Moza Banco was not liquidated and will be sold – Mozambique’s Central Bank

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Moza Banco was not liquidated and will be sold – Mozambique’s Central Bank

12:01 CAT | 24 Oct 2016

Folha de Maputo / File photo of a Moza Banco branch in Maputo, Mozambique

The Bank of Mozambique, which at the end of September announced the suspension of the board of directors and executive committee of Moza Banco to “protect the interests of depositors”, says the bank was not liquidated, but continues to function and will be prepared for sale.

Speaking at a press conference after a meeting of the central bank’s Monetary Policy Committee of the institution, Governor Rogerio Zandamela said: “The decision was for an intervention in order to prepare the bank for sale and, in this case, the law does not require the use of deposit funds for this, because the bank continues to exist. As such, it was not liquidated.”

The governor said that, when banks got into serious difficulties, “such as those faced by Moza”, one option was the immediate liquidation of the institution through the deposit guarantee fund.

“But given the nature of the bank and the importance of the system and the economy, we took a prudential and cautious decision that this would not be the best option,” Zandamela said, without advancing further details.

Announcing the September move, the Bank of Mozambique said: “The financial and prudential situation of Moza Banco SA has degraded unsustainably,” making it necessary to “strengthen the extraordinary measures of sanitation,” prescribed by law, in order “to protect the interests of depositors and other creditors” and safeguard “the normal functioning of the banking system”.

The Bank of Mozambique then appointed João Filipe Figueiredo president, along with a new board of directors with a mandate that “will last until the situation is normalized”.

The Bank of Mozambique’s banking supervision administrator Joana Matsombe said in early October that the interim administration of Moza Banco would be tasked with restoring financial stability in six months.

“The mission is to restore the financial stability of the bank. It is trying to clean up some loans that were not being charged. This process should not last more than six months,” Matsombe said.

The head of the Bank of Mozambique said that a restoration of the bank’s financial stability was aimed at prepare the institution for sale, since the “bank is good and its only problem was enough capital to restore solvency ratios not having been injected”.

In 2015, Moza Banco recorded a net profit of 81.7 million meticais (EUR1.1 million at current exchange rates), down from 153 million meticais (EUR2 million euros) in the previous year.

Founded in 2008, Moza is the fourth largest bank in the country, and is 50.9 percent owned by Moçambique Capitais and 49 percent by the Novo Banco.

In 2015, with 76,000 customers, a 7.2 percent market share in loans, 7.68 percent in deposits and 8.88 percent in assets, it underwent a rebranding exercise, retaining 800 workers and 59 business units across the country.

Source: Lusa