Deloitte & Touche to liquidate ‘O Nosso Banco’ – AIM report

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Deloitte & Touche to liquidate ‘O Nosso Banco’ – AIM report

6:11 CAT | 15 Nov 2016

The Bank of Mozambique has selected the British consultancy and auditing company Deloitte & Touche to liquidate the failed commercial bank, “O Nosso Banco” (“Our Bank”), according to a report in Tuesday’s issue of the independent newssheet “Mediafax”.

The central bank ordered the dissolution and liquidation of Nosso Banco on Friday evening. According to a statement from the Bank of Mozambique, Nosso Banco had an “unsustainable economic and financial structure” and was suffering from “serious liquidity and management problems”.

Cited by “Mediafax”, a director of the central bank, Alberto Bila, said “the company selected is Deloitte & Touche. Now we’re working on the details, but the process has begun”.

Deloitte will have to assess the bank’s assets and liabilities and pay off creditors. In the unlikely event that anything is left over, the shareholders might be able to recover some of their investment.

The main shareholders are public bodies – the National Social Security Institute (INSS) held 77.2 per cent of the shares in Nosso Banco, and the electricity company EDM held 16.13 per cent.

The bank was created in 1999 as the Merchant and Investment Bank (BMI) and changed its name to Nosso Banco in 2015. It never became a significant player in the Mozambican financial market, and had just three branches, all of them in Maputo.

Plans to recapitalise the bank were not fulfilled. In 2014, the shareholders agreed to sink a further 30 million US dollars into the bank over three years. 12 million dollars were raised in 2014, most of which must have come from the INSS, but in 2015 the shareholders only injected 13 per cent of the eight million dollars expected. This year the shareholders were supposed to inject a further 10 million dollars.

The failure to recapitalize led the bank into a critical situation. Its accounts for 2015 showed that it ended the year with accumulated losses of 215.3 million meticais (2.8 million US dollars, at current exchange rates) – a large sum for such a small bank.

The bank’s auditors warned that these losses could create “uncertainties and doubts about the continuity of the bank’s operations”.

On Monday all the branches and ATMs of Nosso Banco were closed. The branch windows displayed the statement from the Deposit Guarantee Fund (FGD), operated by the Bank of Mozambique, announcing that depositors will be reimbursed, but only up to a maximum of 20,000 meticais.

Some clients went to the bank headquarters to protest but found it closed. One of them, interviewed by the independent daily ‘O Pais’, said he stood to lose more than 150,000 meticais.

The FGD announced on Monday that the reimbursement will take place at two of the branches of Nosso Banco from 21 November to 9 February. Although, in principle, these branches will be open for the reimbursements every working day, the FGC promises that it will contact each of the depositors giving then the date, place and form in which they will receive their money.

Only individuals resident in Mozambique who held Nosso Banco accounts in meticais will be reimbursed. Thus companies and other institutions will not be reimbursed, and nor will anyone who held money in a foreign currency account.

Source: AIM