Business
Angola’s financial institutions experience growth while profits feel the pinch
Instead, the opposite happened: “More dollars [are] being sold to commercial banks, so that operators can buy kwanza to pay their suppliers. This means less of the dependence on the Banco Nacional de Angola to auction those dollars.” With fewer greenbacks on the streets, says Staines, the BNA could have more control over the kwanza.
Debt shoots up
According to an October 2013 report from international accountants KPMG, Angola’s banks grew by 14% in 2012 but profits dipped by more than 30%. The BNA announced in October that credit growth rose by 26% in 2012 and banks’ assets grew by 14%. Non-performing loans shot up to 166.5bn kwanza ($1.7bn) – about 84% higher than in 2011 – partly because of a weakening real estate market and delays in payments for government contracts.
Standard Bank chief executive Pedro Pinto Coelho says that his bank, the first South African bank in Angola, was back in the black after two years of losses reflecting big initial investments: “We are swimming against the tide. Our credit book is new, so we don’t have a heap of historic debt like many banks. Interest rates were already coming down when we started out, so we didn’t have that free ride that others had.”
He sounds a note of caution: “There are too many operators in the financial system for an economy like Angola, and we will see some consolidations.” The KPMG report also said that the country’s top five banks control 78% of assets in the banking sector.
Yet Coelho is confident that well-run and competitive banks would emerge stronger as Angola’s oil-driven economy starts to diversify.
Copyright The Africa Report 2014
