Angola: Government borrows another €190M to help shore up banks

The Angolan government is going to issue another 50 billion kwanzas (€190 million) of bonds in 2018 to fund the regeneration of the country’s banking system

Luanda, Angola – A document seen by Lusa on Monday said that the treasury bonds would be in favour of the state-owned company called Recredit, “specifically to support the regeneration of the banking sector”.

The bonds offer a yield of 7.5$ and mature in 10 years.

Since this company was set up in December 2016, the government has issued more than €2 billion to ensure its operations.

Lusa reported last August that Recredit intended to expand the purchase of non-performing loans from four more banks for €765 million, after already having agreed on its acquisitions from the state-owned BPC.

Recredit chairman, Vicente Leitão, said the company was buying non-performing loans from five Angolan commercial banks apart from BPC, such as Banco de Comércio e Indústria (BCI), Banco Angolano de Investimentos (BAI), Banco Keve and Banco de Negócios Internacional (BNI).

The crisis in Angola made the amount on non-performing loans held by banks triple and it is now equivalent to more than fez 30% of all loans granted in 2017 and the five banks are in breach of their mandatory solvency ratio.