Mozambique: Most banks have non-performing loan ratios above guideline – central bank

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Mozambique: Most banks have non-performing loan ratios above guideline – central bank

2:21 CAT | 22 Nov 2023

File photo: TVM

Banco Nacional de Investimento (BNI) and Moza Banco were the two Mozambican banks with the highest non-performing loan ratios in the third quarter, but most remain above the 5% recommended by the central bank.

According to the report on Prudential and Economic-Financial Indicators released on Tuesday by the Bank of Mozambique, Banco Nacional de Investimento (BNI) – which is on the central bank’s list of institutions with fewer than 1,000 clients – closed the third quarter of this year with a non-performing loan (NPL) ratio of 43.79% of total loans (60.45% in the previous quarter) and an NPL coverage ratio of 71.43%.

Among the 15 or so commercial banks on the central bank’s list is Moza Banco, the country’s fifth largest, rescued in 2016 after the collapse of Portuguese shareholder BES and currently 3.54% owned by Portugal’s Novo Banco, with an NPL ratio of 23.92% (26.53% in the previous quarter), but for a coverage ratio of 94.75%.

From the list released by the central bank, based on data provided by the financial institutions themselves, only First Capital Bank (FCB), United Bank for Africa (UBA) and Standard Bank have an NPL ratio lower than recommended, at 0.59%, 0.83% and 2.59% respectively.

The governor of the Bank of Mozambique, Rogério Lucas Zandamela, said this month that the national banking sector is “solid and well capitalised”, but warned that non-performing loans remain at high levels.

“The ratio of non-performing loans remains at relatively high levels,” he described, pointing out that it stood at 9.1% of the total in September, compared to 9.3% in the same month last year.

“The national banking sector remains solid and well capitalised, with the solvency ratio standing at 24.0% in September of this year, corresponding to 12.0 percentage points above the regulatory minimum,” said Zandamela, at the opening of the central bank’s 48th consultative council, in the city of Inhambane, on November 1.

According to data from the central bank, Mozambique has 15 commercial banks and 12 microbanks, as well as credit cooperatives and savings and credit organisations, among others.

Source: Lusa