Angolan bank Banco Angolano de Investimentos (BAI) Tuesday was rated “B1” by Moody’s, making it the first Angolan bank to be rated by a credit rating agency.
As well as the B1 rating, which indicates the risk associated to any debt issued by the bank as “highly speculative”, BAI’s deposits were also rated “Ba3/Not-Prime”.
In a statement Moody’s said that the ratings reflected the bank’s good position in Angola, appropriate provisions to absorb losses and a high probability of systemic support from the government if needed, but also the poor quality of credit and its high cost.
Noting that the outlook for BAI was stable, Moody’s noted the growth in the number of BAI branches across the country and the beneficial effect of growth of the Angolan economy.
To improve its rating the agency recommended that BAI boost its risk management capacity and noted that it believed the bank would benefit from a stringer legal and regulatory framework. (macauhub)