The bank’s asset base also grew by an impressive 31.7% and Tier 1 capital was beefed up by 83.3%. Bank of Africa Madagascar has proved itself adept at evolving alongside the country’s often volatile political and economic environment.
The bank’s three-year plan, launched in 2004, has achieved its goals and considerably strengthened all aspects of its balance sheet. An innovative bank, it has worked hard to spread its influence across Madagascar through an agreement with Western Union and a focus on establishing a microfinance division in the bank.
Its market share among Madagascar’s eight banks also grew last year by 3.3% to 29%. It now has the biggest market share of all Madagascan banks, up from second place in 2006.
The worldwide financial crisis has had an indirect impact on Madagascar as foreign direct investment into the country begins to dry up. Bank of Madagascar’s return on equity dropped slightly in 2007, from 6.9% to 6.8%, and its non-performing loan ratio grew from 3% to 4.1% during the year. Its costs were also a cause for concern, as the cost-to-income ratio at the bank grew from 65.9% to 68.6%. Despite these figures, Bank of Africa Madagascar has shown once again that it is a progressive institution operating in one of the world’s toughest economic environments.
