Portuguese-speaking banking sector ends 2007 on a high

3 December 2007

Macau, China, 3 Dec – The banking sector in countries with Portuguese as an official language is entering the final stretch of 2007 on a high, with acquisitions, new banks, expansion and cooperation projects, opening up capital and many large-scale operations.

Stanley Ho, Macau’s gaming magnate, is one of the main protagonists, after buying a bank in Guinea Bissau, and, at the end of November, setting up a bank in Mozambique, a country in which he had already tried several approaches.

Ho is entering the market in good company: According to Portuguese news agency Lusa, no less than 150 investors, most of which are Mozambican individuals and companies, make up the cpital of MOçambique Capitais, which will be the majority shareholder of Moza Banco with 51 percent, and the remaining 49 percent is owned by Ho’s and Jorge Ferro Ribeiro’s Geocapital.

Ho placed the former governor of the Bank of Mozambique, Prakash Ratilal, as the chairman of Moza Banco, who is considered a sector “heavweight.”

Moza Banco, which will focus on corporate investment and services and wealth management, will open its first branch in 2008.

Ho thus ensures Geocapital’s presence in a market with significant growth, in which last year the profit of the nine Mozambican retail banks rose two and a half fold, according to a report recently published by the Mozambican Bank Association and KPMG.

BIM remains the largest Mozambican retail bank, with assets of 24.7 billion meticais (a fifth more than in the previous year), which compares with the 7.67 billion meticais of assets at BCI-Fomento, which increased profit by 259 percent in 2006.

Geocapital, which has interests in the Angolan financial sector, was close to completing the acquisition of Banco de Desenvolvimento e Comércio (BDC) around a year ago, with the Mozambican press reporting that Almeida Santos, as the company’s lawyer had contacted Mozambican president, Armando Guebuza in order to get speedy approval for the deal by the Bank of Mozambique.

After negotiations came to an end and Geocapital was ruled out, Portugal’s Montepio Geral acquired the stake, ahead of South Africa’s First National Bank.

In Guinea Bissau the deal between Geocapital and Montepio Geral went ahead, with the acquisition of 60 percent of Banco da África Ocidental (BAO), om which Ho and Ferro Robeiro will have Guinean businessman Carlso Domingues Gomes amongst their associates.

Despite the small size of the Guinean banking market, the BAO has the added potential of being authorized to open branches in member countries of the West African Economic and Monetary Union (UEMOA) – Benin, Burkina Faso, the Invory Coast, Mali, Niger, Senegal and Togo.

Ho has also moved into the Angolan market through Banco Angolano de Negócios e Comércio (BANC), an old and apparently inactive project, according to the Africa Monitor newsletter, due to a license for gaming exploration being refused for a the new “Rosa Linda” five star hotel, a project whose first stone was set in June.

At BANC, Ho’s company and other investors had influential Angolan personalities such as José Pedro de Morais, and the current Finance Minister and Kundi Paihama as partners.

This financial institution was focused on the Chinese community and private sector investments, through loans and shareholdings.

Portugal’s largest bank, Caixa Geral de Depósitos (CGD), is on it way to increasing its position in Sao Tome and Principe.

According to a recent report in the Africa Monitor newsletter, the state-owned Portuguese group is interested in becoming the only shareholder of Banco Internacional de Sao Tome and Principe (BISTP), in which it has a 60 percent stake and the state has a 40 percent share, due to differences of opinion in management.

Meanwhile, CGD is set to start its activities in Angola, in partnership with the biggest Iberian bank, Santander, with definitive authorization expected from the central bank in the next few weeks, after a delay of over a year, due to the reorganization of its shareholdings.

In Cape Verde financial activities, namely offshore, have attracted significant investments, but amongst the eight markets, it is Angola that appears to be the most dynamic.

BIC Portugal bank owned by businessman Américo Amorim and Isabel dos Santos, daughter of the Angolan president, traveled in the opposite direction, from Angola to Portugal.

This bank, which is currently one of the main competitors of Banco Fomento in Angola, will focus on wealth management and services to companies and it is hoped to become a bridge for new investments in Portugal, after those made by Sonangol, which recently bought a five percent share in Portugal’s largest private bank, Millenium BCP, and became a shareholder of Portuguese oil company Galp Energia.

Last week, Voice of América reported that Sonangol aimed to take a stake in Millenium Angola and Fomento, at a time when it is already a shareholder in Banco BAI and in another smaller bank.

European banking giant Fortis ahs already taken its first step into the Angolan market by partnering Banco de Negócios Internacional (BNI) to provide banking services.

Chinese banks are also contributing significantly to the dynamism of the sector.

According to the Brazilian press, the Bank of China has requested authorization from the Brazilian banking regulator to start banking and brokerage operations.

China’s Eximbank, linked to the funding of large projects in Angola and Mozambique, recently presented a set of proposals to Portuguese-speaking countries to create a financial platform.

Setting up loans for large-scale projects, establishing joint financing for projects, particularly those that have significant influence on bilateral relations are some of the aims of the Chinese bank for the financial platform. (macauhub)