Angolan banking sector’s credit portfolio deteriorates

23 January 2014

The credit portfolio of most of the Angolan banking sector “has been deteriorating” the chief executive of Angolan bank Banco Angolano de Investimentos (BAI) said Wednesday in Luanda.

Commenting that the bank had received its first credit rating from Moody’s on Tuesday, Luís Filipe Lélis said that in BAI’s case the defaulted credit portfolio stood at 7 percent.

Cited by Portuguese news agency Lusa, Lélis said that defaulted loans were one of the problems facing Angola’s banks, particularly in the last two years, but added that he did not agree with Moody’s rating.

“We don’t agree because you have to understand how the rating is done (…) The credit portfolio of most of the banks, in the last two years, has been deteriorating, as a result of the macroeconomic context, but we are very optimistic about what will happen in 2014 and in the coming years,” he said.

BAI’s chief executive noted that the bank currently has more than half a million customers and 130 branches and that amongst its targets for 2014 is maintaining the annual growth achieved in the last two years, which means attracting 24,000 new customers.

On Tuesday Banco Angolano de Investimentos (BAI) was rated “B1” by Moody’s, making it the first Angolan bank to be rated by a credit rating agency.

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. (macauhub)