Return on equity of Angolan banks grows around 10 pp in 2005

28 September 2006

Luanda, Angola, 28 Sept – The return on equity of the 12 retail banks operating in Angola increased almost 10 percentage points last year, a study by KPMG published Thursday in Luanda showed.

The study, entitled “Survey of the Banking Sector in Angola,” showed that return on equity increased from 26 percent to 35.2 percent in 2005.

It added that the sharp increase of banking activity in Angola led to a 51 percent increase in total banking assets, which totaled 549 billion kuanza (US$6.8 billion) at the end of last year.

Banking deposits increased 70 percent, while loans posted a rise of 58.6 percent in 2005 against the previous year.

KPMG said in its survey that the sector had seen significant growth last year following the beginning of operations by Banco Internacional de Crédito (BIC).

This bank, in which Portuguese businessman Américo Amorim has a 25 percent stake, began operating at the end of May 2005 and rapidly became the fourth largest bank in Angola.

According to KPMG BIC’s aggressive expansion strategy in all Angolan provinces contributed to significant growth of competition.

The new dynamic of the banking sector is also the result of legislative changes, namely the new Financial Institution laws.

In the study, KPMG also highlighted the international projection achieved by Angola’s economy since 2002, which resulted in capturing foreign direct investment of US$7.2 billion.

This amount is around 3.5 times the foreign direct investment in South Africa and some US$1 billion more than the amount invested in Nigeria. (macauhub)