Ver Angola

Banking and Insurance

Bad debt rose 13 percent in 2021 and is worth a fifth of credit

NPLs in Angola rose 13.6 percent last year, rising from 18.41 percent to 20.26 percent in December last year, according to a 2021 report by the National Bank of Angola.


"Regarding non-performing loans at the end of 2021, this recorded an increase of 115.52 billion kwanzas, compared to the same period last year (13.64 percent); in fact, the default ratio in the banking sector went from 18.41 percent in December 2020 to 20.26 percent in December 2021", reads the 2021 Annual Report, released in Luanda.

According to the document, this 13.6 percent rise in credit that banks have not been able to collect for more than 90 days represents a new increase, since from 2019 to 2020, the ratio improved, from 32.46 percent to 18.41 percent.

The report on the activities of the Angolan financial regulator last year also shows that the banking sector almost tripled its profits last year, with an increase of almost 180 percent.

"At the end of 2021, the banking sector recorded positive results in the amount of 394.90 billion kwanzas, an increase of around 179.39 percent compared to the same period last year, mainly due to the increase in income from securities" , refers.

Where the outlook is not so positive for the 25 financial institutions operating in the country, it is in the internal control systems and requirements on good practices in the area of ​​corporate governance, which the National Bank of Angola says are still insufficient.

"There are shortcomings related to policies and processes for identifying and evaluating transactions with related parties and preventing conflicts of interest, fragility of protection processes to inhibit undue access to information systems, as well as in the implementation of recovery processes of disasters in the event of an incident", reads the report

The document states, however, that "in general, the banking sector continues to show a growing trend, in terms of formalizing the requirements of Corporate Governance, which shows the increase in the culture of good governance in institutions and the mitigation of inherent risks".

Regarding internal control systems, despite the "notable growth in the level of compliance with the requirements set out in the regulations in force, compared to the same period in the previous year, there are banks where there are still insufficiencies of trained human resources to face the regulatory attributions of the control functions , namely risk management, compliance and internal audit".

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