Maputo, Mozambique, 04 Dec – Mozambican banks boosted their profits in 2005 in a “dramatic” manner, according to a report on the sector published by the KPMG consulting firm.
The KPMG survey, carried out in partnership with the Mozambican Banking Association and published last Friday, shows that bank profits grew by 64 percent – from meticais 572.76 billion in 2004 to meticais 940.58 billion in 2005.
Operating profits increased 47 percent in nominal terms and 33 percent in real terms after adjustment for the 14 percent inflation rate recorded last year.
Standard Bank was the most profitable with a net result/share capital ratio of 32.8 percent, followed by the country’s largest bank, Banco Internacional de Moçambique (BIM), with 25 percent, the KPMG survey reveals.
In terms of net results, BIM was first-placed with meticais 343.577 billion. Of Mozambique’s nine commercial banks, only two of the smaller institutions, Banco Mercantil e de Investimento (BMI) and Banco Internacional de Comercio (BIC) presented negative results in 2005.
Deposits grew by 30 percent in 2005 to reach a total of meticais 41.588 billion, with KPMG’s survey identifying a 22 percent expansion in currency in circulation and depreciation of the metical against the dollar and other main currencies as the reasons behind this increase.
BIM maintained its position as leader of Mozambique’s banking sector by a large margin with assets of meticais 20.097 billion, almost twice as much as its nearest rival, BCI, with meticais 11.001 billion.
Additionally, BIM held deposits of meticais 17.717 billion, more than double the meticais 8.739 billion of BCI.
Furthermore, BIM granted nearly as much credit as the other eight private banks in total – with loans from the bank in 2005 reaching meticais 8.837 billion compared to BCI’s meticais 5.577 billion and the meticais 1.176 billion credits conceded by Standard Bank.
KPMG’s report also shows that the quality of loans has improved substantially after a major effort by the banking sector to recover bad debts and to wipe out irrecoverable debts.
The proportion of bad debt in Mozambique’s banking system dropped from 6.06 percent of total credit in 2004 to just 3.03 percent in 2005.
The apparently healthy growth of the financial system has only occurred in Mozambique’s main urban areas, as rural bank branches are practically non-existent.
The total number of branches only increased from 193 to 197, still significantly less than the 249 branches that existed in 1995, according to figures from Mozambique’s central bank.
But a significant increase in ATM machines occurred in 2005, with 344 of these being operational – mostly belonging to BIM, compared to the 292 in the previous year.
The KPMG survey reveals that Mozambique’s most efficient bank in 2005 was Banco de Desenvolvimento e Comercio (BDC) with an efficiency ratio of 55.89 percent from its total five branches and 68 employees. (macauhub)