Angolan banking sector prefers public debt securities to client loans

21 March 2019

Government debt securities accounted for 34.01% of assets of commercial banks operating in Angola at the end of 2018, almost double the percentage registered in 2013 (18.73%) according to figures from the National Bank of Angola.

The same figures cited by Angolan newspaper Mercado also showed that credit to customers, which in 2013 had a 40.85% share of commercial bank assets, accounted for 25.93% at the end of 2018.

The figures, which were disclosed in a recent presentation by the central bank to members of the diplomatic corps accredited in Angola, also showed that the weight of public debt securities in bank assets has progressively increased since 2013 to 22.03% in 2014, 27.62% in 2015, 30.31% in 2016 and 34.01% in both 2017 and 2018.

The drop in oil prices and the consequent loss of revenue for the state meant that the government began to issue more and more domestic debt to finance itself from 2014/2015 with commercial banks the main subscribers.

At the same time, banks have also been providing less credit to the economy – a recurring complaint from businesspeople – with the weight of this indicator becoming progressively lower in the assets of the system.

Customer credit was worth 40.85% of assets at the end of 2013, in 2014 it rose slightly to 41.20%, but in the following years, it fell – to 38.05% in 2015, 31.57% in 2016, 30.77% in 2017 and 25.93% in 2018.

The assets of the Angolan banking system rose in the period from 6.5 trillion to around 13 trillion kwanzas. (Macauhub)