Mozambique: Bank, insurance finance chiefs worried about red tape, scrutiny

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Mozambique: Bank, insurance finance chiefs worried about red tape, scrutiny

11:15 CAT | 25 Jan 2024

File photo: Lusa

A study by consultancy firm EY concluded that 75% of the financial directors of banks and insurance companies operating in Mozambique point to “concern about the increase in regulatory complexity and supervisory scrutiny”.

According to the study “CFO Survey Mozambique 2024”, presented on Wednesday in Maputo, the “impact of volatility” in the financial markets (67%), the “fast pace” of change brought about by technology (46%), and “ESG” factors, environmental, social and corporate governance indicators (33%), are other major concerns of the CFOs of banks, microbanks, cooperatives and insurance companies surveyed.

This is a study aimed at leaders and employees in the finance function of Mozambique’s banking and insurance financial institutions, with the aim of gathering their views on current and future challenges, particularly with regard to their strategy, technological capacity and team skills.

Among other conclusions, 60% of the respondents to the EY study admitted that they plan to invest in the future in the implementation of technological accelerators and in the quality of information systems, but 69% indicated plans to reduce investment in the operating model in order to “achieve short-term financial results”.

In addition, 67% foresee “significant” changes in the structure of the Finance Function and 87% identify the team’s knowledge of sustainable finance as inadequate.

The questionnaire was carried out anonymously from August 2023 to October 2023, with the participation of directors, managers and leaders of the financial area of 22 Mozambican banks and 15 insurance companies.

The report recalls that a total of 32 credit institutions operated in Mozambique in 2021, with total assets of 814.4 billion meticais ( €11.7 billion) and profits of 24.5 billion meticais ( €352 million). The following year, the total number of these institutions fell to 31, but total assets grew to 856.2 billion meticais ( €12.3 billion) and profits to 28.5 billion meticais ( €409.6 million).

In the insurance sector, there were 21 insurers operating in Mozambique in 2021, with gross premiums written totalling 20,229 million meticais ( €209.7 million) and a profit of 174.3 million meticais ( €2.5 million). A year later, the total number of insurers fell to 16, in life, non-life and mixed insurance, but gross premiums written grew to 21 billion meticais ( €301.8 million) and profit to almost 2,148 million meticais ( €30.8 million).

Source: Lusa