According to a note sent to Lusa, BAI's rating has deteriorated from B- to CCC, both below the investment recommendation level.
"Following the decline in the rating of Angola, Fitch downgraded BAI's rating to reflect the high risks of the country in which the bank operates, which has a major influence on the rating, its sensitivity to market risks and to risks significantly the bank's exposure to public finances ", reads the note.
According to Fitch Ratings, which is owned by the same owners as consultancy Fitch Solutions, "BAI's operating environment is weaker because it reflects pressure from the sovereign country where it operates, Angola, due to falling oil prices and the economic consequences pandemic, including currency depreciation ".
The authorities, acknowledge Fitch analysts, "have taken steps to support loans, including lowering rates and implementing a credit support program for small and medium-sized enterprises, but the Government's increasing reliance on the domestic debt market. it will also contribute to a departure from the private sector "that will lead to a contraction in credit to the private sector.
Earlier this month, Fitch Ratings dropped the opinion on the quality of Angola's sovereign credit to CCC, indicating that there is a real possibility of Financial Default ('default'), due to the significant increase in public debt and deterioration of public finances.
"The rating decline reflects the significant increase in public debt, the reduced flexibility of external financing, as evidenced by the sharp rise in debt interest, and the decreasing external liquidity," said Fitch Rating in the explanation of the rating action, which comes about six months from the last downward revision in March.
"The sustainability of public debt has worsened and weak public finances will inhibit authorities from significantly lowering the level of debt over the next two years," argued the analysts.
Experts predicted that by the end of this year the debt-to-gross domestic product (GDP) ratio would rise to 129 percent, representing “850 percent of government revenue, more than double the average for countries with a B rating. , with 356 percent, and is indicative of Angola's difficulties in increasing non-oil revenue ".
