Angolan state bank uses courts to recover debt

7 January 2020

Angolan state bank Banco de Poupança e Crédito (BPC) is organising proceedings for legal recovery of debt state newspaper Jornal de Angola reported citing the bank.

The newspaper reported that the decision to go through a judicial process is based on the fact that the BPC had managed to recover just 47 billion kwanzas in 2019, or 4.2% of its debt portfolio of 1.118 trillion kwanzas (US$2.3 billion).

In a written response to the Asset Quality Assessment (AQA) process carried out by the Angolan National Bank from April to December last, the BPC said that, in starting legal proceedings, it has faced challenges related to contractual formalisation of loans and guarantees, which has contributed to the less favourable results of the assessment.

The bank said that of the debt recovered last year 841.1 million kwanzas were recovered due to Renascer, an operation focused on individuals, via which the BPC has intensified its credit restructuring activities through the renegotiation of the terms of the loans.

In 2018, the bank said, a total of 298.7 billion kwanzas in debt was sold to Recredit, equivalent to 26% of the credit portfolio, with the bank receiving in return 231.1 billion kwanzas in 24-year Treasury Bonds with a 5.00% per year coupon.

The capitalisation carried out through the issuance of treasury bonds, as well as the restructuring of the credit portfolio with securities, “ended up, in practice, not solving the problem of the insufficiency of capital and of the structural liquidity deficit, due to the fact that these securities have a market value “far below the nominal value and are not sufficiently liquid instruments.”

The BPC also announced the negotiation of the second credit package, which should end with passing on approximately 80% of outstanding debts to Recredit, as part of efforts to restructure the bank’s financial situation.

The shareholders of Banco de Poupança e Crédito (BPC) are the Angolan State, represented by the Ministry of Finance (75%), the National Institute of Social Security (15%) and the Social Security of the Angolan Armed Forces (10%). (macauhub)