Bad debts in Angolan banking increased 8.8% in 2015, KPMG says

21 November 2016

Loans overdue for more than 90 days, or bad debt, to banks operating in Angola increased by 8.8% in 2015 year on year, and are the main factor of instability in the sector, according to the “Analysis of the Angolan Banking Sector” report, prepared and presented on Friday in Luanda by KPMG.

The document said that the Angolan banks have seen outstanding credit levels grow significantly since 2012, with KPMG estimating that “overdue loans have doubled since 2012, which corresponds to an annual growth of 26%.”

The KPMG survey covered a total of 27 banks operating in the Angolan market, representing almost all of the financial sector (93%) in the country and, despite the rise in overdue loans, the Angolan banking sector continues to provide credit, according to KPMG, with gross loans growing by over 9.5% in 2015.

The profitability of the sector, along with credit growth is another point where the Angolan banking sector has shown resilience, with net aggregate results growing 19.8%, due to the “exchange rate developments in 2015, by increasing amounts of income from the credit granted and progressive levels of operational efficiency,” the auditing company said.

The top five Angolan banks grew from a market share of 73% of total assets in 2013 to 69% at the end of last year, KPMG noted, and the same trend was seen, “in terms of loans and deposits.”

The BFA is the leading bank by deposits, the second by total assets and fifth by credit, and is the leader in terms of net income – 37.860 billion kwanzas.

By profits, Banco BIC comes immediately after the BFA, with 27.650 billion kwanzas in 2015, and is ranked fourth by assets and deposits, and takes third place by total credit. (macauhub)