Mozambique: Millennium BIM bolsters reserves, no dividend from 2024

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Mozambique: Millennium BIM bolsters reserves, no dividend from 2024

9:59 CAT | 16 May 2025

File photo: MzNews

The management of Millennium BIM Mozambique, a bank belonging to the Portuguese group BCP, has decided not to distribute dividends to shareholders from 2024 profits, applying them instead to strengthening reserves, due to recent decisions on Mozambique’s sovereign debt rating.

According to data from the report and accounts, the bank’s profits, one of the two largest in the country, fell by more than half in 2024 to 3.309 billion meticais (€46 million), a reduction of 54% compared to the net result for the 2023 financial year, when it reached 7. 211 million meticais (€100.4 million) — an increase of 8.2% in one year — “essentially explained by increases in impairments and provisions”.

Initially, the bank’s management proposed distributing 30% of 2024 profits in dividends to shareholders, totalling 992.6 million meticais (€13.8 million), with the remainder allocated to reserves. However, in an addendum to the report and accounts, reference is made to the management’s decision, approved by the general meeting on 31 March, “not to distribute dividends to shareholders”.

The proposal, according to the addendum, was based on the fact that, days before the general meeting, Standard & Poor’s (S&P) had “announced a new downgrade of Mozambique’s sovereign debt rating from CCC- to SD (Selective Default)” due to the exchange of domestically issued debt.

“Considering the impact of this measure on the bank’s results, capital and solvency ratio, the board of directors proposed not to distribute dividends to strengthen the capital structure and prepare the balance sheet for possible impacts,” reads the addendum, which also refers to the application of 15% of the net results for the 2024 financial year to legal reserves and the remaining 85% to free reserves.

In its report and accounts, BIM emphasises that the solvency ratio increased in 2024 due to the increase in own funds, standing at 36.7%, “considerably above the regulatory limit of 12%, reflecting the bank’s resilience and financial strength”.

According to the document, the bank’s total assets grew by 6.1% to 202 billion meticais (€2.812 billion), while customer resources (deposits) increased by 7.1% to 156.8 billion meticais (€2.183 billion).

Credit impairment, net of recoveries, stood at 178 million meticais (€2.5 million), up 110.4% on the previous year, resulting from the significant recovery of loans in 2023, with an impact on the reversal of impairments, according to the institution.

Millennium BIM’s equity fell 6.3% to 34.6 billion meticais (€481.8 million), “reflecting the drop in profit for the year and the distribution of dividends on the previous year’s results,” the management said.

Net loans to customers increased 2.2% to 45.16 billion meticais (€629 million). Of the total credit granted by the bank, 2.80% was overdue for more than 90 days, a slight reduction compared to 2.87% in 2023, and far from the 7.78% and 7.96% in 2022 and 2021, respectively.

Millennium BIM closed 2024 with a 6.75% growth in total customers, now more than 2.1 million nationwide. The number of branches remained at 195, and the number of employees increased by almost 2% to 2,625.

BIM began operations in October 1995 due to a strategic partnership between Banco Comercial Português (Millennium BCP) and the Mozambican State.

As of 31 December 2024, it had a share capital of 4.5 billion meticais (€62.6 million), mostly held by BCP África (Millennium BCP group), with a 66.69% stake, followed by the State of Mozambique (17.12%), the Mozambican National Social Security Institute (4.95%) and Empresa Moçambicana de Seguros (4.15%), among other shareholders.

PVJ/ADB // ADB.

Source: Lusa