Mozambican shareholders still trying to recover Moza Bank

Login

Register

http://www.clubofmozambique.com/

Mozambican shareholders still trying to recover Moza Bank

6:51 CAT | 26 May 2017

The majority shareholder in the troubled Moza Bank, Moçambique Capitais (MC), is trying to regain control of the bank and on Tuesday submitted a proposal to recapitalise it, reports Friday’s issue of the independent weekly “Savana”.

Moza Bank was founded in 2008 and rose to become the fourth largest commercial bank in the country. It held 8.9 per cent of the assets in the Mozambican banking market, and 7.6 per cent of all deposits. 51 per cent of the Moza Bank shares were owned by MC, which is a grouping of about 400 small Mozambican investors.

The foreign investor was initially the Portuguese Banco Espirito Santo (BES). But BES in Portugal was seriously mismanaged, and in 2014 it had to be bailed out by the Portuguese central bank. Its healthy assets (including the 49 per cent holding in Moza Bank) were spun off into a new entity, Novo Banco. But it seems that Novo Banco was in no condition to inject new funds into Moza Banco.

In September 2016, the Bank of Mozambique intervened in Moza Bank because it had run into a liquidity crisis which threatened its ability to meet its obligations to clients. The central bank suspended the Moza board, and imposed a new provisional board of directors.

An injection of funds from the central bank ensured that Moza Bank could continue trading – and it has even continued its expansion, opening new branches in various parts of the country.

The Bank of Mozambique made clear that Moza would be handed back to its shareholders, if they could recapitalise it. That would require raising 8.17 billion meticais (137.3 million US dollars, at current exchange rates). But MC and Novo Banco missed the central bank’s deadline of 23 March for recapitalisation.

If the original shareholders cannot recapitalise Moza, then it will be sold off. According to “Savana”, the central bank has now received three bids for Moza. These are from Barclays Bank, from Societe Generale of France, and from the African Bank of Morocco, part of the Moroccan BMCE banking group. The proposal from MC joins these bids.

The full details of the MC bid are not yet known, but “Savana” says MC is now in association with “a European fund with successful experiences in banks of two African counties”. MC believes that this new, and so far unnamed, partner has the financial muscle to pay back the Bank of Mozambique for the money injected into Moza since last September.

Novo Banco has not joined MC in this new proposal – nonetheless the Portuguese bank has expressed an interest in retaining a shareholding in Moza.

MC believes that its proposal will allow Moza ro remain in one piece and to keep all its staff. The Bank of Mozambique has yet to comment on the bids.