Mozambique: Most banks non-performing loans above 5%

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Mozambique: Most banks non-performing loans above 5%

11:06 CAT | 24 Aug 2023

FILE - For illustration purposes only. In its 2022 financial stability report, released last June, the Bank of Mozambique said that the banking sector "remained solid and resilient" in that period, "with growth in results and adequate levels of capitalisation and liquidity". [File photo: Lusa]

Banco Nacional de Investimento (BNI) and Moza Banco were the two Mozambican banks with the highest non-performing loan ratios in the second quarter, but most are above the 5% recommended by the central bank. According to the report on Prudential and Economic-Financial Indicators released on Wednesday by the central bank, the Bank of Mozambique, Banco Nacional de Investimento (BNI) – which is on the central bank’s list of institutions with less than a thousand clients – closed the second quarter of this year with a non-performing loan (NPL) ratio of 60.45% of total loans (48.44% in the previous quarter) and an NPL coverage ratio of 13.03%.

Among the 15 or so commercial banks listed by the central bank is Moza Banco, the country’s fifth largest bank, intervened in 2016 after the collapse of Portuguese shareholder BES and is currently 3.54% owned by Novo Banco, with an NPL ratio of 26.53% (20.12% in the previous quarter) but a coverage ratio of 87.29%.

In its 2022 financial stability report, released last June, the Bank of Mozambique said that the banking sector “remained solid and resilient” in that period, “with growth in results and adequate levels of capitalisation and liquidity”.

“Meanwhile, with regard to asset quality, the non-performing loan ratio stood at 8.97%, above the acceptable benchmark of 5.0%,” it said.
From the list published by the central bank, only First Capital Bank (FCB), Ecobank and Standard Bank have an NPL ratio lower than recommended, respectively 0.43% (coverage ratio of 55.96%), 0.66% (coverage ratio of 15.29%) and 2.40% (coverage ratio of 57.55%).

The country’s two largest banks, Millennium BIM (Banco Internacional de Moçambique, 66.69% owned by Portugal’s BCP) and Banco Comercial e de Investimento (BCI, led by Portugal’s Caixa Geral de Depósitos and BPI), had NPL ratios of 11.19% and 13.13% respectively in the second quarter, and coverage ratios for non-performing loans of 96.37% and 41.52%.

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

Source: Lusa