Angola will need US$2 billion to capitalise two public banks

10 March 2020

The capitalisation of Angolan banks Banco de Poupança e Crédito and Banco Económico and the purchase of 25% of the shares representing the share capital of Unitel will require the Angolan State to pay out US$3 billion, the Secretary of State for Finance and the Treasury , Osvaldo João, announced on Monday in Luanda.

Angolan state oil company Sonangol recently agreed to pay US$1 billion to Africatel Holdings B.V., an indirect subsidiary of Brazilian telecommunications group Oi, to acquire all the shares held by Portugal’s PT Ventures SGPS on Angola’s main telecommunications company.

João also said that the funds needed to capitalise those three companies may be covered by loans or through the issuance of public debt securities.

Quoted by the Angop news agency, the secretary of state said that Banco de Poupança e Crédito would once again benefit from a capital injection, this time through treasury bonds handed over to Recredit, an institution that was set up to recover bad debt in the public banking sector.

“Recredit was capitalised, long ago, with securities in the amount of approximately 440 billion kwanzas (approximately US$885 million at current prices),” said João.

These Treasury bonds will now be delivered by Recredit to Banco de Poupança e Crédito, in exchange for the debt held by this institution, currently estimated at 950 billion kwanzas (US$1.912 billion).

“In practice,” he said, the government’s aim is to clean up the BPC of its non-performing loans and transform the bank into a “good institution,” leaving the most difficult part, the recovery of outstanding loans, to Recredit.

The BPC, which also needs capital of around 1.08 trillion kwanzas (US$2.2 billion), between 2015 and 2018 benefitted from capital injections totalling 500 billion kwanzas (US$1 billion), of which more than 200 billion kwanzas were in Treasury securities with a maturity of 24 years and a coupon of 5.0%. (macauhub)