BIG-Global Investment Bank opens Mozambican subsidiary in March

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BIG-Global Investment Bank opens Mozambican subsidiary in March

3:58 CAT | 15 Mar 2016

OJE (File) / Carlos Rodrigues

BIG-Global Investment Bank is opening a subsidiary in Mozambique this month, according to its recently published 2015 results, which show the bank has a 33 percent core tier 1 ratio, twice that of the largest banks in the Portuguese banking system but lower than the 2014 figure of 35 percent.

Bank chief Carlos Rodrigues explains the slight fall, saying that market conditions “were difficult from the first quarter and worsened as the year went on”. The net result of the institution closed at EUR74.5 million, compared with EUR82.5 million in 2014 and EUR58.6 million in 2013. Operating income reached EUR148.7 million.

Earnings per share were 48 cents in 2013, after a capital increase by incorporation of reserves last year. On a comparable basis and excluding the effect of the capital increase, earnings per share would be in 2015 of 72 cents versus 79 cents in the same period last year. Return on equity fell to 27.7 percent, compared with 35.2 percent, still one of the best among national banks. Book value per share was EUR1.77, or EUR2.66 on an equivalent basis to 2014 before incorporation of reserves. This compares with EUR2.51 in 2014.

The bank statement says: “The 2015 results when compared to the exceptional performance of 2014 reflect a decrease of revenues in treasury and investment activities, as a result of the high volatility conditions recorded in the 3rd and 4th quarters of 2015. They include a 11 percent growth in net commissions and a slight decrease in net interest income (minus 6 percent). The income not related to net interest income, which constitute the core of the specialized business of investment banking, where the bank operates, accounted for 84 percent of total income of the bank in 2015, compared to 85.2 percent in 2014 and in line with years above. Net interest income accounted for about 16 percent of total revenues in 2015, versus 14.8 percent in 2014, also in line with the average of previous years.”

The results were generated in Portugal and incorporate non-recurring expenses like the Oporto headquarters, while costs in Mozambique are already reflected in the consolidated 2015 accounts. Rodrigues says that 2015 ended with a series of events – the Portuguese elections, the Novo Banco bail-in bonds and the resolution of Banif, “with negative impact on investor confidence”.

Source: OJE