Commercial banks started 2023 with results more than 13% below the previous level but turned the situation around, while at the same time adapting operations to customer needs
Banco Internacional de Crédito (BIC) is the financial institution that granted the most loans in 2023, with a total of 727.8 billion kwanzas, as shown in its report for the first half of the current year. Next is Banco de Fomento de Angola (BFA), which lent 496.7 billion kwanzas, while Banco Angolano de Investimentos (BAI) lent 445.8 billion kwanzas. On the other hand, the Bank of Commerce and Industry (BCI) granted a total of 75.6 million kwanzas in credit to customers, while Banco Económico granted the equivalent of 51 million kwanzas, as shown by data from these institutions.
The credit champion, BIC, has more than 77% of its credit portfolio dedicated to financing and just over 7% dedicated to housing. BIC remains firmly in the lead in credit granting, a position it occupied in 2022, where it was followed from afar by Atlântico and BFA, following in 2021 it was also the leader in the segment, but this time followed by Atlântico and BFA. BAI.
Deloitte’s Banking in Analysis showed that at the beginning of the year, total net credit granted by banks amounted to 3.4 billion kwanzas in 2022, which corresponded to an increase of around 11% compared to 2021. In terms of deposits, BAI remains in the lead, with 2.6 billion kwanzas, followed by BFA which has a deposit of 2 billion kwanzas, with Banco Atlântico in third place with deposits in the order of 1.3 billion kwanzas Despite the many prone complaints regarding supposed discounts and high costs for account maintenance, Atlântico is in the top 3 when it comes to deposits.
The sector’s own funds ratio increased by 4.2 percentage points compared to 2022, equivalent to 28.4%, thus remaining above the minimum regulatory value with a safety margin, which demonstrates the sector’s resilience . The improvement in this ratio also resulted from the increase in the share capital of some banks, with emphasis on Banco de Poupança e Crédito (BPC), Banco Caixa Geral de Angola (BC-GA), Banco de Desenvolvimento de Angola (BDA), Banco de International Business (BNI) and BCI, reflecting a positive impact on regulatory own funds.
BAI and BFA the largest in assets
The sector study indicated that the total value of commercial banks’ assets in 2022 corresponds to 17 billion kwanzas at the end of the 2022 financial year, corresponding to a growth of approximately 4.3%, influenced by the improvement in the macro environment. national economic economy with a GDP growth of 3% and a reduction in the inflation rate in 2022. A performance that led to the Net Results of the national banking sector at the end of 2022, standing at 366.6 billion kwanzas, substantiating a reduction of 13.6% compared to 2021.
A reduction that at the time of the study was explained by the worsening of BPC’s losses and the variation in impairments in 2022, which had grown by 306 billion compared to 2021, and here, as the study also clarified, if BE and BPC, the sector’s results had registered a reduction of less than 4%. Now in 2023, BFA bank has recorded assets of 3 billion kwanzas, according to its report and accounts for the first half of the year. BAI, which does not publish a semi-annual report, only publishing a quarterly balance sheet, has assets of 4 billion kwanzas.
Banco Económico has assets of 1.4 billion kwanzas and BCI bank, which at the end of the first half of the current year, had assets of 781 million kwanzas. Even in terms of assets, one can see the practical difference between the banks, with BAI being by far the institution with the largest assets, followed by BFA, as it was in the year that is now underway.
Non-customer focused banking
According to the sector study, there are already national banks taking the first steps towards having a completely customer-centric operation. Commercial banks in Angola face different challenges and opportunities in evolving their operations to “customer centric”. There is, however, a very positive dynamic in terms of the adoption of tools that will tend to accelerate this process in the national market. Note that around 30% of the Angolan population has access to the Internet and uses smartphones, which is significant, since if we go back five years, only 20% used them.
This is how projections point to around 55% to 60% in 2025. But still, commercial banks face internal resistance in adopting a customer-centric approach, especially in more traditional and hierarchical organizational cultures. This adaptation entails costs, requires time and effort, including the need to involve and train teams for such an endeavor. An advance that is ultimately worth it as it can pave the way for improving the customer experience.
BY: Ladislau Francisco