Mauritius-based AfrAsia Bank, which has an office in Johannesburg, has been granted a Financial Services Provider Category 1 Intermediary & Advisory licence, which should enable it to grow its representation over time to all major metropolitan areas in South Africa.
This was according to Raveen Ramaklan, the head of structuring at AfrAsia Bank, who was interviewed yesterday. Ramaklan has more than 25 years of experience in treasury-related activities across institutions such as Citibank, Standard Corporate and Merchant Bank and Rand Merchant Bank.
AfrAsia Bank offers offshore investing and expanded financial services solutions to high-net-worth individuals and corporates looking to diversify into the international financial centre of Mauritius.
The bank has had a representative office in Johannesburg since 2010 and has, until now, only been offering basic financial services such as loans and current accounts to South African private and corporate clients.
Ramaklan said typically the bank’s clients already have funds offshore that they wish to invest or grow, and the new FSCA licence meant the bank could now also provide advice to its clients in South Africa on how to do this.
He said that with South Africa being grey-listed, it was very difficult for them to simply go overseas and open a bank account, as had been possible previously.
He said Mauritius had itself been greylisted – it exited greylisting in 2021 in under two years – so the bank was experienced in dealing with clients from grey-listed countries.
He said Mauritius offered a host of benefits for South African investors including that it did not have foreign exchange controls, the country has a relatively simple tax structure for offshore investing, and no withholding taxes and no capital gains tax.
All this allows the bank to access investments and financial platforms across most non-sanctioned countries, and the new licence means the bank could specifically tailor financial solutions for its clients here in South Africa to invest almost anywhere in the world in equities, funds, bonds, ETFs or other financial instruments, said Ramaklan.
He said their South African clients typically were more passive investors, seeking to retain hold investment positions for three to five years, and more recently, with the volatility in global markets, were increasingly investing in dollar-based fixed deposits.
He said their private clients needed a minimum of $50 000 (R908 127) to invest with the bank, which was a great deal less than traditional private wealth banks that required minimum sums of more than $500 000.
“We give our clients the option to let their $50 000 grow to a level where we can introduce the clients to other investments,” said Ramaklan.
In the nine months to March 31, AfrAsia Bank lifted taxed profit 261% to MUR 3.8 billion (about R1.5 billion) over the same period a year before. The bank benefited from a 300% surge in net interest income on the back of new bookings and investments in products earning higher interest rates.
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