Mozambique spent €1M a day on car imports in 2023
Photo: O País
In a year marked by great challenges, Absa Bank Mozambique improved its main financial and performance indicators and, at the same time, more than doubled its net income for the year.
On Tuesday, April 5th, Absa Bank announced its Financial Results, in the presence of its Chief Executive Officer, Rui Barros and Executive Director Pedro Carvalho, with banking income growing by 20.1% to 5.7 billion meticais, driven both by net interest income, which grew 16.6%, as well as by income from fees and commissions, which grew by 28.6% in the year.
CEO Rui Barros noted that, during the 2021 financial year, operating costs fell by 4.6%, closing the year at 3.9 billion meticais, as a result of a series of successful measures implemented to achieve great efficiencies and continue to grow the business.
Net income stood at 633 million meticais, an increase of 115.1% over the previous year which results from the combination of revenue growth and cost reduction, as mentioned above, together with a prudent risk management policy which, given the circumstances imposed by the Covid-19 pandemic and the situation of insecurity in Cabo Delgado, whose most visible economic impact was the interruption of operations of the Area 1 LNG project in the region, resulted in a higher than the previous year level of credit impairments.
The banking institution justifies this profit “with the conclusion of a cost control and containment process, through the implementation of several efficiency programs, and the increase in revenue generation capacity, through an integrated strategy and multi-annual growth of the business, which, despite the current challenging context, resulted in a very favourable evolution compared to the previous year”, Barros said.
Absa Mozambique also reached a credit share of 9.4% compared to the previous 8.9% recorded in 2020, growth driven mainly by the Corporate segment.
There was an even more significant increase of 43% in the deposit portfolio, an evolution determined by the growth of deposits in all segments, with greater emphasis on Corporate. This represented an increase in the market share in deposits from the 6 .4% of the previous year to 9.1% by the end of 2021.
According to Rui Barros, “this growth in deposits well above the growth of the loan portfolio led to a significant reduction in our 2021 transformation ratio, which stands at 47.6%”. He also added that “the financial and operational performance in 2021, shows the radiography of a resilient bank that has improved its 2021 activity in the main financial indicators”.
In short, Absa Mozambique ended the year with a stronger balance sheet, a more solid capital base and a more robust liquidity position, while improving operational and financial performance and more than doubling net income for the year.
Absa Bank Mozambique continued the process of digital transformation, adjusting the service model and increasing its efficiency in a sustained manner, seeking to provide the best solutions for the needs of customers. In this context, there was notable progress in the adoption of digital, with an increase of 26% in individual customers and 45% in Corporate.
As a responsible bank, guided by the principles of sustainability, Absa has strengthened its role in society, having been involved, in 2021, in initiatives to promote culture, arts, sports, public health, youth development and support for victims of natural and social disasters, thus benefiting more than 50,000 people.
Despite the adversities, the Bank remained committed to finding solutions to boost the economy, having signed a Credit Line with the Economic Rehabilitation Support Fund (FARE), the Post Cyclone Idai Reconstruction Office (GREPOC) and the World Bank for the recovery of the private sector (SMEs) in the provinces affected by Cyclones Idai and Kenneth. And in the course of the year, it established an agreement with the US Financial Development Corporation (DFC) to support agribusiness and other value chains with a shared risk regime.
As a reference agent for social sustainability, the Bank continued to focus on integrating environmental concerns into its way of acting, and it was in this sense that it became a signatory to the United Nations Global Compact. This step demonstrates Absa Mozambique’s engagement and high level of commitment to society, seeking to align its business objectives with economic and social development models that foster prosperity, valuing people, creating jobs, and respecting the environment and biodiversity.
During 2021, Rui Barros was considered by Global Banking Finance the Banking CEO of the Year and Absa the Best Digital Bank. Additionally, the Bank was considered by EMEA Finance as the Best Treasury and Cash Management Provider in Africa and Best Bank for Payment Services in Africa and also by the Mozambique Stock Exchange as the Best Financial Intermediary in the Capital Market.
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