CIP questions the absence of Competition Authority in Mozambique
Mozambican bank Millennium Bim, one of the country’s main banks, posted a net profit of 5.5 billion meticais (74 million Euros) in 2017, an annual growth of 23.6 percent, according to a bank report seen by Lusa.
The macroeconomic environment “remained challenging in the year 2017”, the document’s assessment of the situation in Mozambique reads.
The bank highlights the “deceleration of the national gross domestic product to a historically low level that resulted from weak aggregate demand, influenced by restrictive monetary conditions and the decline in private investment”.
On the positive side, “in a favourable political context, there has been a substantial improvement in some economic indicators,” Millenium Bim notes.
Among them, it highlights “the stabilisation of the metical, the slowdown in domestic inflation and, consequently, the gradual reduction of benchmark interest rates in the interbank market”.
However, rates remain high (the prime benchmark rate is 24.5 percent), which meant that bank credit to the private sector in Mozambique fell 11 percent overall in relation to 2016.
Millenium Bim acknowledges that “the effects of the economic shocks” that the bank has faced since 2016 “implied the adoption of a conservative credit stance of the banking system that was reflected in the cooling of credit to the economy throughout 2017”.
“In this context, the Millennium bim continued to implement preventive measures aimed at ensuring strict monitoring of the credit portfolio and risk monitoring,” the report adds.
After years of growth, loans to customers fell 21.6 percent in 2017 compared to the previous year, standing at 61 billion meticais (812 million Euros).
The percentage of non-performing loans at Millenium Bim increased from 4.04 to 5.55 percent in 2017 and the cost of risk jumped from 188 to 262 basis points.
The estimated solvency ratio of 17.1 percent is “considerably above the regulatory limit of 8 percent” and, according to the bank, “reflects the resilience and financial strength of the institution”.
In other data, the bank increased total assets by 0.9 percent to around 135 billion meticais (1.8 billion Euros), with total customer resources rising 3.6 percent to 104 billion meticais ( 1.3 billion Euros).
The main shareholders of Millennium Bim are Portuguese BCP (66.6 percent of the capital) and the Mozambican state (17.2 percent of the capital).Source: Lusa