bank. Also includes interest earned on amounts due from other commercial banks and assets denominated in foreign currency. 19 Average 91 day Treasury bills rate decreased from 14.05 per cent in 2009 to 2.11 per cent in 2010. 20 Average lending rate decreased from 15.35 per cent in 2009 to 12.71 per cent in 2010. 21 Average savings rate decreased from 6.67 per cent in 2009 to 1.76 per cent in 2010.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 34
Table 13: Performance Ratios
2009 2010
Return on Assets (ROA) 2.13% 3.01%
Return on Equity (ROE) 26.76% 34.54%
Interest Income to Total Income 77.95% 60.26%
Non-Interest Income to Total Income 22.05% 39.74%
Interest Expense to Total Expenses 37.27% 23.20%
Operating Expense to Total Expenses 62.73% 76.80%
Average Return on Advances22 12.59% 7.78%
Average Cost of Deposits23 2.45% 0.91%
Interest income, which accounted for 77.95 per cent of total income in 2009, decreased to
60.26 per cent in 2010. This decrease was attributed to relatively lower interest rates on loans and
Treasury bills throughout the year. Non-interest income, driven primarily by exchange gains,
accounted for 39.74 per cent of total income in 2010 compared to 22.05 per cent in the previous
year. Operating expenses represented 62.73 per cent of total expenses in 2009 compared to
76.80 per cent for the year under review.
The overall decline in lending and savings rates between 2009 and 2010 can be observed in the
average return on advances which decreased from 12.59 per cent in 2009 to 7.78 per cent in 2010.
Likewise, the average cost of deposits showed a decrease from 2.45 per cent in 2009 to
0.91 per cent in 2010.
3.1.5 Liquidity24
Liquidity is the ability of a bank to fund its asset growth in accordance with its business plan and
to meet its financial obligations as and when they fall due. Good liquidity management is therefore
of great necessity as banks may otherwise be more susceptible to liquidity risk. Chart 14 shows
some liquidity ratios which Central Bank monitors.
22 Figures used for the calculation of this ratio are based on unaudited figures. 23 Figures used for the calculation of this ratio are based on unaudited figures. 24 Figures used for this section of the report are based on unaudited figures.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 35
Chart 14: Liquidity Ratios
The Liquidity Risk Management Regulations 2009 require all banks to maintain liquid assets which
should not be less than 20 per cent of the bank‟s total liabilities. In view of such, the industry has
maintained its liquid assets to total liabilities ratio well above the 20 per cent limit. However, the
industry observed a decline in this ratio from 70.38 per cent in 2009 to 56.95 per cent in 2010,
attributed to increases in the industry‟s total liabilities. The rise in the industry‟s total liabilities was
driven mainly by an increase in the total deposits liabilities from R10.24 billion in 2009 to R11.72
billion in 2010.
In 2010, the ratio of core liquid assets25 to total assets amounted to 46.94 per cent whilst the ratio
broad liquid assets26 to total assets stood at 58.90 per cent. The latter shows that the industry had
significant liquid assets in Government securities, mainly in Treasury Bills.
With regards to the industry‟s broad liquid assets to short term liabilities ratio, a slight increase was
observed in this ratio. In 2010, the ratio stood at 62.93 per cent which shows that the industry‟s
short term liabilities could be covered by 62.93 per cent of its liquid assets in case of liquidity
problems.
25 Includes cash, balances with Central Bank and deposits with other banks. 26 Includes core liquid assets and Government securities.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 36
Advances to deposit liabilities stood at 35.89 per cent in 2010 which depicted an increase of
9.14 per cent from 2009. It should be noted that the industry showed growths in both its deposit
liabilities and advances.
The bank run ratio indicates how much of the industry‟s deposits liabilities is matched by its liquid
assets in the event that a bank run occurs27. The bank run ratio decreased from 69.37 per cent in
2009 to 69.11 per cent in 2010. The decrease in this ratio was mainly attributed to a rise in the
industry‟s deposits, as previously mentioned.
3.1.6 Sensitivity to Market Risk
Sensitivity to market risk reflects the degree to which changes in the interest rates, exchange rates,
commodity prices, or equity prices can adversely affect a bank‟s earnings or capital. In Seychelles,
banks are exposed to two main components of market risk- exchange rate risk and interest rate
risk.
3.1.6.1 Exchange Rate Risk This is defined as the risk of loss to a bank from fluctuations in foreign exchange rates. The
Regulations governing foreign currency exposure stipulates a total long and short position to
capital limit of 30 per cent each. The foreign currency exposure limit which was introduced in
2009, is a tool used by the Central Bank to minimize the risk of banks being exposed too heavily
to foreign exchange risk. During the year 2010, mostly all banks met the above limit. However,
one bank was in breach of the long position to capital limit from 2009 to the end of 2010 and it
was given a deadline by which to rectify the situation. Other banks that breached the foreign
currency exposure limit at some stage were able to rectify the issue in a timely manner and
therefore the Central Bank did not find it necessary to take further action.
27 A bank run occurs when a large number of bank customers withdraw their deposits because they believe the bank is, or might become insolvent. As a consequence, the bank‟s reserves may not be sufficient to cover the withdrawals.
Box 10: Market Risk Banks are exposed to market risk as a result of their core business activities related to financial intermediation, that is, accepting funds as deposit and making loans and other investment with those funds. These core business activities expose them to fluctuations in interest rates, exchange rates and the market prices on their assets and liabilities. Fluctuations in market prices impact banks‟ earnings, the value of their assets and their levels of liquidity and capital.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 37
Chart 15: Foreign Currency Risk
From Chart 15, it can be observed that at the industry level, the total long position to capital ratio
has reduced significantly. The decline in this ratio reflects the change in foreign currency exposure
Regulations to move from the situation that existed before the 2008 macroeconomic reform to
reflect best international practice. Just to note, the limit for total long position to capital ratio
decreased from 100 per cent to 30 per cent. The decline in the ratio may also be additionally
attributed to the banks‟ effective management of this risk.
3.1.6.2 Interest Rate Risk Interest rate risk is the risk of loss to a bank from fluctuations in interest rates. Banks in Seychelles
do not have substantial exposures to interest rate risk on their asset side as they usually have a
clause in their loan contracts that allows them to re-price their assets as and when required in line
with the changes in the interest rates on their liabilities.
3.2 OVERVIEW OF OTHER FINANCIAL INSTITUTIONS
3.2.1 SCU
The SCU was established by the Minister of Finance in March 1970 and is governed by the Credit
Union Act 2009, and its subsequent bylaws. In April 2004, certain powers and performance of
duties previously vested with the Ministry of Finance were delegated to the Central Bank which
subsequently in August 2009 became the designated regulatory authority for SCU.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 38
Its main activity is to promote savings amongst its members as well as to grant loans to them. To
become a member, an individual, partners, association or a minor, who is a resident or citizen of
Seychelles, can apply for ownership of shares in the institution. A minimum amount of R100 is
payable upon application for ownership in order for the member to be granted an ownership share
account and a savings account. By having an ownership share account, a member of the SCU is
rewarded through payment of dividends, depending on the decision taken by the Board. With
regards to the savings account, members receive quarterly interest.
In 2010, three significant events occurred in relation to the SCU which are further elaborated on
below.
(i) Changes made to the Act
Two amendments to the Credit Union Act 2009 were made. The first amendment relates to
section 5 of the Act which allows members of the SCU to use cheques drawn on the credit union
as well as for the cheques to be payable on demand. Although the issuance of cheque books has
not materialized in 2010, SCU aims to introduce this new product to its members in 2011. The
second change to the Act was in regards to section 14. The amendment prohibits members
employed by SCU to stand for election on the Supervisory Committee. The main responsibility of
the committee is to verify and validate business and management transactions of the credit union
and report on findings. By prohibiting members employed by SCU on the Supervisory Committee,
this provides SCU with better governance as it avoids conflict of interest in decision making.
(ii) New retirement scheme for SCU in 2010
In late 2010, a retirement benefit scheme was introduced by SCU which resulted in the institution
making an unforeseen provision of R2.4 million in its books. The valuation will award staff with
ten or more years working experience benefits upon retirement or termination with SCU.
Additionally, the scheme will cover past services as well as ongoing and future services to the
credit union.
SCU continued to portray a positive outlook with regards to its financial position and financial
performance. Growths were observed in SCU‟s total assets, loans, deposits and capital as shown in
Chart 16.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 39
Chart 16: Trend in Assets, Loans, Deposits, Capital and Net Profit
SCU‟s total assets increased by 35 per cent from 2009 to 2010, which was mainly as a result of an
increase in SCU‟s loan portfolio. Loans grew by 39 per cent to R92.69 million in 2010 whilst
deposits increased by 24 per cent to R104 million in the same year. The rise in total deposits was
driven mainly by fixed deposits accounts which increased by 67 per cent to R13.55 million. It
should be noted that the loans to deposits ratio of SCU grew by 9 per cent to 89 per cent in 2010.
Capital increased significantly from R7.28 million to R26.94 million which was mainly due to
recognition of a revaluation reserve amounting to R7.69 million as explained above. The second
factor for the rise in equity capital was observed in ownership account of SCU which increased
from R3.54 million to R7.77 million in 2010.
With regards to SCU‟s financial performance, the institution observed a net profit for the year
2010 compared to its prior year ending28. SCU‟s total income increased significantly by
R4.92 million which was due to a revaluation gain on SCU‟s buildings. With regards to SCU‟s
expenses, the rise was mainly as a result of the new staff retirement benefit scheme. Moreover, the
revaluation of SCU‟s buildings caused SCU‟s capital to increase dramatically.
28 The financial statements for the year ending 2009, prepared by Moustache and Associates, showed that SCU made a net profit of R2.33 million. However, in late 2010 when the new retirement benefit scheme was set up, the new auditor, BDO, re-stated the 2009 figures. In view of this, the expense in regards to the scheme was reflected in the 2009 figures which led SCU to incur a net loss for that year.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 40
SCU has also observed an increase in its membership, from 11,137 in 2009 to 11,525 in 2010.
Volume-wise, this showed a growth of 3.5 per cent. Likewise, the value of savings account
increased by R14.55 million from R75.89 million in 2009 to R90.44 million in 2010, whilst that of
fixed deposits increased by R5.43 million from R8.13 million in 2009 to R13.54 million in 2010. As
regards to the value of shares, this increased by R4.23 million to R7.77 million in 2010 from
R3.54 million in 2009.
3.2.2 DBS
DBS is a Government29 owned institution which was established under the DBS Decree of 1978
which delegates certain supervisory functions to the President and the Minister of Finance. In
2009, by virtue of the Delegation of Functions (DBS Decree) Order, 2009, the Ministry of Finance
delegated some of its supervisory powers to the Central Bank. In 2010, certain sections of the FIA
2004 as amended were made applicable to DBS through the Financial Institutions (Application of
Act) Regulations, 2010. DBS is relatively small as compared to the three largest commercial banks
with an asset size of R474 million as at the end of 2010. The bank‟s operations involve the
29 DBS is 55.5 per cent owned by Government.
Box 11: Credit Unions v/s Banks
Although a Credit Union carries out the basic banking functions of taking deposits and lending money, it is not a bank. A person who wants to be a depositor of a credit union needs to obtain membership with a credit union. A member is entitled to purchase shares in a credit union on which it can receive dividends from profits made by the credit union. Credit Unions are mostly locally run and the Board of Directors is elected by members. They typically do not conduct business with the prime objective of making profit, but conduct business for the mutual benefit of member owners. Credit Unions encourage a savings culture and sound credit use with the aim of improving members‟ lives. These institutions are typically exempt from business tax by virtue of their nature as non-profit making co-operatives. In comparison banks are profit making financial corporations which conduct business to maximise the value of shares for their shareholders. As such profits are disbursed in the form of dividends only to shareholders. Banks are not necessarily locally run. The Board of Directors of a bank is elected by shareholders, independent of clients of a bank which have no authority in the overall governance of a bank. Banks are taxed because they are designed as profit-making corporations.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 41
provision of rupee loans for commercial business in most sectors of the Seychelles‟ economy. It
currently charges its clients interest of 10 per cent per annum.
DBS is funded by borrowing locally from commercial banks and in the past also borrowed abroad,
where cheap lines of credit, as compared to local borrowing, were obtained e.g. from Banque
Arabe Developpement Economique en Afrique, African Development Bank and from Caisse
Francaise de Developpement. With the ongoing negotiation on the country‟s debt restructuring,
DBS has ceased to borrow in foreign currency and has turned to raising funds mainly by issuing
bonds. In 2010, the bank issued R100 million in rupee denominated bonds to meet the increasing
demand for loans.
DBS also administers some of the Government‟s concessionary lending programs aimed at
specific sectors such as Agriculture and Fisheries. Approvals for these concessionary loans are
managed by either the Concessionary Credit Agency (CCA) or the Seychelles Fishing Authority
and DBS simply acts as the Government‟s agent in terms of administering the loans. It should be
noted that as DBS only administers these funds on behalf of the Government and as such do not
appear on the books of the institution.
On the financial side DBS‟ assets increased by 37.09 per cent due to increases in loans. The bank‟s
loan portfolio increased from R308.83 million to R387.70 million from 2009 and 2010
respectively, which was driven by a decline in its interest rates from 15 per cent to 8.5 per cent and
also as a result of increased economic activity. DBS‟ equity capital increased from R95.53 million
in 2009 to R112.35 million in 2010. This has been brought about through the net profit of
R16.82 million recorded in 2010, representing 80.01 per cent decline from 2009. The decline in net
profit was mainly due to decreases in provision for foreign unrealised exchange gains which
declined from R76.54 million in 2009 to R0.51 million in 2010.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 42
Chart 17: Trend in Assets, Loans, Capital, loans, and Net Profit
3.2.3 HFC
HFC is a Government owned institution which was incorporated in 2003. The Company is
regulated by several legislations which include the Companies Act 1972, Condominium Property
Act 1992 and Public Enterprises (Monitoring) Act 2009. Certain sections of the FIA 2004, as
stipulated in the Financial Institutions (Application of Act) Regulations 2010, have also been made
applicable to HFC. This follows the delegation of supervisory powers from the Minister of
National Development to Central Bank in 2009.
HFC‟s main activity is the provision of finance to the housing sector. In February 2009, HFC
merged with Property Management Corporation (PMC) whereby all of PMC‟s assets and liabilities
as well as its operations and activities were transferred to HFC at nil consideration. Therefore,
effective February 2009, HFC‟s activities included sale and rental of flats and houses which it took
over from PMC.
On the financial front, HFC‟s total assets increased by 11 per cent from R737.74 million in 2009
to R820.85 million in 2010. The increase was driven by a 37 per cent increase in investment
properties from R102.79 million to R140.89 million in the period under review. Loans and
advances to customers which is the main component of HFC‟s total assets only showed minor
changes from 2009 to 2010. This is illustrated in Chart 18.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 43
Chart 18: Trend in Assets, Loans, Capital and Net Profit
Growth was also observed in HFC‟s capital as capital reserve which is the main component of the
institution‟s capital, increased by 11 per cent from R475.21 million to R529.43 million.
In regards to HFC‟s financial performance, the Company‟s net profit increased from R2.11 million
to R9.50 million during the review period. This was mainly due to a decrease in interest paid out
on borrowings30, whereby interest rates declined from 10.25 per cent to 5.5 per cent.
3.3 BALANCE SHEET OF INSURANCE INDUSTRY
For the purpose of this report, the audited figures of insurance companies from 2009 to 2010 have
been used.
3.3.1 Assets
The total assets for the insurance industry increased by 14 per cent in 2010 to reach
R596.28 million compared to R523.66 million in 2009. This was mainly due to a rise of 33 per cent
in amounts due from group companies which relate to funds borrowed by other companies within
the group. Additionally, there was a 17 per cent increase in investments assets (elaborated below).
In terms of composition, 63 per cent of company assets was in long-term insurance business
whilst the remaining 37 per cent was in general insurance business.
30 Bank borrowings comprise of three loans from Nouvobanq which were merged in one single loan during the year and a loan from Seychelles Savings Bank
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 44
Box 12: Long term and General Insurance Businesses
Insurance business is the business of undertaking liability, by way of insurance or reinsurance, under long term insurance policies or general insurance policies, as the case may be, and includes external insurance business and the business of a professional reinsurer. Long-term insurance business is insurance business of any of the following classes; life, pension, permanent health and linked long term. Of these, the insurance industry in Seychelles currently engages in only life insurance business. General insurance business is insurance business, other than long term insurance business, consisting of the following classes; accident and health, engineering, guarantee, liability, motor, property, marine & aviation and miscellaneous.
Chart 19: Composition of Total Assets
As illustrated in Chart 19, in 2010, investment was the major component of total assets at
R335.71 million. This was equivalent to 56 per cent of the aggregate which stood at
R596.28 million. The second major component at R159.15 million was other assets31 which
represented 27 per cent of total assets. For both investments and other assets their composition in
terms of total assets for 2010 was nevertheless quite consistent to 2009 at 55 per cent and
28 per cent respectively. The investment components are elaborated below.
31 Other assets comprised of property, plant and equipment, computerisation projects, trade and other receivables, taxation recoverable, prepayments, cash and bank balances.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 45
3.3.1.1 Investments
Investment assets are further broken down according to the specific category of insurance
business, namely long-term or general. In 2010, 73 per cent of investment assets belonged to long-
term insurance business whilst 27 per cent belonged to general insurance business. The trends in
the composition of investments for each category of insurance business are shown in Tables 14
and 15 respectively.
3.3.1.1.1 Long-term insurance business
Table 14: Investment Channels for Long-term Insurance Business
2009
% 2010 %
Investment Property 20 25
Loans on Life Assurance Policies 9 9
Life Insurance Development Costs 0 0
Investment in Government Securities 71 66
100 100
Total Investments (R millions) 210.288 251.672
In 2010, the amount of assets for long-term insurance business which were invested increased by
20 per cent, to reach R251.63 million, compared to 2009 which was R210.29 million. In view of
the limited options available for long-term investments on the money market, the majority of
long-term insurance assets (66 per cent) were invested in Treasury bills. The second largest
component was investment property which represented 25 per cent of total investment assets.
This trend was more or less consistent with 2009 performance although slight variations were
observed.
3.3.1.1.2 General insurance business
Table 15: Investment Channels for General Insurance Business
2009
% 2010 %
Investment Property 4 4
Life Insurance Development Costs 1 0
Investment in Government Securities 87 89
Other Investments 8 7
100 100
Total Investments (R millions) 76.951 84.037
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 46
Similar to long-term insurance business, amount of assets invested for general insurance business
increased from R76.95 million in 2009 to R84.04 million in 2010, although at a much lesser rate of
9 per cent. The bulk of investments of general insurance business assets were also in Government
securities (Treasury bills) at 89 per cent. This represented a slight increase of 2 per cent compared
to 2009 from 87 per cent. The second major category of investment, although at a marginal rate
was other investments (in a fellow subsidiary) at 7 per cent. In terms of composition, investment
assets for general insurance business remained somewhat consistent to 2009.
3.3.2 Liabilities
Chart 20: Total Liabilities
Total liabilities of the insurance industry increased by 13 per cent to reach R509.35 million in 2010
compared to R449.25 million in 2009. The biggest increase in liability was observed in amounts
due to group companies which recorded an increase of 74 per cent from R10.05 million in 2009 to
R17.50 million in 2010. In terms of composition, as can be observed in Chart 20, the main liability
was the Life assurance fund at R341 million which represented 67 per cent of total liabilities.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 47
3.3.3 Reinsurance and Technical Reserves
3.3.3.1 Reinsurance In 2010, total premiums ceded to reinsurers increased by 26 per cent to reach R81.47 million. This
is illustrated in the Chart 21 and the increase was mainly attributed to an increase of 38 per cent in
premiums ceded to reinsurers in property insurance business.
Chart 21: Premium Ceded to Reinsurers
0
20
40
60
80
100
2009 2010
R m
illio
ns
Life assurancebusiness
Generalinsurancebusiness
Overall there was no change in its composition, with general insurance business remaining at
99 per cent and long term insurance business at 1 per cent of the industry‟s total premiums ceded
to reinsurers.
32 The Chartered Institute of Insurance.
Box 13: Reinsurance and Technical Reserves Reinsurance is the process whereby an insurer transfers all or part of its risk to another insurer (reinsurer) through some form of arrangement, providing a secondary system of risk spreading which limits the potential for loss of an insurer. The portion of risk which is transferred is the reinsurance premium ceded. Technical Reserve is the amount insurance companies set aside from profits to cover claims, which include the unearned premium reserve and the outstanding claims reserve. The unearned premium reserve is the accounting provision at a specific time that reflects the total amount of unearned premiums. As regards the outstanding claims reserve, this refers to an amount reserved for based on the estimated amount needed to meet incurred claims that have not yet been finally settled (CII32, 2003).
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 48
3.3.3.2 Technical Reserves33v/s Claims
Chart 22 illustrates the trend in the industry‟s technical reserves for general and long-term
insurance businesses against the average of net claims incurred over the last 3 years. This ratio
shows the quality of the insurers‟ estimates of the values of reported and outstanding claims.
Chart 22: Trend in Technical Reserves
0%
100%
200%
300%
400%
500%
600%
700%
800%
2009 2010
General insurance business
Long-term insurance business
In 2010 the technical reserves maintained by insurers were 193 per cent higher than the average
claims incurred during that period. This represents a 15 per cent increase; from 178 per cent in
2009. This was as a result of a 20 per cent increase in the technical provisions of the industry in
2010 whilst the average claims incurred for the last 3 years rose by only 11 per cent in 2010. This
indicates that as at 2010, insurers‟ reserves were much higher than claims incurred and hence
estimates were conservative.
A similar pattern was observed for long term insurance, with the ratio increasing from
714 per cent in 2009 to 735 per cent in 2010. This was as a result of a 10 per cent increase in the
life funds of the industry, hence indicating that similar to general insurance business, reserves were
well estimated.
33 Net technical reserves to average of net claims incurred in last 3 years – shows the quality of the insurers‟ estimates of the values of reported and outstanding claims.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 49
3.3.4 Earnings and Profitability
3.3.4.1 Business Volumes As illustrated in Chart 23, the industry‟s total gross written premiums (GWP)34, which shows the
turnover, increased from R205.82 million in 2009 to R250.53 million in 2010 representing a rise of
22 per cent. Subsequently, the industry‟s net earned premiums (NEP)35 also underwent a similar
growth of 20 per cent. These overall changes in premiums resulted from growths of 20 per cent in
both long-term36 and general insurance37 businesses.
Chart 23: GWP and NEP
0.000
50.000
100.000
150.000
200.000
250.000
300.000
R m
illio
ns
Gross written premiums Net premiums earned
2009
2010
As per Chart 24, the growth observed in GWP of general insurance was mainly due to an increase
of 24 per cent recorded for motor insurance and an increase of 22 per cent in GWP recorded for
property insurance. Motor and property insurance accounted for 40 and 26 per cent respectively
of the industry‟s total premium.
34 Total premium receivable for a whole period of cover provided by contracts entered into during the accounting period. It is recognised as earned premiums when the policy incepts proportionally over the period of coverage. 35 GWP net of reinsurance ceded to reinsurers and adjusted for unearned premiums. 36 From R42.07 million in 2009 to R52.94 million in 2010. 37 From R163.75 million in 2009 to R199.58 million in 2010.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 50
Chart 24: GWP per Class of General Insurance Business
3.3.4.2 Pricing of Insurance Products Analysis of pricing for insurance products can show whether insurance premiums cover the
underlying risks of the insurance contracts and the administrative expenses of the insurer. In doing
so, loss to claims, expenses and combined ratios can be used to show trends between periods.
Such analysis is carried out for general insurance business only. Chart 25 depicts the trend in
loss/claims ratio38, expense ratio39 and combined ratio40 for the general insurance industry for the
year under review.
38 The ratio of claims incurred to premiums earned - gives an indication of how well the pricing of an insurer matches the risks taken in the insurance contracts. This ratio is only used on general insurance business. 39 The ratio of expenses to premiums earned, where expenses are the sum of commissions, administrative expenses and other technical charges. It can be used to assess how well premiums cover expenses incurred. 40 The sum of the loss and expense ratios – gives a rough indication of the profitability of an insurer‟s underwriting operations. This ratio is only used on general insurance business.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 51
Chart 25: Loss/ Claims Ratio, Expense Ratio and Combined Ratio
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009 2010
Loss/Claims ratio Expense ratio Combined ratio
The industry‟s loss/claims ratio for general insurance business increased to 56 per cent in 2010
from 49 per cent in 2009 indicating that the amount of claims paid by insurers are increasing at a
higher rate than premiums collected. To this end, there was a considerable increase of 37 per cent
in net claims incurred in 2010 compared to an increase of only 20.04 per cent in net earned
premium in 2010. The former was due to an increase of 52 per cent in claims incurred for motor
insurance, from R30.01 million in 2009 to R45.71 million in 2010. It can also be observed as per
Chart 26, that motor insurance claims accounted for the bulk of total claims in 2010, at 72 per cent
compared to 67 per cent in 2009.
Chart 26: Claims Incurred per class of Insurance Business
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 52
From Chart 25, it can be observed that the industry‟s expense ratio for general insurance business
decreased from 45 per cent in 2009 to 32 per cent in 2010. This was brought about by a decrease
of 18 per cent in the industry‟s operating expenses attributable to substantial decreases in legal and
professional fees, marketing fees, loss on foreign exchange and provisions for withholding tax.
A combined ratio below 100 per cent indicates that an insurer is making underwriting profit. As
per Chart 25, the industry‟s combined ratio for general insurance business, decreased to
88 per cent in 2010 from 94 per cent in 2009, showing an improvement in the underwriting
operations from a commercial perspective. The decrease in the combined ratio was largely
attributed to the decrease in expense ratio coupled by an increase in earned premium.
3.3.4.3 Profitability
Chart 27: Profitability ratio, investment income ratio and ROE
0%
10%
20%
30%
40%
50%
60%
70%
2009 2010
Profitability ratioInvestment income ratioROE
In 2010, the level of pre-tax profit increased by 5 per cent to reach R57.31 million and after-tax
profit increased by 8 per cent to reach R44.22 million. The growth in pre-tax profit was principally
attributed to 20 per cent increase in net premiums41, 18 per cent gain in fair value of investment
properties42 and 10 per cent decrease in operating expenses despite 25 per cent increase in
underwriting expense43 and 63 per cent decrease in investment income44. Consequently, as
41 From R132.45 million in 2009 to R159.5 million in 2010. 42 From R3.82 million in 2009 to R4.52 million in 2010. 43 From R69.81 million in 2009 to R87.5 million in 2010. 44 From R33.73 million in 2009 to R12.44 million in 2010.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 53
illustrated in Chart 27, the decrease in investment income together with an increase of 37 per cent
in the industry‟s claims incurred caused the industry‟s profitability ratio45 to increase by 44 per cent
in 2010.
Similarly, the reduction in the investment income has resulted in the investment income ratio46
which focuses on the second major revenue source of insurers relative to the volume of their
underwriting business, to decrease from 37 per cent in 2009 to 11 per cent in 2010.
Between 2009 and 2010 return on equity (ROE)47
decreased slightly from 55 to 48 per cent, as a
result of only a 2 per cent growth in the industry‟s profit after tax48 compared to a larger increase
of 12 per cent in the company‟s capital. Changes in items of the industry‟s statement of
comprehensive income which led to an increase in the consolidated profit after tax are shown in
Table 16.
Table 16: Earnings and Profitability
2009 2010
Growth R millions
Net premiums earned 90.539 109.694 21%
Claims incurred 44.747 61.088 37%
Commissions paid 8.287 8.756 6%
Underwriting surplus 46.529 50.833 9%
Investment Income 33.734 12.441 -63%
Operating expenses 32.469 26.574 -18%
Profit Before Tax 54.691 48.225 -12%
Profit After Tax 41.109 42.025 2%
3.3.5 Liquidity
As depicted in Chart 28, the insurance industry‟s current ratio49 decreased to 306 per cent in 2010
compared to 339 per cent in 2009. Despite an increase of 10 per cent in current assets, there was a
more significant growth of 22 per cent in current liabilities, hence leading to the decline in the
45 The ratio of total operating income before extraordinary items and taxes to net premiums earned. 46 The ratio of investment income to net premiums earned expressed as a percentage. 47 The ratio of net income after tax (PAT) to capital expressed as a percentage. 48 Income as shown in a profit and loss account after all taxes have been deducted (Bloomsburry Information, 2011). 49 The ratio of current assets to current liabilities.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 54
ratio. This means that in 2010, the industry had 339 per cent of current assets to cover each per
cent of its liability. This performance was somewhat consistent with 2009.
Chart 28: Current Ratio
200%
220%
240%
260%
280%
300%
320%
340%
360%
380%
2009 2010
Industry
General
insurance
business
Long term
insurance
business
In 2010, current ratio for general insurance business rose from 323 per cent to 370 per cent. This
was due to an increase of 21 per cent in current assets compared to a marginal growth of 6 per
cent in current liabilities. As regards the current ratio for life insurance business, this dropped
from 366 per cent in 2009 to 230 per cent in 2010. This was due to a combined 7 per cent fall in
current assets and a 48 per cent increase in current liabilities.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 55
4.1 DEVELOPMENTS RELATING TO THE SUPERVISORY FRAMEWORK
During the year 2010, FSSD continued to work on strengthening its supervisory framework in line
with the action plan jointly prepared by staff from Monetary and Capital Markets (MCM)
department of the IMF and the division50. In 2010 apart from fulfilling customary duties such as
processing of application for appointment of administrators51 and appointment of external
auditors, the Policy Unit also formulated regulations, notably the Application of Act Regulations,
2010 that state the sections of the FIA 2004 that are applicable to DBS and HFC. The Unit also
administered the transfer of abandoned safe deposit boxes from one bank to Central Bank for
safekeeping, for the first time.
4.1.1 Regulations Prescribed by Central Bank in 2010
4.1.1.1 Financial Institutions (Bank Licence Fees) Regulations, 2010
The Bank Licence Fees Regulations were gazetted in February 2010. The Regulations specify the
application processing fee and the annual fee for banks. Upon submission of an application, the
applicant needs to pay the application processing fee of R20,000 for a banking licence and
USD2,000 or equivalent in any freely convertible currency for an offshore banking licence52. The
annual fee payable by each bank thereafter is calculated based on the total assets of the bank. The
rational for this basis is that a bank with a larger asset base requires more supervision from the
Central Bank. The linking of the annual fee to the cost of supervision is in line with section 10(1)
of the FIA 2004 which states that every financial institution is required to pay such annual fee
taking into consideration the costs of the Central Bank directly caused by its supervisory functions
in relation to financial institutions. Supervisory costs include such costs as to cover the functions
of off-site, onsite as well as policy unit and includes training.
50 The action plan which initially stretched from January 2008 to June 2009 was reviewed in the last quarter of 2008 to span a further 18 months (from January to June 2010) in order to adopt more practical timeframes for deliverables which required more discussion prior to implementation as well as to incorporate new tasks. 51 As per the FIA 2004 an administrator in relation to a financial institution, means any person who is a director or managing director of such institution, or in the case of a branch of a foreign financial institution, the person designated as managing agent pursuant to section 313(1) of the Companies Act. 52 As mentioned in section 2.5, Central Bank intends to migrate to a single licensing regime for banks in 2011.
Chapter 4 – Developments in the Supervisory Framework
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 56
4.1.1.2 The Financial Institutions (Credit Classification and Provisioning) Regulations 2010
The Credit Classification and Provisioning Regulations are aimed at ensuring that banks prudently
classify loans and provision for potential losses accordingly. Hence all credits should be classified
as pass, special mention, substandard, doubtful or loss. For certain classifications, the provisioning
requirement has been revised to be more reflective of potential risks that the loans carry and to be
in line with international norms.
The regulations also provide for the reconciliation of differences between the regulatory
requirements and International Accounting Standards (IAS) and address the issue of write-offs
which was not dealt with in the previous regulations.
4.1.1.3 The Financial Institutions (Capital Adequacy) Regulations 2010
The purpose of the Capital Adequacy Regulations is to ensure that banks maintain adequate capital
to buffer against potential losses. The minimum capital requirement for a domestic bank is
R20,000,000. This amount has doubled in 2010 compared to the preceding requirement which was
set at R10,000,000. The minimum capital requirement for an offshore bank is USD2,000,000 or its
equivalent in any freely convertible currency. It should be noted that although the Regulations
were gazetted in November 2010, banks have up to December 2012 to meet the new minimum
requirement. The revision has been prompted by the devaluation of the Rupee in 2008 and is
aimed at rectifying the disparity between the onshore and offshore minimum capital requirement
which existed at the time.
Whilst the Basel 1 approach to credit risk has been maintained, the new Capital Adequacy
Regulations have also made provisions for the incorporation of the Basic Indicator Approach of
Basel II to capture operational risk. Moreover, current unaudited profit has been included in the
calculation of the capital base, as part of tier 2 capital.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 57
Box 14: Operational Risk and the Basic Indicator Approach
The Basel Committee defines operational risk as “the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events”. There are three methods for calculating operational risk under Basel II namely; (i) the Basic Indicator Approach; (ii) the Standardised Approach; and (iii) Advanced Measurement Approaches (AMA) Of the three approaches mentioned above, the Basic Indicator Approach is the simplest one. It calculates an operational risk charge for the bank, based on the gross income. Gross income is defined here as net interest income plus net non-interest income. Banks using the Basic Indicator Approach must hold capital for operational risk equal to the average over the previous three years of a fixed percentage (denoted by α) of positive annual gross income.
=
KBIA = the capital charge under the Basic Indicator Approach
GI = annual gross income, where positive, over the previous three years n = number of positive three years for which gross income is positive
α = 15%, which is set by the Committee, relating the industry wide level of required capital
to the industry wide level of the indicator. From the three options, the Basic Indicator Approach has been applied as it is more suited to the relatively simple operations of the banking sector in Seychelles.
4.1.2 New Circulars and Pronouncements Issued by Central Bank
4.1.2.1 Bank Licence Fees
Following the gazetting of the Bank Licence Fees Regulations 2010, a circular titled „Bank Licence
Fees‟ that supersedes circular BS21 of 2005 relating to licence fees was issued. The circular
explains that as the basis for computation of the annual fee, total assets as per the audited financial
statements dated two years prior to the year in which the licence fee is due needed to be used. For
example, in 2010 the annual licence fee is based on the total assets reported in the audited financial
statement for the year 2008, since at the beginning of 2010 the figures of 2009 are yet to be
audited.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 58
4.1.2.2 Investment of Capital
The circular titled „Investment of Capital‟ superseded circular BS24 issued in 1985. The circular
informs that the manner for investment of a bank‟s paid up capital and reserve funds that was
prescribed by Central Bank in the past is no longer applicable.
4.1.2.3 Presentation of Audited Accounts
Another circular titled „Presentation of Audited Accounts‟ superseded the circular BS18 issued in
1986. The circular informs that as most banks have adopted or are planning to adopt the
IAS/International Financial Reporting Standards (IFRS), banks should disclose the stipulated
minimum line items and requirements under IAS/IFRS. As this was more comprehensive than the
formats prescribed by Central Bank, the submission of the latter was no longer necessary.
However, for comparability purposes and in line with section 40 of the FIA 2004, banks have to
submit along with their financial statements an annexure which provides specified indicators of
the banks‟ financial performance and position based on the audited figures.
4.1.2.4 Publication of Audited Accounts in Local Newspaper
The circular titled „Publication of Audited Accounts in Local Newspaper‟, informed banks that in
publishing their audited financial statements in the newspaper, the inclusion of directors‟ signature
was not mandatory. This has been deemed necessary as a safeguard against possible fraud that may
result from the widespread circulation of directors‟ signatures.
4.1.2.5 Administration of Safety Deposit Boxes
In line with administration of abandoned property53, a manual titled „Administration of Safety
Deposit Boxes‟ was drafted and provides a step by step guideline as to the transfer of the contents
of safety deposit boxes from a bank to Central Bank and vice versa. This was necessary as for the
first time in 2010 the contents of abandoned safety deposit boxes had to be transferred to Central
Bank. In that instance, staff of the commercial bank, Central Bank along with a representative
from the Attorney General‟s office were in attendance during the transfer, as per the guidelines.
53 Section 59(1) of the FIA, 2004 states that „any unclaimed funds or property held by a financial institution for the account or on behalf of any depositor, creditor or other person are presumed to be abandoned property if for 10 years the depositor, creditor or other person has not evidenced an interest in the funds or property by recorded transaction or written correspondence with the financial institution or otherwise.‟
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 59
4.1.2.6 Publication of Particulars of Abandoned Property
With respect to abandoned deposit on accounts, a circular was issued to banks titled „Publication
of Particulars of Abandoned Property‟. The circular maintain that banks are not required to
disclose amounts held in abandoned accounts in the newspaper publications and at their premises.
This step was taken in order to mitigate against fraudulent claims that may arise when the amount
of abandoned property is publicized. The circular notes that the names of the owner and the
nature of the property (for example, if it is a current/savings account) still need to be disclosed.
4.2 FINANCIAL STABILITY ASSESSMENT
During 2010, Central Bank with the help of IMF consultants monitored the health of commercial
banks with the use of different tools at hand such as stress testing and other industry-wide
analysis. Stress testing is used as an early warning system tool to identify weaknesses in the
financial condition of banks and other institutions at an early stage. Further improvement in the
area of assessing systemic risk which financial institutions are facing was also on the agenda of the
Central Bank.
A workshop was hosted by Central Bank, in collaboration with the Toronto Centre54, on crisis
preparedness late in 2010, in its attempt to promote the stability of the financial system as a whole.
During the four-day workshop, staff from Central Bank, Ministry of Finance and Seychelles
International Business Authority learnt more about preparing for a crisis. The workshop led to the
beginning of work on the Seychelles crisis binder which consists of different tabs addressing:
communication and co-ordination strategies, resolution options and challenges which may impede
effective resolution of a crisis amongst others. To address the gaps identified during the exercise,
an action plan is being developed by staff who attended the workshop.
4.3 CAPACITY BUILDING
In 2010 training remained a divisional strategy in order to keep staff up to date with supervisory
issues and to continuously develop their skills and knowledge. Staff attended trainings held by the
Seychelles Institute of Management on foundation in insurance whilst courses attended overseas
covered issues including financial stability, banking, finance, economics, implementation of Basel
II, life assurance and an attachment at a regulatory authority for insurance supervision.
54 Toronto Centre is a leading institution in providing guidance on financial supervision. The Centre plays an important role in enhancing the capacity of financial regulators from around the world to help improve their agency‟s crisis preparedness and to promote change that will lead to a more sound and inclusive financial system.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 60
Additionally in 2010, the Central Bank sought technical assistance from the Financial Sector
Reform and Strengthening (FIRST) Initiative55 in Canada for the strengthening of its insurance
supervision. It is anticipated that during the course of the next two years, the Insurance
Supervision Section will benefit from further assistance from the FIRST initiative.
55 FIRST Initiative is a multi-donor grant facility providing technical assistance to promote financial sector strengthening. It consists of the following donors and partners: Canadian International Development Agency (CIDA), the Department for International Development for the United Kingdom (DFID), the International Monetary Fund (IMF), the Ministry of Foreign Affairs of The Netherlands, the State Secretariat for Economic Affairs of Switzerland (SECO), the Swedish International Development Cooperation Agency (SIDA), the World Bank, Germany‟s Federal Ministry of Economic Cooperation and Development (BMZ) and the Ministry of Finance of Luxembourg.
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 61
APPENDIX 1: Location and Contacts of Banks
BANKS’ NAME ADDRESS PHYSICAL ADDRESS
OTHER DETAILS
Barclays Bank (Seychelles) Ltd
Main Branch
P.O. Box 167 E-mail: [email protected]
Independence Avenue Victoria, Mahe
Tel: 4383838
Barclays Commercial Centre
Albert Street Victoria, Mahe
Tel: 4383838
Barclays Providence Branch
Providence Industrial Estate, Mahe
Tel: 4374096
Barclays Airport Agency
Seychelles International Airport Pointe Larue, Mahe
Tel: 4373029
Barclays Retail Branch
Baie Ste. Anne, Praslin Tel: 4232218
Barclays Retail Branch
Pension Complex, Grand Anse, Praslin
Tel: 4233344
Barclays La Digue Agency
Anse Reunion, La Digue
Tel: 4234148
Website: www.barclays.com/africa/seychelles
Barclays Offshore Banking Unit
Sham Peng Tong Plaza 2nd Floor Victoria, Mahe
Tel: 4383838 for operator, 4383939 for Queries
Nouvobanq
Main Branch
P.O. Box 241 E-mail: [email protected]
Victoria House Victoria, Mahe
Tel: 4293000
Praslin Branch
P.O. Box 4041 E-mail: [email protected]
Horizon Complex, Baie Ste. Anne, Praslin
Tel: 4232600
Chapter 5 – Appendices
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 62
BANKS’ NAME ADDRESS PHYSICAL ADDRESS
OTHER DETAILS
La Digue Branch
E-mail: [email protected]
Saffron Building La Passe, La Digue
Tel: 4235032
MCB
Head Office P.O. Box 122 E-mail: [email protected]
Caravelle House Victoria, Mahé
Tel: 4284555 Fax: 4322676
Providence Office Providence Insdustrial Estate, Mahé
Tel: 4373829
Anse Royale Office Anse Royale, Mahé Tel: 4385800
Grand Anse Praslin Office
Grand Anse Praslin Praslin
Tel: 4233940
Cote D‟or Office, Praslin
Cote D'or Praslin
Tel: 4232605
La Passe, La Digue
La Passe La Digue
Tel: 4234560
Website: www.mcbseychelles.com
Seychelles Savings Bank
Head Office
P.O. Box 531 E-mail: [email protected]
Orion Mall, Victoria, Mahe
Tel: 4294000
Anse Aux Pins Branch
E-mail: [email protected]
Anse Aux Pins, Mahe Tel: 4376379
Grand Anse Praslin Branch
E-mail: [email protected]
Grand Anse Praslin Tel: 4233810
La Digue Branch E-mail: [email protected]
La Passe, La Digue Tel: 4234135
Victoria Branch E-mail: [email protected]
Kingsgate House, Victoria
Tel: 4294083
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 63
BANKS’ NAME ADDRESS PHYSICAL ADDRESS
OTHER DETAILS
Corporate Branch [email protected] Orion Mall Tel: 4294077
Habib Bank Ltd
Seychelles
P.O. Box 702 E-mail: [email protected]
Sound & Vision House, Francis Rachel Street, Victoria
Tel: 4224371/ 4224372
BMIO
Head Office
P.O. Box 672 E-mail: [email protected]
Suite G-04 & G-08, Capital City Building, Victoria, Mahe
Tel: 4325660 Fax: 4325490
Website: www.bmi.com.sc
Bank of Baroda
Bank of Baroda
P.O. Box 124 E-mail: [email protected]
Trinity House, Victoria, Mahe
Tel: 4618000
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 64
APPENDIX 2: Location of ATMs
BARCLAYS BANK (SEYCHELLES) LTD MAURITIUS COMMERCIAL BANK (SEYCHELLES) LTD
2 Independence Avenue Office 1 Head Office, Caravelle House
1 Market Street Office 1 Mahe Trading Building, Victoria
1 Deepam House, Beau Vallon 1 Providence Office
1 Cable and Wireless, Victoria 1 Seychelles International Airport, Pointe Larue
1 Providence Office 1 Anse Royale Office
1 Seychelles International Airport, Pointe Larue 1 Airport, Grand Anse Praslin
1 Shopping Complex, Anse Royale 1 Grand Anse Praslin Office
1 Grand Anse Praslin Office 1 Cote D‟or Office, Praslin
1 Baie Ste Anne Office 1 La Passe, La Digue
1 La Digue Office
1 Dockland‟s Building
1 Mont Fleuri
NOUVOBANQ SEYCHELLES SAVINGS BANK
1 Head Office, Victoria House 1 Head Office, Kingsgate House
1 Pirates Arms Building, Victoria 1 Orion Mall, Victoria
1 Seychelles International Airport, Pointe Larue 1 La Passe, La Digue
1 La Passe, La Digue 1 Airport, Grand Anse Praslin
1 Cote D‟or, Praslin
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 65
APPENDIX 3: Location and Contacts of BDCs
Licensed and In Operation
BUREAU DE CHANGE NAMES
CLASS POSTAL ADDRESS PHYSICAL ADDRESS CONTACT DETAILS
ARC Exchange (Pty) Ltd
A
P.O. Box 847 Victoria, Mahe
Orion Mall First Floor Victoria, Mahé Paradise Computer Services Victoria House Victoria, Mahe
Tel: 4289555/ 2717481 Fax: 4323087 Tel: 4289565
Cash Plus Co. (Pty) Ltd
A
P.O. Box 87 Victoria, Mahe
Olivier Maradan Building Olivier Maradan Street Victoria, Mahe Jivan‟s Building Albert Street Victoria, Mahe Coral Strand Hotel Beau Vallon, Mahe Ocean Plaza Building Grand Anse, Praslin Aarti Investment Building Baie Ste Anne, Praslin
Tel: 2783660 Fax: 4325260 Tel: 2783661 Tel: 4237263 Tel: 4236272 Tel: 2501021
Doubleclick Exchange (Pty) Ltd
A
Doubleclick Internet Café Maison La Rosiere Palm Street Victoria, Mahe Fashion & Sports World Shop Orion Mall, Second Floor Victoria, Mahe
Doubleclick Internet Café Maison La Rosiere Palm Street Victoria, Mahe Fashion & Sports World Shop Orion Mall, Second Floor Victoria, Mahe
Tel: 4224976/ 2783165 Fax: 4237062 Tel: 2513025
Mason‟s Money (Pty) Ltd trading name – Mason‟s Xchange
A
P.O. Box 459 Victoria, Mahe
Michel Building Benezette Street Victoria, Mahe
Tel: 4288801 Fax: 4288810
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 66
BUREAU DE CHANGE NAMES CLASS POSTAL
ADDRESS PHYSICAL ADDRESS
CONTACT DETAILS
Royale Growth (Pty) Ltd
A
P.O. Box 952 Victoria, Mahe
Printec Press Holdings Building Mont Fleuri, Mahe Royale Florist Shop Pirates Arms Building Victoria, Mahe Coco d‟Or Hotel Beau Vallon, Mahe Quincy Mall Quincy Street Victoria, Mahe
Tel: 4611525 Tel: 4225680 Tel: 4247331 Tel: 4611532
Travel Change (Seychelles) Ltd trading name - Creole Exchange
A
P.O. Box 356 Victoria, Mahe
Mahe Trading Building Victoria, Mahe
Tel: 4297125
Anthrium Foreign Exchange (Pty) Ltd
B
Kot Damoo Building Anse Royale, Mahe
Kot Damoo Building Anse Royale, Mahe
Tel: 2590592/ 2519383
Best Exchange (Pty) Ltd B P.O. Box 94 Victoria, Mahe
Michel Building Revolution Avenue Victoria, Mahe
Tel: 2725511
Bizz Money Changer Co. Ltd
B
P.O. Box 677 Victoria, Mahe
Anse Aux Pins, Mahe
Tel: 4375883
Ideal Money Changer (Pty) Ltd
B
Pension Fund Complex Grand Anse, Praslin
Pension Fund Complex Grand Anse, Praslin
Tel: 2783165/ 2513025
Fax: 4237062
Jamboo Money Changer Ltd
B
Storey House Building Revolution Avenue Victoria, Mahe
Storey House Building Revolution Avenue Victoria, Mahe
Tel: 2783877
La Passe Money Changer (Pty) Ltd
B
C/O Kot Babi Guest House La Passe, La Digue
Jetty Building La Passe, La Digue
Tel/Fax: 4234747
Money Stretcher (Pty) Ltd
B
P.O. Box 1271 Victoria, Mahe
Camion Hall Building Victoria, Mahe
Tel: 2516513/ 2722546
Saymore (Pty) Ltd
B
P.O. Box 3005 Victoria, Mahe
Seychelles Airport Pointe Larue, Mahe
Tel: 4373434 Fax: 4373695
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 67
BUREAU DE CHANGE NAMES CLASS POSTAL
ADDRESS PHYSICAL ADDRESS
CONTACT DETAILS
Sekaar's Foreign Exchange Bureau (Pty) Ltd
B
Market Street Victoria, Mahe
Market Street Victoria, Mahe
Tel: 4323705/ 2727372
Fax: 4373708
Sylvie's Exchange (Pty) Ltd
B
P.O. Box 155 Victoria, Mahe
Mangroo‟s Building Beau Vallon, Mahe
Tel/Fax: 4248125
Thompson (Seychelles) Ltd
B
Mahe Trading Building State House Avenue Victoria, Mahe
Mahe Trading Building State House Avenue Victoria, Mahe
Tel/Fax: 4324779
Universal Money Changer (Pty) Ltd
B
P.O. Box 88 Victoria, Mahe
Chez Deenu Supermarket Quincy Street Victoria, Mahe Deenu‟s Mini Market Premier Building Victoria, Mahe Adam Moosa Building Victoria, Mahe
Tel: 4322639 Fax: 4324028 Tel: 4322059 Tel: 4325474
Victoria Money Changers Ltd
B
P.O. Box 127 Victoria, Mahe
Kandimathy Building Market Street Victoria, Mahe
Tel: 4321612
Vims Exchange Ltd
B
Baie Ste Anne, Praslin
Baie Ste Anne Jetty Baie Ste Anne, Praslin Praslin Airport Grand Anse, Praslin
Tel: 2581110 Fax: 4236152 Tel: 2762110
VSN Exchange (Pty) Ltd B P.O. Box 824 Victoria, Mahe
Deepam House Building Beau Vallon, Mahe
Tel: 4248322/ 4620198/ 2516902
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 68
Licensed but not yet in Operation
BUREAU DE CHANGE NAMES
CLASS POSTAL ADDRESS CONTACT DETAILS
JPL Exchange (Sey) Co. Ltd A P.O. Box 1080 Victoria, Mahe
Tel: 2515153
Le Relax Bureau de Change Ltd A P.O. Box 215 Victoria, Mahe
Tel: 4 380700 Fax: 4344560
Vision Money Transfer Ltd A P.O. Box 708 Victoria, Mahe
Tel: 4224207 Fax: 4224995
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 69
APPENDIX 4: Location and Contacts of Insurance Companies and Intermediaries
ADDRESS PHYSICAL ADDRESS OTHER DETAILS
INSURANCE COMPANIES DOMESTIC
SACOS Life Assurance Co Ltd
P.O. Box 636 E-mail: [email protected]
SACOS Tower, Victoria, Mahe
Tel: 4295000
SACOS Insurance Co Ltd
P.O. Box 636 SACOS Tower, Victoria, Mahe
Tel: 4295000
Harry Savy Insurance Co Ltd
P.O. Box 887 Maison La Rosière, Victoria, Mahe
Tel: 4322272
MUA (Seychelles) Co. Ltd
P.O. Box 1257 E-mail: [email protected]
2nd Floor, Sound & Vision House Francis Rachel Street Victoria, Mahe
Tel: 4322922
NON-DOMESTIC
SRS Insurance Co Ltd P.O. Box 381, E-mail: Oliaji Trade Centre Tel: 4322893
E&G Insurance Co Ltd [email protected] 303 Aarti Chambers, Mont Fleuri, Mahe
Tel: 4225555
EOE P&I Association Ltd
P.O. Box 1402 E-mail: [email protected]
1st Floor Albert Street Tel: 4610215
INSURANCE INTERMEDIARIES PRINCIPAL INSURANCE REPRESENTATIVE (PIR)
Advanced Business Solutions (Pty) Ltd
P.O. Box 1402 E-mail: [email protected]/[email protected]
1st Floor Trinity House, Albert Street, Victoria
Tel: 4321166
BROKERS
Advanced Business Solutions (Pty) Ltd
P.O. Box 1018 Victoria Tel: 4321166
Progress Insurance Broker (Pty) Ltd
E-mail: [email protected]
Mont Buxton, Victoria, Mahe
Tel: 2719169
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 70
ADDRESS PHYSICAL ADDRESS
OTHER DETAILS
Prime Insurance Broker (Pty) Ltd
P.O. Box 906 E-mail: [email protected]
Suite No 203, Victoria House, Victoria, Mahe
Tel: 4322678
Fidelity Insurance Brokers (Pty) Ltd
P.O. Box 1086 E-mail: [email protected]
Victoria, Mahe Tel: 4225776/ 2514652
Integrated Financial P.O. Box 1253 E-mail: [email protected]
Victoria, Mahe Tel: 4224544
Secura Insurance Brokers (Pty) Ltd
E-mail: [email protected]
Salamat House, La Poudrière, Victoria, Mahe
Tel: 4323005
Liberty Insurance P.O. Box 451 E-mail: [email protected]
Victoria, Mahe Tel: 4412433
Reliance Insurance Brokers (Pty) Ltd
E-mail: [email protected]
Sans Soucis, Mahe Tel: 4225668/ 2513121
D.A.A.R.T's Insurance E-mail: [email protected]
Le Niole Tel: 4266325
Belairy Insurance Brokers (Pty) Ltd
P.O. Box 785 E-mail: [email protected]
Victoria, Mahe Tel: 4247025/ 4522044
AGENT
Royal Shield (Pty) Ltd P.O. Box 907 E-mail: [email protected]
Victoria, Mahe Tel: 2511737
SUB-AGENTS LIFE
Kamatchi VINAYAGAMURTHY
E-mail: [email protected]
Quincy Street, Victoria, Mahe
Tel: 2714662
Simon HOAREAU E-mail: [email protected]
Mare Anglaise, Mahe Tel: 2511711
Marie-Paule ROSE
E-mail: [email protected]
Hangard Street, Mahe Tel: 4323266/ 2524747
Rency ERNESTA E-mail: [email protected]
La Louise, Mahe
Patrick HOAREAU E-mail: [email protected]
Sorento, Glacis, Mahe
Tel: 2511370
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 71
ADDRESS PHYSICAL ADDRESS
OTHER DETAILS
Roy MUSSARD E-mail: [email protected]
St. Louis, Mahe Tel: 2513999
Paule DOMINGUE E-mail: [email protected]
La Gogue, Mahe Tel: 2584367
Dorina FRANCOIS
E-mail: [email protected]
Anse Royale, Mahe Tel: 2513258
Shirley LESPERANCE E-mail: [email protected]
Anse La Mouche, Mahe Tel: 2574960
Dolor ERNESTA E-mail: [email protected]
Sans Soucis, Mahe Tel: 2510142
Kevil TELEMAQUE E-mail: [email protected]
Belvedere, Mahe Tel: 2520041
Claudette LOWHON E-mail: [email protected]
La Retraite, Mahe Tel: 2520278
Jude RAOUL E-mail: [email protected]
Grand Anse, Mahe Tel: 2516402
Julina JEANNEVOLE P.O. Box 636 E-mail: [email protected]
SACOS Tower, Victoria Tel: 2515498
Istabelle LESPOIR E-mail: [email protected]
Flat No 2, Sans Soucis, Mahe
Tel: 2722510/ 2710798
Nichol LESPERANCE E-mail: [email protected]
Cap Samy, Baie Ste Anne, Praslin
Tel: 2514850
Andy CADEAU E-mail: [email protected]
Roche Caiman, Mahe Tel: 2717089
Georgette HOAREAU E-mail: [email protected]
Mt Posée, Au Cap, Mahe Tel: 2376376
Julia POOL E-mail: [email protected]
Beau-Bel, Mahe Tel: 2716135
Frankie DUPRES
E-mail: [email protected]
Quincy Village, Mahe Tel: 2521625
Christianne HOAREAU
E-mail: [email protected]
Quincy Village, Mahe Tel: 2510121
Tracey FURNEAU
E-mail: [email protected]
Foret-Noire, Mahe Tel: 2521603
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 72
ADDRESS PHYSICAL ADDRESS
OTHER DETAILS
Guy MOREL
P.O. Box 893 E-mail: [email protected]
Pte Larue, Mahe Tel: 2529988
Agnela LUCAS-FANCHETTE
E-mail: [email protected]
Bel Ombre, Mahe Tel: 4247677/ 2783 099
George GILL P.O. Box 645 E-mail: [email protected]
Victoria Mahe
Tel: 2513600/ 4322733
Mirose LAURENCINE E-mail: [email protected]
Petit Paris, Mahe Tel: 2527305
Kevin ALLY
- Serret Road, St. Louis, Mahe
Tel: 2516727/ 2514303
GENERAL
Kamatchi VINAYAGAMURTHY
E-mail: [email protected]
Quincy Street, Victoria, Mahe
Tel: 2714662
Shirley LESPERANCE E-mail: [email protected]
Anse La Mouche, Mahe Tel: 2574960
Paule DOMINGUE E-mail: [email protected]
La Gogue, Mahe Tel: 2584367
Mirose LAURENCINE E-mail: [email protected]
Petit Paris, Mahe Tel: 2527305
INSURANCE COMPANIES DOMESTIC
SACOS Life Assurance Co Ltd
P.O. Box 636 E-mail: [email protected]
SACOS Tower, Victoria, Mahe
Tel: 4295000
SACOS Insurance Co Ltd
P.O. Box 636
SACOS Tower, Victoria, Mahe
Tel: 4295000
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 73
ADDRESS
PHYSICAL ADDRESS OTHER DETAILS
Harry Savy Insurance Co Ltd
P.O. Box 887 Maison La Rosière, Victoria, Mahe
Tel: 4322272
MUA (Seychelles) Co. Ltd
P.O. Box 1257 E-mail: [email protected]
2nd Floor, Sound & Vision House Francis Rachel Street Victoria, Mahe
Tel: 4322922
NON-DOMESTIC
SRS Insurance Co Ltd P.O. Box 381, E-mail: Oliaji Trade Centre Tel: 4322893
E&G Insurance Co Ltd [email protected] 303 Aarti Chambers, Mont Fleuri, Mahe
Tel: 4225555
EOE P&I Association Ltd
P.O. Box 1402 Email: [email protected]
1st Floor Albert Street Tel: 4610215
INSURANCE INTERMEDIARIES PRINCIPAL INSURANCE REPRESENTATIVE (PIR)
Advanced Business Solutions (Pty) Ltd
P.O. Box 1402 Email: [email protected]/[email protected]
1st Floor Trinity House, Albert Street, Victoria
Tel: 4321166
BROKERS
Advanced Business Solutions (Pty) Ltd
P.O. Box 1018 Victoria Tel: 4321166
Progress Insurance Broker (PTY) LTD
Email: [email protected]
Mont Buxton, Victoria, Mahe
Tel: 2719169
Prime Insurance Broker (PTY) LTD
P.O. Box 906 Email: [email protected]
Suite No 203, Victoria House, Victoria, Mahe
Tel: 4322678
Fidelity Insurance Brokers (Proprietary) Ltd
P.O. Box 1086 Email: [email protected]
Victoria, Mahe Tel: 4225776/ 2514652
Integrated Financial P.O. Box 1253 Email: [email protected]
Victoria, Mahe Tel: 4224544
Secura Insurance Brokers (PTY) LTD
Email: [email protected]
Salamat House, La Poudrière, Victoria, Mahe
Tel: 4323005
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 74
ADDRESS PHYSICAL ADDRESS OTHER DETAILS
Liberty Insurance P.O. Box 451 Email: [email protected]
Victoria, Mahe Tel: 4412433
Reliance Insurance Brokers (PTY) LTD
Email: [email protected]
Sans Soucis, Mahe Tel: 4225668/ 2513121
D.A.A.R.T's Insurance Email: [email protected]
Le Niole Tel: 4266325
Belairy Insurance Brokers (PTY) LTD
P.O. Box 785 Email: [email protected]
Victoria, Mahe Tel: 4247025/ 4522044
AGENT
Royal Shield (PTY) LTD P.O. BOX 907 Email: [email protected]
Victoria, Mahe Tel: 2511737
SUB-AGENTS LIFE
Kamatchi VINAYAGAMURTHY
Email: [email protected]
Quincy Street, Victoria, Mahe
Tel: 2714662
Simon HOAREAU Email: [email protected]
Mare Anglaise, Mahe Tel: 2511711
Marie-Paule ROSE
Email: [email protected]
Hangard Street, Mahe Tel: 4323266/ 2524747
Rency ERNESTA E-mail: [email protected]
La Louise, Mahe
Patrick HOAREAU Email: [email protected]
Sorento, Glacis, Mahe
Tel: 2511370
Roy MUSSARD Email: [email protected]
St. Louis, Mahe Tel: 2513999
Paule DOMINGUE Email: [email protected]
La Gogue, Mahe Tel: 2584367
Dorina FRANCOIS
Email: [email protected]
Anse Royale, Mahe Tel: 2513258
Shirley LESPERANCE E-mail: [email protected]
Anse La Mouche, Mahe Tel: 2574960
Dolor ERNESTA Email: [email protected]
Sans Soucis, Mahe
Tel: 2510142
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 75
ADDRESS PHYSICAL ADDRESS OTHER DETAILS
Kevil TELEMAQUE E-mail: [email protected]
Belvedere, Mahe Tel: 2520041
Claudette LOWHON Email: [email protected]
La Retraite, Mahe Tel: 2520278
Jude RAOUL E-mail: [email protected]
Grand Anse, Mahe Tel: 2516402
Julina JEANNEVOLE P.O. Box 636 E-mail: [email protected]
SACOS Tower, Victoria Tel: 2515498
Istabelle LESPOIR E-mail: [email protected]
Flat No 2, Sans Soucis, Mahe
Tel: 2722510/ 2710798
Nichol LESPERANCE E-mail: [email protected]
Cap Samy, Baie Ste Anne, Praslin
Tel: 2514850
Andy CADEAU E-mail: [email protected]
Roche Caiman, Mahe Tel: 2717089
Georgette HOAREAU E-mail: [email protected]
Mt Posée, Au Cap, Mahe Tel: 2376376
Julia POOL E-mail: [email protected]
Beau-Bel, Mahe Tel: 2716135
Frankie DUPRES
E-mail: [email protected]
Quincy Village, Mahe Tel: 2521625
Christianne HOAREAU
Email: [email protected]
Quincy Village, Mahe Tel: 2510121
Tracey FURNEAU
E-mail: [email protected]
Foret-Noire, Mahe Tel: 2521603
Guy MOREL
P.O. BOX 893 E-mail: [email protected]
Pte Larue, Mahe Tel: 2529988
Agnela LUCAS-FANCHETTE
E-mail: [email protected]
Bel Ombre, Mahe Tel: 4247677/ 2783 099
George GILL
P.O. BOX 645 E-mail: [email protected]
Victoria Mahe
Tel: 2513600/ 4322733
Mirose LAURENCINE E-mail: [email protected]
Petit Paris, Mahe Tel: 2527305
FINANCIAL SERVICES SUPERVISION ANNUAL REPORT 76
ADDRESS PHYSICAL ADDRESS OTHER DETAILS
GENERAL
Kamatchi VINAYAGAMURTHY
E-mail: [email protected]
Quincy Street, Victoria, Mahe
Tel: 2714662
Shirley LESPERANCE E-mail: [email protected]
Anse La Mouche, Mahe Tel: 2574960
Paule DOMINGUE Email: [email protected]
La Gogue, Mahe Tel: 2584367
Mirose LAURENCINE E-mail: [email protected]
Petit Paris, Mahe Tel: 2527305