More banks in Angola could have their licences revoked in a push to clean up the country’s financial sector with results of the asset quality review due out at the end of the month, central bank governor Jose Massano said on Monday.
The government is also planning to tap international capital markets again before year-end, Massano added.
Angola, Africa’s second-largest oil producer, was pushed into an economic crisis by the sharp tumble in oil prices in mid-2014, prompting Luanda to float its currency in early 2018, strike a deal with the International Monetary Fund last December and embark on a series of reforms.
Angola has 27 banks left after revoking two banking licences this year while results of a wider audit of its financial sector are due at the end of the month.
“We are working on improving the resilience of our financial sector – and if in building resilience some have to disappear, then ok – we are ready for this,” Massano told Reuters on the sidelines of the FT Africa summit in London, adding the central bank may have to close down more lenders.
He added that any commercial banks found to need more capital deposits would have until June 2020 to fix their buffers and could keep operating until then. Non-performing loans stood currently at around 30% of all lenders’ debt, Massano added.
President João Lourenço, who was elected in 2017 after 38 years of rule by José Eduardo dos Santos, has said he wants to revive the economy by opening up to foreign investment, privatising state assets and diversifying away from oil, which accounts for more than 90 percent of exports.
Massano also said preparations were well under way for Angola to sell another eurobond.
“They are preparing everything to be able to go to the markets still in 2019 – it will be in dollars,” he said, declining to give further details on maturity or size of the bond issue.
It will be the country’s first foray into international bond markets since the IMF approved a three-year $3.7 billion credit facility to support economic reforms in December 2018.