CENTRAL BANK OF SEYCHELLES Report 2010 - CBS.pdf · 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

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.


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


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


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


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


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


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


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.

http://en.wikipedia.org/wiki/Purchasing_power


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


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


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.


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


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


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)


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.


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


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


4 2 1 7

Bank of Baroda 1 - - 1

BMI Offshore Bank 1 - - 1

Habib Bank Ltd 1 - - 1


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.


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


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


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


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.


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.


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%


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


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%


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.


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


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


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.


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


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


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.


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.


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.


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.


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.


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


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.


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.


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.


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.


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.


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.


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.


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.


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.


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.


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


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.


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


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.


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).


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.


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.


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.


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


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.


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.


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.


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


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.


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.


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.‟


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.


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.


APPENDIX 1: Location and Contacts of Banks

BANKS’ NAME ADDRESS PHYSICAL ADDRESS

OTHER DETAILS


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


Victoria House Victoria, Mahe

Tel: 4293000

Praslin Branch


Horizon Complex, Baie Ste. Anne, Praslin

Tel: 4232600

Chapter 5 – Appendices



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


Orion Mall, Victoria, Mahe

Tel: 4294000

Anse Aux Pins Branch


Anse Aux Pins, Mahe Tel: 4376379

Grand Anse Praslin Branch


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



OTHER DETAILS

Corporate Branch [email protected] Orion Mall Tel: 4294077

Habib Bank Ltd

Seychelles


Sound & Vision House, Francis Rachel Street, Victoria

Tel: 4224371/ 4224372

BMIO

Head Office


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


Trinity House, Victoria, Mahe

Tel: 4618000


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


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


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


Michel Building Benezette Street Victoria, Mahe

Tel: 4288801 Fax: 4288810


BUREAU DE CHANGE NAMES CLASS POSTAL

ADDRESS PHYSICAL ADDRESS

CONTACT DETAILS

Royale Growth (Pty) Ltd

A


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


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


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


Camion Hall Building Victoria, Mahe

Tel: 2516513/ 2722546

Saymore (Pty) Ltd

B


Seychelles Airport Pointe Larue, Mahe

Tel: 4373434 Fax: 4373695


BUREAU DE CHANGE NAMES CLASS POSTAL


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


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


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


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


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


APPENDIX 4: Location and Contacts of Insurance Companies and Intermediaries

ADDRESS PHYSICAL ADDRESS OTHER DETAILS

INSURANCE COMPANIES DOMESTIC



SACOS Tower, Victoria, Mahe

Tel: 4295000


P.O. Box 636 SACOS Tower, Victoria, Mahe

Tel: 4295000


P.O. Box 887 Maison La Rosière, Victoria, Mahe

Tel: 4322272

MUA (Seychelles) Co. Ltd


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


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


P.O. Box 1018 Victoria Tel: 4321166

Progress Insurance Broker (Pty) Ltd


Mont Buxton, Victoria, Mahe

Tel: 2719169



OTHER DETAILS

Prime Insurance Broker (Pty) Ltd


Suite No 203, Victoria House, Victoria, Mahe

Tel: 4322678

Fidelity Insurance Brokers (Pty) Ltd


Victoria, Mahe Tel: 4225776/ 2514652

Integrated Financial P.O. Box 1253 E-mail: [email protected]

Victoria, Mahe Tel: 4224544

Secura Insurance Brokers (Pty) Ltd


Salamat House, La Poudrière, Victoria, Mahe

Tel: 4323005

Liberty Insurance P.O. Box 451 E-mail: [email protected]


Reliance Insurance Brokers (Pty) Ltd


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



AGENT

Royal Shield (Pty) Ltd P.O. Box 907 E-mail: [email protected]


SUB-AGENTS LIFE

Kamatchi VINAYAGAMURTHY


Quincy Street, Victoria, Mahe

Tel: 2714662

Simon HOAREAU E-mail: [email protected]

Mare Anglaise, Mahe Tel: 2511711

Marie-Paule ROSE


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



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


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


Quincy Village, Mahe Tel: 2521625

Christianne HOAREAU



Tracey FURNEAU


Foret-Noire, Mahe Tel: 2521603



OTHER DETAILS

Guy MOREL


Pte Larue, Mahe Tel: 2529988

Agnela LUCAS-FANCHETTE


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




Tel: 2714662



Paule DOMINGUE E-mail: [email protected]




INSURANCE COMPANIES DOMESTIC




Tel: 4295000


P.O. Box 636


Tel: 4295000


ADDRESS

PHYSICAL ADDRESS OTHER DETAILS


P.O. Box 887 Maison La Rosière, Victoria, Mahe

Tel: 4322272

MUA (Seychelles) Co. Ltd


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)


P.O. Box 1402 Email: [email protected]/[email protected]

1st Floor Trinity House, Albert Street, Victoria

Tel: 4321166

BROKERS


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


Suite No 203, Victoria House, Victoria, Mahe

Tel: 4322678

Fidelity Insurance Brokers (Proprietary) Ltd



Integrated Financial P.O. Box 1253 Email: [email protected]


Secura Insurance Brokers (PTY) LTD


Salamat House, La Poudrière, Victoria, Mahe

Tel: 4323005



Liberty Insurance P.O. Box 451 Email: [email protected]


Reliance Insurance Brokers (PTY) LTD


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



AGENT

Royal Shield (PTY) LTD P.O. BOX 907 Email: [email protected]


SUB-AGENTS LIFE




Tel: 2714662

Simon HOAREAU Email: [email protected]

Mare Anglaise, Mahe Tel: 2511711

Marie-Paule ROSE


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]


Dorina FRANCOIS


Anse Royale, Mahe Tel: 2513258



Dolor ERNESTA Email: [email protected]

Sans Soucis, Mahe

Tel: 2510142

mailto:[email protected]





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



Christianne HOAREAU



Tracey FURNEAU


Foret-Noire, Mahe Tel: 2521603

Guy MOREL

P.O. BOX 893 E-mail: [email protected]

Pte Larue, Mahe Tel: 2529988

Agnela LUCAS-FANCHETTE


Bel Ombre, Mahe Tel: 4247677/ 2783 099

George GILL

P.O. BOX 645 E-mail: [email protected]

Victoria Mahe

Tel: 2513600/ 4322733



















GENERAL




Tel: 2714662



Paule DOMINGUE Email: [email protected]







Documents

CENTRAL BANK OF SEYCHELLES Report 2010 - CBS.pdf · 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