SBM Holdings Profits Slide to Rs 4.2 Billion Amid Surge in Risk

SBM Holdings has reported a 2.9% decline in net profit for the financial year ending 31 December 2025, as a significant surge in credit impairment charges offset strong operational growth.

The banking group’s net profit fell to Rs 4.21 billion, down from Rs 4.34 billion the previous year.

While the headline contraction appears modest, the results reveal a stark increase in the cost of risk, with credit losses skyrocketing to Rs 3.53 billion—a nearly eightfold increase from the Rs 431 million recorded in 2024.

Operational Resilience

Despite the pressure on the bottom line, the group maintained a robust operational performance. Total operating income climbed 14.4% to reach Rs 19 billion, bolstered by:

• A 9.1% rise in net interest income.
• A 25.2% expansion in non-interest income, driven by fees and market activities.
• Customer loan growth of nearly 8%, totaling Rs 185.3 billion.

The group also reported significant strides in efficiency. The cost-to-income ratio improved from 63.8% to 54.5%, reflecting successful cost rationalisation and better absorption of fixed expenses.

Leadership Outlook

Group CEO Raoul Gufflet described the 2025 results as a testament to the group’s “intrinsic solidity” during a complex transition.

He noted that despite credit risk challenges in the main entity, the group is benefiting from a structured transformation plan and investments in technology and risk management.

Deputy Group CEO Vimal Naikeny added that the results signal a shift from “stabilisation to execution.”

While admitting that profitability remains hampered by “legacy factors,” he maintained that the group’s trajectory is firmly oriented upwards.

Financial Standing

SBM Holdings maintains a strong capital cushion to weather the current volatility.

Its Tier 1 ratio stands at 14.7%, with a total capital adequacy ratio of 20.5%—both comfortably exceeding regulatory requirements.

However, analysts suggest the central challenge for the group will be balancing its commercial momentum with stricter risk discipline.

As the Mauritian economy faces increased exposure to external shocks and geopolitical uncertainty, the group must now focus on preserving long-term profitability while managing its deteriorating asset quality.

Source: l’Express