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Maputo city: The Mozambique banking sector

2015/07/26

The Mozambique banking sector, which has high increase and good business prospects arising from foreign investment in exploration of natural resources, is attracting the attention of major international banks, according to Eaglestone Securities.

Next the acquisition of Banco Terra by Portugal’s Montepio Geral (44.5 %) and South Africa’s Nedbank (36.6 %), Togo’s Ecobank acquired Banco ProCredit last June and attention has presently focused on the Standard Chartered Bank’s plans and the sale of a 49 % stake in Moza Banco.

In a recent statement on the Mozambican banking sector, Eaglestone Securities expects the sector “will remain on the radar of local and foreign investors, particularly considering the huge potential offered by the natural gas and coal sectors.”

Recently, French bank Société Générale acquired a stake in The Mauritius Commercial Bank Moçambique, as part of its strategy for increase in Africa, where it operates in 18 nations.

The sale of the 49 % stake that Portugal’s Novo Banco owns in Moza Banco is as well underway, with various interested investors, but which will have to rely on the endorsement of Moçambique Capitais, which holds the remaining 51 %.

The interest of the Atlas Mara investment company has by presently been reported. It was founded by the former chief executive of Barclays, Robert Diamond, to purchase the shares owned by Novo Banco.

According to Eaglestone, Moza Banco, along with Banco Ùnico, stands out for its “impressive increase rates” and the trend is for them to gain additional market share someday from their competitors.

Currently, there are 18 banks operating in Mozambique, but 90 % of assets, loans and deposits are held by the six major banks, all most all of them controlled by Portuguese and South African investors.

Last year, the profit of the six major banks increased once again, with a “robust operating performance” than offset the increase in surcharges and taxes, said Eaglestone.

With the economy growing 7.4 %, it added, financial services have a prominent role, with increase in operations and increased revenues.

“In general, it can be said that the local banking sector has improved both in its efficiency and profitability in 2014 compared to the previous year,” said the financial consultancy’s analysts.

The investment portfolio of banks continued to expand at an accelerated rate, with assets, loans and deposits all recording increase of over 20 % last year.

Despite a deterioration of investment quality ratios, these are comfortable levels and the level of capitalisation of most banks is considered favourable.

In terms of the six major banks (Millennium BIM, BCI, Standard Bank, Barclays, Moza Banco and Banco Único), loans grew 27 %, loans in local currency increased by 31 % and deposits 20 %. Due to good operating performance the profits of the six major banks rose 29 %.

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