Annual Report

Transcrição

Annual Report

Annual Report
1
2
Annual Report
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We take pride in promoting
National Art.
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Index
01 -Main Indicators
A. Summary of the Financial Indicators B. Graphical Analysis of the Main Indicators
02 -Joint Message from the Chairman of the Board of Directors
and Chief Executive Officer 03 -Highlights
7
9
10
13
17
A. Governing Bodies
19
B. Milestones
22
C. Social Responsibility
23
D. BAI Brands
25
04 -Strategy and Business Model
05 -Macroeconomic and Financial Background
29
33
A. The International Situation
35
B. The Angolan Situation
42
06 -Core Business Areas
51
A. Corporate Banking and SMEs
53
B. Retail Banking: Individuals
55
C. Private Banking
57
D. Investment Banking
57
07 -Electronic Banking
61
08 -Financial Holdings
65
09 -Risk Management
73
A. Balance Sheet Risk
76
B. Market Risk
76
C. Liquidity Risk
78
D. Capital Adequacy
80
E. Credit Risk
81
F. Operational Risk
86
10 -Human Resources
11 - Financial Review
A. Analysis of the Balance Sheet
89
97
99
B. Analysis of the Income Statement
102
C. Profitability
104
12 - Proposed Appropriation of Net Income
105
13 - Financial Statements
109
A. Board of Directors’ Approval 111
B. Balance Sheets 112
C. Income Statement
113
D. Statements of Changes in Equity 114
E. Cash Flow Statements 115
F. Notes to the Financial Statements
116
14 - External Auditor’s Report
159
15 -Report and Opinion of the Audit Board
163
16 - Geographical Presence and Distribution Channels
167
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Main Indicators
01
7
Van – Fishing Scenes and Collage and Painting Ideogram
Acrylic on Canvas
BAI Private Collection
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01. Main Indicators
The annual report, including the audited financial statements, was originally prepared in Portuguese and then translated into English. Should any discrepancy occur between the Portuguese and English
version of the report, the Portuguese version shall prevail.
A. Summary of the Financial Indicators
Amounts in Million USD
Balance Sheet
Net Assets
Loans to Customers (net)
Guarantees and Sureties Provided
Open Documentary Credit
Total Credit Customer Deposits
Demand Deposits
Term Deposits
Equity
Activity
Net Interest Income (NII)
Net Non-interest Income
Net Operating Income
Earnings From Financial Intermediation
Operating costs
Pre-tax Profit
Net Income for the Year
Shares
Number of Shares
Operational
Number of Employees
Distribution Channels
Number of Customers
Cost to Income Ratio
Productivity
Number of Customers per Employee
Net Assets / Number of Employees (Million USD)
Operating costs / Net Assets
Profitability
Earnings per Share (EPS) in USD Return on Average Equity (ROAE)
Return on Average Assets (ROAA)
Asset Quality
Loan-to-Deposit Ratio (Loans to customers / Customer deposits)
Non Performing Loans as % of Loans to Customers
Off-balance Sheet Credit (Write-off)
Capital Adequacy
Fixed Assets / Regulatory Equity
Regulatory Solvency Ratio
Regulatory Equity
Dec. 10
Dec. 11
Dec. 12
Annual Variation
Absolute
%
8,373
2,476
219
106
2,802
7,284
4,596
2,688
792
11,874
3,002
163
227
3,392
10,455
7,101
3,354
920
10,784
2,685
137
171
3,018
8,507
4,537
3,970
1,038
(1,090)
(317)
(17)
(41)
(374)
(1,948)
(2,564)
616
118
-9%
-11%
-10%
-18%
-11%
-19%
-36%
18%
13%
380
164
544
392
173
230
228
302
226
529
388
188
200
212
322
259
581
390
217
185
180
20
32
52
2
28
(15)
(32)
6%
14%
10%
1%
15%
-7%
-15%
19,450,000
19,450,000
19,450,000
1,426
85
321,211
31.8%
1,526
106
414,481
35.6%
1,747
112
482,948
37.3%
221
6
68,467
1.7%
14%
6%
17%
5%
225
6
2.07%
272
8
1.59%
276
6
2.01%
5
-1.6
0.4%
1.78%
-20.67%
26.64%
11.72
31.78%
2.74%
10.90
24.76%
2.09%
9.24
18.35%
1.59%
-1.66
-6.41%
-0.51%
-15.2%
-25.9%
-24.3%
34.00%
10.74%
138
28.72%
4.93%
206
31.56%
7.24%
307
2.85%
2.31%
101
9.9%
46.9%
49.0%
33.18%
13.67%
688
33.92%
13.09%
800
46.14%
16.07%
887
12.22%
2.98%
87
36.0%
22.8%
10.9%
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B. Graphical Analysis of the Main Indicators
MILLION USD
Net Assets
12,000
10,000
8,000
6,000
4,000
2,000
0
11,874
8,373
10,784
-9%
42%
Dec. 10
Dec. 11
Dec. 12
MILLION USD
250
200
150
100
50
0
228
212
180
-7%
Dec. 10
-15%
Dec. 11
Dec. 12
MILLION USD
Customers Deposits
12,000
10,000
8,000
6,000
4,000
2,000
0
10,455
8,507
7,284
-19%
44%
Dec. 10
Dec. 11
Dec. 12
MILLION USD
Loans to Customers
3,500
3,000
2,500
2,000
1,500
1,000
500
0
3,002
2,476
Dec. 10
10
-11%
21%
Dec. 11
2,685
Dec. 12
01. Main Indicators
18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
Regulatory Solvency Ratio
16.07%
13.67%
Dec. 10
13.09%
Dec. 11
Dec. 12
Cost to Income
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
31.83%
Dec. 10
35.62%
Dec. 11
37.32%
Dec. 12
Return on Average Assets (ROAA)
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
2.74%
2.09%
1.59%
Dec. 10
Dec. 11
Dec. 12
Return on Average Equity (ROAE)
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
31.78%
24.76%
18.35%
Dec. 10
Dec. 11
Dec. 12
11
12
Joint Message from the Chairman of the Board of Directors
and Chief Executive Officer
02
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Jorge Gumbe – Stories about Baobab Trees
Acrylic on Canvas
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02. Joint Message from the Chairman of the Board of Directors and Chief Executive Officer
The year of 2012 was marked by a slowdown in the growth of the world economy, reflecting the reduction of aggregate demand in the developed countries, caused by the fiscal consolidation effort and
weaknesses of the financial system, recorded principally in the countries of the Euro Zone. The performance of gross domestic product contributed to lowering inflation rates at a worldwide level and
to extremely high unemployment rates, above all in the peripheral countries of the Euro Zone.
In spite of this context at an international level, national economic activity was marked by an increased GDP growth rate, standing at 7.4%, and the reduction of annual inflation to 9.02%.
The Angolan banking sector maintained its trend of growth, with a 12% increase of aggregate assets. Turnover grew by 15% as a result of higher levels of deposits, internal credit and use of banking services
by the population, which reached 22%. The loan-to-deposit ratio developed in an equally positive manner, having grown by 7% to stand at 67%. The financial year of 2012 was also marked by a significant
deterioration of the quality of the loan portfolio, demonstrated by the default ratio which shifted from 4.9% to 7.2% and consequent reinforcement of the provisions for the year.
During the year under analysis, domestic reference interest rates continued to fall under the policy to create incentives and stimulate economic activity, and also as a result of the system’s liquidity conditions,
partly induced by the relative aversion of Banks to the growing credit risk. As a result of the combined effect of the lower interest rates and, in some cases, increased credit provisioning, the profitability
of the Banks declined significantly, in the main indicators: ROAA fell by 25% to stand at 1.6% (2.1% in 2011), while ROAE decreased by 27% to stand at 18.4% (25.2% in 2011).
In this context and in an environment of increasingly stronger competition and competitiveness, BAI maintained the position of leadership that it has held for a number of years on the Angolan market, closing
the year with net assets of the order of AKZ 1,033,428 million (USD 10,784 million), a value of deposits of AKZ 815,204 million (USD 8,507 million) and net income of AKZ 17,217 million (USD 180 million).
Notwithstanding the 10% improvement of net operating income for the year, net income declined by 15% compared with the previous year, mainly explained by the (i) 34% increase in provisions for credit,
(ii) 16% increase in administrative costs, and (iii) 144% higher costs related to the industrial tax, as a result of having moved from a situation of reporting a tax loss for 2011 to a taxable profit for 2012 (justified
by the reduction of tax benefits relative to revenue from public debt).
In line with one of the pillars of its long term strategy, BAI pursued its programme of expansion of the commercial network in Angola, increasing its distribution channels from 106 in 2011 to 112 in 2012, with
impacts in terms of portfolio of customers which increased from 414,481 in 2011 to 482,948 in 2012.
During 2012 BAI was distinguished with two international awards, namely the award for the best banking group in Angola and the best Bank in Angola, attributed by World Finance and Euromoney,
respectively, where the selection board highlighted the outstanding financial performance of BAI, the variety of products and services and the institution’s corporate governance culture. At a national level,
BAI won the award of Company of the Year in the Financial Sector, one of the most prestigious awards attributed in our country.
Concerning social responsibility, during 2012 BAI focused its attention on the most vulnerable groups of Angolan society, giving various donations and sponsorships, where the construction of a school centre
in Cunene, the construction of the Osivambi medical centre in Cunene and the construction of a blood bank in Benguela were of particular importance.
For 2013, the Bank’s priorities, concentrated fundamentally on its activity in Angola, involve (i) the improvement of the quality of the loan portfolio, (ii) the provision of high quality service, (iii) the continuous
training of its human resources, (iv) the improvement of processes and technologies supporting operations, and (v) the strengthening of management and budgetary control processes, in order to continue
to meet the challenges that are posed and make the most of the variety of opportunities on the horizon, especially regarding the entry into force of the new foreign exchange regime for the oil sector.
To all of our employees a very special note of gratitude for the dedication and professionalism that has been demonstrated, once again, which has been fundamental to continue to serve our customers with
the same standards of quality and provide acceptable returns to our shareholders and to society.
To our shareholders, customers, suppliers and society in general, we also express our gratitude and the guarantee that we will continue to work to serving them with high standards of quality and
professionalism.
José Carlos de Castro Paiva
Mário Alberto Barber
Chairman of the Board of Directors
Chief Executive Officer
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16
Highlights
03
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António Tomás Ana “Etona” – The red door
Acrylic on Canvas
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03. Highlights
A. Governing Bodies
Board of the General Meeting
Pedro António Filipe
Chairman
Manuel Gonçalves
Deputy Chairman
Alice Trindade Escórcio
Secretary
Board of Directors
José Carlos de Castro Paiva
Chairman
Ana Paula Gray
Francisco José Maria de Lemos
Deputy Chairman
Deputy Chairman
Luís Filipe R. Lélis
Inokcelina B. C. dos Santos
Executive Director
Executive Director
Hélder Miguel P. J. de Aguiar
Simão Francisco Fonseca
João Cândido Fonseca
Executive Director
Executive Director
Executive Director
Theodore Jameson Giletti
Carlos Duarte
Director
Director
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Executive Committee
Luís Filipe R. Lélis
Inokcelina B. C. dos Santos
Ana Paula Gray
Executive Director
ExecutiveDirector
Executive Director
Hélder Miguel P. J. de Aguiar
João Cândido Fonseca
Executive Director
Executive Director
Executive Director
Audit Board
Jaime de Carvalho Bastos
Chairman
Domingos Lima Viegas
Member
Júlio Sampaio
Second Member
Moisés António Joaquim
Alternate Member
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03. Highlights
The distribution of areas of responsibility amongst the members of the Executive Committee as at 31 December 2012 was as follows:
Mário Barber
Planning, Control and Risk
Legal and Litigation
Retail Banking
Commercial Support
Deputy Chairman
Paula Gray
Compliance
Customer Ombudsman Office
Control of Operational Risk
Company Secretary
Executive Director
Executive Director
Executive Director
Inokcelina Santos
Luís Lélis
Hélder Aguiar
Central Treasury
Companies and Institutions
Electronic Banking
Integrated Security
Investment Banking
Operations
Credit Analysis
Marketing and Communication
General Services
Credit Recovery
Private Banking
Information Technologies
Financial Markets
Oil and Gas
Executive Director
Executive Director
Simão Fonseca
João Fonseca
Organisation and Quality
Accounting and Finance
Technological Projects and Development
Internal Audit
Human Resources
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B. Milestones
1996
Incorporation of BAI in Luanda on 13 November.
1997
BAI’s activity began on 4 November with the opening of the first branch in Luanda, in rua Major Kanhangulo.
1998
Opening of the BAI branch in Lisbon on 2 February.
Opening of the first BAI branch outside of Luanda, in the Province of Cabinda on 16 June.
2002 The legal status of BAI Europa was changed from branch to subsidiary.
2003 Expansion into Brazil with the acquisition of a stake in BPN Participações Brasil.
Acquisition of a stake in Banco Internacional de São Tomé e Príncipe (BISTP).
2004 Creation of the virtual branch BAI Directo.
2006 Net Assets exceed the USD 2 thousand million mark.
2007 BAI issues its first cash bonds in Angola (USD 50 million).
Launch of BAI VISA cards.
2008 Inauguration of BAI Cabo Verde.
Launch of BAI’s new image.
2009 BAI Europa opens an office in the city of Porto.
2010
Opening of the representation office in South Africa.
BAI wins the award of the best Commercial and Investment Bank in Angola, attributed by World Finance magazine.
Creation of the Credit Recovery Department.
Creation of the Assets and Liabilities Committee (ALCO).
Launch of the Growing Income Product.
Launch of the Western Union transfer service.
2011
Corporate name changed to Banco Angolano de Investimentos, S.A.
Commemoration of the institution’s 15th anniversary.
Launch of the Mobile Banking service.
Launch of the BAI KAMBA VISA card.
Opening of the one hundredth branch.
BAI exceeds the value of USD 10 thousand million of net assets.
2012
BAI wins the World Finance – Banking Awards 2012 – Best Banking Group in Angola.
BAI wins the Euromoney Awards for Excellence 2012 – Best Bank in Angola.
Control of BAI’s position in NOSSA Seguros and relaunch of the image of NOSSA Seguros.
Launch of the BAI Business Accounts card.
Creation of the Flex card, a prepaid card used as a means of payment at Sonangol fuel stations.
BAI is distinguished as the best company of the year of the financial sector in the 2012 edition of the Sirius Awards.
22
03. Highlights
C. Social Responsibility
Social Responsibility actions are part of the Institution’s values and principles. In 2012, attention was focused on sectors which are capable of ensuring sustainability to the balanced development of society
such as health and education or which directly involve children. Being aware that the success of the banking sector depends on the development of society, BAI has endeavoured to support the most
vulnerable communities and has, over the years, intervened in areas which are essential to the development of the country, such as education and health, as well as in areas that, due to their entertaining
character, tend to be relegated to second place, such as art and sports.
Education and Health
In our tireless search to support the most vulnerable populations, we identified the need to take literacy, the encouragement of reading and social progress within the reach of children of Osivambi village
in Cunene. In June 2012, BAI provided USD 200,000.00 for the construction of a Primary School Centre. Osivambi village is part of the commune of Mongwa, municipality of Kwanyama, at a distance
of 8 km from the international road and 70 km from the capital city, Ondjiva. This area is of difficult access and during the rainy season becomes completely cut off from the rest of the world. This means
that the children do not attend school, there is no access to medical assistance and the acquisition of food is complicated. Such a situation causes and promotes the high levels of illiteracy, child mortality
and extreme poverty. The construction of the School Centre and Medical Centre will contribute to the reduction of these problems in the short and long term. The children of the region will already have
access to education by the next academic year.
The Home for Abandoned Children, situated in the Sagrada Família and which essentially cares for girls, has received monthly assistance of USD 500.00.
Issues related to health are never neglected under BAI’s social responsibility. Since this is an indispensable condition for the well-being and development of a country, this subject has always merited the
Bank’s special attention.
In health we have become faithful partners of Luanda Paediatric Hospital, David Bernardino, since 2010. In 2012, BAI further endowed the Paediatric Emergency Room of Américo Boavida Hospital.
The sponsorship, valued at USD 75,000, enabled the acquisition of ventilators, an infusion pump, monitors, electric syringes, amongst other medical equipment. Also in 2012, together with a group
of institutions, it was possible to lay the first stone of Block 4, with the completion of the work forecast for 2014, which will include an emergency operating theatre, and cut the inaugural ribbon of the built
and equipped Block 3.
This new three storey wing adds 70 beds to the total number, improved diagnosis conditions, accommodation and comfort for the children. With an isolation ward for delicate cases, Neuroinfectology Nursing,
Meningitis, Tetanus, Cerebral Malaria, Medical Internment, Diagnosis Centre, Post-Graduation Centre for the training and specialisation of doctors and to boost medical research.
We also highlight the construction of a blood bank, adjacent to Nossa Senhora da Paz Hospital, in the province of Benguela, budgeted at 800,000.00 Kwanzas.
23
Culture
In August, the city of Lubango hosted the second edition of BAI Art outside Luanda, an event aimed at fostering Angolan art. The exhibition in the capital of Huíla, called “An Exhibition of Talent and Creativity”,
presented the work of six artists, namely: Paulo Kussy, Aguinaldo Faria, Rebeca Lua, André Malenga, Pascoal Duando “Padú” and Claver Cruz.
In the context of the festivities of the 16th anniversary of BAI, the 14th edition of BAI Art in November, an exhibition of sculptures was held at the BAI Academy. The theme of the exhibition, which displayed
the work of three artists, namely Kiana, António Toko and Amândio Vemba, was “African values represented in surprising forms”. The objective of this type of initiative is to create spaces and opportunities
for artists and their expressions to be able to receive the same attention as that given to more popular forms of art.
Also concerning promotion of art, BAI was one of the sponsors of the performance organised as a tribute to André Mingas in memory of the 1st anniversary of his death. The National Oncology Institute was
chosen to receive the funds raised at this event.
Sports
Sports has always been considered crucial in BAI’s social responsibility programme, where the principal focus is placed on types of sport which are capable of taking the name of Angola into the international
arena.
BAI continues to be the sponsor of the Angolan Basketball Federation, lending its name to the most significant event of this sport in the country, the Male Senior National Competition, that is, BAI Basket.
BAI Basket has worked at bringing in renewed enthusiasm for this sport, elevating the levels of internal competition and refreshing the public’s enjoyment in following the competition, where the monopoly
no longer belongs to merely two teams.
Having assumed the position of Official Bank of the Male Senior Football Team, BAI provided BAI Kamba, a Prepaid VISA Card, to the Angolan National Team before their departure to the African Football
Championship (Gabon - Equatorial Guinea). The objective of this initiative was to facilitate the most varied transactions to the team, which they might wish to undertake during their leisure time, including
the payment of accounts and withdrawal of cash under secure conditions.
The Volleyball Federation received a support of USD 3,000.00 towards the participation of their athletes in the Olympic Games.
24
03. Highlights
D. BAI Brands
National and International Recognition
Socially Responsible
25
Focus on Human Capital
26
03. Highlights
Multiple Solutions
MOBILE BANKING
Os serviços do BAI estão num novo espaço: o seu telemóvel.
BAI Business Contas.
O cartão de crédito ideal
para a sua empresa.
O Banco de todos os momentos.
Diga SIM
à sua nova casa.
Mais vantagens, mais negócios.
Investimos em si.
Para que tudo
ande sobre rodas.
Crédito Automóvel
Crédito BAI Habitação
Eu também quero
uma conta
no BAI.
Conta Jovem
Só ando
com o meu
BAI Kamba.
O Banco de todos os momentos.
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28
Strategy and Business Model
04
29
Kinavala – Dance of the Ants I
Acrylic on Canvas
30
04. Strategy and Business Model
Guided by the vision is to be a reference Angolan financial group, standing firmly as one of the pillars of national economic development, capable of attracting, developing and retaining the best professionals
and creating value for its shareholders, BAI’s Business Model is based on four major guidelines, namely its customers, products, channels and platforms.
The objective of BAI’s action directed by these Business Model guidelines resides in the consolidation of our leadership in the market in order to ensure the solidity and sustained growth of the institution,
in a market that is increasingly more competitive and influenced by events at an international level.
Therefore, BAI has developed its activity with the objective of embodying and providing quality service, defending its current position with key customers and diversifying its portfolio of customers, taking
into account the needs of homogenous groups, and paying special attention to Retail Banking, Private Banking, Corporate Banking and Investment Banking.
BAI focuses on market penetration, through the launch of innovative products and services. The development of specialised products and services for homogeneous groups of customers has enabled the
Bank to share solutions and create synergies to support the achievement of its customers’ business objectives.
The policy of expansion of the Bank’s commercial network is based on principles of sustainability, focusing on the offer of services to all its target segments. The Bank’s services and products are provided
to its customers through a diversified distribution network, divided into Universal Branches, Business Service Centres, Private Banking Branches and Service Points. BAI also operates in the microfinance
sector through its subsidiary BAI Micro Finanças, which enables paying particular attention to low income customers as well as micro and small enterprises.
BAI believes that good corporate governance is a competitive advantage and a differentiating element which firmly underlies two fundamental axis of the Bank’s action: shareholder rights and
transparency.
BAI is present in international markets, having embarked on its internationalisation process in 1998 with the opening of BAI Europa, which has supported BAI’s capacity to be an excellent channel for
international trade and investment to and from Angola.
The capture of the best professionals and development of the Bank’s Human Resources, for the purpose of creating a competent and dynamic team of professionals, with a culture of high performance,
geared to meeting customer needs, is extremely important to BAI, hence it offers a range of incentives and allowances and, under its vocational training policy, has created the BAI Academy. BAI has
positioned the human resources function as a catalytic element for institutional growth and, under its policy of human resources motivation and retention, has, over the years, developed an incentive system,
reviewed its remuneration policy and implemented an integrated career management system.
31
32
Macroeconomic and Financial Background
05
33
Paulo Kussy – The Weight of the Soul / Free Soul
Acrylic on Canvas
34
05. Macroeconomic and Financial Background
A. The International Situation
The global economy slowed down again in 2012. The combined and continued effect of the fiscal consolidation and weaknesses in the financial system, especially in the advanced economies, had a negative
impact on aggregate demand, which affected worldwide economic activity in an adverse manner.
The weak worldwide economic activity lowered inflation levels, but maintained unemployment at very high levels, above all in the advanced economies. International trade has suffered the consequences of
this sluggish economic activity, with the balance of payments of relevant countries having pursued a modest corrective trend in relation to their existing imbalances. Foreign exchange rates, especially the
Euro/USD, have shown considerable fluctuations.
Fiscal policies continue to favour fiscal consolidation, particularly in countries with a high fiscal deficit, while monetary policies remained very stable, boosting economic growth.
Economic Growth
The most recent estimates point to a modest growth of the world economy of 3.2% in 2012, slightly recovering to 3.5% in 2013. The gross domestic product (GDP) of the advanced economies is estimated
to have grown by merely 1.3% in 2012, while growth for the emerging and developing economies is estimated at 5.1%, and growth in Sub-Saharan Africa is estimated at 5%.
Advanced Economies
The economy of the USA is estimated to have grown by around 2.3% by the end of 2012 (1.8% in 2011). In spite of the sluggish conditions in the labour market and in aggregate demand, the economic stimulus
policies introduced by the Federal Reserve (FED), especially in the second half of 2012, have contributed to ensuring an acceleration of economic activity in the USA.
In the Euro Zone, real GDP is estimated to have contracted by 0.4% in 2012. The slowdown in relation to the previous year was essentially due to the deterioration of the climate of confidence of economic
agents, leading to, amongst other consequences, the intensification of the Euro Zone crisis, with Spain and Italy having witnessed their sovereign debt spreads soaring to historically high values. Combinations
of factors have led to the intensification of the Euro Zone crisis, including: doubts as to the capacity of the peripheral countries of Europe, in particular Portugal and Greece, to pursue the necessary fiscal
and structural adjustments; the capacity of European institutions to implement common policies to combat the crisis; and apprehensions concerning the response capability of the European Central Bank
(ECB) and European Financial Stability Facility/European Stability Mechanism (EFSF/ESM), in a worst case scenario.
During the second semester of 2012, more concerted measures on the part of political decision-makers and the commitment of the ECB to use both conventional and non-conventional instruments of
monetary policy to stimulate the economy, have regained the confidence of economic agents in the Euro Zone’s capacity to successfully overcome a crisis that seriously threatened the political, economic
and social stability of the region.
Real Growth Rate of GDP
World Economy
7.3%
6.3%
5.1%
5.2%
3.9%
3.0%
1.9%
1.8%
3.2%
2.3%
1.4%
-0.4%
2010
2011
2012
5.5%
Euro Zone
3.5%
Developing Economies
2.0%
-0.2%
USA
Source: IMF
2013P
35
Emerging and Developing Economies
It is estimated that in 2012 the GDP of the emerging and developing economies grew on average by merely 5.1% (6.3% in 2011). According to the International Monetary Fund (IMF), various factors led to this
slowdown, such as: more restrictive policies in response to constraints in economic capacity, increased credit impairments, decreased aggregate demand by the advanced economies and country specific
factors.
China, Russia, India, Brazil and Sub-Saharan Africa should record positive growth, albeit slightly below the levels of the last few years.
In China estimates indicate that economic expansion in 2012 was of the order of 7.8% (9.3% in 2011). The slowdown relative to the previous years in the real growth rate of the Chinese economy was due
to a combination of factors, particularly the restriction in credit concession to the real estate sector – as a precautionary measure in view of a possible overheating of the sector; reduction of the levels of
public investment – aimed at their greater sustainability; and decreased external demand.
In Russia, the reduction of global economic activity had a negative impact on growth. However, the Russian economy should continue to expand, with an estimated growth of gross domestic product of
around 3.6% in 2012 (4.3% in 2011).
In India, GDP is estimated to have grown by merely 4.5% in 2012 (7.9% in 2011). During 2012, the Indian economy suffered from an adverse business environment in a scenario characterised by slowness in
the approval of new projects and weak external demand. The growth of economic activity was also affected by restrictive fiscal and monetary measures adopted in order to combat inflation.
In Brazil, GDP is estimated to have grown by only 1% in 2012 (2.7% in 2011). This marginal growth reflects the international circumstances surrounding the country, but above all the extended result of
more restrictive economic measures (introduced in 2010 for the purpose of counteracting inflationary pressures). During the second half of 2012, the Brazilian government was forced to introduce more
expansionist measures, under which substantial cuts were made in its reference rate and less restrictive macro prudential measures were adopted, with a view to stimulating lending and borrowing
activity.
In Sub-Saharan Africa, is estimated that the regional economy grew by 4.8% in 2012 (5.3% in 2011). The slowdown in worldwide activity affected these countries through the reduction of exports and lower
levels of confidence of economic agents. At the same time, a series of internal constraints inherent to unsustainable economic growth, began to constitute obstacles with adverse impacts on future growth
rates.
Economic Recovery and Public Debt
During 2012 the global economic recovery experienced various unfavourable developments, in particular the exacerbation of the sovereign debt crisis and evident need to increase the limit of public debt in
the USA. These events increased instability in international financial markets and negatively affected confidence in economic performance and, consequently, aggregate demand at a worldwide level.
Sovereign Debt Crisis
The fiscal consolidation underway in countries of the Euro Zone and especially the recognition of the need to adopt additional measures of fiscal austerity in the peripheral countries of Europe (Portugal and
Greece) heightened the climate of suspicion experienced by economic agents in relation to the capacity of the financial authorities to resolve the excessive public debt of some countries of the Euro Zone in
due time. This climate of deep suspicion increased relative to Spain and Italy, intensifying the instability and apprehension in the Euro Zone. The persistent and substantiated lack of confidence of investors
(the joint public debt of these two countries is equivalent to 68% of the sovereign debt of the Euro Zone) as to the capacity of these countries to honour their debt service led to a disturbing rise of their
spreads, forcing interventions by the International Monetary Fund (IMF), European Union (EU) and European Central Bank (ECB).
Although various countries have contributed to the sovereign debt crisis, as shown in the chart below, Greece, Portugal, Ireland and more recently Spain and Italy are primarily responsible for the
intensification and propagation of the phenomenon.
36
Public Debt as % of GDP in 2012
Cyprus
64%
Spain
64%
France
75%
Euro Zone
90%
USA
105%
Portugal
120%
Ireland
113%
Italy
120%
Greece
160%
0%
20%
40%
60%
80%
100%
120%
140%
160%
Source: IMF / The Economist
In Greece, with a ratio of public debt to GDP above 150%, strong austerity measures have been agreed between the IMF, EU and ECB as a condition for a new financial rescue programme for the country
of approximately 147 thousand million Euros. However, the political instability which ecloded right after the general elections of 6 May, contributed to a delay in the implementation of the austerity measures,
which exacerbated the political, economic and social instability in the Euro Zone. Immediately following the general elections of 17 June, the new Greek government agreed on a new rescue programme with
the troika1 which is more in keeping with the country’s macroeconomic situation.
After a very agitated first semester, the second semester of 2012 was characterised by a clearer understanding between the troika and Greece, with the country adopting the necessary measures towards
the correction of its finances and resolution of the crisis in which it is steeped. In 2012, the yields of Greek debt at 10 years fell by 27.3%, having reached values close to 11.0% in December 2012. After having
been downgraded to risk level C in February 2012, the rating agency Fitch upgraded the country’s risk rating to CCC in January 2013.
In Portugal, public debt, estimated at 120% of GDP in 2012, should grow marginally over the next two years, and subsequently invert its upward trend. The IMF has recognised that the effort of the
policies and reforms currently being applied by the authorities is extraordinary and that impressive progress has been achieved in the pursuit of budgetary adjustment and in external accounts, with
the consequent sharp decline in the spreads of sovereign debt. After having reached the historical maximum in January 2012 (17.4%), the yield curve of government debt securities at 10 years has shown
a downward trend, falling to values close to 7% by the end of the year. In November 2012, Fitch reviewed the country’s rating to BB+ with a negative outlook (BB+ in November 2011).
In Spain the deterioration of funding conditions (due to the perception of investors relative to the country’s capability to honour its commitments) in a scenario of crisis, characterised by negative growth,
high unemployment rate and excessive indebtedness (public debt above 85% of GDP), has forced the ECB to intervene in order to prevent the spreads of Spanish debt reaching levels that are unsustainable
for the country. After the intervention of the ECB, the interest rate curve of government securities at 10 years (which showed an annual maximum above 7.5% in July 2012), inverted its upward trend and
closed the year below 6%. In June 2012, the rating agency Fitch downgraded the country’s risk rating to BBB (A in January 2012), and has kept it unchanged since this date.
In Italy, public debt reached 126% of GDP by the end of 2012. The economic crisis combined with factors such as: negative growth; fiscal consolidation; deterioration of funding conditions; and the need for
structural reforms have contributed to exacerbating public debt. The interventions of the ECB have enabled containing the unease of economic agents in relation to Italian debt instruments, with the yields
of government securities at 10 years having fallen consistently, from values above 7% (in January 2012) to below 4.6% in December of the year under analysis. In January 2013, the rating agency Fitch
reiterated its risk rating of A-, which had been attributed to the country in January 2012.
The spreading of the sovereign debt crisis to Spain and Italy threatened destroying the European project, in view of the weight of their debts (68% of the total debt of the Euro Zone) and importance of
these countries within the European Community, hence the government authorities of the Euro Zone were forced to act in a prompt and concerted manner to resolve the problem and prevent destructive
consequences permeating into the economy of the Euro Zone and further into the rest of the world.
1
Committee composed of 3 members: the European Commission, Central European Bank and International Monetary Fund.
37
Public Debt in the USA
In the USA, the evident need to lift the public debt limit and the stalemate created by the Republican party’s refusal to extend this limit, threatened to lead the North American economy towards a so-called
“fiscal cliff” with automatic cuts (increases) in public expenditure (revenue). The stalemate which lasted over the entire second quarter was resolved in a favourable manner at the end of 2012, although
it profoundly affected the confidence of economic agents and by corollary the economic environment. The public debt of the USA stood at 101.6% of GDP in September 2012. In spite of the political and
economic instability generated by the process of increasing the North American public debt ceiling, the yield curve of government securities at 10 years fell to a historic low of 1.4% in July 2012, subsequently
inverting its trend to stand at 2% in December 2012. According to the rating agency Standard & Poor’s, the risk rating of the USA is AA+.
The combination of these two events, the sovereign debt crisis and the stalemate created by the Republican party’s refusal to extend the North American public debt limit, adversely affected economic
recovery, especially in the advanced economies, demonstrating the indispensability of profound structural measures to correct the errors and excesses of the past. These events also had a negative impact
on the emerging and developing economies through the reduction of aggregate demand.
Inflation
In 2012 it is estimated that world inflation fell in relation to the previous year, as a result of the slowdown in global economic activity and decline of commodity prices.
In the more advanced economies, the reduction of commodity prices was a major factor in the decrease of inflation down to 2.0%, while in the emerging and developing economies prices are estimated to
have risen by 6.1%, due above all to the reduction of global economic activity.
Inflation
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
6.1%
7.2%
6.1%
6.1%
Emerging Economies
2.7%
1.6%
2010
2011
2.0%
2012P
1.6%
2013P
Advanced Economies
Source: IMF
Employment
The sluggish world economic activity has affected the creation and maintenance of jobs in the emerging and developing economies, but it is in the advanced economies, especially in some countries of the
Euro Zone, that the effect has been devastating. According to the IMF, the unemployment rate stood at 6.3% in 2012, with a decline having been recorded in the emerging and developing economies and
an increase in the more advanced economies.
In the USA, although the unemployment rate continues high, it fell from 9.0% in 2011 to 8.2% in 2012 benefiting from a combination of economic growth and directed policies implemented by government
authorities.
In the Euro Zone, the economic contraction adversely affected the creation of employment and maintenance of jobs. Unemployment reached extremely high levels in some Euro Zone countries. Spain has
the highest rate of unemployment with 24.9%, followed by Greece with 23.8% and Portugal with 15.5%. At an aggregate level, the unemployment rate is estimated to be of the order of 11.2% for 2012
(10.2% for 2011).
In Japan, the unemployment rate should be close to 4.5% in 2012. This rate is considered moderate in view of the reduction in international economic activity.
38
Unemployment
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
10.1%
9.6%
10.2%
9.0%
11.2%
11.5%
8.2%
8.1%
Euro Zone
USA
Source: IMF
2010
2011
2012P
2013P
Exchange Rates
The year under analysis was marked by some instability in the foreign exchange market. The USD appreciated by 6.1% relative to the Euro, with the exchange rate having stood at USD 1.31 per Euro in
December 2012.
By the end of the first semester of 2012, the Euro/USD exchange rate had varied by 11.1% (relative to the rate in December 2011), reaching the rate of USD 1.23 per Euro. This appreciation was due to the
instability being experienced in the Euro Zone, where the signs of economic contraction were further negatively affected by an economic environment characterised by political instability in Greece, a public
debt crisis in Spain and Italy, and widespread austerity measures all over the Euro Zone.
Between June and December 2012, the USD appreciated by merely 6% in relation to the Euro, reflecting on the one hand pressures of appreciation of the European currency due to a modest improvement
in market economic confidence2 on the part of investors, and on the other hand pressures of depreciation of the North American currency due essentially to the economic stimulus measures (quantitative
easing) with impact on the value of the USD, combined with the deadlock created by the Republican party’s refusal to extend the public debt ceiling.
In an atmosphere of worldwide economic crisis, the Euro appreciated in general terms since the beginning of September 2012 in relation to most of the main currencies. According to a publication of the
ECB, the volatility of the Euro relative to the USD and other currency was particularly due to market economic confidence regarding the budgetary and economic prospects of various countries of the Euro
Zone, as well as the evolution of the expected differentials of the yield rates between the Euro Zone and other advanced economies.
Exchange Rate (EUR/USD)
1.40
1.35
1.30
1.25
1.20
1.15
1.10
1.05
1.00
1.392
1.312
1.253
Dec. 11
Jan. 12
Feb. 12
Mar. 12
Apr. 12
May 12
Jun. 12
Jul. 12
Aug. 12
Sep. 12
Oct. 12
Nov. 12
Dec. 12
Source: Banco de Portugal
2
As a result of more coordinated and incisive measures by the member states of the Euro Zone.
39
Interest Rate
The scenario experienced in 2011 did not change during 2012, with Central Banks keeping their reference interest rates at very low levels in an attempt to stimulate economic activity.
In the United States, the FOMC3 reiterated the maintenance of the FED Funds Rate4 between 0% and 0.25% and indicated that it was likely that the exceptionally low levels for federal fund rates would be
kept at least until the end of 2015.
Interest Rates
1.60%
1.40%
1.20%
1.00%
0.80%
0.60%
0.40%
0.20%
0.00%
1.4
1.0
0.8
0.6
0.3
0.2
0.1
0.1
Dez. 11
Jan. 12
Source: www.global-rates.com
Fev. 12
Mar. 12
Euribor 3M
Abr. 12
Mai. 12
Libor 3M
Jun. 12
Jul. 12
Ago. 12
FED Funds
Set. 12
Out. 12
Nov. 12
Dez. 12
Refi Rate
According to the economic bulletin of the ECB, in October 2012 the FED stated that it would continue to acquire new securitised debt instruments backed by mortgage loans, issued by government agencies
(at a rate of USD 40 thousand million per month). Furthermore, it also announced that it would maintain, until the end of 2012, the programme of increasing the average maturity date of its holdings of
securities, as well as the current policies of reinvestment of the repayment of principal derived from holdings of these instruments and other debts.
In Europe, after having remained at 1% since December 2011, the Refi was lowered to 0.75% in July 2012, and has continued unchanged since this date. Since the ECB’s inflation target of 2% has been
perfectly accommodated due to the reduction of economic activity and commodity prices, this reduction of the Refi essentially aimed to stimulate growth in the region, considering that the levels of economic
activity recorded in the first quarter stood below the forecasts.
Financial Markets
Share Markets
In 2012, the share markets of the advanced economies, particularly of the Euro Zone, United States of America and Japan, showed an upward trend with the exception of the second quarter, a period marked
by a sharp fall5 of stock exchange indices. This negative performance of share markets during the period referred to above was due to the poor economic outlook in the short term and the reappearance of
fears in relation to the political and financial situation of the Euro Zone.
By the second half of 2012, share prices had recovered to an upward trend. In Europe, this improvement in the financial environment was due to a combination of factors, such as: the announcement of
definitive monetary transactions (OTM); measures adopted for the purpose of strengthening the financial system (creation of a banking union); progress in the restructuring of the Spanish banking sector;
and the reaching of an agreement on the Greek rescue programme. Between August and December 2012, the value of shares in the Euro Zone increased by 6%.
In the United States of America the scenario was not positive. In spite of the announcement of new monetary stimulus, the climate of uncertainty caused by the approximation of the “fiscal cliff” negatively
affected the performance of the stock exchange indices. However, in the second half of 2012, share prices increased by approximately 4%.
40
The FOMC “Federal Open Market Operation Committee” is the Federal Reserve body responsible for open market operations that, through specific mechanisms, influence the FED Funds Rate.
FED Funds Rate: Reference interest rate for interbank loans, normally lasting one day (overnight).
5
Principally in the Euro Zone and in the United States of America, where the Dow Jones Euro Stoxx index and the Standard &Poor’s (S&P) 500 index fell by 17% and 6.5%, respectively.
3
4
Bond Markets (Public Debt)
During the first semester of 2012 there was a generalised fall in the yields of long term public debt bonds rated at AAA. In the Euro Zone and United States of America, yield rates declined 70 and 50 basis points
respectively, and fell close to historic lows in June, to stand at 1.8% (Euro Zone) and 1.6% (United States of America).
During this period, the tensions in the bond markets were intensified by the negative economic prospects in the short term, the deterioration in the climate of confidence and by the exacerbation of the debt crisis
of the Euro Zone.
In the second semester of the period under analysis, expectations of weak economic growth and the movement towards the “fiscal cliff” in the United States weighed negatively on the performance of bond
markets.
In December 2012, the yields of public debt bonds stood close to 1.7% in the Euro Zone, 1.6% in the United States and 0.7% in Japan.
Commodities
In 2012, commodity markets were marked by a certain instability, which was reflected in greater price volatility.
During the period under analysis, various factors contributed negatively to this turbulence in commodities, including, in particular: the economic slowdown in China, the very modest economic growth in the
United States of America, the sovereign debt crisis in the Euro Zone and the political instability in the Middle East and North Africa6.
Commodity Prices
250
1,800
200
1,750
150
1,700
100
1,650
50
1,600
0
1,550
Dec. 11
Source: World Bank
Jan. 12
Feb. 12
Energy (USD)
Mar. 12
Apr. 12
May 12
Non-Energy (USD)
Jun. 12
Jul. 12
Aug. 12
Oil - Brent (USD/bbl)
Sep. 12
Oct. 12
Nov. 12
Dec. 12
Gold (USD/troy oz)
By the end of 2012, energy and non-energy commodity prices recorded a minor increase of 0.4% and 1.1%, respectively. Prices of agricultural products fell by 0.6%, with the consequent decline in the price
of food by 1.3%.
However, the period under analysis (between May and August), food prices increased significantly, partly due to a heat wave which affected the production of corn in the United States of America and drought
conditions in Central Asia and Eastern Europe which damaged the production of wheat.
Prices of metals recorded an increase below 2% (the average price of gold stood at USD 1,667/ounce compared with 1,569 recorded in 2011), while prices of common metals had increased by 4.8% by the
end of 2012.
Also during the period under analysis, the average price of oil (Brent) stood at USD 112/barrel, having reached a maximum value of USD 125/barrel (in March) and a minimum of USD 96/barrel (in June),
closing the year at the value of USD 110/barrel. The volatility of the price of oil was particularly related to the poor economic prospects in the short term and geopolitical tensions.
According to OPEC7 estimates, in 2012, world demand for oil stood at approximately 88.8 mb/d8, while world oil production was estimated at close to 89.9 mb/d, where OPEC member countries were
responsible for around 35% of world oil production.
World Bank, Commodity Market Outlook, January 2013.
OPEC (Organisation of the Petroleum Exporting Countries).
8
Million barrels per day.
6
7
41
B. The Angolan Situation
Introduction
In 2012, the Angolan economy recorded stronger activity in relation to the previous year, mainly driven by the recovery of the growth levels of the oil sector, combined with considerable buoyancy in the
non-oil sector.
The monetary and exchange rate policies adopted by the Central Bank had a positive impact, having lowered inflation to a single-digit figure and maintained the exchange rate with minimal fluctuations
throughout the year. Regarding trade relations with the rest of the world, a surplus was recorded in the overall balance of payments, which also led to increased net international reserves.
The maintenance of macroeconomic stability, demonstrated throughout the period under analysis, contributed to the financial rating agencies, in particular a Moody´s and Fitch, reiterating their risk
classifications of Angola (Ba3 and BB- respectively), and changing their outlook rating of the country from Stable to Positive.
Economic Growth
The most recent Government projections point to GDP growth rate of the order of 7.4% in 2012 (3.9% in 2011), as a result of the real growth of the oil sector of approximately 4.3% (-5.6% in 2011) and non-oil
sector of 9.1% (9.7% in 2011), with the non-oil sector thus showing a stronger growth trend than the oil sector.
It is estimated that the most dynamic sectors of the economy were the energy sector, with the growth rate of 23.9%, agriculture (13.9%), trade services (10.0%), fisheries and derivatives (9.7%), and the sector
of diamonds and other (9.0%).
Real Growth Rate of GDP
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
8.0%
5.3%
3.4%
7.4%
7.4%
7.1%
5.1%
5.0%
3.9%
2.9%
3.1%
2010
2011
2.6%
Sub-Saharan Africa
7.1%
6.7%
Angola
5.7%
3.0%
Nigeria
South Africa
2012
2013P
Source: IMF / MinFin
The recovery of the growth of the oil sector in relation to the previous year, was mainly due to the start-up of new well operations, as well as the beginning of the activity of Paz-Flor (oil and natural gas
processing and storage unit).
Contributing to the continued growth of the non-oil sector was a series of measures aimed at stimulating the sector, such as the Micro, Small and Medium-Sized Enterprise Development Programme9.
With this perspective in mind, in September 2012 , the Government created the “Angola Investe10” programme for the purpose of stimulating the activity of micro, small and medium-sized enterprises, and
gearing their output towards exports, where the priority sectors of the economy were defined as construction, fisheries, agriculture, livestock, manufacturing industry and mining.
The Sovereign Fund of Angola was also created during 2012, with the objective of using funds derived from the oil business to foster the country’s growth, prosperity and socioeconomic development.
The Government’s forecasts for 2013 point to a growth rate of the order of 7.1%, which is in conformity with the forecasts of the Economist Intelligence Unit11 (7%), and higher than the forecast of the
International Monetary Fund (IMF) which indicated a rate of 5.5%.
Approved in 2011.
This programme includes funding (with subsidised interest rates and public backing) to enterprises that meet certain requirements, such as being certified by the National Institute of Support to Small and Medium-Sized Enterprises (INAPEM), having 75% Angolan share capital and submitting projects linked to the specified areas.
11
EIU, September 2012
9
42
10
Inflation
During 2012, accumulated inflation stood at a historic level by reaching the rate of 9.02% in September compared with the 11.38% recorded in 2011.
The expenditure categories which most contributed to inflation in 2012 were: “food and non-alcoholic beverages”; “clothing and footwear”; “housing, electricity, water and fuel”; and “furniture, domestic
equipment and maintenance”.
The continued reduction of inflation levels recorded in the country was achieved as a result, above all, of the use of monetary/exchange rate and fiscal policy instruments.
Inflation
16%
14%
12%
10%
8%
6%
4%
2%
0%
11.38%
9.02%
Dec. 11
Jan. 12
Feb. 12
Mar. 12
Apr. 12
May 12
Jun. 12
Jul. 12
Aug. 12
Sep. 12
Oct. 12
Nov. 12
Dec. 12
Inflation over last 12 months
Source: INE
Employment
According to the estimates of the African Economic Outlook12 in 201213 the unemployment rate was approximately 26%13 in Angola. Statistical data published by the Ministry of Public Administration,
Employment and Social Security (MAPESS) for 2011, indicate that 596,176 new jobs were created for the economy as a whole, and in particular in the sectors of agriculture and fisheries (with 33% of the
total jobs created), trade (21%), public administration (16%), and urbanism and construction (16%).
Exchange Rates
In 2012, the Kwanza devalued by 0.6% in relation to the North American currency, having reached the average reference rate of 95.83 Kwanzas per USD in December.
105
100
95
90
85
80
75
25,901
100
95.28
Dec. 11
Sourcee: BNA
12
13
26,767
30,215
95.32
Jan. 12
Feb. 12
Mar. 12
RILs
95.36
Apr. 12
May 12
Jun. 12
AKZ/USD (Informal Market)
32,242
30,043
95.42
Jul. 12
Aug. 12
Sep. 12
95.83
Oct. 12
Nov. 12
Dec. 12
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
MILLION USD
AKZ/USD
RILs and Exchange Rate (USD/AKZ)
AKZ/USD
The African Economic Outlook is an annual publication of the Organisation for Economic Co-operation and Development (OECD) which presents the economic, political and social situation of most of the African countries.
Estimated average since 2007.
43
During the first semester of the year there was a minor depreciation of the local currency relative to the USD (around 0.1%) explained above all by the low levels of economic activity in the period.
Regarding the second semester, the increased economic activity, generated essentially by the rise in imports, led to a higher demand for USD and the consequent devaluation of the local currency (0.5%).
The highest monthly volatility of this exchange rate occurred during the month of November, when the local currency depreciated by 0.3%.
The stable levels of net international reserves has enabled Banco Nacional de Angola (BNA) to exert more effect control over the exchange rate, in this way dampening the trend of volatility of the local
currency, in spite of the pressures of depreciation inherent to an economy which is still highly dependent on imports. In 2012, the BNA supplied a total of USD 18.2 thousand million (21% higher than the
previous year) in order to meet the country’s growing need for foreign exchange.
Interest Rates
During the first semester of 2012, reference interest rates continued to fall, within the context of a policy more geared towards the stimulation of economic activity. The base interest rate of the BNA14 was
cut in January from 10.50% to 10.25% and remained unchanged over the rest of the year, reflecting the stability of the general level of prices in the economy.
BNA’s lending rate for overnight operations declined in absolute terms by 1%, to stand at 11.5% by the end of the period under analysis. However, in view of the liquidity of the market, this instrument is rather
irrelevant since the Overnight Luibor rate was consistently below 6.5% throughout the entire year. The rate of absorption of liquidity fell in April 2012 from 2% to 1.5% and remained at this level up to the
end of the year, thus discouraging the accumulation of free reserves by commercial banks.
Luibor Rates (%)
12.01
11.51
10.68
9.74
8.22
6.44
Jan. 12
Source: BNA
Feb. 12
Mar. 12
Apr. 12
Overnight
1 Month
May 12
10.77
10.70
10.66
10.25
10.07
9.30
8.65
8.94
8.44
10.22
9.42
8.65
7.59
7.44
7.70
5.40
5.40
6.20
Jun. 12
Jul. 12
3 Months
Aug. 12
6 Months
Sep. 12
Oct. 12
9 Months
Nov. 12
Dec. 12
1 Year
Regarding interbank interest rates, in 2012, the Overnight Luibor rate, which reflects the effective transactions carried out in the Interbank Market, declined by 3%, to stand at 5.4% by the end of the period under
analysis.
A downward trend was also observed for all other maturities, as indicated in the graph above, where particular note should be made of the reductions recorded in the Luibor (3 months) and Luibor (1 year) rates which
fell in relative terms by 14 and 12 percentage points, to stand at 8.7% and 10.7%, respectively, by the end of December.
In the Primary Monetary Market, the yields of Central Bank Securities (TBC) fell sharply, while the yields of State instruments to capture liquidity, namely Treasury Bonds (OT) and Treasury Bills (BT), which respectively
reflect the Government’s financial policy and the State’s short term funding needs, remained stable over the year.
Concerning Treasury Bills, the Central Bank placed a total of Kz 143.97 thousand million, with the stock reaching Kz 103.87 thousand million in December 2012. The yields of Treasury Bills with maturities of 91 days, 182
days and 361 days declined by 15%, 23% and 1% over the year, to reach the level of 3.4%, 3.7% and 5.1%, respectively by the end of 2012.
The total amount of Treasury Bonds that were issued came to Kz 83.98 thousand million, resulting in a stock of Kz 735.93 thousand million by the end of the year. The yields of Treasury Bonds for maturities of 2, 3, 4
and 5 years remained at 7.0%, 7.3%, 7.5% and 7.8% over the year, respectively, signalling, on the one hand, the intention of the Monetary Authorities regarding the long term evolution of inflation, and on the other hand,
the creation of a coherent interest rate.
44
14
Indicates the price of money from the perspective of the regulator.
Regarding Central Bank Securities, the BNA issued a total of Kz 756.7 thousand million, with the stock having reached the value of Kz 87.97 thousand million by the end of the year. For maturities of 63 and 182 days, the
yields of Central Bank Securities showed a negative variation over the year of 43% and 25%, and reached the yield of 4.1% and 5.1% respectively, by December 2012.
Public Sector Accounts
Estimated fiscal revenue for 2012 amounted to USD 49.7 thousand million (43.3% of GDP), of which USD 37.2 thousand million corresponded to oil taxes (34.6% of GDP) and USD 10.0 thousand million to nonoil taxes (6.4% of GDP). Estimated fiscal expenditure (excluding amortisation of debt and constitution of assets) stood at USD 41.0 thousand million (35.6% of GDP), where current expenditure represented
26.2% of GDP and expenditure related to the acquisition of non-financial assets corresponded to 9.4% of GDP.
In 2012, the overall budget balance (commitment) recorded a surplus of the order of USD 8.9 thousand million, while the overall cash balance recorded a surplus of USD 10.0 thousand million.
The heading variation of overdue items showed a balance of approximately USD 1.1 thousand million, compared with a balance of USD 1.6 thousand million in 2011, thus demonstrating the gradual settlement
of the short term public debt accumulated during 2009 and 2010.
During 2012, the Government continued to implement the Tax Reform with the entry into force of the amendments to the Tax on Capital Investment, Stamp Duty, Consumption Tax and the Real Estate
Property Tax Code. The Reform is primarily aimed at diversifying the sources of tax revenue, as well as improving the effectiveness and efficiency of the tax administration. It is also important to note the
implementation of the new rules for the execution of the State Budget (OGE), which determine the discontinuation of the expenditure made by Sonangol in the name of the State15.
State Budget Functional Expenditure Structure (%)
40
35
30
25
20
15
10
5
0
32.9 33.1
25.8
21.3
20.5
14.3
Administration
15.3 15.1
11.8
Defence, Security
and Public Order
Social Sector
10
Economic Sector
2011
2012
Financial Costs
Source: MinFin
For the second consecutive year, the Government attributed the largest sum of the total expenditure of the State Budget to the Social Sector (33.1%), followed by Financial Costs (21.3%), Administration
(20.5%), Defence, Security and Public Order (15.1%), and the Economic Sector (10.0%).
External Accounts
According to the estimates of the Angolan Government for 2012, the balance of payments showed a positive overall balance of close to USD 6,457.30 million.
During the period under analysis, the value of exports stood at USD 75.63 thousand million, while imports reached USD 21.74 thousand million, resulting in a trade balance of USD 53.90 thousand million. In
relation to 2011, exports and imports grew by 14.6% and 5.1%, respectively.
In 2012, the main destinations of Angolan exports were China (43.6%), United States of America (15.8%), India (10.1%) and Taiwan (6.7%). The principal countries of origin of Angolan imports were Portugal
(18.9%), China (11.8%), Singapore (8.4%) and United States of America (7.6%). Also during the reference period, the categories of products which recorded the largest amount of imports were: Other boats tanks (6.2%); Diesel for other uses (1.8%); Other motor vehicles with double cabin (1.5%) and Frozen pieces and offal of cocks and chicken (1.3%).16
15
16
Presidential Decree number 320/11 of 30 December.
Annual Report of the Customs of Angola 2012.
45
Monetary Accounts
During the period under review, Net Foreign Assets grew by 8% as a result of rising oil prices, with the consequent increase in earnings from oil exports, which led to an increase in Net International
Reserves of approximately 17%, to reach USD 30,602.7 thousand million. The 4% growth recorded in Net Domestic Assets was essentially due to the 74% reduction of Credit to the General Government17
and 23% increase of Credit to the Economy.
In 2012, the broad monetary aggregate M3 grew by 7%. This increase was mainly due to the rise in Net Foreign Assets and Net Domestic Assets. The M2 monetary aggregate, which accounts for
approximately 98% of M3, grew by 10% as a result of the increases in Term Deposits in Local Currency (35%) and Term Deposits in Foreign Currency (19%). The M1 monetary aggregate recorded very modest
growth of merely 1%, due to the 15% increase under the heading Notes and Coins held by the Public Sector (NMPP) and 1% reduction in the heading Demand Deposits18.
During the period under review, the Monetary Base19 increased by 3%, essentially explained by the increased Notes and Coins in Circulation (by approximately 16%), and a negative variation in Deposits of
Financial Entities at the BNA (around 2%). Underlying the increased Notes and Coins in Circulation was the 32% decrease under the heading Cash at the Central Bank.
The Monetary Reserve20 recorded a negative variation of the order of 5%. This reduction was due, above all, to the 49% decline in Securities held by Commercial Banks, in spite of the 3% increase in the
Monetary Base.
The Monetary Multiplier21 grew by 12%, shifting from 3.21 to 3.60 as a consequence of the expansion of M3 and contraction of the Monetary Reserve.
Sectors of Activity
Oil and Gas
During 2012, the activity of prospecting and production in the oil sector gave rise to new discoveries in Block 16, province of Cabinda, with Chissonga-1 and Caporolo-1 wells.
The developments recorded in 2012 in the oil sector enabled reaching a growth rate of approximately 4.3% (compared with a negative rate of 5.6% in 2011). The exploration of new discoveries and, especially,
the start-up of activity of the Paz-Flor project were driving engines underlying the growth of the sector.
Oil Production 2012
2,500
2,111
2,000
1,667
2,143
2,075
1,763
1,738
2,110
1,709
1,955
1,726
2,070
1,734
1,500
1,000
Angola
500
Nigeria
0
2011
1st Q 12
2nd Q 12
3rd Q 12
4th Q 12
2012
Source: OPEP
According to OPEC, in 2012 the average daily production of oil reached 1.73 million barrels a day, thus surpassing the production observed in 2011 (1.66 mb/d) which was negatively affected due to reasons
of technical-operational nature.
Pursuant to the Ministry of Finance, in 2012 Angola exported an average of 1.72 million barrels of oil per day, of which approximately 47.5% were sent to China. In that same year, the country continued to
be the second largest exporter of oil to China, accounting for 15% of China’s oil imports, preceded only by Saudi Arabia with 21%.
Reduction of Net Credit to the Central Government (of 74%) and Credit to Local Government (of 11%).
Demand Deposits in Local Currency increased by 8%; Demand Deposits in Foreign Currency fell by 10%.
The Monetary Base is the operational variable of BNA monetary policy that includes Notes Issued, Cash at the Central Bank and Bank Deposits at the Central Bank.
20
The Monetary Reserve includes the Monetary Base, Other Deposits at the BNA and Central Bank Securities held by Commercial Banks.
21
The Multiplier estimates the change in means of payment (M3) resulting from a change in the Monetary Reserve – Multiplier = M3/Monetary Reserve.
17
18
46
19
Diamonds and Minerals
After a period of slowdown of activity in the diamond sector as a result of the international financial crisis and consequent decline in the demand for diamonds, 2012 was characterised by the resurgence
of the diamond sector. The most recent Government projections for the sector of Diamonds and Other point to a growth rate of the order of 9.0% in 2012, compared with a negative rate of 0.7% recorded
in 2011.
According to the Foundation Report of the State Budget for 2012, the total production of diamonds during the period under review is estimated at 11,364,000 carats, compared to 8,301,000 carats in 2011.
For 2013, forecasts point to the start-up of operations of Calonda alluvial mine (province of Lunda Norte), Tchege mine (Lunda Sul), as well as the operationalisation of the first diamond mine in the province
of Malanje (operation of Maua alluvial mine). In addition to these initiatives, it is also expected that activities will be resumed in various mines such as Calanda, Uari and Cambange.
Construction and Public Works
According to Government projections, in 2012, the construction sector presented a growth rate of the order of 7.5%, compared to the 12.0% recorded in 2011.
The Angolan Government has pursued its programme for the real economy, which in the area of construction and housing covered the review of the statutes of national roads, review of the national road
plan, and continuity of the promotion of territorial qualification, stimulating integrated operations of urban rehabilitation which includes land regularisation, social housing, water, basic sanitation, electric
power and environmental valorisation.
The growth which has occurred in this sector was primarily due to public initiative in the pursuit of various projects under the public investment plan (PIP). Regarding private initiative, the construction sector
has suffered especially from the real estate speculation generated in previous years and from the excessive allocation of funds in high rent residential segments. The lack of buyers for these high rent houses
has compromised the debt service incurred with banks, which have reacted by restricting funds to the sector, thereby causing a sharp slowdown in the real estate sector.
Industry
During 2012, the Angolan Government continued to implement the programme aimed at re-launching the industrial sector, with the primary objectives of economic diversification, job creation and import
replacement.
The official estimates point to growth of 6.5% in manufacturing industry for the period under review (13% in 2011). This growth was partly due to the improved business environment, as a result of progress
in various aspects which negatively affected the exercise of industrial activity, namely: the lack of power and water, the lack of qualified labour and high absenteeism22.
Concerning the stimulation of manufacturing industry, various industrial projects were implemented. In the Special Economic Zone of Luanda/Bengo, we highlight the inauguration of 6 industrial units
(Ninhoflex, Indutubos, Telhafal, Transplás, MTBT and Inducabos) valued at USD 78 million. At Catumbela Development Centre, in the province of Benguela, considered Angola’s second industrial park,
particular note should be made of the private investment of USD 8.62 million, which has enabled the construction of 4 factories, namely Tutti Angola, EBM, Neonatal and Ferpinta.
The outlook for the textile industry is very promising. The Angolan Government in partnership with the Japanese company Marubeni has continued the programme of recovery, rehabilitation and modernisation
of three major industrial plants, budgeted at USD 1.15 thousand million, namely África Têxtil (Benguela), Satec (Kwanza-Norte) and Textang (Luanda).
Agriculture and Livestock
According to the estimates of the Angolan Government, the agricultural sector grew by 13.9% in 2012 (9.2% in 2011). The growth in the agricultural sector was due to various actions carried out by the Angolan
authorities with a view to stimulating agricultural activity, at a period marked by a dry spell23 and floods which affected various regions of the country.
Concerning the actions of the Angolan Government, particular note should be made of: the inauguration in Luanda of the first Central Agro-Food Laboratory, whose main objective is the verification of the
quality of national and imported food products, with a capacity to conduct 40 thousand analyses/month in forty samples; the inauguration, in Huíla, of the agro-industrial complex for corn drying and storage
budgeted at approximately USD 8.2 million, with a storage capacity of 12 thousand tons of corn.
The funding of the agricultural sector has mainly been ensured by the Campaign Agricultural Credit and Investment Agricultural Credit programmes24.
”Conjuntura Económica, IVº Trimestre de 2012”,INE, p.16.
A dry spell is a climatic phenomenon caused by insufficient rainfall, in a specific region for an extended period of time.
24
At the time of the approval of these programmes, on 14 April 2010, USD 150 million and USD 200 million, respectively, were made available.
22
23
47
With a view to re-launching livestock activity, the Angolan Government carried out vaccination campaigns aimed at combating and preventing some of the diseases that affect cattle in various parts of the
country. Special note should be made of the start-up of production of vaccines against poultry disease at the Veterinary laboratory, in the province of Huíla.
Fisheries
According to the projections of the Angolan Government, the fisheries sector grew by 9.7% in 2012, showing a strong slowdown of fishing activity in relation to 2011 (17.2%). Fish production stood at 354,500
tons and fish imports reached approximately 60 thousand tons.
During the period under review, there was a considerable recovery in horse mackerel biomass, which enabled reducing the period of prohibition of fishing from 6 to 4 months (May, June, July and
August).
Regarding fish processing techniques, freezing has very largely surpassed salting and drying, partly due to the low production of salt which stood around 50 thousand tons, greatly below the real needs of
the sector.
The Angolan authorities have pursued various initiatives aimed at changing the panorama of the fisheries sector. The legal framework has been strengthened with two important presidential legislative
decrees, where the first validates the management measures relative to marine fishing, continental fishing, aquaculture25 and the second establishes the import figure for horse mackerel.
From a technical perspective, we highlight: the construction and inauguration of the Cold Storage Plant of Porto Amboim (in the province of Kwanza-Sul, estimated at approximately USD 5 million, with a
capacity of preserving 3 tons of fish/day); the reuptake and expansion of five salt production units (three in Benguela and two in Namibe); the receipt of two inspection vessels; the operation of the 1st stage
of the MONICAP system26; and the construction of the regional centres of fishing inspection in the provinces of Zaire, Kwanza-Sul, Benguela and Namibe27.
Trade Services
The official estimates point to growth of 10% in trade services for 2012 (9.5% in 2011).
During the period under review, the number of wholesale commercial establishments on Angolan territory stood at 5,952, generating 52,866 jobs (of which 61% are located in the province of Luanda)28.
However, it is estimated that an increase of around 50 thousand commercial establishments would be required for a complete expansion of the commercial network in Angola.
Regarding the developments in the commercial sector, we highlight: the approval of a credit line to fund the Integrated Development Plan for Rural Commerce and Entrepreneurism (PLAIDENCOR)29;
the implementation of the integrated computerised system for the issue of licenses which has enhanced the efficiency of the process of creation and legalisation of enterprises linked to commercial activity;
reopening of the Nosso Super shops in various points of the country and the inauguration of the Nosso Centro commercial establishment in Luanda30.
Financial Sector
The Angolan banking system maintained its trend of growth in 2012, and is considered one of the most dynamic sectors of the Angolan economy. According to the data published by the BNA, during the
period under analysis, the aggregate assets of the banking system grew by 12%, to stand at USD 65.73 thousand million. The rate of use of banking services by the population31 reached 22% and turnover
grew by 15%, as a result of the 11% increase in deposits and 18% increase in domestic credit.
There have been no significant alterations in the level of competition in the banking system, with five institutions continuing to dominate the Angolan financial market. Of this group of banks, BAI has the
largest market share in terms of deposits, accounting for approximately 20% in December 2012.
Concerning the banks’ profitability, it has been found, according to the preliminary data indicated by the BNA, that there has been a significant reduction in the main indicators: ROAA fell by 39% to stand at
1.6% (2.6% in 2011), while ROAE decreased by 37% to stand at 16% (25% in 2011).
Also during the period under review, the default ratio increased considerably by 91%, shifting from 5.6% to 10.6%. The loan-to-deposit ratio32 grew by 11%, reaching 67% compared to 60% recorded
in 2011.
Aquaculture is the production of aquatic organisms, such as the creation of fish, molluscs, crustaceans, amphibians and the cultivation of aquatic plants for human use.
MONICAP - Continuous Monitoring of Fishing Activities (Ships).
Source: “Jornal de Economia & Finanças”, published on 1 January 2013, p.9
28
CECANG – Census of Wholesale Commercial Establishments of Angola.
29
Magazine “Distribuição em Expansão”, Edition O, 17/12/12.
30
Source: Angop.
31
Partly due to BNA’s Financial Education programme and the project Bankita – Jornal Expansão.
32
Loan-to-Deposit ratio = Credit to the economy / Total deposits.
25
26
27
48
The implementation of the New Foreign Exchange Regime for the Oil Sector (NRCSP) will boost the National Financial System, since the oil sector is the main engine driving the country’s economy. The
various contributions that are expected from the NRCSP include, in particular: greater sophistication of banking products and services, larger sums available in foreign currency, and increased deposit
portfolios and possibility of their transformation into credit to the economy. However, this also poses some challenges, particularly regarding the effectiveness of payment systems, the structuring of
procedures and technological investments, and higher capacity-building needs of the staff in order to meet the requirements of a demanding sector. The NRCSP began to be implemented partially in May
2012, with its completion forecast for October 2013.
Concerning the regulation of the banking system by the BNA, particular note should be made of various instruments which are of most relevance in banking activity and in the economy in general, such as:
the regulation of the entry and exit of local currency and foreign currency; rules for the concession and classification of credit operations; rules for the protection of consumers of financial products and
services; procedures and mechanisms for foreign exchange operations inherent to the Oil Sector (in particular the recording of foreign exchange operations in the Integrated System of Foreign Exchange
Operations - SINOC); combat of money laundering and the financing of terrorism; and the rules and procedures for foreign exchange operations relative to the import, export and re-export of merchandise.
The table below highlights some important legislation that entered into force in 201233.
33
The presidential legislative decrees relative to the Capital Investment Tax Code, Stamp Duty Code and amendments to the Consumption Tax were published in 2011, but entered into force on 1 January 2012; Notices 03/12 to 18/12 are not included in the legislative survey because they refer to 2011, but due to reasons of internal organisation of the National Press they were republished in 2012.
49
Legislation
Date of Publication
Presidential Legislative Decree nr. 05/12
30 Dec. 11
30 Dec. 11
30 Dec. 11
Law nr. 02/12
13 Jan. 12
Presidential Decree nr. 1/12
16 Jan. 12
Law nr. 05/12
18 Jan. 12
Law nr. 08/12
18 Jan. 12
Notice nr. 1/12
27 Jan. 12
Orders nr. 59 and 60/12
31 Jan. 12
Presidential Order nr. 158/12
20 Feb. 12
13 Mar. 12
13 Mar. 12
13 Mar. 12
13 Mar. 12
16 Mar. 12
Notice nr. 2/12
26 Mar. 12
Joint Executive Decree nr. 103/12
29 Mar. 12
Notice nr. 19/12
19 Apr. 12
Notice nr. 20/12
12 Apr. 12
Notice nr. 21/12
13 Apr. 12
Notice nr. 22/12
13 Apr. 12
Law nr. 14/12
4 May 12
4 May 12
4 May 12
Notice nr. 24/12
1 Jun. 12
7 Jun. 12
7 Jun. 12
Law nr. 19/12
11 Jun. 12
Executive Decree nr. 207/12
12 Jun. 12
Order nr. 724/12
12 Jun. 12
Order nr. 725/12
12 Jun. 12
27 Jul. 12
Law nr. 20/12
30 Jul. 12
6 Aug. 12
9 Aug. 12
Joint Executive Decree nr. 255/12
9 Aug. 12
Notice nr. 25/12
14 Aug. 12
Notice nr. 26/12
30 Aug. 12
Notice nr. 27/12
30 Aug. 12
Order nr. 2153/12
5 Oct. 12
Order nr. 2165/12
9 Oct. 12
Notice nr. 28/12
1 Nov. 12
Order nr. 2529
21 Nov. 12
Order nr. 124/12
27 Nov. 12
28 Nov. 12
7 Dec. 12
50
Object
Approval of the Review of the Capital Investment Tax Code (IAC)
Approval of the Stamp Duty Code (IS)
Amendment of articles 1, 2, 8, 9, 11, 12 and 14 of the Consumption Tax Regulation (IC)
Law on the foreign exchange regime applicable to the oil sector
Special Regime of Exemption from the Capital Investment Tax - National Housing Programme
Law of Delimitation of the Municipalities of the Province of Luanda
Patronage Law
Regulation on the Entry and Exit of Local Currency and Foreign Currency
Creation of Two Institutionalised Arbitration Centres - Arbitral Luris, S.A and Harmonia
Authorises the incorporation of the insurance company «Proteja Seguros, S.A»
Creation of the Entrepreneur One-Stop Shop (BUE) and approval of the respective Legal System
Approval of the Implementation Model of the Micro, Small and Medium-Sized Enterprise (MPMEs) Support Programme
Approval of the Small Business Support Programme (PROAPEN)
Approval of the regulations of Law number 30/11 - MPMEs
Tax incentives to national companies of the oil sector.
Establishes periods for the execution of monetary transfers and remittances
Regulation of the Micro-Credit Line called «Meu negócio, Minha vida»
Rules and Procedures to be observed in foreign exchange operations for the payment of imports,
exports and re-exports
Procedures and mechanisms for foreign exchange operations inherent to the New Foreign
Exchange Regime for the Oil Sector, and definition of a schedule for their gradual implementation
Regulation of the conditions for the exercise of the obligations of the Law to Combat Money
Laundering and the Financing of Terrorism applicable to Non-Banking Financial Institutions
Regulation of the conditions for the exercise of the obligations of the Law to Combat Money
Laundering and the Financing of Terrorism applicable to Banking Financial Institutions
Regulation of the process of establishment and exercise of the activity of real estate mediators
and developers
Creation of the Credit Guarantee Fund and approval of the respective regulation
Regulation of Credit Guarantee Companies
Principles and models of standardised cheques to be used in the SPA
Approval of the Regime of Access to Real Estate Properties for residential purposes in the city
of Kilamba managed by the Housing Promotion Fund (FFH)
Creation of FACRA - Fundo Activo de Capital de Risco Angolano (Angolan Venture Capital Active Fund)
Law of Single Person Companies - Creates single person companies, which should adopt a status of limited single person company or public limited liability single person company
Determines that treasury bonds issued under article 1 of Presidential Decree number 96/12 are
issued with no re-adjustment of nominal value
Determines the issue, placement and redemption of treasury bonds in local currency, as advances for future increases of share capital
Determines the issue and placement of treasury bills during the financial year of 2012, as debt founded at the end of the year
Approval of the Regime of Legal Regularisation of Real Estate Properties for Housing, Commerce,
public and private
Authorises the BNA to issue and place in circulation a new family of notes and metal coins, called
“Série 2012”
Approves the Regulation of FACRA (Angolan Venture Capital Active Fund)
Approves the regulation of the public guarantee mechanism for micro, small and medium-sized
enterprises, and natural person entrepreneurs
Approves the regulation of the subsidised credit lines for Micro, Small and Medium-Sized Enter
prises, and Natural Person Entrepreneurs
Banking correspondences
Transition of the Clearing Service for the Cheque Clearing Subsystem
Price List for the Payment System in Real Time - SPTR
Creates the committee for the preparation of the proposed reviews of the Law of Securities and
Law of Financial Institutions
Authorises the creation of the institutionalised mediation and arbitration centres called: «Centros de
Mediação e Arbitragem de Angola (CMA)» and «Centro Angolano de Arbitragem de Litígios (CAAL)»
Amends the wording of article 8 of notice number 1/12 on the regulation of the entry and exit of foreign currency
Authorises the amendments to the Pension Plan and Memorandum of Association of the Pension
Fund of BAI Employees
Creation of the Justice and Law Retirement Committee, directly under the Ministry of Justice
Approves the investment project called «Nova Cimangola II»
Approves the investment project called «GE-GLS Oil & Gas Angola, Limitada»
Core Business Areas
06
51
Jorge Gumbe – The Myth of Kianda
Acrylic on Canvas
52
06. Core Business Areas
In 2012, BAI continued the improvement of its internal processes and adaptation of the supporting structures, with a view to ensuring good performance in the attendance of its customers, improving
commercial action and ensuring suitable coordination of the commercial teams. In this context, alterations were made to the levels of competence of the employees of the network of retail banking and small
and medium-sized enterprises, creating four central departments subdivided into Luanda Bengo I, Luanda Bengo II, Sul and Norte.
In this process, the Bank also restructured the companies and institutions department with the objective of offering greater autonomy in customer relations and in the specialisation of the employees working
in segments with high commercial activity.
A. Corporate Banking and SMEs
Corporate banking and SMEs constitute the segment with the largest turnover for the Bank, accounting for over half the deposits obtained and credit granted. In order to meet the needs of this segment, the
Bank has endowed its employees with training sessions, both in classroom situations and on-the-job, and in 2012 adopted a strategy of greater proximity to its customers where, simultaneously with its physical
branches, the Bank actually makes ongoing visits to customer domiciles with a view to supporting the stimulation of their business and ensuring the adequacy of their management and reporting policies.
During the year, yet another business service centre was inaugurated, leading to a total of 6 which are distributed strategically over the country. The number of customers in the corporate banking and
SME segment stood at 25,952, an increase of 3,006 new customers (+13%) relative to 2011 (22,946 customers). However, the amount of deposits obtained and credit granted fell by 27% and 7% respectively.
In 2012, the Bank offered the credit product BAI Business Accounts, which is a credit card of the VISA network specifically customised for companies and institutions denominated in local currency,
provided for the acquisition of goods and payment of services in commercial establishments of the VISA network in Angola and abroad, also of necessary convenience in travel and representations.
Deposit Portfolio
In contrast to the previous year, 2012 was marked by a reduction in the amount of deposits in the portfolio assigned to the corporate and SME segment. Deposits in this segment reached USD 6,695 million,
representing a decrease of 27% relative to 2011 (USD 9,171 million). These deposits corresponded to 79% of the Bank’s total deposit portfolio (2011: 88%).
By the end of 2012, 51% of the deposits in the company and institutions segment were held as current, having fallen by 19 percentage points in relation to 2011. Current deposits of the corporate and SME
segment stood at USD 3,414 million.
MILLION USD
Deposits – Corporate Banking and SMEs versus Deposit Portfolio
12,000
10,000
8,000
6,000
4,000
2,000
0
10,455
8,507
88%
Companies and Institutions
79%
Total
Dec. 11
Dec. 12
Term deposits recorded an increase of 19 percentage points in the weight of the deposits of the corporate and SME segment, having shifted from 30% in 2011 to 49% in 2012. Term deposits reached USD
3,280 million, corresponding to an increase of USD 487 million relative to December 2011.
Deposits by Products - Individuals
December 2011 (Million USD)
DD; 70%
6,378
TP; 30%
2,793
DD; 51%
3,414
TP; 49%
3,280
53
Foreign currency deposits (FC) continued to represent the largest amount of deposits in the segment, with a total of USD 4,359 million in December 2012. This value was 31% lower than that recorded in
the previous year (USD 6,277 million).
Deposits by currency - Corporate Banking and SMEs
FC; 68%
Deposits by currency - Corporate Banking and SMEs
FC; 65%
DC; 32%
2,895
6,277
DC; 35%
2,336
4,359
Deposits in local currency (DC) increased by 3 percentage points in relation to the amount recorded in 2011. At the end of 2012, deposits in DC stood at USD 2,336 million, representing 35% of the total
deposit portfolio of this segment.
Deposits by Currency & Product - Corporate Banking and SMEs
Deposits by Currency & Product - Corporate Banking and SMEs
TD - DC; 13%
DD - FC; 34%
1,227
DD - FC; 51%
2,270
DD - DC; 18%
1,668
4,711
TD - DC; 18%
1,192
TD - FC; 31%
2,088
TD - FC; 17%
DD - DC; 17%
1,146
1,566
Loan Portfolio
Credit granted to the corporate and SME segment stood at USD 2,613 million, compared with USD 2,851 million recorded in 2011. This amount represents a reduction of 8% in the credit granted to this
segment. During 2012, the credit granted to this segment accounted for 88% of the total credit granted.
Medium and long-term credit stood at USD 1,390 million, an increase of 4% relative to the previous year. By contrast, short-term credit fell by 19%, to stand at USD 1,223 million. Thus, the weight of shortterm credit shifted from 53% at the end of 2011 to 47% by the end of 2012, increasing the gap between the funds payable and the liquidity of the investments.
MILLION USD
Loans - Corporate Banking and SMEs versus Loan Portfolio
3,500
3,000
2,500
2,000
1,500
1,000
500
3,236
2,973
88%
Corporate Banking and SMEs
Total
Dec. 11
54
88%
Dec. 12
Loans by Term - Corporate Banking and SMEs
M/L Term; 47%
Loans by Term - Corporate Banking and SMEs
S/ Term; 53%
M/L Term; 53%
1,519
1,332
S/ Term; 47%
1,223
1,390
B. Retail Banking: Individuals
During 2012, the Bank reached the mark of 96 branches providing specialised services for the retail network, with the opening of 8 new branches in Luanda and 5 in other parts of the country, where the
are distributed between 56 in Luanda and 43 in the rest of the country. The Bank reduced its network of service points to 8 (10 service points in 2011) justified by their proximity to traditional branches and
replacement by electronic channels such as the installation of ATMs.
During the year, the number of customers in the Individuals segment increased by 65,461 (+17%) compared to that recorded at the end of 2011, with the Bank achieving a total of 456,996 individual
customers.
BAI continued its efforts to be the leading provider of innovative products in the market and which meet its customers’ needs. It was to this end that the Bank launched the product “Crédito SuperOrdenado”
and the Flex fuel card, restructured the salary-based credit product and updated the terms and conditions of the BAI Kamba card, thus improving the range of products for individual customers.
The turnover (Deposits and Loans to customers) of the Individuals segment increased by 30%, reaching an amount of USD 2,197 million, compared to the USD 1,825 million recorded in 2011, demonstrating
the strong influence that this segment continues to represent in the Bank’s activity.
MILLION USD
Turnover
3,000
2,500
2,000
1,500
1,000
500
0
2,197
1,825
Dec. 11
Dec. 12
Deposit Portfolio
At the end of 2012, the portfolio of deposits of Individuals stood at USD 1,813 million, representing 21% of the Bank’s total deposits. This value was higher than that recorded in December 2011 (USD 1,283 million).
MILLION USD
Deposits - Individuals versus Deposit Portfolio
12,000
10,000
8,000
6,000
4,000
2,000
0
10,455
8,507
Individuals
21%
12%
Dec. 11
Total
Dec. 12
55
During 2012, BAI recorded a total of USD 1,122 million in current deposits of the Individuals segment, corresponding to an increase of 55% relative to the end of 2011 (USD 722 million). Term deposits accounted
for 44% of total deposits of the Individuals segment, reaching a total of close to USD 690 million, which represented a significant increase in absolute terms (+ 23%) relative to the previous year.
DD; 56%
TD; 44%
561
722
DD; 62%
TD; 38%
690
1,122
Deposits in local currency (DC) accounted for 36% of the deposits of the Individuals segment, amounting to USD 645 million. This value reflects growth of 22% relative to that recorded in December 2011
(USD 527 million). Foreign currency deposits stood at USD 1,168 million (64% of the total), representing an increase of 54% relative to that recorded at the end of 2011 (USD 756 million).
Deposits by Currency - Individuals
FC; 59%
Deposits by Currency - Individuals
DC; 41%
527
756
Deposits by Currency and Product - Individuals
TD - DC; 16%
TD - FC; 28%
354
Deposits by Currency and Product - Individuals
700
DD - FC; 31%
DC; 36%
645
DD - FC; 39%
207
402
FC; 64%
1,168
DD - DC; 25%
TD - DC; 12%
223
TD - FC; 26%
321
467
DD - DC; 23%
422
Loan Portfolio
Loans granted to Individuals stood at USD 360 million, recording a reduction of 6% in relation to the end of 2011 (USD 385 million). In 2012, loans granted to Individuals accounted for 12% of the total portfolio
of loans granted by the Bank.
56
MILLION USD
Loans - Individuals
3,500
3,000
2,500
2,000
1,500
1,000
500
3,236
2,973
Corporate Banking and SMEs
12%
12%
Dec. 11
Dec. 12
Loans by Term - Individuals
M/L Term; 53%
Loans by Term - Individuals
S/ Term; 47%
203
Total
180
M/L Term; 67%
S/ Term; 33%
242
118
C. Private Banking
The evolution of markets and progressive need to meet customer requirements led to the creation of the Private segment. This segment is characterised by demanding customers, with considerable funds
and the specific qualities of discerning customers with knowledge of the market. These customers seek a personalised service based on a close relationship, reliability, speed and efficiency. Above all, they
seek solutions from financial institutions for the different challenges they face.
Currently, the products and services in the financial sector are quite similar. The particular advantage offered by BAI lies in the added value it provides to the daily lives of its customers. Hence, in 2011, BAI
created the infrastructure to implement the specialised business model in this segment, and also allocated highly qualified and specialised managers to this segment.
In 2012, the Bank continued to develop training actions on an ongoing basis, both in a classroom situation and on-the-job, with the objective of endowing private customer managers with technical,
behavioural and strategic skills in their action.
The Bank invested in customer loyalty using the member-get-member strategy, through the sale of products such as credit cards, provision of financial investments according to the customer profile and
sales of credit insurance products.
D. Investment Banking
Investment Banking is a business area of the Bank which provides financial advisory services to its customers, offering a range of integrated financing solutions for the undertaking and development
of their business, including business combination solutions such as transfer of funds, subscription or acquisition of securities, mergers and acquisitions and privatisation, aimed at creating value for all
stakeholders.
In this perspective, in 2012, investment banking activity was focused on the design of financing products suited to the specific needs of customers under project finance solutions,, structuring of solutions
for customers of the real estate sector, provision of financial advisory services, covering typical corporate finance and capital market solutions as well as ensuring the restructuring of high potential
operations.
In 2012, the loan portfolio under the management of the investment banking segment stood at USD 1,584 million, having increased by 13% relative to 2011, of which 92% is in a normal situation, 4% is overdue
and 4% is off balance sheet. The weighted average remuneration rate stood at 9.87%.
57
The majority of the credit allocated to this business segment is expressed in foreign currency which accounts for 73% (USD 1,153 million).
Loan Portfolio by Currency
USD; 73%
AKZ; 27%
The Bank continued its action of structuring corporate finance, project finance and syndicate operations, with its portfolio having presented the following distribution by activity sector as at 31 December
2012 and 2011:
Activity Sector
Real estate
Oil
Industrial
Other
Total portfolio (USD million)
2011
2012
37%
19%
18%
26%
1,153
42%
20%
4%
34%
1,584
The portfolio, by residual maturity period, presents credit of larger amounts for projects above 5 years, accounting for 52% of total credit, while for periods below 5 years the distribution is more or less
equitable with some relevance for the 3 and 4 year periods, which recorded a balance of approximately USD 229 million.
In 2012, Investment Banking presented a loan portfolio associated to different risk categories varying from A to G, where category A represents lowest risk and G highest risk. Particular note should be made
of category C, corresponding to low risk, representing 62% of the Investment Banking portfolio for 2012, which reveals an improvement in the risk level when compared to 2011.
Risk Level
B; 18%
C; 62%
A; 1%
G; 5%
F; 2%
E; 4%
D; 8%
58
Project Finance is a very important form of funding, with a total amount of USD 897 million, representing 54% of the portfolio at the end of the year. Note should also be made of the weight of Bank Funding
and Bank Syndicates, which together accounted for approximately 46%.
Form of Funding
Syndicate Arrangements; 20%
Project Finance; 54%
Bridge Finance; 5%
Loans; 20%
Venture Capital; 1%
In terms of structured operations, in 2012, Investment Banking approved a total of 15 loans out of 36 analysed, equivalent to a turnover of the order of USD 2,206 million. In terms of form of funding, 60% of
the approved projects were under a regime of Funding, 33% Project Finance and 7% Bank Syndicate. Regarding the distribution between activity sectors, 33% was attributed to the real estate sector, 13%
to the service sector, 7% to the oil sector and 47% to miscellaneous sectors.
Restructuring
During 2012, BAI conducted a total of 33 restructuring projects, having recorded a total of USD 127,49 million. This value results from the revaluation of projects of the real estate, commerce, oil and other
sectors. This restructuring mainly referred to Extension of Periods with 18 restructured projects, 10 increases of share capital and 5 transformations of form of funding.
59
60
Electronic Banking
07
61
António Toko – Diversity
Work Carving
62
07. Electronic Banking
During 2012, the Bank continued its effort towards the development of innovative solutions, providing higher levels of satisfaction in the services provided to its customers, through the creation of more
attractive and convenient products and channels for all segments and businesses.
BAI Directo
The portfolio of customers subscribing to BAI Directo services (SMS and Internet Banking) increased by 16,965 customers, 24% more than in 2011, and this variation is reflected in the increased access of
customers to the SMS channel, which represented 62% of the total portfolio. This positive change is also reflected in the expansion of the network, which increased by 13 branches, to close the year with
a total of 112 branches, and in the effort to develop solutions to provide greater satisfaction in the services provided to customers, through the creation of attractive and convenient products and channels
for all segments.
BAI Directo
120%
100%
80%
60%
40%
20%
0%
50,379
70,572
87,537
37%
38%
38%
63%
62%
62%
SMS Customers
IB Customers
2010
2011
2012
In 2012, the Bank endeavoured to ensure that the Call Centre provides an efficient service to customers subscribing to the Electronic Banking services, which recorded an access of 31,830 calls compared
to the 1,471 calls received in 2011.
Banking Terminals
During 2012, BAI’s network of Automatic Teller Machines (ATMs) and Points of Sale (POS) grew strongly. Hence, 264 ATMs and 2,040 POS were active by the end of 2012, compared to 232 ATMs and 1,676
POS in 2011, representing growth of 14% and 22% respectively.
Banking Terminals
2,040
2012
264
Active POS
1,676
2011
232
Active ATM
1,193
2010
157
0
500
1,000
1,500
2,000
2,500
63
BAI Payment Cards
The year was marked by the continued growth of debit cards. Active cards showed a decline of 14%, reaching 145,115 cards, while Live and Valid cards recorded a total increase of 83,925 cards. In 2012, BAI
achieved an operating ratio of 43% which represented 11% of the market.
Debit Cards
120%
100%
80%
60%
40%
20%
0%
486,645
727,996
754,878
Valid Cards
14%
15%
19%
32%
30%
36%
53%
54%
45%
Live Cards
Active Cards
2010
2011
2012
In relation to VISA credit cards, there was a 21% increase in the number of users, corresponding to 6,618 valid credit cards compared to 5,467 in 2011. In light of our competitive position, we intend to continue
to restructure every product and retain our customers’ loyalty through new financial solutions.
64
Financial Holdings
08
65
Aguinaldo Faria – The Plunge
Acrylic on Canvas
66
08. Financial Holdings
The formation of a reference financial group, the diversification of the group’s activity and its internationalisation are important aspects of the Bank’s strategy. Having embarked on its internationalisation
early, the Bank has been guided by rigour and prudence in its operations, both at home and abroad. The Bank’ solidity, based primarily on its customer-driven approach, has been reflected in its strategy of
continuing to be a preferred channel of business and investment into and from Angola.
As at 31 December 2012, BAI S.A. had three subsidiaries in the financial banking sector, namely BAI Europa S.A. (BAIE), BAI Micro Finanças S.A. (BMF) and BAI Cabo Verde (BAI CV), as well as minority
stakes in Banco Internacional de São Tomé e Príncipe (BISTP) and BPN Participações Brasil Ltda. In the non-banking financial sector, the Bank has control over the company Nova Sociedade de Seguros
de Angola (NOSSA Seguros) through a holding of 62.24% and control over SAESP (Sociedade Angolana de Ensino Superior Privado de Angola) and Fundação BAI, as detailed in Note 8 of the Notes to the
Financial Statements.
BAI Europa S.A.
BAI Europa S.A. (BAIE) started operations in Portugal in 1998 as a branch of BAI S.A. In 2002, it changed its legal status from branch office to subsidiary, with the main shareholder being the Banco Angolano
de Investimentos, S.A., which owns over 99.9% of its share capital, with head office in Lisbon and an office in Porto.
In the different contexts of the Angolan economy and Portuguese economy, BAI Europa has maintained the business strategy adopted over the past few years, focusing on bilateral trade of goods and
services between the two countries, as well as company investment actions directed at the Angolan market, with natural concentration in the funding of exports of Portuguese origin.
The Bank has upheld the high standards of prudence in the management of business risks, while at the same time seeking to make the most of emerging business opportunities, scrupulously observing the
prudential parameters applicable to the associated risk.
Concerning the management of liquidity, a policy of prudence has been pursued in the investment of the funds obtained, particularly, in Angola. The interbank market continues to be the main receiver of the
funds obtained by the Bank, complemented by investments in public debt, predominantly short term, and in commercial paper of selected issuers.
At the end of the year, the portfolio of loans to customers represented a low percentage (9.6%) of total assets, including commercial paper operations. The balance of loans to customers is fully covered by
customer deposits and equity.
The Bank’s equity amounted to Eur 58,542,087 at the end of 2012 (+10.8% than at the end of 2011), with solvency and Core Tier 1 ratios of 15.2% and 14.7%, respectively, greatly above the minimum regulatory values.
The Bank’s activity in 2012 led to the generation of a pre-tax profit of Eur 7,081,744 (+ 20.8% than in 2011), while net income after tax stood at Eur 4,596,875 (+ 17.3% than in 2011), where these figures indicate
an effective income tax rate of 35% (without considering the exceptional tax which the Bank continued to be subject to). These earnings are explained by the combination of the following factors:
• Net interest income of Eur 8,297,249, practically identical to that achieved in 2011 (Eur 8,296,239), as a result of a lower average amount of assets and a higher remuneration of these assets
relative to the Bank’s funding costs;
• Reduction of provisions and impairments, from Eur 1,127 thousand to Eur 107,671, as a consequence of the annulment of provisions for risks which were extinguished;
• Increased loan-to-deposit costs, from Eur 3,375,348 to Eur 3,582.561 (+ 6.1%), in particular regarding staff costs which increased by 8.4%, from Eur 1,972,094 to Eur 2,138,421, which led to a
slight aggravation of the cost-to-income ratio of 32.6% in 2011 to 33.3% in 2012.
It should also be noted that the Bank’s net income was negatively affected by the incidence of the exceptional tax on certain headings of the liabilities, created in 2011 and maintained in the law of the State
Budget for 2012, calculated on the average value of these headings in 2011, which was reflected in a cost of Eur 711,400, representing Eur 85,568 (13.7%) more than the value settled and paid in 2011. This tax
will remain in force in 2013, although the amount payable should be lower since the average value of the liabilities upon which it is incident was lower in 2012 than that recorded in 2011.
BAI Micro Finanças
Banco BAI Micro Finanças, S.A., hereinafter referred to as BMF or Bank, with head office in Luanda, is a private bank owned by resident and non-resident entities. The Bank was incorporated on 19 February
2004, and began its banking activity on 20 August 2004. BAI S.A. has shareholder control and manages the Bank with a 92.93% stake in its share capital. Chevron Texaco Sustainable Development Ltd. owns
a stake of 7.07% in the Bank’s share capital. The presence of BAI in the micro finance area falls under its policy of social responsibility and business, support to the entrepreneurial spirit and contribution to
improving the living conditions of disadvantaged citizens.
67
During 2011, BMF joined the national financial education campaign “Bankita” promoted by Banco Nacional de Angola (BNA). BNA thus invested in the national financial education campaign, together with
other commercial banks, for the purpose of further enhancing the growing level of participation of the national population in the banking system. This was why the Bankita account was created, a demand
deposit account with a minimum opening value of AKZ 100.00. This account is exempt from maintenance costs and offers free access to a Multicaixa card.
Accordingly, the BNA intends to reverse the current scenario of the banking system, which has a rate of bank use by the population of 21%, and reduce the amount of cash outside the financial system.
BMF closed the year of 2011 with a net income of USD 653 thousand, representing a decrease of 23% over the previous year. Net Operating Income amounted to USD 10.9 million (USD 7.6 million in 2010)
thereby recording 44% year-on-year growth. This performance is explained by the excellent performance of Net Non-interest Income, which reached USD 6.6 million, corresponding to annual growth of
71%. Revenue from foreign exchange transactions and commissions generated by Western Union services represent, cumulatively, 79% of net non-interest income.
In 2011, the Bank recorded net assets of USD 99 million, an annual increase of USD 41 million. In 2011, the loans granted by the Bank to its customers amounted to USD 57 million (USD 12.1 million in 2010),
which represents an increase of 372%. Accumulated provisions recorded a value of USD 1.5 million, thus representing an increase of 23% relative to the previous period, reflecting an increase in overdue
loans. On the liabilities side, we highlight the growth of third party funds, by USD 36.6 million, which shifted from a value of USD 36.9 million to USD 73.5 million. The deposit portfolio represented 34% of
net assets, standing at 33.6 million, while money market liabilities represented 40%.
BMF closed the year 2011 with a total of 17 branches (13 branches in 2010), affirming its position in 7 provinces of the country and employing 234 employees, a reduction of 5 employees year-on-year.
BAI Cabo Verde
Banco BAI Cabo Verde (BAI CV) was created in November 2008, in a partnership between BAI S.A (73.39%), the Sonangol Group (19%) and SOGEI (7.61%). The Bank began operations with the opening of its
head office in the capital of the country (Praia). The Bank’s main target segment is comprised of companies, but it also provides services to individuals, emigrants and foreign investors.
The buoyancy of domestic investment in Cape Verde has contributed, together with the performance of tourism, to underpin economic growth. Under the absence of significant inflationary pressures, the
persistence of adverse external conditions has maintained pressure on public and external accounts, with monetary policy having acted in defence of the foreign exchange system linked to the Euro.
The key indicators of activity show the following evolution:
Management Indicators
Accumulated
Dec. 10
Accumulated
Dec. 11
Accumulated
Dec. 12
5,559
2,493
1,355
923
160
189
445
-110
236%
-2%
-12%
7,668
3,325
2,011
914
183
189
464
-348
245%
-5%
-38%
9,002
3,892
2,415
904
304
401
444
-58
111%
-1%
-6%
Net change (Dec. 12 vs Dec. 11)
Abs
%
Values in Million ECV
Net Assets
Loans to Customers
Customer Funds
Equity
Net Interest Income
Net Operating Income
Operating costs
Net Income
Cost to Income
ROA
ROE
1,334
567
404
-10
121
212
-19
290
-135%
4%
32%
17%
17%
20%
-1%
66%
112%
-4%
-83%
-55%
-86%
-83%
BAI CV closed the year of 2012 with Net Assets of ECV 9,002 million compared to ECV 7,678 million in 2011. The portfolio of customer deposits stood at ECV 2,415 million and the portfolio of net loans to
customers reached ECV 3,892 million, corresponding to an increase of ECV 567 thousand relative to the previous year. The loan-to-deposit rate stood at 161%, a result of an increase in the loan portfolio.
Net Interest Income showed growth of 66% relative to the previous year, reaching ECV 304 million and representing 76% of net operating income which stood at ECV 401 million at the end of 2012. In terms
of costs, during the period under review, BAI CV recorded Operating costs of ECV 444 million, corresponding to a decrease of ECV 19 million, where General Administrative Costs accounted for ECV 213
million, Staff Costs represented ECV 151 million and Depreciation for the Year came to ECV 81 million.
The Bank once again showed a negative net income of ECV 58 million, an increase of 83% relative to the previous year.
68
BISTP - Banco Internacional de São Tomé e Príncipe
The presence of BAI in the archipelago of São Tomé e Príncipe has been maintained through its holding in Banco Internacional de São Tomé e Príncipe (hereinafter referred to as BISTP or the Bank) since
2004 with a 25% stake in its share capital. The Bank’s head office is in the city of São Tomé and its other shareholders are the State of São Tomé e Príncipe with 48% and Caixa Geral de Depósitos de
Portugal, with 27%.
BISTP is the largest and oldest bank of the financial system of São Tomé, which started its operations on 3 March 1993. With the characteristics of a universal bank, BISTP focuses its activity on the retail
banking and corporate segments.
The Bank recorded a net income of STD 27,504 million (USD 1.4 million), a 17% decrease relative to the previous year.
Net Operating Income grew by 13% year-on-year, standing at STD 170 million (USD 9 million) in 2012. This figure reflects the good performance of net interest income, which grew by 8% in relation to 2011,
to reach STD 100,479 million (USD 5.4 million) and the contribution of net non-interest income, which increased by 22% to stand at STD 70,144 million (USD 3.7 million).
BISTP closed the financial year of 2012 having recorded good performance in its key activity indicators. Net assets stood at STD 1,764 thousand million (USD 95 million), 25% higher than the previous year.
The increases in the deposit portfolio and provisions essentially contributed to this result. The deposit portfolio showed an increase of 29%, closing at STD 1,382 thousand million (USD 74 million). An increase
of 12% was recorded under provisions, which stood at STD 123 thousand million (USD 6.5 million) at the end of 2012. Loans to customers grew by 13%, reaching the value of STD 782 thousand million (USD
42 million), giving the Bank a loan-to-deposit rate above 57% (2011: 65%).
BPN Participações Brasil
BPN Participações Brasil Ltda. seeks to invest in Brazilian financial institutions and other institutions authorised to operate by Banco Central do Brasil. The company’s share capital, fully subscribed and
paid-up in local currency, is R$ 126,229,265.00 (USD 67,293,562.75) divided into 227,118,015 shares. BPN Participações, SGPS, S.A. holds 212,838,163 shares, corresponding to approximately 93.71% of the
shares representing the company’s share capital and Banco Angolano de Investimentos S.A. owns 14,279,852 shares, that is, 6.29% of the shares representing the company’s share capital.
It was expected that Brazil would show very robust economic growth in 2012, which, in fact, did not occur (estimated growth below 1%), in spite of the Government’s effort to accelerate credit, maintain the
reduction of the IPI (tax on industrialised product) for goods such as motor vehicles, and the reduction of credit rates by the Brazilian Development Bank (BNDES).
The Brazilian financial market considered that the Government’s interference in the financial and electric sectors, placing State banks in a position of lending at lower rates and applying lower and rather
negative prices, was leading to the drying up of financial flows in particular to the stock exchange.
In response, the Central Bank of Brazil cut taxes on capital investment in Brazil (e.g. IOF and IR), but this was not sufficient to strengthen the confidence of investors to prior levels.
Added to this negative scenario, the main Brazilian banks showed net earnings in line with market expectations, but with default levels in their loan portfolios still at high levels, a fact which might well be
repeated in the first semester of 2013.
BPN Brasil recorded R$ 17.9 million in provisions for loans during 2012 and achieved the recovery of assets given to back loan operations of the order of R$ 9.4 million during the same period.
The loan portfolio closed the year of 2012 valued at R$ 90.9 million and for 2013, without considering new operations, should close the year at R$ 53.6 million.
In this context, and depending on expectations concerning loan operations and taking into account the Bank’s monthly cost (around R$ 1 million/month), if the Bank’s is not sold to a new investor, R$16.5
million of extra capital will be required for the financial year of 2013.
During 2012, BPN Brasil showed a net loss of R$ 18,841 thousand (projection of R$ 28,778 thousand), where this relative improvement was achieved mainly due to the (i) calling in of guarantees of nonperforming loan operations of the value of R$ 9,643 thousand (projection of R$ 4,524 thousand), and (ii) intermediation of operations conducted in the second semester (R$ 2,900 thousand).
69
NOSSA Seguros
Nova Sociedade de Seguros de Angola, S.A. (hereinafter referred to NOSSA Seguros or NOSSA), was established on 6 October 2004, for the exclusive corporate purpose of exercising the activity of direct
insurance and reinsurance in all life and non-life branches, as well as the management of pension funds to the full extent permitted by law.
The Bank’s investment in the Angolan insurance market falls under its strategy of diversification of the group’s activity in financial businesses of high potential growth and creation of synergies to boost the
differentiated range of services and products on offer.
The insurance sector in Angola is composed of 7 insurance companies, and has experienced remarkable growth. The public deed of incorporation of ASAN (Association of Angolan Insurers) was drawn up
in the first fortnight of February 2012, constituting an extremely important instrument for the strengthening and growth of the insurance sector in Angola.
In early 2012, through the definitive contract for the purchase and sale of share in NOSSA, BAI acquired part of the shares that had been held by Real Seguros Holding, SGPS, S.A. in NOSSA (971,300 shares),
having paid a value equivalent to USD 10,000 thousand, implying the strengthening of its stake to 65.24%.
As at 31 December 2012, the Bank was awaiting authorisation by the Insurance Supervision Institute and Ministry of Finance in order to acquire the remaining 7% that Real Seguros Holding, SGPS, S.S. still
holds in NOSSA, under the promissory contract signed with this company.
The milestones in the activity of NOSSA Seguros during 2012 are highlighted below:
• Approval of the new statute of the company which seek to comply with the current legal requirements and empower the shareholders and members of the governing bodies with capacity
to take decisions so as to enable developing the business in an encompassing and sustained manner;
• Approval of the Strategic Plan for the next 5 (five) years;
• Launch of the new image and brand of NOSSA Seguros conferring greater focus to BAI’s strategy and association to the brand;
• Inauguration of 3 (three) new branches, with two being in Luanda and one in Lobito (Benguela);
• Acquisition and installation of the new Data Centre which will serve the strategy of business growth and national coverage;
• Configuration of the products associated to the Bancassurance channel.
During 2012, NOSSA’s activity was developed pursuant to high standards of prudence and rigour in the management of financial assets in the direct insurance and reinsurance activity in all life and non-life
branches, as well as in the management of pension funds.
The net income of NOSSA Seguros for 2012 reached USD 2.04 million, representing an increase of USD 1.9 million compared with the USD 119 thousand achieved in the previous year. This increase is the
consequence of the decline in the claims rate, which shifted from 40% to 30%, reflected in the 7% reduction in claims costs, which stood at USD 10.9 million in 2012 (2011: USD 11.7 million) and 23% increase
in premiums and their additional items, which stood at USD 36.3 million (2011: USD 29.5 million).
At the end of the year, NOSSA’s Net Assets stood at USD 77.3 million, showing minor growth of 0.91% in relation to the previous year. The portfolio of premiums under collection fell by 10.95% (USD 7.5
million) in relation to 2011, standing at USD 28.9 million. However, the largest change in the asset portfolio was due to the increase in Net Fixed Assets, which shifted from USD 1.1 million to USD 4.7 million
in 2012. On the liabilities side, the portfolio of technical provisions decreased by USD 2.08 million compared to 2011, standing at USD 29.6 million in the period under review.
FIPA (Angolan Private Investment)
Similarly to the Bank’s involvement in the insurance market, placed under its strategy of diversification of the group’s activity in financial businesses of high potential growth and creation of synergies, BAI
also has a stake in FIPA (Angolan Private Investment Fund).
The Fundo de Investimento Privado - Angola SCA, SICAV-SIF (hereinafter referred to as FIPA) is a corporate partnership, limited by shares, constituted under the laws of the Grand Duchy of Luxemburg as
a unit trust (“société d’investissement à capital variable”), a specialised investment fund subject to the law of 13 February 2007, relative to the specialised investment funds of this country.
The fund was constituted as autonomous on 4 December 2009, for a limited period of 10 years as of the fund’s first investment, with possible extension for a further 2 years. The head office of the fund is
in the Grand Duchy of Luxemburg. The fund’s investors have undertaken a capital commitment to disburse USD 34 million through cash calls.
70
The principal objective of the fund is to invest in venture capital projects, fostering the expansion of the business in order to achieve higher returns through the appreciation of the private equity. The
investments are made in a portfolio of companies based in Angola.
Initially, the fund seeks to acquire significant minority positions and representation on the board and/or other shareholder rights. The intended investment strategy follows the mandate defined by FIPA and
seeks to explore the opportunities in various sectors in Angola (excluding the upstream oil sector). Primary exit strategies include sale to strategic or financial investors entering into or under expansion in
Angola, listed on local stock exchanges (if existing), or sale to minority shareholders.
As at 31 December 2012, the fund had cash calls relative to the capital commitment of USD 11.3 million, i.e. 33%, and had invested USD 6.85 million of the committed capital. The fair value of the private equity
under the fund’s management is USD 8.3 million, while the fair value of BAI stood at USD 2.4 million.
Investors
Banco Angolano de Investimentos
Norfund
MAEC Spain
European Investment Bank
Banco Atlântico
Total
%
Ownership
Capital
Commitment (USD)
Accumulated Contributions (USD)
29.41%
29.41%
17.65%
17.65%
5.88%
100%
9,999,400
9,999,400
6,001,000
6,001,000
1,999,200
34,000,000
3,320,000
3,320,000
1,990,000
1,990,000
660,000
11,280,000
Accumulated Gain or Losses (USD)
-870,536
-870,536
-522,440
-522,440
-174,048
-2,960,000
Fair Values (USD)
as at 31/12/2012
Missing
Contributions (USD)
2,449,464
2,449,464
1,467,560
1,467,560
485,952
8,320,000
6,679,400
6,679,400
4,011,000
4,011,000
1,339,200
22,720,000
During 2012, the Fund’s Investment Committee recommended two projects for final approval. The fund signed four investment contracts: the equity investment in Special Edition S.A. and Big Media Lda
(approved in 2012), the equity investment option contract in African Selection Trust SA and the investment contract in Angola Environmental Service Lda (approved in 2011).
The fund also disbursed USD 6.2 million to Special Edition S.A.and granted a loan to an Angolan Special Purpose Vehicle to the value of USD 0.65 million, used to acquire a 7.5% stake in Big Media Lda.
As at 31 December 2012, the Bank recorded the contribution made to the fund (USD 3,320,000) as financial fixed assets due to referring to a closed fund not listed on the stock exchange, with a 10-year
period of life with possible extension for a further 2 years (see note 8 of the Notes to the Financial Statements).
71
72
Risk Management
09
73
Kinavala – Dance of the Ants II
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09. Risk Management
Introduction
During 2012, the Bank upheld risk management as a determinant element in the definition of its capital allocation strategy and protection of its net worth, therefore having developed a series of initiatives
which enabled attenuating the negative effect derived from credit, market and operating risks.
Main risk management developments in 2012:
• Strengthening of information systems, internal control and operating risk with the creation of the Operational Control and Risk Office and of the measures to prevent money laundering and
the financing of terrorism;
• Creation of the IT and Security Committee (CIS) with the objective of responding to and mitigating system risk through the definition of limits and preventative measures;
• Creation of the Credit Recovery Department, focusing on the creation of the Off Balance Sheet Department;
• Preparation for the new requirements of the banking supervisory body (employees received further training in Basel II, Credit Risk Analysis, Anti-Money Laundering and other areas).
Organisation of the Risk Function
Risk management is led by the Executive Committee which conducts the risk management of the Bank’s assets is an integrated manner through specialised committees by type of risk. These committees
are managed based on the provisions described in their respective regulations and best practices for overall risk management.
Governance of Risk Management
Board of Directors
Executive Committee
Credit Committee
Assets and Liability Committee (ALCO)
IT Committee
In 2012, the Bank’s risk management function had three committees, the Credit Committee, Asset and Liability Committee (ALCO) and IT Committee, respectively for the management of credit risk, balance
sheet risk (interest rate, liquidity and exchange rate risk) and operating risk (information systems).
Operational risk management as a whole is also managed by the executive committee which interacts on an ongoing basis with the different structural units (including the Integrated Security Offices,
Compliance, the Internal Audit Department, etc.) in order to mitigate the probability of occurrence of losses arising from shortcomings, deficiency or inadequacy of internal processes, compliance, people,
etc. The executive committee is also supported by the Operational Control and Risk Office which is currently starting up.
75
A. Balance Sheet Risk
BAI’s risk management of its balance sheet is an activity which seeks to ensure adequate levels of exposure to risk in relation to its equity structure and capacity to absorb losses arising from the
materialisation of such risks.
The ALCO is chaired by the Chairman of the Executive Committee and is composed of the managers and directors responsible for the Financial, Planning, Accounting, Commercial and Marketing areas. Up
to 2012 the committee held quarterly meetings, which has been changed to monthly meetings as of 2013.
The committee is entrusted with the following duties:
• Definition, assessment, implementation and follow-up of the balance sheet risk management policy (particularly liquidity, exchange rate and interest rate risks);
• Documentation of the Balance Sheet Risk Management Policy, which should structure and characterise the limits of exposure to balance sheet risks and define the management reports and
indicators that will enable the assessment and monitoring of the defined limits;
• Promotion of the existence of the necessary human, technical and IT resources for the effective and efficient management of assets and liabilities;
• Definition, organisation, supervision and direction for the aggregate management of the different volumes of assets and liabilities of BAI.
The Planning, Control and Risk Department is responsible for the operational organisation of the committee.
The committee’s deliberations are monitored by the actual department, which in turn, is responsible for the follow-up of the activity of the risk-taking and departments and compliance with the risk
management policies and regulations.
During 2012, the main developments in balance sheet risk management included the following:
• Definition of strategies to maintain comfortable liquidity levels;
• Alteration of liquidity gap limits to shorter maturities;
• Definition of strategy aimed at maintaining the foreign exchange position within defined limits.
B. Market Risk
Market risk refers to the probability of occurrence of loss of market value arising from variations in exchange rates, interest rates, share prices and commodity prices. The management of this group of
risks is defined by the Asset and Liability Committee (ALCO), assisted by the structural units (Financial Market Department, Credit Department and Investment Banking Department) in the reallocation and/or
appropriate taking of funds, pursuant to the limits and guidelines defined by the ALCO.
Risk Management Policies and Defined Limits of Competence
The Bank actively participates in money, foreign exchange and secondary securities markets, as well as the attraction of term deposits. The following main objective are transversal to all operations in the
markets referred to above:
• Ensuring adequate levels of liquidity for the Bank;
• Adequate management of the risks associated with trading room activities;
• Maximising income from monetary assets available at the Bank;
• Minimising the costs associated to the Bank’s funding;
• Satisfying customer needs, as well as those arising from the implementation of all other operations of the Bank;
• Maximising foreign exchange earnings;
• Maximising the profitability of the Bank’s trading portfolios.
Within the normal limits of prudence, the Bank’s Executive Committee authorises the Trading Room to incur the risks resulting from taking of positions, under an active, efficient and profitable policy in order
to serve the Bank’s customers, operating in a professional manner in the financial centres in which it operates.
The taking and maintenance of positions of risk should be guided essentially by the search for market opportunities, considering their permanent evolution, where they should be short term positions and
communicated to the Director of the Financial Markets Department and to the Director of this area whenever they assume a longer nature.
76
a) Interest Rate Risk
The Bank incurs this type of risk as a result of adverse variations in interest rates and, concomitantly, in the foreign exchange premiums or discounts on forward exchange rates of the currencies concerned.
This risk arises from the mismatch between the maturity periods of receipts and payments in a given currency, increasing the growth of the gap (difference between total receipts and total payments
maturing in the respective period).
Methodologies
Interest rate risk is assessed based on the analysis of tables showing the interest rate gap, gap duration and simulations (stress tests) for the purpose of assessing possible impacts on the Bank’s profitability
whenever such variations occur. For the effect of these analyses, only assets and liabilities that are sensitive to interest rate variation are considered.
The following table presents the Bank’s sensitivity to interest rate risk as at 31 December 2012:
Interest Rate Gap Analysis
2D
2W
1M
2M
3M
6M
1Y
2Y
5Y
Short-term investments
504 925 362 211 232 509 121 6
0
Trading securities
0
0
0
0
0
0
0
0
0
Securities held-to-maturity
0
0
0
167 44 170 426 252 185 Loans
461 13 17 58 115 128 500 235 968 Total Assets
965 938 379 436 391 807 1,047 493 1,153 Deposits -904 -153 -682 -175 -273 -267 -1,327 -173 -2 Money market liabilities
-105 0
0
0
0
0
0
0
0
Funding with securities
0
0
0
0
0
0
0
0
0
Total Liabilities
-1,009 -153 -682 -175 -273 -267 -1,327 -173 -2 GAP
-44 785 -303 260 119 540 -280 320 1,152 GAP Acumulado
-44 741 438 699 817 1,358 1,078 1,398 2,550 +5Y
TOTAL
76 4
495 477 1,053 -15 5
0
-10 0
1,042 3,592 2,946
4
1,740
2,973
7,663
-3,970
-100
0
-4,070
3,592
Earning at Risk (EaR)
EaR reflects the variations in the Bank’s estimated net interest income, arising from variations in the level of interest rates and the evolution of the balances of funds and investments. The Bank consistently
uses EaR to quantify the value that the Bank would no longer earn if there were to be an adverse change in interest rates.
Therefore, based on the Bank’s net worth at the end of December 2012, and simulating a variation of one percentage point in interest rates, the impacts of the different residual maturity periods could reduce
net interest income by USD 7 million to USD 26 million. The Bank closely monitors interest rate variations, and in order to mitigate the adverse impact of these variations, it conveniently reallocates its assets
and liabilities so as to favourably influence the gaps in the different periods of residual maturity.
Earning at Risk (Thousand USD)
20,000
15,000
10,000
5,000
0
-5,000
-10,000
-15,000
-20,000
-25,000
-30,000
EAR
Accumulated EAR
2 Days
2 Weeks
1 Month
2 Months
3 Months
6 Months
1 Year
77
b) Foreign Exchange Risk
The Bank incurs this type of risk as a result of maintaining a given open position in foreign currency, due to the fact that any adverse variation in market exchange rates could give rise to real or potential
losses. In this case, the Bank defines an open position as any situation where the Bank’s overall outstanding liabilities in a particular currency are not equal to the respective total amount receivable by the
Bank in that currency.
The Bank controls exchange rate risk by monitoring the limits defined under BNA Notice number 05/2010 of 10 November. The transitional regime for foreign exchange exposure limits which had been
enforced since 2010, ended in June 2012 with the establishment of these limits at 20% for both long and short term positions (at the end of December 2011 the limits stood at 30% for long term positions
and 20% for short term positions).
The constraints arising from the implementation of BNA Notice number 04/11 of 8 June, namely article 4 which forces banks to accept repayments in any currency, regardless of the currency in which the
loan was granted, have had significant impacts on foreign exchange exposure in relation to the Bank’s balance sheet structure by currency. Therefore, BAI has developed strategies to ensure that its foreign
exchange position is within defined and prudential limits.
During the year under review, the main foreign exchange gaps were recorded particularly in the principal currencies traded in the foreign exchange market, that is United States Dollars (USD), Euros (EUR)
and Pounds Sterling (GBP). Indexed operations also recorded significant foreign exchange gaps. In order to mitigate the impact of these gaps, the Bank has developed a series of measures which seek to
ensure its maintenance within the foreign exchange exposure limits, as well a satisfactory level of regulatory capital for the Bank’s solvency, such as: (i) the creation of indexed deposits, and (ii) review of
the controls associated to foreign currency purchase and sale transactions.
As at 31 December 2012, the Bank’s foreign exchange exposure was long, standing at USD 70 million, with the ratio of foreign exchange exposure to regulatory capital being 8% (within the regulatory limits).
C. Liquidity Risk
The Bank incurs this type of risk when it does not have the appropriate means of coverage to deal with lack of liquidity situations at a given moment, making it impossible to obtain the necessary resources
to cover its investments and thus, as a consequence, unable to honour its commitments. Such situations of lack of liquidity can be eliminated through the use of special credit lines that are confirmed and
backed through agreements with other banks.
Liquidity management is defined by the ALCO which determines the strategies and limits underlying the monitoring and control of liquidity risk. The Financial Markets Department (DMF) is responsible for
the daily and operational management of the Bank’s liquidity under the supervision of the executive committee.
Methodology
The Bank controls liquidity through the analysis of liquidity gap tables. These tables present the assets and liabilities distributed over periods of residual maturity periods, thus illustrating the flows of
payments and receipts over the time horizon of the operations. Moreover, the Bank also analyses liquidity ratios, the risks of concentration of deposits, and the balance sheet by currency.
78
09. Risk Management
Liquidity Profile (GAP analysis) 2D
2W
1M
2M
3M
6M
1Y
2Y
5Y
+5Y
TOTAL
Values in Million USD
Consolidated
Available Funds (T) 1,620 31 109 37 56 83 384 426 0
Short-term Investments 504 925 362 211 232 509 121 6 Trading Securities Investment Securities 167 44 170 426 252 185
Loans 435 13 17 57 112 124 482 228 871
Other Assets (T) 43 1 76 Total Assets 2,602 968 488 472 444 886 1,489 912 1,056
Demand Deposits -8 -51 -59 -71 -101 -290 -1,266 -2,691 Term Deposits -904 -153 -682 -175 -273 -267 -1,327 -173 -2
Money Market Liabilities -105 Funding with Securities Other Liabilities (T) -790 0 -27 -64 -212 -42 0
Total Liabilities -1,807 -205 -768 -310 -374 -557 -2,804 -2,906 -2
GAP 795 764 -279 162 70 329 -1,315 -1,994 1,054
Acumulated GAP
795 1,559 1,279 1,442 1,512 1,841 526 -1,468 -414
2
76
4
495
347
542
1,466
-15
5
-4
-14
1,452
1,038
2,748
2,946
4
1,740
2,685
662
10,784
-4,537
-3,970
-100
-1,139
-9,746
1,038
-
In December 2012, BAI showed comfortable liquidity levels. The accumulated gap remained positive over all short term maturities, with the available funds and short-term investments (higher quality assets)
accounting for over 50% of net assets.
The liquidity ratios were also at comfortable levels and above the internally defined minimum limits. Immediate liquidity increased by 12 percentage points (p.p.) in relation to 2011.
The loan-to-deposit ratio grew modestly, having increased by 3 p.p. relative to 2011.
Liquidity Ratios
Immediate
Reduced
General
Loan-to-deposit Ratio Dec. 10
Dec. 11
Dec. 12
24%
41%
47%
46%
20%
64%
69%
29%
32%
66%
65%
32%
79
D. Capital Adequacy
Ensuring capital adequacy is one of the Bank’s main management tasks, being established as one of the pillars underlying the financial performance of the institution.
Regulatory Capital (FPR)
The calculation of regulatory capital is defined by the BNA, in its Notice number 05/07 of 12 September and Instruction number 03/2011 of 8 June.
Capital Adequacy
Dec. 10
Dec. 11
Dec. 12
Million USD
Core Capital
Negative Items of Core Capital
Additional Capital
Regulatory Capital (RC)
Risk-weighted Assets at 0%
Total Risk-weighted Assets (RWA)
Capital for Foreign Exchange Risk and Gold/Minimum Ratio
Regulatory Solvency Ratio 778
-132
47
694
0
540
0
24
0
2,745
0
3,309
1,689
13.88%
914
-156
43
800
0
70
1,152
87
20
1,450
2,805
5,585
531
13.09%
1,011
-163
39
887
0
105
856
82
13
1,094
2,854
5,005
515
16.07%
In 2012, regulatory capital stood at USD 887 million, reflecting 11% growth relative to 2011, and explained by the increase in tier 1 capital which evolved from USD 914 million in 2011 to USD 1.011 million in 2012.
The legal reserve and other reserves were the headings which showed most growth in 2012, standing at USD 189 million (+28%) and USD 487 million (+27%), respectively.
The deductions of core capital also recorded an increase, essentially as a result of the 2.3% variation of financial fixed assets and 20.9% variation of intangible fixed assets. On the other hand, additional
capital recorded a negative variation in relation to the value for 2011 (USD 4 million less), standing at USD 39 million, explained by the repayment of subordinated debt (BAI cash bonds) of USD 9.9 million
(AKZ 944 million) in spite of the increased social fund arising from the distribution of the net income for 2011 (USD 6.4 million).
Risk-weighted Assets (RWA)
Risk-weighted assets represent credit risk for the effect of the calculation of the regulatory solvency ratio, that is, for every item of the Bank’s assets a specific weight is attributed according to the type of
operation, currency, institutional sector and foreign exchange residence of the operation, where assets in foreign currency require more regulatory capital.
In 2012, a reduction of RWA of the order of 10% was recorded in relation to the previous year. This reduction was due to the decreased net assets of the Bank. However, note should be made of the
reductions in assets with weight factors of 100% (USD 357 million less) explained by the reduction of loans in local currency and in assets with weight factors of 30% (USD 296 million) explained by the
lower short-term investments. On the other hand, there was a moderate increase in assets with a weight factor of 130% as a result of the recognition of assets given in exchange of loan repayments (see
note 7 of the Notes to the Financial Statements).
80
09. Risk Management
Capital for Foreign Exchange Risk and Gold (CRCO)
Capital for exchange rate risk and gold represents the level of capital that the Bank should have in order to meet the risks related to exchange rates and deterioration of assets denominated in gold. This
indicator is included in the denominator of the regulatory solvency ratio and is determined based on foreign exchange exposure, whose limit is established at 20% for both short and long foreign exchange
positions and, applying the formula, corresponds to the sum of 13% of the absolute value between the sum of the two positions and 7% of the highest absolute value between the two positions, as well as
20% of the net position in gold.
In 2012, CRCO stood at USD 515 million, reflecting a decline of the order of 3% in relation to 2011. This reduction arises from the transfer of short term loans into foreign currency (escrow accounts) for loans
in domestic loans in compliance with BNA Notice 04/11 of 08 June and, and due to the recognition of provisions for loans in foreign currency which were stated in local currency in the previous year.
Capital Adequacy
Capital adequacy is monitored through the regulatory solvency ratio which represents the minimum percentage of capital that the Bank should have in order to meet any possible losses derived from credit
risk and foreign exchange risk.
The calculation of the Regulatory Solvency Ratio (RSR) is given by the formula defined in BNA Notice number 05/07 of 12 September:
RSR=
FPR
( (APR + (CRCO/10%))
)*100
As at 31 December 2012, the solvency ratio had grown by 2.99 percentage points in relation to 2011, to stand at 16.07%. This growth is explained by the increase in regulatory capital (11%) and reduction in riskweighted assets (10%).
E. Credit Risk
Credit risk refers to the probability of a customer or counterpart not being able to honour its obligation to the Bank to repay its outstanding debt instalments on the contractually defined dates.
In 2012, BAI developed a series of actions aimed at increasing the efficiency of the credit risk management process, such as:
• The creation of the sub-unit for the analysis of credit risk involving Small and Medium-Sized Enterprises (SMEs). This unit separates SMEs from large companies and institutions, thus facilitating
the analysis and diversification of the credit portfolio’s risk;
• The redefinition of the Credit Decision Matrix, where this measure sought to enhance the efficiency and effectiveness of the analytical and decision-making process concerning lending operations
to customers;
• The restructuring of the Credit Recovery Department, where the new structure includes a unit dedicated to the management of off balance sheet operations.
Management and Control Model
The Bank’s credit risk management is conducted based on its credit policy and regulation, and in observance of the provisions issued by Banco Nacional de Angola, namely Notice number 04/11 of 8 June,
which establishes the parameters for the granting and classification of loan operations, and Notice number 08/07 of 12 September which establishes the limit of exposure for the largest debtors.
Credit risk management is led by the Executive Committee which, through the Credit Committee, defines and controls the levels of exposure by currency, segment and type of loan.
81
Credit Committee
The Credit Committee is a corporate board whose objective is the promotion of the alignment of loan concession policies and rules, the analysis and approval of loan operations in accordance with the policies
and limits defined by the executive committee, and the monitoring of the non-performing loan portfolio. All the decisions taken involve the participation and taking of position of the committee’s members,
that is, there is no individual empowerment to take decisions.
Following a credit matrix defined by the Bank’s executive committee, various credit subcommittees have been instituted which hold weekly meetings in light of the objectives referred to above.
The decision matrix is applicable only to risk level A to C, arising from the application of BAI’s scoring or rating model. Any operation with a risk rating above C is decided at the level of the 4th bracket, with
the exception of renegotiation/restructuring operations, whose risk arises from any non-performing evolution.
Credit Decision Matrix
Decision bracket
1st
2nd
3rd
(Credit Committee - CCR3) 4th
(Credit Committee - CCR4)
5th
6th
Decision body
Manager + Coordinator of the Zone
Manager + Coordinator of the Zone + Regional Executive Manager
DAC Deputy Executive Manager + Regional Executive Manager +
DEI Deputy Executive Manager + DRC Deputy Executive Manager
1 Director + DBR Executive Manager + DEI Executive Manager +
DAC Executive Manager + DRC Executive Manager
3 Directors + DBR Executive Manager + DEI Executive Manager +
DBI Executive Manager + DAC Executive Manager + DRC Executive Manager
Executive Committee
Board of Directors
DBI - Investment Banking Department, DAC - Credit Analysis Department, DEI - Companies and Institutions Department,
DBR - Retail Banking Department, DRC - Credit Recovery Department.
Credit Concession Process
The credit decision-making process begins in the commercial area (DBR/DEI) where, according to the specifications of the operation and their suitability to the parameters defined in the credit decision
matrix, an assessment is made at the level of the commercial departments. For operations placed within the 1st and 2nd decision brackets, the DBR analyses and submits them for approval. For operations
in the 3rd, 4th and 5th decision brackets, the respective commercial department submits the case file (accompanied by a commercial opinion) to the DAC or DBI for due risk analysis and endorsement, and
submission to the respective Credit Committee for approval.
82
09. Risk Management
Measurement and Assessment
The Bank has its own rating and scoring models for classification of the credit risk of companies and individuals, respectively.
In the case of companies, the attribution of the rating is the result of the assessment of the (i) company’s management capacity, (ii) economic and financial situation, (iii) history at the bank, (iv) quality of the
guarantees, and (v) activity sector. Weighting is established for each of these parameters which, when applied to the attributed classification, lead to a grade for each parameter. The sum of the grades of
the 5 parameters is equivalent to the risk factor (see table below) or rating of the company.
In the case of individuals, the scoring model assesses the (i) commercial involvement, (ii) social stability, (iii) professional situation, and (iv) economic and financial situation of the customer. Weighting is established
for each of these parameters which, when applied to the attributed classification, lead to a grade for each parameter. The sum of the grades of the 4 parameters is equivalent to the customer’s score.
Classification of the Loans Granted
Rating
Risk
Risk Factor
grade range
[6.5 to 7]
[5.5 to 6.4]
[4.5 to 5.4]
[3.5 to 4.4]
[2.5 to 3.4]
[1.5 to 2.4]
[0 to 1.4]
A
B
C
D
E
F
G
Zero
Very Low Low
Moderate High
Very High Loss Furthermore, the Bank also has tools which enable the assessment of the credit-worthiness of customers at a national and international level. In order to assess the exposure of customers on the domestic
market, BAI uses the Credit Risk Information Centre (CIRC) of the BNA. For the assessment of the credit-worthiness of companies or economic groups with exposure in other markets, the Bank uses a
platform of financial information of companies that operate on the European market.
The table below indicates the exposure to the risk of loans to customers in 2012:
Credit Risk Exposure
Dec. 10
Dec. 11
Dec. 12
2,688
-211
2,476
8,383
30%
325
138
3,235
-233
3,002
11,874
25%
389
206
2,973
-288
2,685
10,784
25%
308
307
Million USD
Loans
(-) Provisions for Doubtful Loans
Net Loans
Net Assets
Net Loans / Net Assets Guarantees and any Other Liabilities
Loans Written off the Assets
83
In December 2012, net loans stood at USD 2.7 thousand million, 11% less than in the previous year. Contributing to the reduction of this portfolio, in particular, were i) the overdue loans granted to the State
of the value of USD 500 million, ii) the increased loans written off the assets of USD 120 million, (iii) the transfer of loans to fixed assets under construction relative to the New Head Office (NES) of the value
of USD 70 million, and (iv) increased default levels. The weight of loans to companies fell by 1 percentage point relative to 2011. The individual credit concentration ratios are referred in note 6 of the Notes
to the Financial Statements.
Loans by Segment (% Stock of Loans)
120%
100%
80%
60%
40%
20%
0%
88%
89%
88%
Individuals
Companies
12%
2010
11%
2011
12%
2012
Loans by Risk Level
By the end of 2012, loans by risk level recorded improvements in relation to the previous year. Loans at the lower risk levels (A to C) represented 88% of the stock of loans in 2012, in particular those at risk
level C, whose weight increased to 61% (2011: 47%). On the other hand, loans at higher risk levels (D to G) fell by 8 percentage points in relation to 2011.
Rating
A
B
C
D
E
F
G
Total Exposure
2010
2011
2012
13%
16%
52%
3%
9%
2%
5%
100%
21%
20%
47%
5%
1%
2%
4%
100%
5%
22%
61%
7%
1%
2%
2%
100%
Loan Default and Recovery
The default ratio stood above the levels recorded in 2011, having shifted from 4.93% to 7.25% in 2012. The loan portfolio stated as Off Balance Sheet (write-offs) grew by over USD 174 million when compared
to the previous year.
By the end of the year under review, the industrial sector was primarily responsible for the value of overdue loans, accounting for 24%, followed closely by the sectors of commerce (22%), real estate (19%),
services (16%), hotel services (9%) and civil construction (9%).
84
09. Risk Management
Analysing non-performing loans by residual maturity periods in December 2012, the values overdue by more than 90 days and equal to or below 180 days represented 5.4% of the total stock of loans.
% Total Stock of Loans
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0%
1.8%
1.3%
1.3%
0.9%
0.8%
Up 30 days
31 to 60 days
61 to 90 days
91 to 180 days
181 to 360 days
During 2012, the Bank developed various initiatives to promote loan recovery, in particular the following:
i. The credit recovery campaign;
ii. A workshop on credit recovery in the provinces of Cabinda, Benguela, Huambo, Huíla and Lunda Sul;
iii. Training sessions conducted in the commercial departments (DBR/DEI);
iv. Insertion of credit cards in the collection process (DBR, DRC);
v. Creation of the Off Balance Sheet Credit Recovery Department;
vi. Creation of the new Structural Manual of the DRC and creation of the new layout and recruitment of new employees;
vii. Effective implementation of the CIRC, with the requirement of higher standards in the collection of information for the analytical work underlying the granting and restructuring of loans.
In 2012, the Bank recovered USD 194 million, of which 82% were overdue and 18% off the balance sheet.
Counterpart Risk
Counterpart risk corresponds to the risk the Bank might incur as a result of the non-payment of its loans through imposition of the sovereign power of the debtor country, due to a situation of political and/
or economical instability, the possible nationalisation of the Bank’s assets, conditions in terms of foreign exchange control regulations or other circumstances which might place in question the commitments
undertaken.
In order to limit the risks identified above, the Trading Room observes the following concerning operations in the money, foreign exchange and secondary securities markets, segmenting the limits into two
groups, according to their nature:
i) Trading Limits – related to risks arising from maintaining open positions in foreign currency, resulting from mismatches between the maturity periods of receivables and payables, as well
as from overtrading.
All positions of foreign exchange risk assumed by the Trading Room should be of short duration and communicated to the DMF Director and Director of the area, whenever such positions remain
for periods greater than one week and two weeks, respectively. The Trading Room keeps its own records duly updated, recording all situations where the negotiation limits are exceeded, as well
as the respective authorisations, which fall under the exclusive responsibility of the Bank’s Executive Committee.
The Bank has defined the following main types of Trading Limits:
• Limit of the open foreign exchange position at the end of the day;
• Limit of the open foreign exchange position during the day;
• Overall limit of the open foreign exchange position;
• Overall limit of the open foreign exchange position during the day;
• Overall maximum limit of business traded throughout the day;
• Mismatched position limit;
• Stop loss limit;
• Daily loss limit;
• Monthly loss limit.
85
ii) Credit Limits – concerning risks related to the ability and willingness of the counterpart to fully comply with the contracts.
The Trading Room is responsible for monitoring the Bank’s overall foreign exchange risk positions, with domestic and foreign entities, and conducting the necessary supervision and control
so that the credit limits are not exceeded. The Executive Commission is exclusively responsible for authorising any exceeding of these limits, delegating such powers up to a certain percentage
of excess, pursuant to the following hierarchy:
• To the DMF Director, up to a maximum of 10% of the limit;
• To the Director of the area, up to a maximum of 25% of the limit;
• To the Executive Commission (at least two directors), 25% above the limit.
The Bank has defined the following main types of Credit Limits:
• Forex limit;
• Money market limit;
• Total credit limit.
F. Operational Risk
At the Bank, operational risk is defined as the probability of a direct or indirect loss arising from the poor execution or shortcomings of internal processes, people and systems, non-compliance with laws,
or events external to the Bank.
Operational risk management and control is conducted by the Executive Committee and assisted by the Integrated Security Office, Compliance Office, Internal Audit Department and recently-created
Operational Risk Control Office, with the following objectives:
• Ensure the design, implementation and updating of policies which assure the efficient monitoring of operational risk;
• Define, assess, monitor and manage operational risk;
• Coordinate the actions required for the implementation of measures aimed at correcting any identified deficiencies and shortcomings of internal control.
System Risk Management
The Bank incurs this risk as a consequence of irregularities in the use of information technologies and systems.
In 2012, the Bank created the IT and Security Committee (CIS) with the objective of ensuring the planning, monitoring, implementation and integrated control of various activities and projects in the area
of information technologies and systems (IT).
The CIS is composed of permanent members, namely a Chairman and Coordinator. The CIS holds monthly meetings and is entrusted with the following duties:
• Ensuring that the requirements of compliance with Laws and Regulations, national and international, are understood and that there is heightened awareness of the risks inherent to IT;
• Ensuring that IT contributes to the achievement of BAI’s strategic objectives, minimising costs, incorporating best management and security practices, and maximising the value created for
the organisation through its investments;
• Ensuring that the performance and security of the IT are monitored and measured efficiently, with special attention to the achievement of the objectives, fulfilment of initiatives and plans,
and efficient use of resources, in a controlled and secure environment.
The management structure for the mitigation of technological risk operates based on a standard process of identification, assessment, monitoring, control and reporting of risks, aimed at establishing a regulatory
and operational framework to guide and discipline activities related to security and promote the auditing of the information systems, preserving the confidentiality of the data it processes and stores.
The principal irregularities in this risk category include the risks of intrusions, theft, access and fire.
In this context, a series of processes are under identification and implementation, which promote, formalise and implement preventative measures related to the control of accesses, fire-fighting, prevention
of intrusion and theft, and closed circuit television systems. These measures have been structured based on the result of audits related to good practices in the electronic security systems of the banking
sector.
The Bank is developing and optimising its operational centre which will be part of the different existing security systems, designed to control the branches, which will ensure the physical maintenance of
the equipment in a preventative form by enabling their remote maintenance, reducing costs and boosting cost/benefit gains.
86
09. Risk Management
Over the entire period under review, the system of delayed opening of bank safes was standardised, all the electronic security equipment was standardised, and improvements have been identified and
implemented in the processes of areas dedicated to IT security and logical security. A series of internal controls are carried out periodically in order to ensure proactive action in the identification and
correction of deficiencies.
Occurrences of Operational Risk (People and Processes)
In 2012, the Bank recorded 64 occurrences of operational risk, resulting in financial losses assessed at USD 1.4 million. Shortcomings in the management and implementation of processes accounted for
around 42% of the occurrences of operational risk, with external and internal fraud having represented 36% and 17%, respectively.
Occurrences of Operational Risk
60%
50%
40%
30%
20%
10%
0%
42%
36%
17%
2%
Shortcoming
in process
management
and execution
External
fraud
Internal
fraud
3%
Inadequate practices Breach of professional
relative customers,
duties relativeto
products or services customers, products
and business practices
Compliance
The mission of BAI’s Compliance Office (GCL) is to supervise compliance and correct implementation of the legal, regulations, statutory and ethical provisions, and recommendations and guidelines issued
by the competent supervisory authorities. The Compliance Office is also responsible for ensuring and monitoring the implementation of measures aimed at combating money laundering and the financing
of terrorism.
With a view to complying with its mission, the Executive Committee approved a Compliance Architecture in May 2011, aimed at endowing the Compliance Office with tools for coordination and interaction
with the other structural units of the Bank, thus ensuring compliance with its function.
CE/CA
Compliance Officer (CO)
AML Officer (AMLO)
Analyst / Legal Officer
Compliance
KYC Officer (KYCO)
professionals
Professionals of
various units of
CANAL COMPLIANCE
DOQ
DSI
DJC
DAI
DPC
DSG
DBR
NETWORK / PRIVATE
DEI
BUSINESS
CENTRES
the Bank
DOP
INTERNAL
DEPARTMENTS
DMF
DAC
DBE
DCF
87
Anti-Money Laundering (AML) and Know Your Costumer (KYC) – Customer and Business Monitoring
Pursuant to Law number 34/11 of 12 December, Presidential Decree number 35/11 of 15 February and Notice number 1/11 of 26 May, the Bank instituted, in February 2012, new forms for opening and
maintaining accounts (natural and legal person), as well as processes for cash movements of a value equal to or above USD 15,000.
In order to ensure the adequacy of its KYC and AML procedures in account opening processes, reinforcements were made in the system of collection of information on customers and monitoring of new
accounts opened in the system, as well as for the control of cash deposits or withdrawals, ensuring the monitoring of movements of this nature with a value equal to or above USD 15,000.
The monitoring is ensured through the daily extraction of information on (i) cash movements in personal and company accounts, (ii) new accounts opened in the system, and (iii) new credit. The Compliance
Office prepares statistical reports for the Executive Committee on a monthly basis, for follow-up.
Compliance
In 2012, the Compliance Office closely followed various projects such as the launch of electronic banking products, bancassurance, segmentation of the portfolio of customers, updating of the Bank’s price
list and portfolio of products, with a view to validating and controlling compliance with procedures and regulations, both internal and external.
The Compliance Office started the implementation of the Anti-Money Laundering Guide, currently under approval by the BNA, and is developing a Risk Matrix for the systematic attribution of customer risk.
The automation work of the compliance Risk Matrix will ensure full compliance with this Guide.
Also during 2012, a tool was implemented which filters the database of customers and payments made to third parties, in order to check their records against the sanctioned lists (OFAC, EU, etc.).
Information Reporting Monitoring
In order to safeguard the Bank from possible fines and penalties by the BNA, the Compliance Office ensures the continuous monitoring of the sending of compulsory reports by the departments, with monthly
reports being prepared on the situation of compliance with the sending of information and justification of any delays in their sending.
Training
The training of the Bank’s employees has been an ongoing activity of the Compliance Office, with nationwide actions having been developed on compliance procedures as well as specific training on the
Western Union remittance system.
The Compliance Office organises training sessions for the employees of the retail branch network (individuals and SMEs), employees of the network of companies and institutions and private banking at a
national level, for capacity building and clarification of the different compliance procedures. During 2012, 76 hours of training were ministered to 300 employees of the branch network.
With a view to furthering their knowledge and improving the performance of their work activities, the members of the Compliance Office participated in various training actions, such as in the first edition of
the Post-Graduate Course on Compliance and Combat of Money Laundering and the Financing of Terrorism, training actions on fraud in the Banking Sector promoted by ABANC, amongst others.
88
Human Resources
10
89
Cláver Cruz – Peasant Revolution on Our Land
Acrylic on Canvas
90
10. Human Resources
BAI continued with its strict policy of recruitment, selection, training and placement of staff, maintaining its vision to attract, develop and retain the best professionals in the market, recognising that they are
an important and decisive asset in ensuring its success.
Since BAI operates in an increasingly more competitive market, requiring companies to adopt flexible and adaptable structural models, which enable them to coordinate and motivate the behaviour of their
employees, improving labour relations within the company and fostering organisational development. The remodelling of the employees’ management programmes has led to their action in accordance with
the Bank’s needs and in close harmony with the strategic plan, in order to achieve the established targets.
During the year under review, the Bank recruited 221 new employees, thus recording a total of 1,747 permanent employees. The increased number of employees in 2012 reflects the growth of the Bank’s
distribution channels. However, BAI has a ratio of 16 employees per distribution channel, two more than the 14 employees per branch presented in the previous year.
Number of employees per branch and distribution channels
120
100
80
60
40
20
0
112
106
Distribution Channels
Number of Employees per Branch
14
16
2011
2012
91
In 2012 and 2011, the distribution of employees per functional area is as follows:
Units
Siglum
Head
Category Directors
Structural
Board of Directors
CA
José Paiva
Chairman
11
Integrated Security Office
GSI
N´Vunda Ferreira
Executive Manager
Compliance Office GCL
Ulanga Martins
Executive Manager
Operational Risk Control Office GCRO
Vladimir Gaspar
Executive Manager
Customer Ombudsman Office GPC
Carlos A. Freitas
Ombudsman
Oil and Gas Office GOG
Makanjila Almeida
Executive Manager
Executive Committee Secretariat SCE
Antónia Mascote
Head of Exec. Secretariat
Retail Banking Department DBR
Raquel Gourgel Coordinating Executive Manager
Commercial Support Office GSC
Cláudia Fernandes
Deputy Executive Manager
Luanda-Bengo I DBRLBI
Petra Meireles
Executive Manager
Luanda-Bengo II DBRLBII
Paulo Assis
Executive Manager
Norte DBRN
Feliciano Tavares
Executive Manager
Sul DBRS
José Manuel
Executive Manager
Private Banking Department
DBP
N’zola Rangel
Executive Manager
Companies and Institutions Department DEI
Jorge Silva
Executive Manager
Electronic Banking Department
DBE
Carla Pataca
Executive Manager
Investment Banking Department
DBI
Victor Cardoso
Executive Manager
Financial Markets Department DMF
Alexandre Carreira
Executive Manager
Operations Department DOP
Gisela Fonseca
Executive Manager
Credit Analysis Department DAC
José Burity
Executive Manager
Credit Recovery Department DRC
Camilo Ortet
Executive Manager
Human Resources Department DRH
Cláudia Mbeng
General Services Department DSG Amarildo Van-Dúnem
Executive Manager
Accounting and Finance Department DCF
Lukamba Magalhães
Executive Manager
Information Technology Department DTI
Luís Rodrigues
Executive Manager
Marketing and Communication Department DMC
Diala Monteiro
Executive Manager
Quality and Organisation Department DOQ
Luís Fernandes
Executive Manager
Legal and Litigation Department DJC
Alexandre Morgado
Executive Manager
Planning, Control and Risk Department DPC
Francisco Figueira
Internal Audit Department DAI
José T. Lima
Executive Manager
Central Treasury Department DTC
Eduardo Rodrigues
Executive Manager
Technological Projects and
Development Department DPD
Nuno Veiga
Executive Manager
Other
Total - December 12
11
Total - December 11
9
Absolute Net Change
2
Net Change %
22%
Central
Services
Commercial
Units
Total
7
7
8
2
2
3
7
1
9
13
325
1
288
2
173
13
288
8
30
50
10
19
76
24
19
25
103
22
44
12
10
8
8
21
37
18
7
8
2
2
3
7
1
9
338
289
175
301
8
30
50
10
19
76
24
19
25
103
22
44
12
10
8
8
21
37
13
48
662
1,074
562
955
100
119
18%
12%
13
48
1,747
1,526
221
14%
Concerning BAI’s activities, there is a greater predominance of staff on the business areas which accounted for 69% of total staff, with the supporting areas accounting for 31% of total staff in 2012. Particular
note should be made of the Commercial Network which has 63% of the total staff, corresponding to 1,074 employees.
92
10. Human Resources
The Bank presented the following structure of employees by professional category:
2011
2012
7 11 9 8 31 44 20 20 54 53 15 15 3 4 92 106 73 85 289 353 95 113 92 125 43 50 553 530 77 136 73 78 - 16
1.526 1.747 Distribution of staff by category
Board of Directors*
Advisors
Executive Managers
Deputy Executive Managers
Department Assistant Executive Managers
Commercial Coordinators
Supervisors
Branch Managers
Deputy Branch Managers
Technicians/Analysts
Treasurers
Costumer Managers
Administrative Staff
Customer Assistants (I, II, III)
Interim Customers Assistant
Auxiliary Staff
Apprentices
Total
Net Changes
Abs.
%
4
57%
-1
-11%
13 42%
0
0%
-1 -2%
0
0%
1
33%
14 15%
12 16%
64 22%
18 19%
33 36%
7
16%
-23
-4%
59 77%
5
7%
16 100%
221 14%
* Chairman of the Board of Directors, Chairman of the Executive Committee and Directors
At the end of 2012, the Bank’s age structure primarily consisted of employees aged between 25 and 30 years old, representing 40% of the total staff. The average age of the BAI’s employees is 33 years old.
Distribution in terms of gender showed a total of 954 (55%) male and 793 (45%) female employees.
Age structure
Up to 24; 10%
25-30; 40%
31-35; 26%
Over 35; 24%
Regarding years of service in 2012, 63% (1,107) had been working at BAI for a period equal to or below 5 years, while 18% (307) had been working at BAI for over 8 years.
Years of Service
8%
2012
Over 11 years
10%
19%
48%
8-10 years
16%
5-7 years
9%
2011
2-4 years
11%
23%
43%
Up to 1 year
14%
0%
10%
20%
30%
40%
50%
60%
93
In 2012, the academic qualifications of BAI employees indicated that 20% of the employees had completed a licentiate degree, representing an increase of 54 employees relative to 2011. While 38% had
completed middle-level and pre-university education, and an increase was recorded of 151 employees with a bachelors degree and attending university, representing 35% compared with the 30% recorded
in 2011.
Qualifications
6%
Primary and Secondary Education
38%
35%
2012
Middle-level and Pre-University Education
20%
1%
1%
Bachelors and University attendance
6%
Licentiate Degree
43%
30%
2011
Post-Graduation
19%
1%
1%
0%
Master’s and Doctorate
10%
20%
30%
40%
50%
60%
BAI continues to support training, with the objective of improving the technical, behavioural and managerial skills of its employees. The training actions are ministered in classrooms and on-the-job using
the BAI Academia and School Branch. The graphs below illustrate the training actions and their costs by type, carried out in 2012:
Number of participants by type of training
Training Costs
Behavioural; 27%
Behavioural; 26%
902
Banking; 52%
1.712
Banking; 55%
Technical; 19%
Technical; 16%
635
Seminars; 2%
Seminars; 2%
69
During the year of 2012, BAI provided 226 training actions. On average, the employees benefited from two training actions over the year. Of the 226 training actions, 9 were conducted abroad and the
remaining 217 took place in Angola (2011: 76).
BAI has also supported its employees in encouraging their own independent training, through financial contribution to their academic education, thus promoting academic training and specialisation, as well
as the professional development of the human resources required for the growth of the institution.
In 2012, the investments in incentives to the employees own training initiatives reached USD 46,020, an increase of 33% relative to 2011, with 25 employees benefiting from this incentive, that is, 4 more
employees than in 2011.
2011
Own training
Number of beneficiaries
Commercial network
Central services
Investment (in USD)
94
21
13
8
34,670
2012
25
15
10
46,020
Net Change
Abs.
%
4
2
2
11,350
19%
15%
25%
33%
10. Human Resources
System of Performance Assessment and Career Progression
The Bank’s System of Assessment and Management of Performance (SAGD) is a Human Resources Management instrument which has been developed and improved with the objective of recognising and
improving employee performance, through support to personal and professional development.
With the updating of this system, all the employees clearly understand what is expected of them as an individual and how their performance will be assessed, as well as the context of their career prospects
at BAI and the support which will be given for their development.
BAI’s assessment of employee performance consists of:
1. Promotion of the Internal Personal and Professional Development of the Employees;
2.Recognition of Employee Performance;
3.Enabling Employee Progression in terms of Position (level) and Wage (bracket);
4.Stimulation of Individual Productivity.
BAI’s System of Assessment and Management of Performance is based on the assumption of continuous assessment. Hence, in addition to the formal stage of annual assessment of performance, interim
records are kept, such as the mid-year follow-up interview and daily records of important events. Formal and informal feedback moments also take place, which the senior staff consider necessary for
monitoring performance, as well as the introduction of corrective measures and support for the achievement of objectives.
The employees are assessed according to the following criteria:
• Objectives – targets to be achieved / results-driven approach;
• Daily Effectiveness – unjustified absences, justified absences and punctuality;
• Competences – capacity / focus on behaviour.
The objectives are defined according to the position, experience and capacities of the employees. The senior staff stress the connecting threads between personal objectives and the way that the Bank and
its departments intend to operate, taking into account its vision and strategy.
95
96
Financial Review
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Acrylic on Linen Canvas
98
11. Financial Review
2012 was marked by the return to growth of the economy and by Angola having reached a one-digit inflation rate, important events in the developments for financial activity.
The reduction of inflation rates and the interest rates of the main liquidity management instruments of the Treasury and Central Bank continued to exert downward pressure on interest rates, leading to
lower income and costs derived from the Bank’s principal financial instruments. On the other hand, the growth of the economy did not have the desired impact on the Bank’s activity due to the deterioration
of credit quality which implied greater caution in the granting of loans.
However, the Bank’s management strategy enabled turnover to have increased by USD 18 million, to stand at USD 772 million by the end of 2012. The increased turnover is underpinned by net interest
income and net non-interest income which grew by 6% and 14%, respectively. In spite of the downward pressure on interest rates, net interest income increased by USD 20 million, since the impact of the
reduction of interest rates was stronger for financial liabilities than for financial assets. Net non-interest income amounted to USD 32 million, compared to the previous year, standing at USD 259 million by
the end of 2012.
The Bank continued to expand its commercial network, opening six distribution channels (branches, service points and business service centres), and also increasing the number of employees and resources
at their disposal in order to improve customer service. As a consequence, operating costs increased by USD 28 million (+15%), reaching USD 217 million in December 2012.
The default ratio stood at 7.24%, representing an increase of 2.31 percentage points in relation to the previous year. As a consequence of the exacerbation of risk levels, provisions increased by USD 55
million (+23%), to stand at USD 288 million.
Pre-tax profit stood at USD 185 million, a reduction of USD 15 million (-7%) relative to the end of 2011. The tax load recorded for 2012 stood at USD 5 million, as a result of the lower income derived from
public securities in contrast to the previous year when the Bank recorded deferred tax to the value of USD 12 million (see note 31 of the Notes to the Financial Statements).
A. Analysis of the Balance Sheet
Structure of the Balance Sheet
The Bank’s financial structure is primarily composed of borrowed funds, which account for 90% of the funding of the assets. Borrowed funds consist of customer funds and other funds. Customer funds are
the principal source of funding of banks and by the end of 2012 represented 79% of the funding of the assets of Banco BAI, a reduction of 9 percentage points compared to the previous year. On the other
hand, other funds increased by 7 percentage points, having shifted to represent 11% of funding.
During 2012, the Bank continued its conservative policy, favouring liquidity over profitability. However, highly liquid assets stood at 52% of the Bank’s investment, a reduction of 4 percentage points compared
to the end of 2012. Highly liquid assets are cash, available funds and short-term investments. Less liquid assets represented approximately 41% of the Bank’s investment, falling by 1 percentage point in
relation to December 2011. Less liquid assets are securities and loans to customers, which account for 16% and 25% of investment, respectively.
Balance Sheet Structure
100%
80%
5%
30%
4%
18%
7%
25%
38%
Other assets
60%
Cash and available funds
Securities
Loans to Customers
20%
31%
8%
10%
4%
88%
11%
79%
27%
8%
26%
40%
9%
4%
87%
13%
16%
27%
25%
Equity
Other funds
Customer deposits
0%
Dec. 10
Dec. 11
Dec. 12
Dec. 10
Dec. 11
Dec. 12
99
Customer Funds
Customer funds stood at USD 8,506 million at the end of 2012, having fallen by 19% in relation to 2011. These funds are also composed of demand deposits and term deposits. Demand deposits stood at
USD 4,537 million, a reduction of 36% when compared to 2011. As a consequence, the relative weight of demand deposits in customer funds fell by 15 percentage points to represent 53% of customer funds
by the end of 2012. On the other hand, term deposits increased by USD 616 million (+18%) in relation to December 2011, reaching USD 3,970 million at the end of 2012. As a consequence, their weight in
customer funds stood at 47%.
MILLION USD
Customer funds
12,000
10,000
8,000
6,000
4,000
2,000
0
10,455
3,354
7,284
8,506
3,969
2,688
Demand deposits
7,101
4,596
Term deposits
4,537
2010
2011
2012
Foreign currency deposits accounted for 65% of customer funds, 2 percentage points lower in comparison to the previous year (67% in 2011). Deposits in local currency shifted from 33% at the end of 2011
to 35% by the end of 2011.
Deposits by currency December 2011
FC deposits; 67%
Deposits by currency December 2012
FC deposits; 65%
DC deposits; 33%
DC deposits; 35%
Loans to Customers
Loans to customers fell by USD 317 million (-11%) relative to December 2011, standing at USD 2,685 million. This reduction is explained by the i) falling due of the operation with the State of the value of AKZ
50 thousand million, ii) transfer of loans to fixed assets under construction relative to the New Head Office (NES) of the value of USD 70 million, iii) deterioration of credit quality which implied greater caution
in the granting of loans, iv) increased provisions, and v) increased write-off of loans of USD 126 million (see note 6 of the Notes to the Financial Statements).
Non performing loans and interest stood at USD 215 million, having increased by USD 55 million (+35%) in relation to the previous year. As a consequence, the default ratio grew by 2.31 percentage points
compared to 2011, to stand at 7.24%.
Provisions for loans were strengthened by USD 55 million (+24%) in relation to the previous year due to the deterioration of the quality of the loan portfolio, to stand at USD 287 million. The loan coverage
ratio stood at 9.7% in 2012, that is, 2.5 percentage points higher than in 2011.
Loans to Customers
2,477
MILLION USD
289
2,399
3,002
166
3,069
-11%
2,685
215
2,758
Performing Loans
Non Performing Loans
(211)
Dec. 10
100
21%
(233)
Dec. 11
(288)
Dec. 12
Provisions for Loans
Securities
Investment in securities reached USD 1,744 million, having increased by USD 116 million (+6%) compared with the end of 2011, in spite of the continued reduction of interest rates on the principal securities of
the Government and Central Bank, which made investing in these securities less attractive. In contrast to 2011, when all the portfolio securities were classified as held-to-maturity, in 2012, BAI also recorded
securities classified under the trading category in its portfolio of securities.
The Bank’s portfolio of securities is primarily composed of securities issued by the Angolan State which, as a whole, accounted for 96% of the portfolio in December 2012. The securities held by the Bank
and issued by the Angolan State are Treasury Bonds, Treasury Bills and Central Bank Securities. Other Bonds accounted for 4% of the portfolio, a 1 percentage point reduction compared with 2011.
Securities
2,228
MILLION USD
80
1,955
Banco Nacional de Angola Securities
-27%
193
1,628
1,744
+6%
83
1,290
134
1,342
171
84
180
217
Dec. 10
Dec. 11
Treasury Bills
Treasury Bonds
Other Liabilities
Dec. 12
Short-term Investments and Available Funds
Short-term investments abroad stood at USD 1,069 million, a reduction of 67% compared with 2011, which was influenced by the reduction of the portfolio of deposits and by the low attractiveness of
investments abroad. The Bank continued to invest in the domestic market, offering liquidity to banks through securities purchased with repurchase agreements.
Short-term Investments
4,599
-36%
2,946
MILLION USD
+585%
1,069
3,263
531
141
672
1,336
Dec. 10
In-country
Abroad
1,877
Dec. 11
Dec. 12
The available funds amounted to USD 2,748 million, an increase of USD 620 million (+29%) in relation to 2011. This increase was influenced by the USD 773 million increase in our available funds in financial
institutions abroad.
Available Funds
MILLION USD
2,588
1,277
1,310
Dec. 10
2,748
-18%
2,128
288
1,840
+29%
1,111
1,637
In-country
Abroad
Dec. 11
Dec. 12
101
B. Analysis of the Income Statement
Net Income declined by 15% in relation to 2011, to stand at USD 180 million. This result reflects the following factors:
• Increased net non-interest income arising from the increased amount of operations;
• Recovery of loans through assets given in exchange of loan repayment;
• Higher increased overhead costs relative to the increased net operating income;
• Larger income tax load when compared to the previous year;
• Deterioration of the quality of the loan portfolio, and consequent increase in provisions for loans.
Dec. 10
Dec. 11
Dec. 12
Net Change
Abs
%
Income Statement
Income from financial assets
579
527
513
(14)
Costs of financial liabilities
(200)
(224)
(191)
33
Net interest income
380
302
322
20
Income from foreign exchange operations
113
128
129
Income from financial services rendered (Note 23)
47
94
122
27
Other operating income and costs
5
4
8
5
164
226
259
32
Net operating income
544
529
581
52
Provisions for loans
(147)
(137)
(182)
(45)
Results from Financial Intermediation
397
392
398
6
Operating costs
(174)
(190)
(219)
(29)
Provisions for risks and contingent liabilities
(5)
(18)
(21)
(3)
Other administrative and trading costs
-
Operating profit
218
184
158
(26)
Non-operating profits and losses
12
16
27
11
Profit before tax and other charges
230
200
185
(15)
Current and deferred taxes
(2)
12
(5)
(18)
Net Income for the Year 228
212
180
(32)
Cost to Income Ratio
31,8%
35,6%
37,3%
1,7%
-3%
-15%
6%
0%
29%
127%
14%
10%
33%
2%
15%
17%
-14%
68%
-7%
-144%
-15%
5%
Net Interest Income
The average investment in financial assets stood at USD 8,302 million, having increased by USD 1,000 million (+14%) compared to December 2011. In spite of the higher average investment, income from
financial assets fell by USD 14 million, to stand at USD 513 million. The increased average investment in financial assets was insufficient to offset the reduction in interest rates which occurred in securities
as well as for loans. However, particular note should be made of the higher interest rates for loans in USD and the lower interest rates for loans in Kwanza.
The increased average investment was influenced by the higher value of short-term investments which, in spite of representing 45% of the average investment in financial assets in December 2012, accounted
for only 18% of financial income. In contrast, loans and securities together represented 65% of the average investment in financial assets, but accounted for 82% of the financial income in December 2012.
Average financial liabilities stood at USD 9,582 million, having increased by USD 611 million (+7%) in relation to December 2011. This increase in average financial liabilities was not reflected in the costs of
financial instruments which fell by USD 36 million. This reduction in the costs of financial liabilities was influenced by the lower borrowing interest rates.
102
Net interest income stood at USD 322 million, having increased by USD 20 million in relation to 2011. This increase in net interest income was influenced by the reduction of interest rates and by the
characteristics of the assets and liabilities held by the Bank. The impact of the fall in interest rates was stronger on financial liabilities than on financial assets, since the assets show longer maturity than the
liabilities. Hence, the costs of financial instruments fell by USD 33 million (-15%), and income from financial instruments declined by USD 14 million (-3%) relative to 2011.
Income from Financial Investments
527
513
60%
58%
59%
38%
33%
23%
2%
9%
18%
Dec. 10
Dec. 11
200
MILLION USD
MILLION USD
579
Costs of Financial Investments
Dec. 12
Securities
Average Balance
Financial Assets
Securities
Loans to Customers
Other Assets
Average Net Assets
Financial Liabilities
Deposits
Money Market Liabilities
Other Liabilities
Average Liabilities
Average Total Equity
Average Total Liabilities and Equity
3%
73%
98%
97%
Dec. 11
Deposits
Dec. 11
Averages
Dec. 12
Rates*
7,303
7.3%
2,635
1.8%
1,928
9.1%
2,739
11.4%
2,833
10,135
8,970
7%
8,869
7%
101
4%
301
9,271
865
10,135
191
2%
Dec. 10
Loans
224
27%
Dec. 12
Liquidity Funding
Averages
Rates*
8,302
6.2%
3,772
2.5%
1,686
6.8%
2,844
10.8%
3,047
11,349
9,582
5%
9,481
4.7%
101
5.6%
771
10,353
996
11,349
Net Change
Abs
%
1,000
1,137
(242)
104
215
1,214
611
612
(0)
471
1,082
132
1,214
14%
43%
-13%
4%
8%
12%
7%
7%
0%
157%
12%
15%
12%
*The average rates of financial assets and liabilities are the result of the department of the income or costs by the assets and liabilities producing them
The increased commissions of bank services rendered and commissions of foreign exchange operations contributed to increase the earnings of the financial services rendered by USD 30 million (+32%)
and consequent higher net non-interest income by USD 30 million (+12%) relative to December 2011, standing at USD 260 million by the end of 2012.
MILLION USD
165
230
260
3%
1%
3%
28%
42%
47%
69%
57%
50%
Earnings from Foreign Exchange Operations
Earnings from Financial Services
Other Operating Income and Costs
Dec. 10
Dec. 11
Dec. 12
103
Operating costs
Operating costs are represented by staff costs, third party supplies, amortisation and depreciation which increased as a result of the expansion of the commercial network, the restructuring of the IT systems
and increased number of employees. Indeed, the Bank’s Operating costs increased by USD 24 million (+12%) in relation to 2011, to standing at USD 215 million by the end of 2012. Costs related to third party
supplies accounted for 48% of Operating costs, reaching USD 105 million, an increase of USD 8 million relative to 2011. Staff costs represented 42% of Operating costs, reaching USD 89 million at the end
of 2012, an increase of USD 12 million (+15%) relative to 2011.
The cost-to-income ratio increased by 1.7 percentage points in relation to 2011, standing at 37.4%, due to the stronger growth of Operating costs in relation to net operating income.
Operating costs
MILLION USD
174
190
219
8%
9%
10%
51%
51%
48%
41%
40%
42%
Dec. 10
Dec. 11
Staff Costs
Third Party Supplies
Depreciation and Amortisation
Dec. 12
C. Profitability
Return on average equity (ROAE) stood at 18%, having fallen by 7 percentage points, and return on average assets (ROAA) stood at 1.6%, having declined by 0.4 percentage point in relation to 2011.
Return on average assets measured by net interest income stood at 2.85%, decreasing by over 1 percentage point in relation to 2011.
Return on average assets measured by net non-interest income stood at 2.3%. In spite of the increased net non-interest income, the return on equity declined in relation to December 2011 due to the equity
having grown more than net non-interest income.
The reduction of the Bank’s return on average equity is a consequence of the fact that net income fell while average assets and equity increased.
Profitability
1.6%
2012
18%
18%
ROAA
2.1%
2011
ROAE
25%
22%
RAI/Equity
2.7%
2010
32%
29%
0%
104
5%
10%
15%
20%
25%
30%
35%
Proposed Appropriation of Net Income
12
105
André Malenga – Shanty Towns of Angola
Acrylic on Canvas
106
12. Proposed Appropriation of Net Income
In view of the legal and statutory provisions, the Board of Directors proposes that the net income of AKZ 17,217,380,033 (seventeen thousand million, two hundred and seventeen million three hundred and
eighty thousand and thirty-three Kwanzas), equivalent to USD 179,673,573 (one hundred and seventy-nine million, six hundred and seventy-three thousand and five hundred and seventy-three USD) for the
year ended on 31 December 2012, should be applied as follows:
Dividends Free Reserves
Social Fund
%
25%
70%
5%
100%
AKZ
USD
4,304,345,008
12,052,166,023
860,869,002
17,217,380,033
44,918,393
125,771,501
8,983,679
179,673,573
107
108
Financial Statements
13
109
Isabel Baptista – Planks
Acrylic on Linen Canvas
110
13. Financial Statements
A. Board of Directors’ Approval
The Directors of BAI – Banco Angola de Investimentos, S.A. are responsible for the preparation, integrity and objectivity of the Financial Statements.
15 March 2013
José Carlos de Castro
Hélder Miguel Palege Jasse Aguiar
Chairman of the Board of Directors
Executive Director
Ana Paula Alcobia Gray
Inokcelina Ben’Africa Correia dos Santos
Deputy Chairman
Executive Director
Francisco José Maria de Lemos
Deputy Chairman
Executive Director
João Cândido Soares Moura Oliveira Fonseca
Executive Director
Luís Filipe Lélis
Executive Director
Director
Carlos Duarte
Director
111
B. Balance Sheets
Balance Sheets as at 31 December 2012 and 2011
Amounts in thousand Kwanzas - AKZ
and thousand United States Dollars - USD
Notes
31 Dec. 2012
Thousand AKZ
31 Dec. 2012
Thousand USD (Nota 2)
31 Dec. 2011
Thousand AKZ
31 Dec. 2011
Thousand USD (Nota 2)
Assets
Available funds
3
263,331,006 2,748,015 202,718,831 2,127,577
Interbank deposits
4
206,718,184 2,157,227 354,909,156 3,724,846
Repurchase agreements
4
75,579,315 788,715 83,276,715 874,007
Securities
Trading 5
394,547 4,117
-
Held-to-maturity
5
166,702,206 1,739,636 155,124,381 1,628,063
Foreign exchange operations
397 4
395 4
Loans
Loans
6
284,897,310 2,973,072 308,250,218 3,235,151
Provision for doubtful loans
6
(27,583,618)
(287,851)
(22,190,510)
(232,894)
Other Assets
7
15,393,103 160,636 14,888,932 156,261
Fixed Assets
Financial fixed assets
8
8,775,983 91,583 8,574,933 89,996
Tangible fixed assets
9
32,438,863 338,519 20,250,085 212,529
Intangible fixed assets
9
6,781,080 70,765 5,607,280 58,850
Total Assets
1,033,428,376 10,784,438 1,131,410,416 11,874,390
Liabilities and Equity
Deposits
Demand deposits
10
434,737,603 4,536,746 676,580,481 7,100,854
Term deposits
10
380,466,069 3,970,389 319,567,798 3,353,931
Money market liabilities
Money market operations
11
9,582,590 100,000 9,672,667 101,517
Financial derivatives
12
45,191 472 43,621 458
Liabilities in the payment system
13
76,314,413 796,386 16,510,455 173,281
Foreign exchange operations 14
15,356,632 160,256 10,477,736 109,966
Subordinated debt
15
1,464,460 15,283
2,408,755 25,280
Advances from customers
16
2,355,752 24,584 2,254,541 23,662
Other liabilities
17
9,615,970 100,346 3,578,503 37,557
Provisions for contingent liabilities
18
4,039,283 42,152 2,629,282 27,595
Total Liabilities
933,977,963
9,746,614 1,043,723,839 10,954,101 Share capital
19
14,786,705 154,308 14,786,705 155,190
Reserve for monetary revaluation of share capital
19
28,669 299 28,669 301
Reserves and funds
19
66,797,836 697,075 52,053,485 546,312
Potential earnings
19
667,083 6,961 667,083 7,001
Own shares
19
(47,260)
(493) (47,260)
(496)
Net income for the year
19
17,217,380
179,674 20,197,895 211,981
Total Equity
99,450,413
1,037,824 87,686,577 920,289
Total Liabilities and Equity
1,033,428,376
10,784,438 1,131,410,416 11,874,390
The Notes are an integral part of these balance sheets.
112
C. Income Statement
For the Years Ended on 31 December 2012 and 2011
Notes
Income from short-term investments
21
Income from securities
21
Income from loans
21
Deposit costs
21
Money market liabilities costs
21
Costs of financial derivatives
21
Net Interest Income
Earnings from foreign exchange operations
22
Earnings from financial services rendered
23
Provisions for doubtful loans 18
Earnings from Financial Intermediation
Staff
24
Third party supplies
25
Taxes and rates not incident on earnings
26
Penalties applied by regulatory authorities
27
Other administrative and trading costs
Depreciation and amortisation
9
Other Administrative and Trading Costs
18
Earnings from financial fixed assets
28
Other operating income and costs
29
Other Operating Income and Costs
Net Operating Income Non-operating earnings
30
Profit Before Tax and Other Charges
Current tax
31
Deferred tax assets
31
Net Income for The Year
31 Dec. 2012
Thousand AKZ
8,902,268 11,006,593 29,237,236 49,146,097 (17,769,284)
(483,513)
(45,191)
(18,297,988)
30,848,109 12,329,861 11,679,505 (17,478,141)
37,379,334 (8,703,873)
(9,934,711)
(185,675)
(2,585)
-
(2,126,307)
(20,953,151)
(2,036,359)
(929,918)
776,120 (23,143,308)
14,236,026 3,494,517 17,730,543 (1,711,903)
1,198,740 17,217,380 31 Dec. 2012
Thousand USD (Note 2)
92,900 114,860 305,108 512,868 (185,433) (5,046) (472) (190,951) 321,917 128,669 121,883 (182,393) 390,076 (90,830) (103,675) (1,938) (27) -
(22,189) (218,659) (21,251) (9,704) 8,099 (241,515) 148,561 36,468 185,029 (17,865)
12,510 179,674 31 Dec. 2011
Thousand AKZ
4,412,356 16,426,086 29,344,548 50,182,990 (20,992,498)
(337,179)
(43,621)
(21,373,298)
28,809,692 12,242,772 8,996,255 (13,067,565)
36,981,154 (7,231,538)
(9,061,687)
(81,499)
(6,735)
(44,138)
(1,657,841)
(18,083,438)
(1,725,140)
(154,223)
340,388 (19,622,413)
17,358,741 1,672,946 19,031,687 -
1,166,208 20,197,895 31 Dec. 2011
46,309
172,395
307,977
526,681
(220,321)
(3,539)
(458)
(224,318)
302,363
128,490
94,418
(137,147)
388,124
(75,897)
(95,104)
(855)
(71)
(462)
(17,399)
(189,788)
(18,106)
(1,619)
3,572
(205,941)
182,183
17,558
199,741
12,240
211,981
The Notes are an integral part of these statements.
113
D. Statements of Changes in Equity
Reserves and Funds
Balance as at 31 December 2010
Transfer of net income for 2010
Distribution of dividends
Reduction of the social fund
Net income for 2011
Transfer of net income for 2011
Distribution of dividends
Reduction of the social fund
Net income for 2012
114
Reserve for monetary
revaluation of Potential
Net income Total
Share Capital Share Capital
Legal
Free
Social Fund
Total
earnings
Own shares for the year
equity
14,786,705 -
-
-
-
14,786,705 -
-
-
-
14,786,705 28,669 -
-
-
-
28,669 -
-
-
-
28,669 9,894,315 4,224,715 -
-
-
14,119,030 4,039,578 -
-
-
18,158,608 25,403,950 11,195,494 -
-
-
36,599,444 10,098,948 -
-
-
46,698,392 915,665 422,471 -
(3,125)
-
1,335,011 605,937 -
(112)
-
1,940,836 36,213,930 15,842,680 -
(3,125)
-
52,053,485
14,744,463 -
(112)
-
66,797,836 667,083 -
-
-
-
667,083 -
-
-
-
667,083 (47,260)
21,123,574
- (15,842,680)
- (5,280,894)
-
-
-
20,197,895 (47,260)
20,197,895
- (14,744,463)
- (5,453,432)
-
-
-
17,217,380 (47,260)
17,217,380 72,772,701
(5,280,894)
(3,125)
20,197,895
87,686,577
(5,453,432)
(112)
17,217,380
99,450,413
E. Cash Flow Statements
31 Dec. 2012
Thousand AKZ
31 Dec. 2012
31 Dec. 2011
Thousand AKZ
31 Dec. 2011
Receipts derived from:
8,632,461 90,085 4,204,103 44,123
10,576,601 110,373 18,180,267 190,806
Income from loans
27,021,192 281,982 27,408,648 287,660
Payments related to:
Deposit costs
(17,716,578)
(184,883) (17,537,746)
(184,062)
Money market liabilities costs
(736,350)
(7,684) (445,648)
(4,677)
Net Interest Income Cash Flows
27,777,326 289,873 31,809,624 333,850
Earnings from foreign exchange operations
12,330,036 128,671 12,242,772 128,490
11,679,505 121,883 8,996,255 94,418
Financial Intermediation Cash Flows
51,786,867 540,427 53,048,651 556,758
Payment of administrative and trading costs
(19,097,417)
(199,293) (16,425,596)
(172,390)
Payment of charges on earnings
(989,945)
(10,331) (413,152)
(4,336)
Clearance of operations in the payment system
59,803,958 624,090 13,637,559 143,129
Other operating costs and income
383,639 4,004 340,388 3,572
Cash Flow From Operations
91,887,102 958,897 50,187,850 526,733
Investments in short-term investments
156,158,179 1,629,603 (375,736,746)
(3,943,436)
Investments in active securities
(11,147,833)
(116,334) 49,500,844 519,522
Investments in foreign exchange operations
(2)
-
(11)
Investments in loans
13,518,311 141,072 (67,765,547)
(711,214)
Investments in other values
(1,017,049)
(10,614) (6,442,135)
(67,612)
Investments in fixed assets
(15,689,935)
(163,734) (6,507,570)
(68,298)
Other non-operating gains and losses
3,498,778 36,512
1,672,946 17,558
Cash Flow Of Investments
145,320,449 1,516,505
(405,278,219)
(4,253,480)
Funding with deposits
(180,943,175)
(1,888,249) 437,545,121 4,592,128
54,435 568 480,793 5,046
Funding with securities
-
-
(119,640,307)
(1,255,650)
Funding with foreign exchange operations
3,106,737 32,420 5,080,749 (18,330)
Funding with other fundraising
(789,297)
(8,237) 339,509 3,563
Funding with other liabilities
7,025,398 73,314 (429,916)
(4,512)
Payment of dividends
(5,049,474)
(52,694) (5,280,894)
(55,424)
Cash Flow Of Funding
(176,595,376)
(1,842,878) 318,095,055 3,266,821
Changes In Available Funds
60,612,175 632,524 (36,995,314)
(459,926)
Available funds at the beginning of the year
202,718,831 2,115,491 239,714,145 2,587,503
Available funds at the end of the year
263,331,006 2,748,015 202,718,831 2,127,577
115
F. Notes to the Financial Statements
1. Introduction
Banco Angolano de Investimentos, S.A. (hereinafter also referred to as “Bank” or “BAI”), with head office in Luanda, is a private capital Bank, partly held by non-resident entities. The Bank was incorporated
on 13 November 1996, with operations having started on 4 November 1997. On 4 May 2008, BAI changed its corporate status from private limited liability company (SARL) to public limited liability company
(SA), pursuant to the Financial Institutions Act, Law number 13/2005, of 30 September, with respect to article 13, paragraph b). On 11 January 2011, the Bank changed its corporate name from Banco Africano
de Investimentos, S.A. to Banco Angolano de Investimentos, SA.
The Bank’s corporate object is the exercise of banking activity, under the terms and within the limits defined by Banco Nacional de Angola (hereinafter referred to as “BNA”), dedicated to attracting funds
from third parties in the form of deposits, deposit certificates and cash bonds, which it invests, together with its own funds, in the granting of loans, in deposits at Banco Nacional de Angola, investments
in credit institutions, the acquisition of securities or in other assets for which it is duly authorised. It also provides other banking services and performs different types of operations in foreign currency,
underpinned by a national network of 112 service points, 15 of which were opened in 2012. Around 65 service points of its national network are located in the city of Luanda. The Bank’s network includes 6
(six) business service centres and one Private Banking centre.
2. Basis of Presentation and Summary of the Main Accounting Policies
The financial statements were prepared under the assumption of continuity of operations, based upon the accounting records kept by the Bank, according to the accounting principles established in the
Accounting Plan for Financial Institutions (CONTIF), as defined in BNA Instruction number 09/07, of 19 September, and subsequent updates. These principles may differ from those generally accepted in
other countries.
Furthermore, BNA authorised that, for the years ended on 31 December 2012 and 2011, the Bank could maintain the recording of its financial fixed assets through the historical acquisition cost method and
not pursuant to the equity method as defined in the CONTIF.
The Bank’s financial statements as at 31 December 2012 and 2011 are expressed in Kwanzas, with the assets and liabilities denominated in other currencies having been converted to local currency, based
on the reference average exchange rate published by BNA on those dates. Moreover, and merely for purposes of presentation, the Board of Directors also discloses the financial statements converted into
United States Dollars, based on the indicative average exchange rate published by BNA as at 31 December 2012 and 2011.
As at 31 December 2012 and 2011, the reference exchange rates of the Kwanza (AKZ) to the United States Dollar (USD) and the Euro (EUR) were as follows:
Year
USD
EUR
2012
2011
95,826
95,282
126,375
123,137
The financial information relative to 2012 and 2011 expressed in USD is presented merely for purposes of presentation with its conversion having been based on the indicative average exchange rate,
published by BNA as at 31 December 2012 and 2011. This conversion should not be interpreted as representing that the amounts in Kwanzas (AKZ) have been, could have been or in the future might be
converted into United States Dollars (USD) at these or at any exchange rates.
Accounting Policies
The principal accounting policies used in the preparation of the financial statements were as follows:
a) Accruals Basis
Income and costs are recognised according to the duration of operations, in accordance with the accrual accounting principle and are recorded as they are generated, regardless of when they are received
or paid.
Dividends are recognised when received.
116
b) Transactions in Foreign Currency
Transactions in foreign currencies are stated pursuant to the multi-currency system principles, where each transaction is recorded according to the respective denomination currency. Assets and liabilities
denominated in foreign currencies are converted into Kwanzas at the average exchange rate published by BNA as at the reporting date. Costs and income relative to currency conversion differences,
incurred or potential, are recorded in the income statement for the year under the heading earnings from foreign exchange operations.
Foreign exchange transactions, when not settled on their contracting date, are recorded in off balance sheet accounts, under the heading “Foreign currency sales payable” (Note 32), when they have been
settled on their contracting date the amounts are recorded in the appropriate balance sheet accounts.
Transfers to and from abroad in foreign currency are recorded as operations payable or receivable, as applicable.
Payment orders sent abroad and received from abroad, are recorded on the date of receipt of the order or credit note, as operations payable or receivable, in specific debit or credit accounts.
c) Loans
Loans are non-derivative financial assets with fixed or determinable payments that are not listed on an active market and are registered at their contracted values when created by the Bank, or at the values
paid when acquired by other entities.
Interest, commissions and other costs and gains associated to credit operations are carried over the life cycle of the operations against income statement headings, regardless of when they are received
or paid.
Income derived from internal analyses associated to the opening, dispatch and extensions of credit operations are recognised through profit or loss at the time of their collection.
Liabilities related to guarantees and sureties are recorded in off balance sheet headings at their risk value, with the flows of interest, commissions or other income being stated through profit or loss
throughout the life cycle of the operations.
Credit operations granted to customers, including guarantees and sureties provided, are subject to the constitution of provisions pursuant to BNA Notice number 4/2011, of 8 June, published in the Diário da
República as Notice number 3/2012, of 28 March, on the methodology for the classification of loans granted to customers and determination of the respective provisions.
The Bank cancels interest that is overdue for more than 60 days and does not recognise interest as of that date until the customer settles the situation.
With the entry into force of Notice number 4/2011, of 8 June, credit operations for disbursement, were granted in local currency for all entities except the State and companies with proven revenue and
receipts in foreign currency, for the following purposes:
i. Financial liquidity assistance, including, among others, escrow accounts;
ii.Motor vehicle financing;
iii.Consumer loans;
iv.Micro credit;
v.Advances to depositors or overdrafts;
vi.Other forms of financial credit of a short term nature (less than one year).
Provision for Doubtful Loans and Guarantees Provided
Under the terms of Notice number 4/2011, of 8 June, granted credit falling due and guarantees provided are classified in increasing order of risk, according to the following levels:
117
Level Risk
A
B
C
D
E
F
G
Zero
Very low
Low
Moderate
High
Very high
Loss
Credit operations from the same customer or economic group are classified under the category showing greatest risk. In this context, the Bank reviews the credit classification every month according to
any delay observed in the payment of the principal or costs, using the same procedure that determined its initial classification.
Overdue loans are classified in risk levels according to the time that has passed since the starting date of non-performance of the operation, with minimum provisioning levels being calculated in accordance
with the following table:
Risk Level % Provision Time passed since entry into default:
Operations with term less than two years
Operations with term more than two years
A
B
C
D
0%
1% to < 3%
3% to < 10%
10% to < 20%
-
-
15 to 30 days
15 to 60 days
1 to 2 months
2 to 4 months
2 to 3 months
4 to 6 months
E
F
G
20% to < 50%
50% to < 100%
100%
3 to 5 months
6 to 10 months
5 to 6 months
10 to 12 months
Over 6 months
Over 12 months
Credit overdue for more than 30 days is classified under risk levels B, C, D, E, F and G according to the amount of time that has passed since the date of entry into default of the operations. As shown in the
table above, for credit granted for a period of more than 24 months (two years), the periods defined for establishing the risk level should be regarded as double.
Six months after the classification of an operation in Category G, the Bank writes off this credit from the assets through use of the respective provision. Furthermore, these loans remain recorded in an off
balance sheet heading for a period of at least ten years.
Whenever loans are recovered or assets are received in exchange of repayments of loans that have previously been written off from the assets through use of provisions, the amounts received are recorded
under the heading “Non-operating earnings” (Note 30).
Real estate properties which have been given in exchange of loan repayments, for recovered loans that have previously been written off the assets, are stated under the heading “Other assets - Properties”
not for the Bank’s own use, and recorded against the recognition of income from credit recovery, based on the following procedures:
• The valuation is conducted by an expert or company specialised in the matter pertinent to the object of the valuation, not bound directly or indirectly to the Bank or any company connected
to the Bank, nor to its external auditor or any company linked to the external auditor;
• The value of the asset to be recorded is limited to the amount calculated in its valuation;
• The accounting recognition is made with the agreement of the external auditor on the adequacy of the procedures used in the valuation;
• The approval of the valuation is drawn up in the minutes of the Executive Committee;
• The properties are not subject to depreciation or revaluation;
• The exceptional income derived from the recording of these properties is considered for the effect of calculation of tax pursuant to the Industrial Tax Code at the legal rate of 35%.
The Bank should sell properties arising from loan repayment within the period of two years (article 11 of Law number 13/05, of 30 September - Law of Financial Institutions).
d) Reserve for Monetary Revaluation of Share Capital
Pursuant to BNA Notice number 2/2009, of 8 May, on monetary revaluation, financial institutions should, in the case of inflation above 100% over 3 consecutive years, consider the effects of changes in the
purchasing power of local currency on a monthly basis, based on the Consumer Price Index in capital balances, reserves, retained earnings and fixed assets.
118
The value arising from monetary revaluation should be reflected on a monthly basis by debiting the account “Result of monetary adjustment” of the income statement, against the increased equity balances,
with the exception of the heading “Share capital”, which should be classified under a specific heading (“Reserve for monetary revaluation of share capital”) which can be used only for subsequent share
capital increases.
During 2012 and 2010, the Bank did not revalue its share capital, since the observed inflation did not correspond to that stipulated under the Notice referred to above.
e) Financial Fixed Assets
For the years ended on 31 December 2012 and 2011, the Bank was exceptionally authorised by BNA to keep its financial fixed assets recorded at their acquisition cost. However, from 2013, they should begin
to be recorded according to the Equity Method, as established in the Accounting Plan for Financial Institutions (CONTIF).
Therefore, as at 31 December 2012 and 2011, financial fixed assets were stated at their acquisition cost. When these assets are denominated in a foreign currency, they are reflected in the accounts at the
exchange rate of the transaction date. Whenever permanent losses in their realisation value are estimated, a provision for losses in fixed assets is recognised.
The Bank carries out annual impairment tests on subsidiaries whose events or circumstances indicate that their carrying value exceeds the recoverable amount, with provisions for losses in fixed assets
being recognised against the heading “Earnings from financial fixed assets” (Note 28).
f) Intangible and Tangible Fixed Assets
Intangible assets correspond mainly to improvements in third party properties and software development and acquisition. These expenses are stated at acquisition cost including the indispensable costs
required to place them in operation and are depreciated on a straight-line basis over a three-year period, with the exception of work on leased buildings which are depreciated according to their estimated
useful life or contractual lease period.
Tangible fixed assets are initially recorded at acquisition cost, with their revaluation being permitted under the applicable legal provisions.
A percentage equivalent to 30% of the increase in depreciation arising from the revaluation carried out is not accepted as a cost for tax purposes pursuant to the legislation in force, hence this portion is
added to taxable profit.
Depreciation is calculated on a straight-line basis at the maximum rates accepted as a cost for tax purposes, in accordance with the Industrial Tax Code, which corresponds to the following years of estimated
useful life:
Years of useful life
Buildings
Works on leased buildings
Equipment
Furniture and material
Machines and tools
Computer equipment
Land transport vehicles
Other fixed assets
50
10
10
6 to 10
3 to 10
3
10
g) Committed Operations
The Bank conducts transactions involving the purchase or sale of temporary liquidity, backed by securities, with or without a change of ownership. Committed operations are carried out in the interbank
market with BNA or between financial institutions, or in the secondary market between the Bank and its customers.
As at 31 December 2012, the Bank purchased securities with repurchase agreements in the interbank market, where funds were invested receiving securities from third parties as collateral, with a
commitment for their resale at the end of the contract (Note 4).
Income from the repurchase agreements, corresponds to the difference between the resale value and the purchase price of the securities. This income is recognised pursuant to the accrual principle due
to the operation’s time flow under the heading “Income from financial assets – short-term investments” (Note 21).
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h) Securities
The Board of Directors determines the classification of its investments at initial recognition. In view of the characteristics of the securities and intention at the time of their acquisition, the Bank’s securities
as at 31 December 2012 are classified as trading securities and securities held-to-maturity. As at 31 December 2011, all the securities were classified as securities held-to-maturity.
Trading Securities
Trading securities are defined as securities acquired for the purpose of being actively and frequently traded.
Financial assets held for trading are initially recognised at acquisition cost, including the costs directly attributable to the acquisition of the asset, and subsequently measured at fair value.
Gains and losses arising from subsequent measurement at fair value are recognised in the income statement under the heading “Income from securities” (Note 21).
The methodology of calculation of fair value (market value) is established based on criteria that are consistent and capable of being verified, which take into consideration independence in the collection of
data relative to the rates applied in trading rooms, in particular:
i) The average trading price on the day of calculation or, when not available, the average trading price of the previous business day;
ii)The probable net realisable value obtained through the adoption of a price formation technique or model;
iii)The price of similar financial instruments, taking into consideration, at least, the payment and maturity periods, credit risk and currency or reference rate;
iv) The price defined by the BNA.
As at 31 December 2012, assets at fair value through profit or loss include fixed income securities.
Securities Held-to-Maturity
This category includes the securities for which the Banco has the intention and financial capacity to maintain in its portfolio until their maturity date. Securities classified under this heading are recorded at
acquisition cost, plus the income earned as a result of the time flow of its periods (including the distribution over time of interest and the premium/discount against profit or loss).
Central Bank Securities (TBC) and Treasury Bills (BT) are issued at a discount and recorded at acquisition cost. The difference between the acquisition cost and nominal value is recognised in accounting
terms as income over the period between the purchase date and maturity date of the securities, in a specific account named “Income receivable” (Note 5).
Treasury Bonds (OT) acquired at a discounted value are recorded at acquisition cost. The difference between the acquisition cost and nominal value of these securities, which corresponds to the discount
applied at purchase, is recognised during the useful life of the security under the heading “Income receivable”. Accrued interest relative to these securities is also stated under “Income receivable” (Note 5).
Treasury Bonds issued in local currency, indexed to the USD (OTMN-TXC) are subject to exchange rate updates. Thus, the result of exchange rate adjustment of the nominal value of the security, the discount
and the accrued interest is reflected in the income statement for the financial year when it occurs, under the heading “Income from securities” (Note 21).
Treasury Bonds issued in local currency linked to the Consumer Price Index (OTMN-IPC) are subject to the updating of the nominal value of the security pursuant to variations in this index. Therefore, the
result of the exchange rate update of the nominal value of the security and the accrued interest is reflected in the income statement for the year when it occurs, under the heading “Income from securities”
(Note 21).
During 2012, Executive Decree number 68/12 of 16 February of the Ministry of Finance authorised the publication of Order number 159/12 of 20 February, which authorises the regular issue of nonreadjustable Treasury Bonds in local currency with coupon interest rates that are predefined by maturity and placed on the market through price auction. Accrued interest relative to these securities is stated
under the heading “Income receivable” (Note 5).
Other liabilities in foreign currency are recorded at acquisition cost. Accrued interest relative to these securities, as well as the difference between the acquisition cost and the repayment value, are reflected
linearly through profit or loss under the heading “Income from securities” (Note 21).
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Taxation Regime for Public Debt Securities
Income from public debt securities issued by the Angolan State, whose issue is regulated by the Framework Law of Direct Public Debt (Law number 16/02, of 5 December) and Presidential Decree number
259/10, of 18 November (which revoked and replaced the previous regulating diplomas, namely Decree number 51/03 and Decree number 52/03, both of 8 July), benefits from exemption from all taxes.
Subparagraph c) of number 1 of article 23 of the Industrial Tax Code establishes the exclusion of this tax for this type of income.
Presidential Legislative Decree number 5/11, of 30 December, introduces a rule subjecting the interest of treasury bills and treasury bonds to Capital Investment Tax (IAC). However, article 2 of this diploma
stipulates that the subjection to tax is applicable only to securities acquired after the entry into force of the Law.
Classification of Risk
Pursuant to the provisions of the CONTIF, the Bank classifies the securities of its own portfolio according to the following credit risk rating:
Level A. Sovereign securities issued by the Angolan State or states belonging to the G7 group, and securities with a credit rating assigned by Standard & Poor’s (S&P) or any other reputed
independent agency (Moody’s or Fitch), between AAA and AA-;
Level B. Sovereign securities issued by the BRIC group (Brazil, Russia, India and China), securities with a credit rating assigned by S&P or any other reputed independent agency of between
A+ and A;
Level C. Securities with a credit rating assigned by S&P or any other reputed independent agency of between A- and BBB+;
Level D. Securities with a credit rating assigned by S&P or any other reputed independent agency of between BBB and BBB-;
Level E. Securities with a credit rating assigned by S&P or any other reputed independent agency of between BB+ and B-;
Level F. Securities with a credit rating assigned by S&P or any other reputed independent agency of between CCC+ and C;
Level G. Securities with a credit rating assigned by S&P or any other reputed independent agency equal to or below D.
i) Financial Derivatives
The Bank carries out financial derivative operations such as “currency forwards” under its daily activities, managing proprietary positions based on expectations of market developments and its liquidity
needs in foreign currency.
Financial derivative transactions are conducted in Over-the-counter markets (OTC).
Derivative financial instruments are recorded at fair value on the date when the Bank negotiates the contracts, and are subsequently measured at fair value. The Bank only has trading derivatives, which are
measured at fair value, with changes in value recognised immediately through profit or loss, under the headings “Income or Costs of Financial Derivatives”. Derivatives are considered assets when their fair
value is positive and liabilities when their fair value is negative (Note 12).
Derivatives are also recorded in off balance sheet accounts at their contractual reference value (notional value) (Note 32).
Derivative financial instruments are classified as hedges or speculation and arbitrage, according to their purpose.
j) Retirement and Survival Pensions
Pension Fund
Law number 07/04, of 15 October, which repealed Law number 18/90 of 27 October, regulating the Social Security system of Angola, provides for the granting of retirement pensions to all Angolan workers
enrolled in Security Social. The value of these pensions is calculated based on rates proportional to the number of years of work, applied to the average monthly gross wages received during the periods
immediately before the date when the employee ended his/her period of activity. According to Decree number 7/99 of 28 May, the rates of contribution to this system are 8% for the employer and 3% for employees.
In addition to the above, the Bank has undertaken, on a voluntary basis, through the creation of a defined contribution pension fund, to grant monetary instalments as a supplement to the retirement
pension for old age, disability, early retirement and survival pensions to its employees. According to the contract establishing this Fund, BAI will contribute an annual 6% of its employees’ wages, with
a contribution of 3% from the wages of the participants of the fund also being foreseen. The Bank is currently, on an exceptional basis, undertaking the 3% contribution corresponding to that of the
participants (employees). The contribution to be made in relation to 2012 and 2011 is recorded under the heading “Remuneration of Employees – Contribution to the Pension Fund” (Notes 17 and 24).
121
Until 31 December 2009, the Bank had also granted, on a voluntary basis, a supplementary retirement pension on account of old age, disability, early retirement and survival pensions to its workers, as a
defined benefit. As of 31 December 2009, and after permission from the Ministry of Finance, the benefits plan and the contract constituting the Pension Fund was changed to a defined contribution plan.
In 2010, with reference to the beginning of the year, as a result of the change of the pension plan to a defined contribution plan, the value of the pension fund on that date, which amounted to tAKZ 1,138,886
(tUSD 12,739), was used as the first contribution to the new Fund.
The amount corresponding to the rights acquired under the previous pension plan were transferred to the present pension plan and converted into contributions of the participant. BAI, as an associate,
guaranteed the funding of the participant contributions relative to acquired rights as a result of the conversion into defined contributions. After 31 December 2009, the participant and the associate individually
assume their contribution liabilities.
Retirement Benefits
Under the terms of article 262 of the General Labour Law, the Bank has constituted provisions to cover liabilities arising from “Retirement benefits”, determined by multiplying 25% of the basic monthly
wage applied on the date when the worker reaches the legal age of retirement by the number of years of service on the same date. The total value of the liabilities is determined on an annual basis (Notes
17 and 24).
k) Provisions for Contingent Liabilities
A provision is constituted whenever there is a present obligation (legal or non-formalised) resulting from past events for which the future disbursement of funds is probable, which may be determined
reliably. The amount of the provision corresponds to the best estimate of the value which must be disbursed in order to settle the liability on the reporting date.
If future disbursement of funds is not likely, this is deemed a contingent liability. Contingent liabilities are reported only for purposes of disclosure, unless the possibility of materialisation is remote.
Provisions for continent liabilities recorded by BAI are intended to support potential losses and other contingencies, namely those arising from non-recoverable assets, fraud, shortages of cash and other
fixed assets (Note 18).
l) Income Taxes
The income obtained by the Bank, under normal business activities, is subject to various taxes, according to its nature.
Hence, the Bank is fully taxed on profits obtained both in Angola and abroad, and its taxable profit corresponds to the difference between all the income or gains received and costs or losses imputable to
the year under review, possibly corrected under the terms of the Industrial Tax Code.
The Bank’s income is taxed under the terms of numbers 1 and 2 of article 72 of Law number 18/92, of 3 July, where the applicable tax rate is 35%, following Law number 5/99, of 6 August (Note 31).
Industrial Tax is paid provisionally, in three equal and consecutive instalments, specifically in January, February and March, where the tax to be paid in advance is calculated based on 75% of the taxable
profit of the previous year.
Capital Investment Tax
Presidential Legislative Decree number 5/11, of 30 December, introduced various legislative amendments to the Capital Investment Tax (IAC) Code, following the Tax Reform currently underway.
The IAC is generically incident on income from the Bank’s financial investments (e.g. income derived from investments, liquidity assignment operations, earnings from Central Bank Securities and, in a
general form, any other income arising from the simple investment of capital). The rate varies between 5% (in the case of interest paid relative to public debt securities showing a maturity equal to or above
three years) and 15%.
The IAC is a payment on account of Industrial Tax, being offset through the abatement of tax which is later calculated, under the terms of subparagraph a) of number 81 of the Industrial Tax Code.
122
Urban Property Tax
Pursuant to the amendments introduced by Law number 18/11, of 21 April, to the Urban Property Tax Code (IPU), the rent earned from leased properties is subject to the IPU at the rate of 15% (Note 26).
On the other hand, under the terms of article 23 of the Industrial Tax Code, rents which are subject to the IPU are not considered income or gains for the year, for calculation of the due tax.
m) Deferred Taxes
Deferred taxes correspond to the impact on tax recoverable/payable in future periods, arising from deductible or taxable temporary differences between the book value of assets and liabilities and their
tax basis used in determining taxable profit.
Deferred tax assets are recognised up to the extent that it is likely that there will be future taxable income to enable the use of the corresponding deductible tax differences or tax losses carried over, while
deferred tax liabilities are normally recorded for all temporary taxable differences. Tax losses determined in a year are deductible from tax profits for subsequent years.
Deferred tax assets or liabilities relative to temporary differences arising on initial recognition of assets and liabilities in transactions that do not affect the accounting profit or taxable profit are not recorded.
Additionally, no deferred tax assets are recognised where their recoverability may be questionable due to other situations, including matters of interpretation of current tax legislation.
The principal situation at BAI causing temporary differences between the book value of assets and liabilities and their tax base refers to tax losses carried forward that were unused due to being of a higher
value than the taxable profit for the year and temporarily non-deductible provisions.
Deferred taxes are calculated on an annual basis using tax rates that are expected to be in force on the date of the reversal of the temporary differences.
The Bank recorded deferred tax assets under the balance sheet heading “Other assets – Deferred tax assets” (Note 7) against the income statement heading “Deferred tax” (Note 31), thus assuming the
existence of future taxable profit and based on current tax legislation. Any future changes in tax laws might affect the amounts expressed in the financial statements in relation to deferred taxes.
n) Property Taxes
Urban Property Tax
Pursuant to the amendments introduced by Law number 18/11, of 21 April, the exemption previously established in the Urban Property Tax (IPU) Regulation was repealed, with the value for tax purposes of
own properties for use in the development of the Bank’s normal business now being subject to the IPU at the rate of 0.5% (above AKZ 5,000,000) (Note 26).
SISA
Under the terms of Legislative Diploma number 230, of 18 May 1931, as well as the amendments introduced by Law number 15/92, of 3 July and Law number 16/11, of 21 April, SISA is incident on
all acts which represent the perpetual or temporary transfer of property of any value, type or nature, regardless of the denomination or form of the security (e.g. acts representing the transfer of
improvements to rural or urban properties and buildings, transfers of immovable assets through donations with entries or pensions or the transfer of immovable assets through donations) at the rate of 2%.
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o) Other Taxes
The Bank is also subject to indirect taxes, namely Customs Taxes, Stamp Duty, Consumption Tax, as well as other taxes (Note 26).
p) Tax Replacement
Under its activity, the Bank takes on the duty of tax replacement through withholdings made at source of taxes relative to third parties, which are subsequently submitted to the State.
Capital Investment Tax
Pursuant to Presidential Legislative Decree number 5/11, of 30 December, the Bank withholds capital investment tax at source, at the rate of 10% of the interest on term deposits paid to customers.
Stamp Duty
Pursuant to Presidential Legislative Decree number 6/11, of 30 December, the Bank is responsible for the settlement and submission of the Stamp Duty owed by its customers on bank operations in general
(e.g. loans, collection of interest on loans, commissions for financial services), with the Bank proceeding with the settlement of the tax, at the rates established in the Stamp Duty Table.
Industrial Tax
Pursuant to law number 7/97, of 10 October – Law of Contract Works, the Bank carries out withholding at source on certain services rendered, at the rates stipulated in the diploma under consideration.
Urban Property Tax
Pursuant to Law number 18/11, of 21 April, the Bank withholds payable urban property tax at source, at the rate of 15% of the payment or submission of rents relative to leased properties (Note 26).
q) BAI Backed Securities
BAI backed securities are deposit certificates subscribed by the Bank’s customers that are denominated in various currencies, in particular AKZ, USD and EUR, whose maturity periods range from one
month to one year. These securities are substantially identical to term deposits, thus representing no risk to the subscribers beyond BAI’s credit risk. The remuneration of these securities consists of an
interest rate defined according to the amount subscribed, the currency and the repayment period.
BAI backed securities are issued and recorded at their subscription price (nominal value) and repaid at par once only, with early repayment of the issue on the customer’s initiative not being permitted.
Accrued interest is recorded as a liability through profit or loss under the heading “Customer term deposit costs” (Note 21).
124
3. Available Funds
This heading is broken down as follows:
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD Thousand AKZ
Thousand USD
Cash and cash equivalents
Notes and coins in local currency
10,794,427 112,646 8,862,644 93,015
Notes and coins in foreign currency
In United States Dollars
12,110,427 126,379 7,409,097 77,760
In Euros
1,296,263 13,527 502,166 5,270
In Other Currencies
242,193 2,527 223,736 2,348
Notes in ATM
1,990,443 20,771 2,163,923 22,711
26,433,753 275,850 19,161,566 201,104
Demand deposits at BNA
In local currency
53,131,519 554,459 56,530,242 593,297
76,861,946
802,100 98,430,616 1,033,050
129,993,465 1,356,559 154,960,858 1,626,347
Demand deposits abroad:
103,100,138 1,075,913 16,430,572 172,443
In Euros
1,836,296
19,163 1,175,207 12,334
In Other Currencies
1,420,157 14,820 9,792,069 102,770
106,356,591 1,109,896 27,397,848 287,547
Cheques pending collection – in Angola
473,757 4,944 1,128,493 11,844
Cheques pending collection – abroad
73,440 766 70,066 735
547,197 5,710 1,198,559 12,579
263,331,006
2,748,015 202,718,831 2,127,577
Demand deposits at BNA, in local currency and foreign currency aim to comply with the provisions in force regarding maintenance of compulsory reserves and not remunerated.
The compulsory reserves are calculated pursuant to Instruction number 2/2011, of 28 April, and are constituted in national and foreign currency, according to the respective denomination of the underlying
liabilities, and should be maintained over the entire period to which they refer.
As at 31 December 2012, the required amount of compulsory reserves was calculated through the application of a 20% coefficient to eligible liabilities in local currency, pursuant to Instruction number
02/2011 of 28 April, which repealed point 6.1 of Instruction number 03/2010 of 4 June, and a coefficient of 15% to eligible liabilities in foreign currency, under the terms of Instruction number 03/2010 of 4
June, and 25% to cash values in local currency.
As at 31 December 2012 and 2011, the total amount of compulsory reserves in domestic and foreign currency stood at tAKZ 52,528,629 and tAKZ 56,530,242, and tUSD 798,112 and tUSD 1,033,050,
respectively. The balance of the heading “Demand deposits at the BNA” may diverge from these values due to including free reserves.
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4. Short-Term Investments
This heading corresponds to term deposits held at other credit institutions and securities with repurchase agreements, made with the BNA and other domestic credit institutions, which show the following
structure:
31 Dec. 12 31 Dec. 11
Average
Amount Thousand Thousand
Average
Amount
Thousand Thousand
Interest Rate
in Currency
AKZ
USD
Interest Rate
in Currency
AKZ USD
Short-term investments in Angola
In Kwanzas
5.98%
47,512,800,039 47,512,800 495,824 6.61%
4,285,992,000 4,285,992 44,982
3.84%
534,500,000 51,218,939 534,500 4.37%
417,000,000 39,732,411 417,000
98,731,739 1,030,324 44,018,403 461,982
Short-term investments abroad
0.62%
965,738,958 92,542,795
965,739 0.73%
3,198,768,000 304,783,622 3,198,768
In Euros
1.69%
59,530,606 7,523,188 78,509 2.66%
45,396,090 5,589,941 58,668
100,065,983
1,044,248 310,373,563 3,257,436
Investments at the Central Bank in USD 51,600,000 4,944,616 51,600
-
-
Collateral deposits abroad in FC
24,872,123 2,383,393 24,872 2,041,786 194,545 2,042
7,328,009 76,472 194,545 2,042
Income receivable
592,453 6,183 322,645 3,386
206,718,184 2,157,227 354,909,156 3,724,846
Repurchase agreements
BNA - In Kwanzas
4.25%
75,579,315 788,715 5.28%
67,932,636 712,968
Other Banks - In United States Dollars
-
-
3.34%
15,344,079 161,039
75,579,315 788,715 83,276,715 874,007
282,297,499 2,945,942 438,185,871 4,598,853
As at 31 December 2012, the heading “Collateral deposits abroad in FC” includes the value of tAKZ 1,873,301 corresponding to a collateral constituted by the Bank to secure an issued bank guarantee. The
rest of the balance comprising this heading as at 31 December 2012 and 2011 refers to the collateralisation of accounts where transactions made with VISA cards are charged for subsequent settlement
with the customer.
As at 31 December 2012, the heading “Short-term investments abroad - in Euros” includes the values of tAKZ 871,494 (tEUR 6,896), and tAKZ 3,291,815 (tUSD 30,000 and tEUR 3,300), which were securing
credit operations granted by the subsidiaries BAI Cabo Verde and BAI Europa, respectively. Provisions were constituted for this operation of the value of tAKZ 209,724 (tUSD 2,189) through the heading
“Provisions for contingent liabilities” (Note 18).
As at 31 December 2012, the heading “Repurchase agreements” only includes operations maintained with BNA. These operations have a nominal value, excluding interest receivable, of tAKZ 74,771,893
(tUSD 780,289), and show residual maturities below six months.
As at 31 December 2012 and 2011, money market operations were broken down as follows, according to their residual maturity:
Up to three months
Three to six months
Six months to one year
Over one year
126
31 Dec. 12
Thousand AKZ
Thousand USD 147,026,767
1,534,312 35,387,189 369,286 91,138,506
951,084 8,745,037 91,260
282,297,499 2,945,942 31 Dec. 11
Thousand AKZ
Thousand USD
408,014,095 4,282,089
24,071,599 252,741
6,100,177 64,023
-
438,185,871 4,598,853
5. Securities
Average
Interest Rate
31 Dec. 12
Thousand Thousand
Average
AKZ
USD Interest Rate
31 Dec. 11
Thousand Thousand
AKZ USD
Trading Mantidos
para Negociação Banco Keve de
cash
bonds
Obrigações
Caixa
Banco Keve
11.00%
383,303 4,000
-
383,303 4,000
-
Income receivable
Proveitos
a receber
Banco Keve de
cash
bonds
Obrigações
Caixa
Banco Keve
11,244 117
-
11,244 117
-
394,547 4,117
-
Held-to-maturity
Mantidos
até ao Vencimento
Treasurydo
Bills
Bilhetes
Tesouro
4.42%
16,844,317 175,780 5.71%
16,005,821
167,984
Central do
Bank
Securities
Títulos
Banco
Central
4.26%
20,792,021 216,977 7.13%
7,905,460 82,969
Treasury Bonds
in local em
currency
Obrigações
do Tesouro
moeda nacional
Linked to the
USD
exchange
rate dos Est, Unidos
Indexadas
à taxa
de câmbio
do Dólar
7.00%
68,622,468 716,116 6.87%
72,580,554 761,748
Non-readjustable
Não
reajustáveis
7.39%
6,203,900 64,741
-
Linked to the
Price do
Index
Indexadas
ao Consumer
Índice de Preço
Consumidor
-
-
4.00%
6,931,619 72,749
Treasury Bonds
in foreign
Obrigações
do Tesouro
emcurrency
moeda estrangeira
4.08%
46,350,677 483,697 3.86%
43,030,714 451,616
Other bonds
in foreign
currency
Outras
obrigações
em moeda
estrangeira
3.27%
6,624,561 69,131 3.72%
7,788,546 81,742
Other financial
investments
Outros
investimentos
financeiros
-
-
47,398 499
165,437,944 1,726,442 154,290,112 1,619,307
Income receivable
Proveitos
a Receber
Banco Keve de
cash
bonds
Obrigações
Caixa
Banco Keve
2,708 28
-
Treasurydo
Bills
Bilhetes
Tesouro
372,605 3,888 312,675 3,282
Central do
Bank
Securities
Títulos
Banco
Central
61,324 640 66,028 693
Treasury Bonds
in local em
currency
Obrigações
do Tesouro
moeda nacional
Linked to the
USD
exchange
rate
Indexadas
à taxa
de câmbio
do Dólar
dos Est, Unidos
82,083 857 126,515 1,328
Non-readjustable
Não
reajustáveis
16,737 175
-
Linked to the
Price Index
Indexadas
ao Consumer
Índice de Preços
do Consumidor
-
-
12,326 129
Treasury Bonds
in foreign
Obrigações
do Tesouro
emcurrency
moeda estrangeira
683,356 7,132 240,510 2,524
Other bonds
in foreign
currency
Outras
Obrigações
em moeda
estrangeira
45,449 474 76,215 800
1,264,262 13,194 834,269 8,756
166,702,206 1,739,636 155,124,381 1,628,063
167,096,753 1,743,753 155,124,381 1,628,063
As at 31 December 2012 and 2011, the securities portfolio had the following structure, according to their residual maturity:
Up to three months
Three to six months
Over one year
31 Dec. 12
Thousand AKZ
220,289 15,744,887 164,307 40,951,173 427,350 89,291,305 931,807 167,096,753 1,743,753 31 Dec. 11
Thousand AKZ
Thousand USD
15,379,689 161,413
11,222,316 117,781
48,005,787 503,831
80,516,589 845,038
155,124,381 1,628,063
127
As at 31 December 2012, the Bank’s securities portfolio, excluding income receivable, was broken down as follows, taking into account the credit risk rating:
31 Dec. 12
Thousand Thousand Issuer
Domicile
Activity
Risk
Market
AKZ
USD
Level
Price
Banco Keve - cash bonds
Treasury bonds linked to the exchange rate
Treasury bonds in foreign currency
Central Bank securities (TBC)
Treasury Bills
Non-readjustable treasury bonds
BPN cash bonds 05/13
CLN Sonangol FINANCE 08/14
CLN Standard bank PLC
Banco Keve - cash bonds
BAI Cabo Verde cash bonds 12/16
Fast Ferry bonds 07/15
Sogei bonds 02/14
Impact
Market of fair
value tAKZ value tAKZ
383,303 4,000 Keve
Angola
Financial institution
C
101.17%
387,786 383,303 4,000 387,786
68,622,468 716,116 State
Angola
Government
A
n.d.
n.d.
46,350,677 483,697 State
Angola
Government
A
n.d.
n.d.
20,792,021 216,977 BNA
Angola
Central Bank
A
n.d.
n.d.
16,844,317 175,780 State
Angola
Government
A
n.d.
n.d.
6,203,900 64,741 State
Angola
Government
A
n.d.
n.d.
3,008,006 31,390 Banco BIC Port., S.A.
Portugal
C
100.0% 3,008,210 1,264,369 13,194 Sonangol
Angola
Oil company
C
100.0%
n.d.
1,098,630 11,465 Ministry of Finance
Angola
A
90.5%
994,807 479,129
5,000
Keve
Angola
C
101.2%
484,733 476,494 4,972 BAI Cabo Verde Cape Verde
C
100.0%
476,494 257,819 2,690 Fast Ferry Cape Verde
Transport
C
89.9%
231,779 40,114 420 Sogei Cape Verde
Construction
C
96.9%
38,870 165,437,944 1,726,442 165,821,247 1,730,442 4,483
4,483
n.d.
n.d.
n.d.
n.d.
n.d.
204
n.d.
(103,823)
5,604
(26,040)
(1,244)
(125,299)
(120,815)
As at 31 December 2011, the Bank’s securities portfolio, excluding income receivable, was broken down as follows, taking into account the credit risk rating:
31 Dec. 11
Thousand Thousand Issuer
Domicile
Activity
Risk
Market
AKZ
USD
Level
Price
Treasury bonds linked to the exchange rate
Treasury bonds in foreign currency
Treasury Bills
Central Bank securities (TBC)
Treasury bonds linked to the treasury
BPN cash bonds 05/13
CLN Sonangol 08/14
CLN Ministry of Finance 07/13
Portuguese bonds
BAI Cabo Verde cash bonds 12/16
Fast Ferry bonds 07/15
Other financial investments
Sogei bonds 02/14
128
Impact
Market of fair
value tAKZ value tAKZ
72,580,554 761,748
State
Angola
Government
A
n.d.
n.d. 43,030,714
451,616 State
Angola
Government
A
n.d.
n.d.
16,005,821 167,984
State
Angola
Government
A
n.d.
n.d.
7,905,460
82,969
BNA
Angola
Central Bank
A
n.d.
n.d.
6,931,619 72,749
State
Angola
Government
A
n.d.
n.d.
2,931,512 30,767 BPN, S.A.
Portugal
C
100.0% 2,931,512 2,117,571 22,224 Sonangol
Angola
Oil company
C
n.d.
n.d.
1,054,727 11,070 State
Angola
Government
A
99% 1,060,701 930,151 9,762 State
Portugal
Government
C
97%
926,675 464,285
4,873
BAI Cabo Verde Cape Verde
C
100.0%
464,285 251,213 2,637 Fast Ferry Cape Verde
Transport
C
100.0%
251,213 47,398 497 Investment Fund Not applicable
Investment Fund
C
n.d.
n.d. 39,087 411 Sogei Cape Verde
Construction
C
100.0%
39,087
154,290,112 1.619.307
n.d.
n.d. n.d.
n.d.
n.d.
n.d.
5,974
(3,476)
n.d.
2,498
6. Loans
Advances to depositors
Local currency
Business sector
Individuals
Foreign currency
Business sector
Individuals
Current account credit
Local currency
Public sector
Business sector
Individuals
Foreign currency
Public sector
Business sector
Loans
Local currency
Public sector
Business sector
Individuals
Foreign currency
Public sector
Business sector
Individuals
Overdue loans
Principal
Interest
Income receivable
Provision for doubtful loans (Note 18)
31 Dec. 12
Thousand AKZ
Thousand USD 31 Dec. 11
Thousand AKZ
Thousand USD
562,451
15,062
5,870 157 903,189
9,789
9,479
103
893,647
4,948
9,326 52 420,031
9,332
4,408
98
177,644
14,085,898
824,133
1,854 146,995 8,600 41,122,283
23,720,592
680,120
431,587
248,953
7,138
1,711,711
3,341,309
17,863 34,869 1,659,485
26,050,107
17,417
273,401
15,891,820
38,915,003
11,105,056
165,841 406,101 115,888 1,869,832
22,089,838
11,631,204
19,624
231,837
122,072
261,208
145,389,573
24,085,377
257,264,840
2,726 1,517,223 251,345 2,684,710 14,431,123
120,584,706
23,081,542
288,263,173
151,458
1,265,562
242,246
3,025,383
19,236,334
70,534
1,328,041
20,634,909
277,899,749
6,997,561
284,897,310
(27,583,618)
257,313,692
200,743 736 13,859 215,338 2,900,048 73,024 2,973,072 (287,851) 2,685,221 13,561,187
721,846
922,495
15,205,528
303,468,701
4,781,517
308,250,218
(22,190,510)
286,059,708
142,328
7,576
9,681
159,585
3,184,968
50,183
3,235,151
(232,894)
3,002,257
As at 31 December 2012 and 2011, loans including income receivable were broken down as follows:
Kwanzas
United States Dollars
Euros
Other currencies
31 Dec. 12
Thousand AKZ
Thousand USD 95.226.061
993.740 189.658.103 1.979.195 13.131 137 15 -
284.897.310 2.973.072 31 Dec. 11
Thousand AKZ
Thousand USD
112.009.342 1.175.562
196.225.412 2.059.427
15.464 162
-
308.250.218 3.235.151
129
As at 31 December 2012 and 2011, in order to cover the risk of collecting loans granted, the Bank has the following provisions stated through the methodology of calculation of provisions for overdue loans
and interest, pursuant to the accounting policy described in Note 2 c):
Thousand AKZ
31 Dec. 12
Range
Capital
Interest
Total
of Provision
31 Dec. 11
Total
Provisions
Principal
Interest
Total
Range
of Provision
Total
Provisions
Class A
14,526,812 -
14,526,812 0%
- 62,946,560
-
62,946,560 0%
Class B
60,056,051 1,519 60,057,570 1% to < 3%
(873,800) 60,895,629 388,402 61,284,031 1% to < 3%
(612,840)
Class C
170,006,471 67,799 170,074,270 3% to < 10% (9,746,416) 145,395,089 330,588 145,725,677 3% to < 10% (4,371,770)
Class D
18,185,895 1,152 18,187,047 10% to < 20% (3,469,002) 13,745,910 -
13,745,910 10% to < 20% (1,374,591)
Class E
4,012,091
64 4,012,155 20% to < 50% (2,317,358) 3,564,479 -
3,564,479 20% to < 50%
(712,896)
Class F
5,540,781 -
5,540,781 50% to <100% (4,139,204) 5,225,801 -
5,225,801 50% to <100% (2,612,901)
Class G
5,501,114
-
5,501,114
100% (5,501,114) 10,973,387
2,856
10,976,243 100% (10,976,243)
For guarantees provided and doc. credit (Note 32)
(923,024) (639,846)
Provisions for interest receivable
(613,700) (889,423)
277,829,215 70,534 277,899,749 (27,583,618) 302,746,855 721,846 303,468,701 (22,190,510)
Thousand USD
31 Dec. 12
Range
Capital
Interest
Total
of Provision
Class A
151,594 -
151,594 0%
Class B
626,721 16 626,737 1% to < 3%
Class C
1,774,118 708 1,774,826 3% to < 10%
Class D
189,781 11 189,792 10% to < 20%
Class E
41,869
1
41,870 20% to < 50%
Class F
57,821 -
57,821 50% to <100%
Class G
57,407
-
57,407
100%
For guarantees provided and doc. credit (Note 32)
Provisions for interest receivable
2,899,312 736 2,900,048 31 Dec. 11
Total
Provisions
Principal
Interest
Total
Range
of Provision
-
660,637
-
660,637 0%
(9,119) 639,112 4,076 643,188 1% to < 3%
(101,710) 1,525,952 3,470 1,529,422 3% to < 10%
(36,201) 144,266 -
144,266 10% to < 20%
(24,183) 37,410 -
37,410 20% to < 50%
(43,195) 54,846 -
54,846 50% to <100%
(57,407) 115,169
30
115,199 100%
(9,632) (6,404) (287,851) 3,177,392 7,576 3,184,968 Total
Provisions
(6,432)
(45,883)
(14,427)
(7,482)
(27,423)
(115,199)
(6,715)
(9,333)
(232,894)
As at 31 December 2012, the Bank’s largest debtor represents 16.5% of Regulatory Capital (FPR) and 5.3% of the total loan portfolio, excluding guarantees and documentary credit. In this context, as at 31
December 2012, the Bank complies with the 25% limit of Regulatory Capital stipulated in Notice number 08/2007 of 26 September.
Moreover, the Bank’s ten largest customers represent approximately 103% of the Regulatory Capital and 33% of the total loan portfolio.
130
As at 31 December 2012 and 2011, the loan portfolio, broken down by activity sectors, including overdue loans and interest and income receivable, is as follows:
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD
Local Currency
Services
25,466,895
265,762 20,948,281 219,857
Wholesale and retail commerce
19,930,108
207,982 14,360,172 150,713
Construction
18,989,568
198,167 6,432,962 67,515
Mining and processing
17,981,381
187,646 11,020,080 115,658
Individuals
9,286,474
96,910 16,464,142 172,795
State
2,811,622
29,341 42,563,967 446,718
Agriculture, livestock, fisheries and forestry
759,873
7,930 219,737 2,306
95,225,921
993,738 112,009,341
1,175,562
Foreign Currency
Mining and processing
43,930,523
458,441 33,238,136 348,841
Services
37,270,816
388,943 71,218,032 747,448
Wholesale and retail commerce
25,749,490
268,711 26,535,120 278,492
Construction
45,653,208
476,420 17,585,876 184,567
Individuals
25,223,234
263,219 33,189,335 348,329
State
8,714,062
90,936 12,889,385 135,277
Agriculture, livestock, fisheries and forestry
3,130,056
32,664 1,584,993 16,635
189,671,389
1,979,334 196,240,877
2,059,589
284,897,310 2,973,072 308,250,218 3,235,151
As at 31 December 2012 and 2011, the average interest rate applied by the Bank was as follows:
In local currency
In foreign currency
31 Dec. 12
31 Dec. 11
14.27%
8.58%
16.50%
8.70%
As at 31 December 2012 and 2011, the residual maturity of loans, excluding overdue loans and income receivable, was broken down as follows:
Maturing Credit
Up to three months
Three to six months
One to three years
Over three years
31 Dec. 12
Thousand AKZ
12,256,264
47,904,999
61,088,991
79,317,700 257,264,840
591,666 127,901 499,917 637,500 827,726 2,684,710 31 Dec. 11
Thousand AKZ
Thousand USD
83,239,936 7,983,212 39,615,303 95,433,754 61,990,968 288,263,173 873,621
83,785
415,773
1,001,597
650,607
3,025,383
131
As at 31 December 2012 and 2011, the residual maturity of overdue loans had the following structure:
Overdue loans
31 Dec. 12
Thousand AKZ
Thousand USD Up to one month
One to three months
Three to six months
Over six months
1,869,568 6,285,494 5,371,195 7,108,652
20,634,909 31 Dec. 11
Thousand AKZ
Thousand USD
19,510 65,593 56,052 74,183 215,338 280,522 14,174,059 168,937 582,010 15,205,528 2,944
148,760
1,773
6,108
159,585
As at 31 December 2012 and 2011, renegotiated loans amounted to tAKZ 36,549,544 (tUSD 381,404) and tAKZ 44,955,346 (tUSD 471,816), respectively.
As at 31 December 2012 and 2011, the total loans written-off from the assets in risk level G and the total loans recovered was as follows:
Loans written off from the Assets
31 Dec. 12
Thousand AKZ
Thousand USD Risk level G (Note 18)
12,085,033 12,085,033 Loans recovered
31 Dec. 11
Thousand AKZ
Thousand USD
126,114 126,114 10,460,684 10,460,684 31 Dec. 12
Thousand AKZ
Thousand USD 109,787
109,787
31 Dec. 11
Thousand AKZ
Thousand USD
From off balance sheet
Principal
3,480,750 36,324 837,998 Interest (Note 30)
2,623,732 27,380 1,585,157 6,104,482
63,704 2,423,155 8,795
16,637
25,432
Between 31 December 2011 and 2012, the migration of the risk of loan takers showed the following evolution:
Loan portfolio as at 31 Dec. 11
Risk
Values
% Portfolio
Level
in tAKZ as at 31 Dec. 11
A
A
B
C
D
E
F
G
Total 62,946,560 61,284,031 145,725,677 13,745,910 3,564,479 5,225,801 10,976,243 303,468,701 21%
20%
47%
5%
1%
2%
4%
100%
Risk level A
B
C
D
E
F
G
Total
132
20%
0%
0%
0%
0%
0%
0%
12,829,957 B
0%
60%
0%
0%
0%
0%
0%
37,402,508
C
0%
0%
47%
45%
1%
0%
65%
80,686,187 Kept at same level
Aggravation
12,829,957 -
37,402,508 9,192,605 68,491,068 8,743,541 -
962,214 35,645 249,514 2,351,609 -
-
-
121,110,787 19,147,874 31 Dec. 12
D
0%
13%
1%
0%
39%
1%
0%
11,127,794 Moved to levels
Reduction
-
-
-
6,185,660 1,390,146 52,258 7,134,558 14,762,622 E
F
0%
0%
1%
2%
1%
0%
0%
2,069,161 0%
2%
1%
3%
1%
45%
0%
5,743,778 Write-offs
-
399,427 1,843,604 2,330,692 1,858,452 1,873,649 3,779,209 12,085,033 G
0%
0%
3%
2%
6%
0%
0%
5,161,898 Receipts
50,116,603 14,289,491 66,647,464 4,267,344 30,722 948,285 62,476 136,362,385 Write-offs
-
399,427 1,843,604 2,330,692 1,858,452 1,873,649 3,779,209 12,085,033 Receipts
Total
50,116,603
14,289,491 66,647,464 4,267,344 30,722 948,285 62,476 136,362,385 303,468,701
Total
62,946,560 61,284,031
145,725,677
13,745,910
3,564,479
5,225,801
10,976,243
303,468,701
7. Other Assets
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD
Deferred tax assets (Note 31)
1,198,740
12,510 1,166,208
12,240
Tax recoverable
666,313 6,953 254,875 2,675
1,865,053 19,463 1,421,083 14,915
Real estate properties
Assets acquired for sale to employees
4,747,757 49,546 3,520,773 36,951
Assets acquired in exchange of loans
2,905,097 30,316
-
Provision for assets acquired in exchange of loans
(626,358)
(6,536)
-
Central Government – Ministry of Finance
2,521,700 26,315 3,836,795 40,268
Debtors - loans
629,972 6,574 226,230 2,374
Sociedade Angolana de Ensino Superior - SAESP
595,548 6,215
-
Fraud
429,699
4,484 298,063 3,128
Cash shortages
321,149 3,351 421,477 4,423
Operations pending settlement
174,806 1,824 266,381 2,796
Bonuses receivable
1,728
18 22,714 238
Other 335,281 3,499 356,799 3,745
12,036,379 125,606 8,949,232 93,923
Expenditure with deferred cost
Insurance
328,928 3,433 304,675 3,198
Hire and rental charges
313,994 3,277 3,772,823 39,597
Office material
272,864 2,847 84,208 884
Advertising
-
-
21,076 221
Other
575,885 6,010 335,835 3,523
1,491,671
15,567 4,518,617 47,423
15,393,103 160,636 14,888,932 156,261
As at 31 December 2012 and 2011, the heading “Tax recoverable” of the values of tAKZ 666,313 (tUSD 6,953) and tAKZ 254,875 (tUSD 2,675) respectively, corresponds to the amount of tax credit derived
from surplus tax payments on account carried out during 2012 and 2011.
As at 31 December 2012 and 2011, the heading “Real estate properties” presents the balances of buildings acquired by the Bank still in plans, with a view to their sale to the Bank’s employees at price similar
to the acquisition values. As at 31 December 2012, this heading is composed of five buildings, two of which are at a final stage of sale with a purchase and sale agreement between BAI and its employees,
with no gain or loss being expected on these transactions. Regarding the remaining three properties, one is in the process of being sold to employees at an expected loss of tAKZ 418,688 (tUSD 4,369) to the
Bank, for which a provision has been recognised under the heading “Provisions for contingent liabilities” (Note 18). The other two properties are still being completed.
As at 31 December 2012, the heading “Assets acquired in exchange of loans” includes properties given in exchange of loan repayments concerning the recovery of credit written off from the assets to the
value of tAKZ 2,905,097 (tUSD 30,316) (Note 2 c). During 2012, the Bank recognised a provision of the value of tAKZ 626,358 (tUSD 6,536) for these properties, due to the fact that the Bank had only considered
the amount of valuations which complied with the requirements defined by the Bank and described in Note 2, subparagraph c).
As at 31 December 2012 and 2011, the heading “Central Government – Ministry of Finance” corresponds to the amounts receivable from the Ministry of Finance, relative to commissions on tax collection for
the year, under the agreement signed by both parties. These commissions are recognised as income for the year under the heading “Commissions Received – for bank services rendered” (Note 23).
As at 31 December 2012 and 2011, the headings “Fraud” and “Operations pending settlement” correspond to operations pending settlement whose legal proceedings are underway and other liabilities, with
the Bank having constituted the necessary provisions based on the information currently available through the heading “Provisions for contingent liabilities” (Note 18).
As at 31 December 2012 and 2011, the heading “Cash shortages” refers to unfavourable differences for the Bank in the accounts of notes and coins expressed in local currency and in ATM machines. This
value is fully provisioned through the item “Provisions for contingent liabilities” (Note 18).
133
The net change observed in the heading “Expenditure with deferred cost - hire and rental charges” between 31 December 2012 and 2011 refers to the advance of rents on a rental agreement for the Bank’s
future head office, of the value of tAKZ 3,312,178 (tUSD 34,565) whose inauguration is expected to take place in 2013. The rents paid in advance were deducted from the acquisition value of the building, as
stipulated in the agreement. During 2012, the Bank recorded this building under the heading “Fixed assets under construction” (Note 9), with this value having been included in the transaction value.
As at 31 December 2012 and 2011, the remaining balances comprising the heading correspond to deferred costs of advances on rents of Bank branches.
8. Financial Fixed Assets
The balance of financial fixed assets may be broken down as follows:
31 Dec. 12
Thousand AKZ
Thousand AKZ
Thousand USD
Holdings in associate and equivalent companies
In Angola
967,280 10,094 776,975 8,155
Abroad
5,892,537 61,492 5,534,865 58,090
6,859,817 71,586 6,311,840 66,245
Holdings in other companies
In Angola
1,139,767
11,894 147,078 1,544
Abroad
323,897
3,380 274,845 2,885
1,463,664 15,274 421,923 4,429
Shareholder loans to entities
In Angola
452,502 4,723 1,313,342 13,784
Abroad
-
-
527,828 5,538
452,502 4,723 1,841,170 19,322
8,775,983 91,583 8,574,933 89,996
134
31 Dec. 12
Share Capital
%
Acq. cost Thousand Thousand
Holding
Head Office
Activity
Currency (thousand)
Holding
in currency AKZ
USD
31 Dec. 11
Thousand Thousand
AKZ
USD
Holdings in associate and equivalent companies in Angola
BAI Micro Finanças, S.A.
Luanda
Banking services
AKZ
845,460 92.93%
776,975 1,444,892 15,078 776,975 8,155
BAI Micro Finanças, S.A. - Impairment (Note 28) (477,612)
(4,984)
-
967,280 10,094 776,975 8,155
Holdings in associate and equivalent companies abroad
Banco BAI Europa, S.A.
Lisboa
Banking services
EUR
40,000 99.99%
39,996 4,322,614 45,109 4,322,614 45,367
BAI Cabo Verde, S.A.
Praia
Banking services
CVE
1,522,000 73.39%
710,000 1,682,249 17,555 1,147,115 12,039
BAI Cabo Verde, S.A. - Impairment (Note 28) (177,462)
(1,852)
-
Banco Internacional de São Tomé e Príncipe
S.Tomé
Banking services
STD 150,000,000 25.00% 37,500,000 65,136 680 65,136 684
5,892,537 61,492 5,534,865 58,090
6,859,817 71,586 6,311,840 66,245
Holdings in other companies in Angola
NOSSA - Nova Sociedade Seguros Angola, S.A.
Luanda
Insurance
AKZ
900,000 65.24%
86,990 1,039,920 10,851 86,990 913
EMIS - Empresa Interbancária de Serviços, S.A.
Luanda
Banking services
AKZ
110,085 4.09%
29,990 57,354 599 29,989 315
AAA Seguros, Lda
Luanda
Insurance
AKZ
1,127,528 5.00%
14,733 14,733 154 14,733 155
BVDA - Bolsa de Valores e Derivativos de Angola
Luanda
Financial services
AKZ
1,343,000 0.95%
12,419 12,419 130 12,419 130
Fundação BAI
Luanda
Public charity foundation
AKZ
10,000 100.00%
10,000 10,000 104
-
AAA Pensões
Luanda
Pension funds
AKZ
225,506 5.00%
2,947 2,947 31 2,947 31
SAESP
Luanda
Education
AKZ
2,000 80.00%
2,394 2,394 25
-
1,139,767 11,894 147,078 1,544
Holdings in other companies abroad
BPN Brasil
S. Paulo
Banking services
BRL
89,798 6.29%
10,980 486,143 5,073 486,144 5,103
BPN Brasil - Impairment (Note 28) (486,143)
(5,073) (211,299)
(2,218)
FIPA - Fundo Privado de Investimento de Angola 323,897 3,380
-
323,897 3,380 274,845 2,885
1,463,664 15,274 421,923 4,429
8,323,481 86,860 6,733,763 70,674
Shareholder loans to entities in Angola
339,512
3,543 1,183,560 12,422
112,990 1,180 20,761 218
FIPA - Fundo Privado de Investimento de Angola -
-
109,021 1,144
452,502
4,723 1,313,342
13,784
Shareholder loans to entities abroad
-
-
527,828 5,538
-
-
527,828 5,538
8,775,983
91,583 8,574,933 89,996
During 2012, BAI purchased 1,111,130 shares in NOSSA – Nova Sociedade de Seguros de Angola, S.A. (Companhia) from Real Seguros Holding, SGPS, for the value of tUSD 10,000. After having completed
this transaction, the Bank’s stake in NOSSA increased to 65.24%.
Furthermore, the Bank plans to acquire an additional 140,000 shares, representing 7% of the share capital of NOSSA, in 2013.
As at 31 December 2012, the heading “Shareholder loans – in Angola” includes a balance of tAKZ 112,990 (tUSD 1,180) corresponding to additional paid-in capital to the entity EMIS – Empresa Interbancária
de Serviço S.A., which does not earn interest nor has defined repayment periods.
The Board of Directors is currently undertaking the corporate reorganisation of all the activities associated to BAI, which, among other aspects, aims to create a group of companies that will be owned by a
holding company. As a result of this process, the Bank’s Board of Directors does not expect any negative impacts on net worth in the Bank’s financial statements.
As at 31 December 2012, the Bank carried out impairment tests on the subsidiary BPN Participações Brasil, since it has been presenting negative net income in recent years, as described in subparagraph
e) of Note 2. Based on these tests, the Bank recognised an impairment of the amount of tAKZ 274,844 (tUSD 2,868) and tAKZ 211,299 (tUSD 2,218), respectively.
135
Moreover, as at 31 December 2012, the Bank carried out impairment tests on the subsidiaries BAI Micro Finanças S.A. and BAI Cabo Verde S.A., with recognition of impairment of the value of tAKZ 477,612
(tUSD 4,984) and tAKZ 177.462 (tUSD 1,852), respectively.
The impairment value is recognised under the income statement heading “Earnings from financial fixed assets” (Note 28).
As at 31 December 2012 and 2011, balances from asset, liability and off balance sheet operations with the Bank’s subsidiaries are detailed in Note 34.
As at 31 December 2012, the provisional and unaudited financial information on the subsidiaries is as follows (amounts in tAKZ converted at the year-end exchange rate):
Thousand AKZ
Reference
Date
Net assets Equity
Net income
Equity holding
Holding
31.12.2012
141,780,698 7,398,264 580,931 7,397,524 BAI Cabo Verde, S.A.
31.12.2011
8,787,988 1,047,843 (399,081)
743,969 NOSSA - Nova Sociedade Seguros Angola, S.A.
31.12.2011
7,301,902 1,082,113 11,339 781,664 BAI Micro Finanças, S.A.
31.12.2011
9,712,050 1,763,963 47,242 1,596,034 FIPA - Fundo Privado de Investimento de Angola n.d.
n.d.
n.d.
n.d
31.12.2012
9,095,992 1,391,683 141,818 347,921
31.12.2011
4,124,483 737,942 87,711 16,825 AAA Seguros, Lda
31.12.2010
13,428,513 1,757,809 53,548 87,809 BVDA - Bolsa de Valores e Derivativos de Angola
n.d.
n.d.
n.d. n.d.
Fundação BAI
n.d.
n.d.
n.d.
n.d.
AAA Pensões
31.12.2010
2,102,163 309,706 47,896 15,485 SAESP
n.d.
n.d.
n.d.
n.d.
BPN Brasil
31.12.2011
15,604,108 2,293,879 (4,023,755)
9,512,396 31 Dec. 12
Book value
4,322,614
1,504,787
1,039,920
967,280
323,897
65,136
57,354
14,733
12,419
10,000
2,947
2,394
8,323,481
n.d. - no data available
Thousand USD
Reference
Date
Net assets Equity
Net income
Equity holding
Holding
31.12.2012
1,479,566
77,205
6,062
77,198
31.12.2011
91,708
10,935
(4,165)
7,764
NOSSA - Nova Sociedade Seguros Angola, S.A.
31.12.2011
76,200
11,292
118
8,157
31.12.2011
101,351
18,408
493
16,656
FIPA - Fundo Privado de Investimento de Angola n.d.
n.d.
n.d.
n.d.
31.12.2012
94,922
14,523
1,480
3,631
31.12.2011
43,041
7,701
915
176
AAA Seguros, Lda
31.12.2010
140,134
18,344
559
916
BVDA - Bolsa de Valores e Derivativos de Angola
n.d.
n.d.
n.d.
n.d.
Fundação BAI
n.d.
n.d.
n.d.
n.d.
AAA Pensões
31.12.2010
21,937
3,232
500
162
SAESP
n.d.
n.d.
n.d.
n.d.
BPN Brasil
31.12.2011
162,838
23,938
(41,990)
99,267
n.d. - no data available
136
31 Dec. 12
Book value
45,109
15,703
10,851
10,094
3,380
680
599
154
130
104
31
25
86,860
9. Tangible And Intangible Fixed Assets
The movement under the headings of tangible fixed assets, intangible fixed assets and fixed assets under construction during 2012 and 2011 was as follows:
2012
Balance as at 31 Dec. 11
Gross
Accumulated
Net
Adjustment of
Amortisation
Value
amortisation
Value
Increases
Transfers
amortisation
for the year
Thousand AKZ
Gross Accumulated
Net
Value
amortisation Value
Properties in use
14,203,807 (678,425)
13,525,382 1,269,350 1,507,720 (58,025)
(653,274) 16,922,852 (1,389,724)
Furniture, facilities and equipment
7,844,025 (4,024,972)
3,819,053 944,494 99,839 -
(1,003,593) 8,888,358 (5,028,565)
Other fixed assets
168,726 (66,358)
102,368 107,224 6,460 -
(23,880)
282,410 (90,238)
Fixed assets under construction
2,803,282
-
2,803,282 11,115,684 (1,065,196)
-
- 12,853,770 -
25,019,840 (4,769,755) 20,250,085 13,436,752 548,823
(58,025)
(1,680,747) 38,947,390 (6,508,527)
Automatic data processing system
2,170,042 (1,593,795)
576,247 528,124 -
-
(302,591) 2,698,166 (1,896,386)
Organisation and expansion costs
570,399 (493,748)
76,651 114,269
-
-
(50,632)
684,668 (544,380)
Improvements to third party properties
3,284,039 (298,638)
2,985,401 29,617 73,630 58,025
(92,337) 3,445,311 (332,950)
1,968,981 -
1,968,981 1,380,123 (622,453)
-
- 2,726,651 -
7,993,461 (2,386,181)
5,607,280 2,052,133 (548,823)
58,025 (445,560) 9,554,796 (2,773,716)
33,013,301
(7,155,936)
25,857,365 15,488,885 -
-
(2,126,307) 48,502,186 (9,282,243)
2011
Gross
Accumulated
Net
Adjustment of
Amortisation
Value
amortisation
Value
Increases
Transfers
amortisation
for the year
Thousand AKZ
15,533,128
3,859,793
192,172
12,853,770
32,438,863
801,780
140,288
3,112,361
2,726,651
6,781,080
39,219,943
Gross Accumulated
Net
Value
amortisation Value
Properties in use
6,651,846
(435,241)
6,216,605
503,749
7,048,212
(67,864)
(175,320) 14,203,807 (678,425) 13,525,382
Furniture, facilities and equipment
6,125,297
(3,226,803)
2,898,494
1,039,394
679,334
316
(798,485) 7,844,025 (4,024,972) 3,819,053
Other fixed assets
141,976
(46,342)
95,634
26,750
-
-
(20,016)
168,726
(66,358)
102,368
7,837,036
-
7,837,036
2,693,792
(7,727,546)
-
- 2,803,282
- 2,803,282
20,756,155
(3,708,386)
17,047,769
4,263,685
-
(67,548)
(993,821) 25,019,840 (4,769,755) 20,250,085
Automatic data processing system
1,726,062
(1,233,513)
492,549
352,847
91,133
(9,999)
(350,283) 2,170,042 (1,593,795)
576,247
Organisation and expansion costs
561,918
(378,305)
183,613
8,481
-
-
(115,443) 570,399 (493,748)
76,651
Improvements to third party properties
2,376,711
(167,920)
2,208,791
32,584
874,744
67,576
(198,294) 3,284,039 (298,638) 2,985,401
1,203,050
-
1,203,050
1,731,808
(965,877)
-
- 1,968,981 - 1,968,981
5,867,741
(1,779,738)
4,088,003
2,125,720
-
57,577
(664,020) 7,993,461 (2,386,181) 5,607,280
26,623,896
(5,488,124)
21,135,772
6,389,405
-
(9,971)
(1,657,841) 33,013,301 (7,155,936) 25,857,365
As at 31 December 2012, the heading “Tangible fixed assets – Fixed assets under construction” includes the transfer of the Bank’s New Head Office (NES) of the value of tAKZ 9,641,966. The remaining
balance essentially corresponds to the acquisition of buildings and construction work for the opening of new branches of the Bank.
As at 31 December 2012, the heading “Intangible fixed assets – Fixed assets under construction” primarily corresponds to construction work at branches of the Bank in rented properties.
The values presented as “Adjustment of amortisation” correspond to accumulated amortisation associated to assets that were transferred between the headings “Improvements to third party properties”
and “Properties in use”. The gross value of the transferred assets is reflected in the balance of transfers.
As at 31 December 2011, the item “Tangible fixed assets – Fixed assets under construction” essentially corresponds to the investment in the building where the BAI Academy operates, whose inauguration
and start-up of activities took place in November 2012.
The Bank plans to transfer this property to Sociedade SAESP, during 2013, against a shareholder loan agreement.
137
10. Deposits
These headings are broken down as follows:
31 Dec. 12
Thousand AKZ
Thousand AKZ
Thousand USD
sitos de Clientes
Depósitos de Clientes
Customer deposits
itos à Ordem de Residentes
Depósitos à Ordem de Residentes
Demand deposits of residents
a Nacional
Moeda Nacional
Local currency
presas
56,908,238 597,264 Empresas
91,280,306
952,564
56,908,238
597,264 91,280,306 952,56
Companies
56,908,238
597,264 91,280,306
952,564
ticulares
29,711,527 311,829 Particulares
39,733,857
414,646
29,711,527
311,829 39,733,857 414,64
Individuals
29,711,527
311,829 39,733,857
414,646
tor público empresarial
101,546,320
1,065,750 Sector
13,499,381
público empresarial
140,874 101,546,320
1,065,750
13,499,381 140,87
Public
business sector
101,546,320
1,065,750
13,499,381 140,874 tor público administrativo
321,169 3,371 Sector
4,558,958
público
47,575
321,169
3,371 4,558,958 47,57
Public administrative
sector
321,169administrativo
3,371 4,558,958
47,575
149,072,502
188,487,254
1,978,214 149,072,502 1,555,65
1,978,214 1,555,659
188,487,254 188,487,254
1,978,214 149,072,502
1,555,659
Moeda Estrangeira
a Estrangeira
Foreign currency
Empresas
122,035,396
1,280,787 172,123,712 1,796,21
presas
122,035,396 1,280,787 172,123,712 1,796,215
Companies
122,035,396
1,280,787 172,123,712 1,796,215
Particulares
37,782,078
396,531 66,479,167 693,75
ticulares
37,782,078 396,531 66,479,167
693,750
Individuals
37,782,078
396,531 66,479,167
693,750
Sector
323,254,841
3,392,628
39,137,026 408,41
323,254,841
3,392,628 39,137,026
408,418 Public
business sector
323,254,841
3,392,628
39,137,026 408,418 Sector
público
168,524
1,769 3,330,911 34,76
tor público administrativo
168,524 1,769 3,330,911
34,760
sector
168,524administrativo
1,769 3,330,911
34,760
483,240,839
483,240,839
5,071,715 281,070,816 2,933,14
5,071,715 281,070,816 2,933,143
483,240,839 5,071,715 281,070,816 2,933,143
Depósitos à Ordem de Não Residentes
itos à Ordem de Não Residentes
Demand deposits of non-residents
Moeda919,485
nacional
966,960
10,148 919,485 9,59
eda nacional
966,960 10,148 9,595
Local currency
966,960
10,148 919,485
9,595
Moeda
estrangeira
3,885,428
40,777 3,674,800 38,34
eda estrangeira
3,885,428
40,777 3,674,800
38,349
Foreign
currency
3,885,428
40,777 3,674,800
38,349
4,594,285
4,852,388 50,925 4,594,285
47,94
4,852,388 50,925 47,944
4,852,388 50,925 4,594,285
47,944
Total434,737,603
de
Depósitos à Ordem
676,580,481
7,100,854 434,737,603 4,536,74
de Depósitos à Ordem
676,580,481
7,100,854 4,536,746
Total demand
deposits
676,580,481
7,100,854 434,737,603
4,536,746
Depósitos a Prazo em Moeda Nacional
itos a Prazo em Moeda Nacional
Term deposits in local currency
Empresas
95,138,300
998,496 104,907,773 1,094,77
presas
95,138,300 998,496 104,907,773
1,094,775
Companies
95,138,300
998,496 104,907,773
1.094,775
Particulares
25,676,494
269,480 20,625,329 215,23
ticulares
25,676,494 269,480 20,625,329
215,238
Individuals
25,676,494
269,480 20,625,329
215,238
Sector
12,539,133
131,601
2,600,518 27,13
12,539,133
131,601 2,600,518
27,138
Public
business sector
12,539,133
131,601 2,600,518
27,138 Sector
público administrativo
1,357,577
14,249 6,304,921 65,79
14,249 6,304,921
65,796
Public1,357,577
administrative
sector
1,357,577
14,249 6,304,921
65,796
Não Residentes
33,184 34
o Residentes
-
33,184-
342- Non-residents- 33,184-
342- 134,471,725
134,711,504
1,413,826 134,471,725 1,403,28
1,413,826 1,403,289
134,711,504 134,711,504
1,413,826 134,471,725
1,403,289
Depósitos a Prazo em Moeda Estrangeira
itos a Prazo em Moeda Estrangeira
Term deposits in foreign currency
Residentes
entes
Residents
Empresas
137,811,844
1,446,364 194,005,011 2,024,55
presas
137,811,844 1,446,364 194,005,011
2,024,557
Companies
137,811,844
1,446,364 194,005,011
2,024,557
Particulares
39,795,051
417,657 43,386,342 452,76
ticulares
39,795,051 417,657 43,386,342
452,762
Individuals
39,795,051
417,657 43,386,342
452,762
Sector1,128,803
público
1,128,803
11,847
-
11,847 - empresarial
- Public1,128,803
business sector
11,847
- - Sector362,158
público administrativo
249,875
2,622 362,158 3,77
249,875 2,622 3,779
sector
249,875
2,622 362,158
3,779
Não Residentes
1,128,447
11,843 3,980,887 41,54
esidentes
1,128,447 11,843 3,980,887
41,543
Non-residents
1,128,447
11,843 3,980,887
41,543
241,734,398
180,114,020
1,890,333 241,734,398 2,522,64
1,890,333 2,522,641
180,114,020 180,114,020
1,890,333 241,734,398
2,522,641
Total 376,206,123
de
Depósitos a Prazo
314,825,524
3,304,159 376,206,123 3,925,93
de Depósitos a Prazo
314,825,524
3,304,159 3,925,930
Total term
deposits
314,825,524
3,304,159 376,206,123
3,925,930
Total de4,259,946
Juros a Pagar
de Depósitos44,459
a Prazo
4,742,274
49,772 4,259,946 44,45
de Juros a Pagar de Depósitos a Prazo
4,742,274
on term deposits
49,772 Total interest
payable
4,742,274
49,772
4,259,946
44,459
de
Depósitos e Juros a Pagar
a Prazo
319,567,798
3,353,931 380,466,069 3,970,38
de Depósitos e Juros a Pagar a Prazo
319,567,798
3,970,389
Total deposits
andinterest payable3,353,931
on term depositsTotal380,466,069
319,567,798
3,353,931
380,466,069
3,970,389
Total 815,203,672
de
Depósitos de Clientes 10,454,785
996,148,279
10,454,785
815,203,672 8,507,13
de Depósitos de Clientes
996,148,279
10,454,785 8,507,135 Total customer
deposits
996,148,279
815,203,672
8,507,135 As at 31 December 2012, customer term deposits, excluding interest payable, showed the following structure by currency and average interest rate:
Deposits by Currency 2012
Av. interest rate
Amount in currency In United States Dollars
3.67%
2,484,697,123 In Kwanzas
4.52%
134,471,725,000 In Euros
2.57%
45,638,122 138
Amount
Thousand AKZ
Thousand USD
235,966,868 134,471,725 5,767,530 376,206,123 2,484,697
1,381,047
60,186
3,925,930
As at 31 December 2011, customer term deposits, excluding interest payable, showed the following structure by currency and average interest rate:
Deposits by Currency 2011
In Kwanzas
In Euros
Av. interest rate
Amount in currency 4.80%
1,839,658,598 7.10%
134,711,504,129 2.00%
39,212,237 Amount
Thousand AKZ
Thousand USD
175,285,540 134,711,504 4,828,480 314,825,524 1,839,659
1,413,826
50,674
3,304,159
As at 31 December 2012 and 2011, customer deposit certificates, excluding interest payable, were broken down as follows, according to their residual maturity:
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD
Local currency
Up to three months
73,560,339
767,646 64,590,631
677,892
Three to six months
7,899,391
82,435 16,615,692
174,385
46,063,591
480,701 53,167,380
558,003
Over one year
6,948,404
72,507 337,801
3,546
134,471,725
1,403,289 134,711,504
1,413,826
Moeda Estrangeira
Up to three months
132,950,941
1,387,422 69,612,370
730,596
Three to six months
17,649,841
184,187 10,846,044
113,832
79,910,750
833,916 98,330,797
1,032,002
Over one year
11,222,866
117,116 1,324,809
13,903
241,734,398
2,522,641 180,114,020
1,890,333
376,206,123
3,925,930 314,825,524
3,304,159
11. Money Market Liabilities
Money market liabilities in other credit institutions
Interest payable
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD
9,582,590 100,000 9,528,156 100,000
-
-
144,511 1,517
9,582,590 100,000 9,672,667 101,517
As at 31 December 2012 and 2011, this heading corresponds to taking the value of tUSD 100,000 (tAKZ 9,582,590) and tUSD 100,000 (tAKZ 9,528,156) respectively, with maturity on 3 January 2012 and
remunerated at an interest rate of 3%. This operation was renewed at its maturity date, at a remuneration rate of 4.5%.
The interest associated to this operation was paid as at 31 December 2012.
As at 31 December 2012 and 2011, funds from other long-term credit institutions, excluding interest, were broken down as follows, according to their residual maturity:
Up to three months
31 Dec. 12
Thousand AKZ
100,000 9,582,590
100,000 31 Dec. 11
Thousand AKZ
Thousand USD
9,528,156
100,000
9,528,156
100,000
139
12. Derivative Financial Instruments
As at 31 December 2012, the balance of the heading “Derivative financial instruments” corresponds to the fair value of a forward exchange rate operation contracted at Commerzbank on 13 September 2012
which establishes the exchange of tEUR 15,000 for USD, payable on 25 June 2013.
The fair value of the derivative is the difference between the market price calculated based on the EUR/USD exchange rate on the contract date, and the market price determined based on the exchange
rate on the closing date of the financial year, 31 December 2012 (Note 21).
This operation was backed by collateral of the value of tUSD 6,000 provided to the counterpart.
As at 31 December 2011, the balance of the heading “Derivative financial instruments” corresponds to the fair value of a forward exchange rate operation contracted at Commerzbank on 30 November 2011
which established the exchange of tUSD 13,505 for tEUR 10,000, paid on 18 January 2012.
13. Liabilities In The Payment System
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD
Relations between institutions
Clearing of cheques and other paper
Certified cheques in local currency
1,197,018 12,492 995,503 10,448
Cheques payable in foreign currency
608,012 6,345 509,726 5,350
Cheques payable in local currency
129,295 1,348 129,746 1,362
Certified cheques in foreign currency
-
-
5,365 56
Other operations pending settlement
Customer operations pending settlement
74,354,236 775,931 14,580,446 153,025
EMIS and VISA clearance
25,852 270 289,669 3,040
76,314,413 796,386 16,510,455
173,281
As at 31 December 2012 and 2011, the headings “Cheques payable in local currency” and “Certified cheques in local currency” correspond to the values of cheques presented for clearing by other resident
commercial banks relative to BAI customers and the value of cheques whose coverage is guaranteed by BAI through debit of customer accounts, respectively.
As at 31 December 2012, the balance of the heading “Customer operations pending settlement” includes two payment orders issued, which, on 2 January 2013, paid tUSD 430,161 and tUSD 322,670,
respectively.
As at 31 December 2011, the balance of the heading “Customer operations pending settlement” included two payment orders received of the value of tUSD 132,361, equivalent to tAKZ 12,611,352, and one
payment order issued to the value of tUSD 20,000, equivalent to tAKZ 1,905,600, which were pending settlement as at 31 December 2011.
14. Foreign Exchange Operations
31 Dec. 12
Thousand AKZ
Thousand AKZ
Thousand USD
Funds linked to foreign exchange operations
Cash funds
15,353,750
160,226 10,474,884
109,936
Other funds
2,882 30 2,852 30 15,356,632 160,256 10,477,736
109,966
As at 31 December 2012 and 2011, the heading “Cash funds” refers to blocked values of customer deposits in foreign currency associated to documentary credit for imports and the issue of payment orders
in foreign currency.
140
15. Subordinated Debt
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD
Subordinated debt
Loan
1,437,388
15,000 2,382,039
25,000
Interest payable
27,072 283 26,716 280 1,464,460 15,283 2,408,755
25,280
As at 31 December 2012 and 2011, the balance of the heading “Subordinated debt” corresponds to the outstanding value in debt of the issue of 50,000 bonds at par, with the unitary nominal value of USD
1,000 US, made in February 2008 and maturing in February 2014.
The issue will be repaid through six-monthly instalments of the value of 10% of the initial issue, with the first starting one year after the date of issue.
Remuneration is variable, corresponding to the 6-month LIBOR rate of the USD plus an increasing spread from 125 basis points to 300 base points by the last semester. Interest is paid semi-annually in
arrears.
As at 31 December 2012 and 2011, the outstanding value in debt corresponds to tAKZ 1,437,388 and tAKZ 2,382,039 (equivalent to tUSD 15,000 and 25,000, respectively).
This savings collection instrument contributes to additional equity, as stipulated in BNA Notice number 5/2007, of 12 September. As at 31 December 2012 and 2011, the remuneration rate corresponds to
3.2% and 2.0% respectively.
16. Advances from Customers
BAI Kamba prepaid cards
VISA receipts in advance
31 Dec. 12
Thousand AKZ
Thousand USD 1,737,003 618,749
2,355,752 18,127 6,457 24,584 31 Dec. 11
Thousand AKZ
Thousand USD
807,135 1,447,406
2,254,541
8,471
15,191
23,662
The heading “VISA receipts in advance” refers to receipts in advance for the current expenditure of employees of companies which have signed protocols with the Bank.
The BAI Kamba product is a customised prepaid card of the VISA network, issued by the Bank, through which the customer makes payments and withdrawals in Angola and abroad, without needing to resort
to credit. The Kamba cards also offer customers financial control up to the limit established by the rules of BNA, enabling customers to add to their accounts when abroad, with no interest being charged
on these operations.
141
17. Other Liabilities
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD
Acquisition of Treasury bonds
4,791,295 50,000
-
Tax charges payable - third party withholdings
460,388
4,804 127,652 1,340
Payables due to acquisition of goods and rights
451,820 4,715 364,290 3,823
Distribution of the Micro Finance support fund (Note 19)
403,958 4,216
-
Income tax payable of employees
67,209 701 52,863 555
Tax charges payable
81,342 849
-
Dividends payable
88,234 922 87,789 921
Sundry payables
Outstanding contributions to the pension fund (Note 24)
910,347 9,500 535,245 5,618
Retirement benefits (Note 24)
502,235 5,241 400,506 4,203
Remainders
95,414 996 68,839 722
Funds for shortages
82,005 856 72,805 764
Other
32,171 336 20,460 215
Wages and other remuneration
Bonuses (Note 24)
721,918 7,534 960,000 10,075
Holiday allowances
282,718 2,950 258,928 2,718
Social security contributions
Social security contributions
45,193 472 42,726 448
Employees
7,626 80 6,179 65
Other administrative costs
592,097 6,174 580,221
6,090
9,615,970 100,346 3,578,503 37,557
As at 31 December 2012 and 2011, the heading “Outstanding contributions to the pension fund” corresponds to the contribution for 2012 and 2011, equivalent to 9% of the basic wage of the Bank’s employees.
BAI is currently undertaking the cost of the 3% contribution to be made by employees, recorded under the cost heading “Contributions to the pension fund” (Note 24).
As at 31 December 2012, the heading “Retirement benefits”, of the value of tAKZ 502,235 (tUSD 5,241) and tAKZ 400,506 (tUSD 4,203), respectively, corresponds to the provision established by the Bank to
cover liabilities arising from “Retirement benefits” (Note 2 j).
As at 31 December 2012 and 2011, the heading “Wages and other remuneration” corresponds to the holiday allowance of tAKZ 282,718 (tUSD 2,950) and tAKZ 258,928 (tUSD 2,718), respectively, and to the
performance bonus to be distributed to the Bank’s employees during 2013 and 2012, of the value of tAKZ 721,918 (tUSD 7,534) and tAKZ 960,000 (tUSD 10,075), respectively (Note 24). The cost of performance
bonuses for 2012 amounted to tAKZ 960,000 (tUSD 10,018), which diverges from the value payable as at 31 December 2012 due to the early payment of the bonuses of some employees.
As at 31 December 2012, the balance of the heading “Acquisition of Treasury Bonds” of the value of tUSD 4,791,295 (tUSD 50,000) refers to an operation of acquisition of Treasury Bonds from the Ministry
of Finance, which will be settled in early 2013 through payments made to Bank customers, on behalf of this entity.
142
18. Provisions For Contingent Liabilities
The movement which occurred in the provisions during the years ended on 31 December 2012 and 2011 was as follows:
Thousand AKZ
Provisions for doubtful loans (Note 6)
Provision for assets acquired in exchange of loans (Note 7)
Thousand AKZ
Provisions for doubtful loans (Note 6)
Balance 31 Dec. 11
Increases
22,190,510 2,629,282 -
2,629,282 24,819,792 31,881,808 1,410,001 626,358 2,036,359 33,918,167 31 Dec. 12
Uses
Write-back & annulment
Balance 31 Dec. 12
(14,403,667)
-
-
-
(14,403,667)
27,583,618
4,039,283
626,358
4,665,641
32,249,259
(12,085,033)
-
-
-
(12,085,033)
Balance 31 Dec. 10
Increases
Uses
19,583,629 896,807
20,480,436 23,543,061 1,725,140
25,268,201 (10,460,684)
-
(10,460,684)
31 Dez. 11
Adjustments
-
7,335
7,335 Write-back & annulment
Balance 31 Dec. 11
(10,475,496)
-
(10,475,496)
22,190,510
2,629,282
24,819,792
As at 31 December 2012 and 2011, the balance of the item “Provisions for contingent liabilities” is broken down as follows:
Interest receivable on loans (Note 6)
Fraud (Note 7)
Assets acquired for sale to employees (Note 7)
Cheques pending collection
Cash shortages (Note 7)
Associate companies
Provisions for fixed assets under construction
Credit risk on collateralised investments (Note 4)
Operations pending settlement (Note 7)
31 Dec. 12
Thousand AKZ
Thousand USD 1,569,614 16,380 429,699 4,484 418,688 4,369 374,000 3,903 321,149 3,351 318,212
3,321
223,391 2,331 209,724 2,189 174,806 1,824 4,039,283 42,152 31 Dec. 11
Thousand AKZ
Thousand USD
554,608 5,821
298,063 3,128
260,688 2,736
500,970 5,258
421,477 4,423
-
223,391 2,345
103,704 1,088
266,381 2,796
2,629,282 27,595
19. Equity
As at 31 December 2012 and 2011, the Bank’s share capital corresponds to tAKZ 14,786,705, equivalent to USD 194,500,000, fully subscribed and paid-up in cash, and is divided into 19,450,000 shares with
a nominal value in Kwanzas equivalent to USD 10 each.
Pursuant to article 5 of BNA Notice 15/2007 of 12 September, the financial statements should be published with values expressed in local currency. The conversion to USD is shown merely for purposes of
presentation, and does not involve a restatement of values but rather a direct conversion based on the reference average exchange rate published by BNA as at 31 December 2012 and 2011.
The Bank may, under the terms and conditions permitted by the law, acquire its own shares and perform all legally authorised operations on these shares.
143
As at 31 December 2012 and 2011, the Bank’s share capital showed the following shareholder structure:
Shareholders
Sonangol – Sociedade Nacional de Combustíveis, UEE
Oberman Finance Corp.
Dabas Management Limited
Mário Abílio R. M. Palhares
Lobina Anstalt
Coromasi Participações Lda.
Mário Alberto dos Santos Barber
Macropar - Consultoria e Participações S.A.
Outros
Nr. shares
Thousand AKZ
Thousand USD 1,653,250 972,500 972,500 972,500 972,500 972,500 923,875 752,715
583,500 10,674,160
19,450,000 1,256,870 739,335 739,335 739,335 739,335 739,335 702,368 572,245 443,601 8,114,946 14,786,705 13,116 7,715 7,715 7,715 7,715 7,715 7,330 5,972 4,629 84,686 154,308 % Holding
8.50%
5.00%
5.00%
5.00%
5.00%
5.00%
4.75%
3.87%
3.00%
54.88%
100,00%
Stakes in the share capital held by members of the governing bodies (subparagraph 3, of article 446 of Law 1/04, of 13 February – Commercial Companies Law):
Shareholders
Paula Gray
Mário Alberto dos Santos Barber
Position
Deputy Chairman
Director
Acquisition Nr. shares
% Holding
Nominal value
Nominal value
Nominal value
486,250 752,715 972,500 2.50%
3.87%
5.00%
Em 31 de Dezembro de 2012 e 2011 o lucro e dividendo por acção apresentam-se conforme segue:
Number of shares (in units)
Net earnings per share
Dividends
Dividend paid per share (gross)
31 Dec. 12
Thousand AKZ
179,674 19,450,000
19,450,000 0.89
0.009 4,304,345
44,919 0.22
0.002 31 Dec. 11
Thousand AKZ
Thousand USD
20,197,895
211,981
19,450,000
19,450,000
1.04
0.01
5,453,432
57,211
0.26
0.003
On 30 March 2012, the General Meeting approved the proposed appropriation of net income presented by the Board of Directors. Hence the net income for 2011, of the value of tAKZ 20,197,895 (tUSD 211,981),
was distributed through tAKZ 5,049,474 (tUSD 52,995) of direct dividends to the shareholders and tAKZ 403,958 (tUSD 4,216) to the micro finance support fund (Note 17), with the remaining value having
been transferred to reserves, as presented in the Statement of Changes in Equity.
Legal Reserve
Under the terms of the legislation in force, the Bank should constitute a legal reserve fund until this value corresponds to that of its share capital. To this end, the Bank has annually transferred the equivalent
of 20% of the net income from the previous year to this reserve. This reserve may be used to cover accumulated losses only when all other constituted reserves have been depleted.
Potential Earnings
Potential earnings correspond to the revaluation reserves of fixed assets pending settlement, but likely to be settled under the provisions of Decree-Law number 6/96, of 26 January, in order to reflect the
effect of the devaluation of local currency.
144
20. Balance Sheet by Currency as at 31 December 2012 and 2011
As at 31 December 2012 and 2011, currency balances were broken down as follows:
Amounts in thousand Kwanzas - tAKZ
Notes
31 Dec. 12
Local
Local Currency
Foreign
Local
Currency
Linked to FC
Currency
Book Value
Currency
Assets
Available funds
3
66,390,144 Short-term investments
4
47,628,960 Repurchase agreements
4
75,579,315 Securities
Trading 5
-
Held-to-maturity
5
44,019,411 Foreign exchange operations
-
Loans
Loans
6
95,225,924 Provision for doubtful loans
6
(17,213,528)
Other values
7
10,539,587 Fixed assets
8
7,691,349 Tangible fixed assets
9
32,438,863 Intangible fixed assets
9
6,781,080 Total Assets
369.081.105 Liabilities and Equity
Deposits
Demand deposits
10
149,992,107 Term deposits
10
123,606,344 Money market liabilities
11
-
12
-
13
1,265,656 Foreign exchange operations 14
-
Subordinated debt
15
-
16
2,355,752 Other liabilities
17
7,607,643 Provisions for contingent liabilities
18
-
Total Liabilities
284,827,502 Share capital
19
14,786,705 Reserve monetary for revaluate. of share capital
19
28,669 Reserves and funds
19
66,797,836 Potential earnings
19
667,083 Own shares
19
(47,260)
19
17,217,380 Total Equity
99,450,413 Total Liabilities and Equity
384,277,915 31 Dec. 11
Local Currency
Foreign
Linked to FC
Currency
Book Value
-
196,940,862 263,331,006 92,953,566 - 109,765,265 202,718,831
-
-
159,089,224 -
206,718,184 75,579,315 4,353,820 78,482,961 -
-
350,555,336 4,793,754
354,909,156
83,276,715
-
68,704,550 -
394,547 53,978,245 397 394,547
166,702,206 397 -
20,731,001 -
-
72,707,069 -
-
61,686,311 395
155,124,381
395
-
-
-
189,671,386 (10,370,090)
4,853,516 284,897,310 (27,583,618) 15,393,103 112,004,796 (22,190,510)
10,379,822 -
-
-
196,245,422 -
4,509,110
308,250,218
(22,190,510)
14,888,932
-
-
-
68,704,550 1,084,634 8,775,983 -
32,438,863 -
6,781,080 595,642,721 1,033,428,376 7,498,980 20,250,085 5,607,280 330,071,801 -
-
-
72,707,069 1,075,953 -
-
728,631,546 8,574,933
20,250,085
5,607,280
1,131,410,416
-
12,028,802 284,745,496 244,830,923 434,737,603 380,466,069 189,454,214 136,593,583 -
-
487,126,267 182,974,215 676,580,481
319,567,798
9,582,590 9,582,590
45,191 45,191
75,048,757
76,314,413
15,356,632 15,356,632
1,464,460 1,464,460
-
2,355,752 2,008,327 9,615,970 4,039,283 4,039,283
637,121,659
933,977,963 -
14,786,705 -
28,669 -
66,797,836 -
667,083 -
(47,260) -
17,217,380 -
99,450,413 637,121,659 1,033,428,376 9,672,667 -
1,530,727 -
-
2,254,541 2,289,211 2,629,282 344,424,225 14,786,705 28,669 52,053,485 667,083 (47,260)
20,197,895 87,686,577 432,110,802 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,672,667
43,621 43,621
14,979,728 16,510,455
10,477,736 10,477,736
2,408,755 2,408,755
-
2,254,541
1,289,292 3,578,503
-
2,629,282
699,299,614 1,043,723,839
-
14,786,705
-
28,669
-
52,053,485
-
667,083
-
(47,260)
-
20,197,895
-
87,686,577
699,299,614 1,131,410,416
-
-
-
-
-
-
-
-
12,028,802 -
-
-
-
-
-
-
12,028,802 The appendix is part of these statements.
145
(Amounts in thousand in United States Dollars - tUSD)
Notes
31 Dec. 12
Local
Thousand AKZ
Foreign
Local
Currency
Linked to FC
Currency
Book Value
Currency
Assets
Available funds
3
692,821 Short-term investments
4
497,036 Repurchase agreements
4
788,715 Securities
Trading 5
-
Held-to-maturity
5
459,369 Foreign exchange operations
-
Loans
Loans
6
993,739 Provision for doubtful loans
6
(179,633)
Other values
7
109,987 Fixed assets
8
80,264 Tangible fixed assets
9
338,519 Intangible fixed assets
9
70,765 Total Assets
3,851,582 Liabilities and Equity
Deposits
Demand deposits
10
1,565,257 Term deposits
10
1,289,906 Money market liabilities
11
-
12
-
13
13,208 Foreign exchange operations 14
-
Subordinated debt
15
-
16
24,584 Other liabilities
17
79,390 Provisions for contingent liabilities
18
-
Total Liabilities
2,972,345 Share capital
19
154,308 Reserve monetary for revaluate. of share capital
19
299 Reserves and funds
19
697,075 Potential earnings
19
6,961 Own shares
19
(493)
19
179,674 Total Equity
1,037,824 Total Liabilities and Equity
4,010,169 The appendix is part of these statements.
146
31 Dec. 11
Thousand AKZ
Foreign
Linked to FC
Currency
Book Value
-
2,055,194 2,748,015 975,567 -
1,152,010
2,127,577
-
-
1,660,191 -
2,157,227 788,715 45,694 823,695 -
-
3,679,152 50,312 3,724,846
874,007
-
716,973 -
4,117 563,294 4
4,117
1,739,636 4
-
217,576 -
-
763,076 -
-
647,411 4
1,628,063
4
-
-
-
1,979,333 (108,218)
50,649
2,973,072 (287,851) 160,636 1,175,514 (232,894)
108,938 -
-
-
2,059,637 -
47,323 3,235,151
(232,894)
156,261
-
-
-
716,973 11,319 -
-
6,215,883 91,583 338,519 70,765 10,784,438 78,703 212,529 58,850 3,464,172 -
-
-
763,076 11,293 -
-
7,647,142 89,996
212,529
58,850
11,874,390
-
125,528 2,971,489 2,554,955 4,536,746 3,970,389 1,988,362 1,433,578 -
-
5,112,492 1,920,353 7,100,854
3,353,931
-
-
-
-
-
-
-
-
125,528 -
-
-
-
-
-
-
125,528 100,000
472 783,178 160,256 15,283 -
20,956 42,152 6,648,741 -
-
-
-
-
-
-
6,648,741 100,000
472
796,386 160,256
15,283
24,584 100,346 42,152
9,746,614 154,308 299 697,075 6,961 (493) 179,674 1,037,824 10,784,438 101,517 -
16,065 -
-
23,662 24,026 27,595 3,614,805 155,190 301 546,312 7,001 (496)
211,981 920,289 4,535,094 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
458 157,216 109,966 25,280 -
13,531 -
7,339,296 -
-
-
-
-
-
-
7,339,296 101,517
458
173,281
109,966
25,280
23,662
37,557
27,595
10,954,101
155,190
301
546,312
7,001
(496)
211,981
920,289
11,874,390
21. Net Interest Income
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD
From short-term investments
8,902,268 92,900 4,412,356 46,309
From securities
Held-to-maturity
Central Bank Securities
1,035,605 10,807 1,860,371 19,525
Treasury Bills
1,014,554 10,587 351,218 3,686
Treasury Bonds in local currency
Linked to the USD exchange rate
5,418,470
56,545 7,393,604 77,597
Linked to the Consumer Price Index
551,933 5,760 4,374,303 45,909
Treasury Bonds in foreign currency
2,986,031
31,161 2,446,590 25,678
11,006,593 114,860
16,426,086 172,395
From credit granted
Loans
19,076,715 199,077 16,808,410 176,408
Current account credit
6,664,675 69,550 9,779,718 102,640
Other
3,495,846 36,481 2,756,420 28,929
29,237,236
305,108 29,344,548 307,977
49,146,097 512,868 50,182,990 526,681
Of customer term deposits
Local currency
(4,993,796)
(52,113) (8,120,808)
(85,230)
Foreign currency
(12,720,950)
(132,751) (12,818,203)
(134,530)
Of subordinated debt
(54,538)
(569) (53,487)
(561)
(17,769,284)
(185,433) (20,992,498)
(220,321)
Of money market operations
Of liabilities represented by securities
-
-
8,755 92
Of funds raised in the money market
(43,010)
(449) (33,490)
(351)
Of funding with securities
(440,503)
(4,597) (312,444)
(3,280)
(483,513)
(5,046) (337,179)
(3,539)
Of financial derivatives (Note 12)
(45,191)
(472) (43,621)
(458)
(18,297,988)
(190,951) (21,373,298)
(224,318)
30,848,109 321,917 28,809,692 302,363
During the years ended on 31 December 2012 and 2011, the heading “Earnings from financial assets – securities” includes the amounts of tAKZ 9,707,851 (tUSD 101,308) and tAKZ 14,007,340 (tUSD 147,010),
respectively, relative to interest on Treasury Bonds and Treasury Bills issued by the Angolan State, which are exempt from tax (Note 31).
During the years ended on 31 December 2012 and 2011, the heading “Earnings from financial assets – short-term investments” includes the amounts of tAKZ 3,020,085 (tUSD 31,516) and tAKZ 2,084,752
(tUSD 21,880), respectively, relative to interest on repurchase agreements contracted with BNA, which are exempt from tax (Note 31).
During the years ended on 31 December 2012 and 2011, the heading “Earnings from financial assets – credit granted” includes the amounts of tAKZ 3,653,822 (tUSD 38,130) and tAKZ 6,296,085 (tUSD 66,079)
relative to income from credit operations with the Government whose contracts include a clause of tax exemption on interest received (Note 31).
147
22. Earnings from Foreign Exchange Operations
Income from Foreign Exchange Operations
31 Dec. 12
Thousand AKZ
Thousand AKZ
Thousand USD
Profits on foreign exchange operations
Revaluation of spot foreign exchange position
827,734,021 8,637,895 768,918,201 8,069,958
Revaluation of assets and liabilities
19,346,299 201,890 113,120,698 1,187,226
Purchase and sale of foreign currency
12,563,094 131,103 11,757,073 123,391
859,643,414 8,970,888 893,795,972 9,380,575
Negative results from foreign exchange operations
Revaluation of spot foreign exchange position
(827,503,049)
(8,635,485) (766,440,904)
(8,043,958)
Revaluation of assets and liabilities
(19,370,067)
(202,138) (113,959,267)
(1,196,026)
Purchase and sale of foreign currency
(440,437)
(4,596) (1,153,029)
(12,101)
(847,313,553)
(8,842,219) (881,553,200)
(9,252,085)
12,329,861 128,669 12,242,772 128,490
23. Earnings from Financial Services
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD Thousand AKZ Thousand USD
Income from financial services rendered
Commissions received:
For banking services
7,075,668
73,839 6,006,084 63,035
For foreign exchange operations
5,125,868 53,491 3,135,582 32,909
For guarantees provided
155,589 1,624 241,257 2,532
Other commissions received
97,947 1,024 85,895 901
Other profit from financial services
191,661 2,000 84,725 889
12,646,733 131,978 9,553,543 100,266
Costs of financial services rendered
Commissions paid:
For banking services
(398,420)
(4,158) (255,932)
(2,686)
For miscellaneous liabilities or commitments
(276,727)
(2,888) (174,176)
(1,828)
For other services rendered
(2,600)
(27) (3,001)
(31)
Other commissions paid
(36,038)
(376) (31,010)
(325)
Other losses on financial services
(253,443)
(2,646) (93,169)
(978)
(967,228)
(10,095) (557,288)
(5,848)
11,679,505 121,883 8,996,255 94,418
As at 31 December 2012 and 2011, the heading “Commissions received - for banking services” essentially corresponds to commissions on tax collection and credit opening commissions.
As at 31 December 2012 and 2011, the heading “Commissions received – foreign exchange operations” refers to fees charged by the Bank in the operations involving cash withdrawals in foreign currency at branches.
The growth in income between 2012 and 2011 was mainly due to the increasing number of operations performed.
148
24. Staff Costs
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD
Retribution
Remuneration of management and supervisory bodies
154,215 1,609 110,700 1,162
Remuneration of employees
4,200,994 43,840 3,374,477 35,416
4,355,209 45,449 3,485,177 36,578
Allowances
2,716 28 13,726 145
1,956,768 20,420 1,291,642 13,556
1,959,484 20,448 1,305,368 13,701
Contributions to the Pension Fund (Notes 17 and 33)
375,102 3,914 395,420 4,150
Retirement benefits (Note 17)
101,729 1,062 400,506 4,203
Social security
333,935 3,485 265,919 2,791
810,766 8,461 1,061,845 11,144
Voluntary social security charges
243,294 2,539 147,771 1,551
Other additional remunerations
21,449 224 11,252 118
Remuneration of employees (Note 17)
960,000 10,018
960,000 10,075
Other
353,671 3,691 260,125 2,730
1,335,120 13,933
1,231,377 12,923
8,703,873 90,830 7,231,538 75,897
As at 31 December 2012 and 2011, the average number of workers at the Bank was 1,747 and 1,526, respectively. The growth in 2012 was mainly due to the opening of new branches and the strengthening
of technical areas of the Bank’s central services, in line with the Bank’s policy of growth.
As at 31 December 2012 and 2011, the heading “Retribution – Remuneration of employees” includes basic pay, duty allowance and other benefits.
149
25. Third Party Supplies
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD
Specialised services
Security services
1,506,680 15,723 1,467,791 15,405
Auditors and consultants
498,009 5,197 487,759 5,119
IT services
338,059 3,528 497,211 5,218
Cleaning services
323,161 3,372 263,292 2,763
Staff training costs
167,320 1,746 143,789 1,509
Retainers and fees
53,976 563 57,244 601
Occasional manpower
35,461 370 62,975 661
Legal and notary expenses
8,459 88
12,481 131
Other
163,509 1,706 48,159 505
3,094,634 32,293 3,040,701 31,912
Third party supplies
Consumables
171,626 1,791 255,352 2,680
Water and energy
39,477 412 37,949 398
Other
700,365 7,308 603,750 6,337
911,468 9,511 897,051 9,415
Rents
1,147,039 11,970 959,289 10,068
Communications
1,069,767 11,164 796,967 8,364
Security, maintenance and repairs
882,627 9,211 930,457 9,765
Advertising and publishing
849,539 8,865
1,251,697 13,137
Hire charges
606,635 6,331 191,428 2,009
Transport, travel and accommodation
566,810 5,915 476,660 5,003
Insurance
477,676 4,985 336,413 3,531
Donations and gifts
Tax deductible
209,965 2,193 154,750 1,624
Non-tax deductible (Note 31)
113,274 1,182 16,175 170
Levies
5,277 55 10,099 106
5,928,609 61,871 5,123,935 53,777
9,934,711 103,675
9,061,687 95,104
26. Taxes and Rates Not Incident on Earnings
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD
stos Indirectos
Impostos Indirectos
Indirect taxes:
posto SISA
-
Imposto58,102
SISA
606
-
58,102 606
SISA tax -
-
-
58,102-
606
posto predial
-
Imposto40,429
predial
422
-
40,429 422
Property tax- -
-
40,429- 422
posto do selo
-
Imposto37,399
do selo
390
-
37,399 390
Stamp duty - -
-
37,399- 390
postos aduaneiros
55,814
585
Impostos
12,930
aduaneiros
136
55,814
585
12,930 136
Customs
duties
55,814
585
12,930 136
55,814 585
148,860
1,554
55,814 585
148,860 1,554
55,814 585
148,860
1,554
s
Taxas
Rates
xa de fiscalização
25,042
263 Taxa de25,042
32,753
fiscalização
342
25,042
263
32,753 342
Supervision
fee
263
32,753 342
xa de circulação
2
Taxa de circulação
1,376
14
162 2
1,376 14
Circulation162
fee
162 2
1,376
14
tras taxas
5
Outras taxas
2,686
28
481 5
2,686 28
Other rates481
and fees
481 5
2,686
28
25,685 270 36,815 384
25,685
270
36,815 384
25,685
270
36,815 384
81,499 855
185,675
1,938
81,499 855
185,675 1,938
81,499 855
185,675
1,938
150
27. Penalties Applied by The Regulatory Authorities
As at 31 December 2012 and 2011, this heading corresponds to the costs incurred through financial penalties applied by BNA as the supervisory body of banking activity.
28. Earnings from Financial Fixed Assets
BAI Micro Finanças, S.A. - Impairment (Note 8)
BAI Cabo Verde, S.A. - Impairment (Note 8)
BPN Brasil - Impairment (Note 8) NOSSA - Nova Sociedade de Seguros Angola, S.A. dividends
31 Dec. 12
Thousand AKZ Thousand USD 477,612 177,462 274,844 -
929,918 4,984
1,852
2,868 -
9,704 31 Dec. 11
Thousand AKZ
Thousand USD
-
-
211,299 (57,076)
154,223 2,218
(599)
1,619
29. Other Operating Income and Costs
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD
Other operating income
For other services rendered
637,066
6,648 490,395 5,147
For credit analysis and management
101,849 1,063 344,869 3,619
For reimbursement of expenses
51,320 536 43,397 455
Other
190,040 1,982 90,738 953
980,275 10,229 969,399 10,174
Other operating costs
(204,155)
(2,130) (629,011)
(6,602)
776,120 8,099 340,388 3,572
During the years ended in 2012 and 2011, the heading “Other operating income – for other services rendered” refers to income received during the year relative to commissions charged on the different
services rendered by the Bank and commissions charged for the issue of cheques.
During the years ended 2012 and 2011, the heading “Other operating income – for credit analysis and management” refers to fees received by the Bank upon the opening of credit contracts.
151
30. Non-Operating Earnings
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD
Non-operating income or gains
Gains from previous years:
Interest (Note 2 c)
2,623,732 27,380
1,585,157 16,637
Assets acquired in exchange of loans
2,162,450 22,566
-
Principal (Note 2 c))
972 10 837,998 8,795
Fees
68,522 715 455,715 4,783
Gains on disposal of fixed assets
-
-
1,855 19
4,855,676 50,671 2,880,725 30,234
Other exceptional gains
149,538
1,561 7,330 77
5,005,214 52,232 2,888,055 30,311
Non-operating costs or losses
Losses from previous years
Interest
(852,880)
(8,900) (655,695)
(6,882)
Other
(526,054)
(5,489) (349,101)
(3,664)
(1,378,934)
(14,389) (1,004,796)
(10,546)
Other exceptional losses
(131,763)
(1,375) (210,313)
(2,207)
(1,510,697)
(15,764) (1,215,109)
(12,753)
Non-operating earnings
3,494,517
36,468 1,672,946 17,558
During the years ended on 31 December 2012 and 2011, the balance of non-operating income or gains – principal and interest, is essentially composed of the receipt of principal and interest relative to the
recovery of loans which had been written off the assets and, as such, were recorded under off balance sheet headings.
As at 31 December 2012, the heading “Assets acquired in exchange of loans” refers to the recovery of principal and interest through assets given in exchange of loan repayments (Note 7).
As at 31 December 2012 and 2011, the balance of the heading “Losses from previous years – interest” consists of the reversal of interest of loans that are overdue for more than 60 days, pursuant to article
17 of BNA Notice number 4/2011.
152
31. Charges on Current Earnings
The Bank is subject to industrial tax under the terms defined in the current tax legislation in Angola, as described in Note 2, subparagraph l).
As at 31 December 2012 and 2011, the reconciliation between accounting profit and profit for tax purposes is as follows:
31 Dec. 12
31 Dec. 11
Thousand AKZ
Thousand USD
Profit before tax and other charges
17,730,543 185,029 19,031,687 199,741
Deductible temporary differences
3,424,971 35,742
-
-
Surplus payments (Note 25)
113,274
1,182 16,175 170 Tax fines (Note 27)
139 1
6,735 72 Non-specified expenses
3,981 42 1,556 15 Total to be added
3,542,365 36,967 24,466 257 Tax benefits
Income from public debt (Note 21)
(12,727,936)
(132,824) (16,092,092)
(168,890)
Income from lending operations
(3,653,822)
(38,130) (6,296,085)
(66,079)
(16,381,758)
(170,954) (22,388,177)
(234,969)
Taxable profit
4,891,150 51,042 (3,332,024)
(34,971) Nominal tax rate
35.00%
35.00% 35.00%
35.00%
Current tax
1,711,903 17,865
-
-
Deferred tax assets (Note 7)
(1,198,740)
(12,510) (1,166,208)
(12,240)
Tax on net income for the year
513,163 5,355 (1,166,208)
(12,240)
As at 31 December 2012 and 2011, income from credit operations with the Central Administration refer to loans whose interest is exempt from industrial tax.
During the year ended on 31 December 2012, the Bank recorded deferred tax assets to the value of tAKZ 1,198,740 (tUSD 12,510) under the balance sheet heading “Deferred tax assets” (Note 7) against the
income statement heading “Deferred taxes” relative to deductible temporary differences between the book value and value for tax purposes.
During the year ended on 31 December 2011, based on the assumption of future taxable profit and pursuant to current tax legislation, the Bank recorded deferred tax assets under the balance sheet heading
“Deferred tax assets” (Note 7) against the income statement heading “Deferred taxes”, arising from the existence of tax benefits carried forward that were unused due to being greater than the taxable profit
for the year. These deferred taxes were used during 2012.
The reconciliation between the tax on net income for the year and the tax payable/recoverable as at 31 December 2012 and 2011 is presented as follows:
Tax payable/recoverable at the beginning of the year
Payments on account made during the year
Use of deferred tax assets
Current tax for the year
Tax payable/recoverable at the end of the year (Note 7)
31 Dec. 12
Thousand AKZ
Thousand USD 254,875 957,133 1,166,208
(1,711,903)
666,313 2,660 9,988 12,170
(17,865)
6,953 31 Dec. 11
Thousand AKZ
Thousand USD
(977,111)
1,231,986 -
-
254,875 (10,255)
12,930
2,675
The tax authorities are entitled to reviewing the Bank’s tax situation for a period of five years, which may lead to corrections to the taxable profit for 2008 to 2012. However, the Bank’s Board of Directors
believes that any possible additional settlements which may arise from these reviews will not have a significant impact on the financial statements.
153
32. Off Balance Sheet Accounts
31 Dec. 12
Thousand AKZ
Thousand AKZ
Thousand USD
Guarantees and any other liabilities
Open documentary credit
16,394,495
171,086 21,601,492 226,712
Guarantees and sureties provided
13,097,635 136,682 15,496,309 162,637
Commitments to third parties
134,962 1,408 134,195 1,408
Liabilities from services rendered
Custody of securities
16,391,791 171,058 26,774,936 281,009
Collection of values
545,222 5,690 621,206 6,520
Credit granted by third parties
Collateralised investments in BAI Europa (Note 4)
3,291,815 34,352 1,905,640
20,000
Collateralised investments in BAI Cabo Verde (Note 4)
871,494 9,095 849,164 8,912
Foreign exchange operations:
Sales of foreign currency pending settlement
934,907 9,756 14,292,234 150,000
Purchases of foreign currency pending settlement
2,814,646 29,373
-
Notional amount of financial derivatives
1,895,625 19,782 1,286,777 13,505
Loans written off the assets
Loans
18,379,757 191,804 14,897,472 156,352
Escrow accounts
8,582,000 89,558 3,593,186 37,711
2,360,787 24,636 1,124,320
11,800
Guarantees and sureties provided are banking operations that do not involve mobilisation of funds by the Bank, and involve guarantees provided to support import operations and the execution of contracts
by customers of the Bank. The guarantees provided and commitments undertaken represent amounts that might be payable in the future. These operations are provisioned according to their risk (Note 6).
Open documentary credit is an irrevocable commitment undertaken by the Bank, on behalf of its customers, to pay/order payment of a certain amount to the supplier of a given good or service, by an
established deadline, upon presentation of documents for dispatch of the goods or service delivery. Being irrevocable, its cancellation or alteration without the explicit agreement of all parties involved is
prohibited. These operations are provisioned according to their risk (Note 6).
As at 31 December 2011, the balance of the heading “Foreign exchange operations” refers to a sale of foreign currency to BNA contracted on 30 December 2011 and settled on 3 January 2012. Through this
operation, BAI sold tUSD 150,000, equivalent to tAKZ 14,292,234, for the amount of tAKZ 14,327,949, obtaining a profit of tAKZ 35,715.
In spite the peculiarities of these contingent liabilities and commitments, the appraisal of these operations follows the same basic principles as any other commercial operation, specifically the solvency of the
customer and business underlying them, where the Bank requires that these transactions should be duly collateralised when necessary. Since it is expected that most of these liabilities will expire without
having been used, the amounts indicated do not necessarily represent future cash needs.
As at 31 December 2012, the following liabilities had also been undertaken and contracted (not reflected in the balance sheet):
Limits of escrow accounts not used by customers
Other irrevocable commitments - FIPA
Works on contracted rented buildings
154
31 Dec. 12
Thousand AKZ
Thousand USD
36,598,820
381,930
641,280 6,692
429,684 4,484
37,669,784 393,106
33. Retirement and Survival Pensions
The Bank has undertaken the voluntary commitment, through the creation of a fixed contributions pension fund, to grant monetary instalments to employees, or to their families, as a supplement to their
retirement pension due to old age, disability, early retirement and survival pensions, pursuant to the terms and conditions agreed in the contract constituting the “BAI Pension Fund” (see subparagraph j) of
Note 2).
The benefit will be allocated according to the cumulative net balance in the participant’s individual account, with the benefit being paid up to the limit of the accumulated capital.
AAA Pensões, S.A. is responsible for the management of the pension fund of Banco Angolano de Investimentos S.A.
Order number 2529/12 approved by the Ministry of Finance was published in Diário da República, whose single point contains the approval of amendments to the Pension Plan and Contract of Constitution
of the Pension Fund of the Bank’s employees.
As at 31 December 2012 and 2011, the cost for the year recorded by the Bank reached tAKZ 375,102 (tUSD 3,914) and tAKZ 395,420 (tUSD 4,150), respectively, relative to the monthly contribution of
approximately USD 326 thousand and USD 351 thousand in 2012 and 2011, respectively, equivalent to 9% of the basic wage of the Bank’s employees. As mentioned in subparagraph j) of Note 2, BAI is
currently undertaking the cost of the 3% contribution to be made by employees, recorded under the cost heading “Contributions to the pension fund” (Note 24).
34. Balances and Transactions with Related Parties
As at 31 December 2012 and 2011, the principal balances and transactions maintained with related entities are as follows:
Thousand AKZ
Shareholders
Members of governing bodies
31 Dec. 12
Financial
holdings
Other
entities
Total
31 Dec. 11
Total
Assets
Available funds
-
-
1,093,403 -
1,093,403 1,968,261
-
-
73,344,922 -
73,344,922 77,525,355
Securities
1,331,677 -
477,353 -
1,809,030 2,582,781
-
-
9,917,200 -
9,917,200 9,116,600
Loans
15,680,461 86,444 18,925,449 6,641,890 41,334,244 33,939,521
17,012,138 86,444 103,758,327 6,641,890 127,498,799 125,132,518
Liabilities
Demand deposits
18,548,419
1,233,716 2,982,164 44,566,511 67,330,810 314,583,479
Term deposits
1,087,379 208,493 1,441,145 1,216,829 3,953,846 5,086,946
-
-
-
9,582,590 9,582,590 9,672,667
5
-
55,000 553,927 608,932 910,311
Subordinated debt
1,464,460 -
-
-
1,464,460 2,408,755
1,846 938 -
530 3,314 2,381
Other liabilities
88,234 -
-
-
88,234 87,789
21,190,343 1,443,147
4,478,309 55,920,387 83,032,186 332,752,328
Off balance sheet
Guarantees received
670,781 18,728 21,128,601 437,582 22,255,692
21,815,324
Other off balance sheet liabilities
2,173 -
804,995 2,363,034 3,170,202 2,162,688
672,954 18,728 21,933,596 2,800,616 25,425,894 23,978,012
Collateral on loan operations
-
-
3,205,050 -
3,205,050 2,754,804
155
Shareholders
Thousand USD
31 Dec. 12
Financial
holdings
Other
entities
Total
31 Dec. 11
Total
Assets
Available funds
-
-
11,410 -
11,410 20,657
-
-
765,398 -
765,398 813,645
Securities
13,897 -
4,981 -
18,878 27,107
-
-
103,492 -
103,492 95,681
Loans
163,635 902 197,498 69,312 431,347 356,202
177,532
902
1,082,779
69,312
1,330,525
1,313,292
Liabilities
Demand deposits
193,564 12,875 31,121 465,078 702,638 3,301,620
Term deposits
11,347 2,176 15,039 12,698 41,260 53,388
-
-
-
100,000 100,000 101,517
-
-
574 5,781 6,355 9,554
Subordinated debt
15,283 -
-
-
15,283 25,280
19 10 -
6
35 25
Other liabilities
921 -
-
-
921 921
221,134 15,061 46,734 583,563 866,492 3,492,305
Off balance sheet headings
Guarantees received
7,000 195 220,489 4,566 232,250 228,956
Other off balance sheet liabilities
23 -
8,401 24,660 33,084 22,698
7,023 195 228,890 29,226 265,334 251,654
Collateral on loan operations
-
-
33,447 -
33,447 28,912
As at 31 December 2012 and 2011, the balance of available funds with related parties may be broken down as follows by related party (Note 3):
Deposits
Banco BAI Europa
Other entities
31 Dec. 12
Thousand AKZ
11,410 -
-
1,093,403 11,410 31 Dec. 11
Thousand AKZ
Thousand USD
1,916,761 20,117
51,500 540
1,968,261 20,657
As at 31 December 2012 and 2011, the Bank’s balance in liquidity applications with related parties may be broken down as follows by related party (Note 4):
Banco BAI Europa
Banco BAI Micro Finanças
BAI Cabo Verde
31 Dec. 12
Thousand AKZ
Thousand USD 65,881,835 687,516 4,148,191 43,289 3,314,896 34,593 73,344,922 765,398 31 Dec. 11
Thousand AKZ
Thousand USD
72,584,464 761,789
2,785,992 29,240
2,154,899 22,616
77,525,355 813,645
As at 31 December 2012 and 2011, the balance of loans with related parties may be broken down as follows by related party (Note 6):
Loans
Shareholders
BAI subsidiaries
Other entities
156
31 Dec. 12
Thousand AKZ
Thousand USD 15,680,461 163,635 18,925,449 197,498 86,444 902 6,641,890 69,312 41,334,244 431,347 31 Dec. 11
Thousand AKZ
Thousand USD
1,164,969 12,227
3,797,658 39,857
120,557 1,265
28,856,337 302,853
33,939,521 356,202
As at 31 December 2012 and 2011, the balance of deposits (demand and term) with related parties may be broken down as follows by related party (Note 10):
Loans
Shareholders
BAI subsidiaries
Other entities
31 Dec. 12
Thousand AKZ
Thousand USD 19,635,798 204,911 4,423,309 46,160 1,442,209 15,051 45,783,340 477,776 71,284,656 743,898 31 Dec. 11
Thousand AKZ
Thousand USD
135,063,765 1,417,523
8,221,231 86,284
1,399,347 14,686
174,986,082 1,836,515
319,670,425
3,355,008
As at 31 December 2012 and 2011, operating income and cost with related parties may be broken down as follows:
Shareholders
31 Dec. 12 Financial
holdings
Other
entities
31 Dec. 11
Thousand AKZ
Thousand AKZ
-
-
1,006,611 -
1.006,611 448,919
-
-
45,719 -
45,719 61,513
Income from loans
23,702
1
211,949 149,738 385,390 1,046,336
23,702 1
1,264,279 149,738 1,437,720 1,556,768
Deposit costs
(1,319)
(389)
(27,836)
(702,749)
(732,293)
(153,556)
Money market liability costs
-
-
-
(434,810)
(434,810)
(289,011)
(1,319)
(389)
(27,836)
(1,137,559)
(1,167,103)
(442,567)
22,383
(388)
1,236,443 (987,821)
270,617 1,114,201
Shareholders
31 Dez. 12 Financial
holdings
Other
entities
31 Dez. 11
Thousand USD Thousand USD
-
-
10,505 -
10,505 4,712
- -
477 -
477 646
Income from loans
247 -
2,212 1,563 4,022 10,982
247 -
13,194 1,563 15,004 16.340
Deposit costs
(14) (4)
(290)
(7,334)
(7,642)
(1,611)
Money market liability costs
-
-
-
(4,538)
(4,538)
(3,033)
(14)
(4)
(290)
(11,872)
(12,180)
(4,644) 233 (4)
12,904 (10,309)
2,824 11,696
As at 31 December 2012 and 2011, income received from short-term investment operations with related parties may be broken down as follows by entity:
Banco BAI Europa
Banco BAI Micro Finanças
BAI Cabo Verde
Other entities
31 Dec. 12
Thousand AKZ
Thousand USD 597,072 6,231 297,562 3,105 111,977 1,169 -
-
1,006,611 10,505 31 Dec. 11
Thousand AKZ
Thousand USD
179,967 1,889
174,557 1,832
52,477 551
41,918 440
448,919 4,712
157
35. Other Disclosures
Pursuant to BNA Notice number 15/07 of 12 September, which enforces the compulsory publication of the elements comprising the Balance Sheet and Income Statement, the following explanations to the
headings listed below are mentioned in the present Notes in:
i) The summary of the main accounting criteria is detailed in Note 2;
ii) The Bank did not revalue the properties for its own use during 2012;
iii) The relevant investments in other companies are detailed in Note 8;
iv) No forward sales of assets were made by the Bank;
v) The details of the guarantees provided and other liabilities are presented in Note 32;
vi) The share capital is detailed in the Table on Changes in Equity and in Note 19, which also includes details on the calculation of dividends per share;
vii) There were no alterations of accounting criteria to consider between the years of 2011 and 2012;
viii)Credit transferred to loss, renegotiated and recovered during the period is described in Note 6;
ix) The details of the subsidiaries and holdings abroad, as well as the results of impairment assessment, total profit and shareholder loans are presented in Note 2 e) and Note 8;
x) The Bank has no shares with purchase option granted and/or exercised during the period;
xi) The main headings whose balance is above 10% of the value of the respective group or category are broken down;
xii) The Board of Directors is not aware of any subsequent events which might have had or might have future relevant effects on the net income for the period and/or future earnings of the Bank;
xiii)The information relative to tax credit is detailed in Note 7;
xiv)The information on securities is detailed in Note 5;
xv) The information on financial derivatives is detailed in Note 12.
158
External Auditor’s Report
14
159
Mayemba – Nonji ya Lote Ebaba / The Mute Man’s Dream
Wood Carving
160
14. External Auditor’s Report
161
162
Report and Opinion of the Audit Board
15
163
Padu – Child, Absolute Priority
Acrylic on Canvas
164
15. Report and Opinion of the Audit Board
Report and Opinion of the Audit Board
Dear Shareholders,
In compliance with the legal and statutory provisions, specifically Law 1/04 of 13 February (Commercial Companies Law), we submit for your appraisal the Report and Opinion of the Audit Board on the 2012
Annual Report and on the proposed appropriation of net income:
1. During the year, we had the opportunity to regularly monitor the Bank’s activity through accounting information and contacts both with the Management and different departments, including
Internal Audit and Planning, Control and Risk.
2.In the exercise of our duties and to the depth and extent possible, based on the accounting information consulted, we analysed the Bank’s operations, verifying and examining, through samples,
the supporting documents, records and books and appraised the Report of the Board of Directors and the Financial Statements, including the Balance Sheet, Income Statement and respective
notes.
3.Under these terms, taking into account the External Auditors’ Report, we conclude the following:
(a) That, being consistent with the accounting records, the Report of the Board of Directors and the Financial Statements comply with the legal and statutory provisions;
(b) That 2012 was a positive year, where we highlight the fact that the Bank achieved a net income of AKZ 17,217,380 thousand (seventeen thousand two hundred and seventeen million and three
hundred and eighty thousand Kwanzas), in observance of the legally permissible and economically advisable practice to constitute appropriate provisions designed to contribute to the stability
of its net worth;
(c) That the valuation criteria used and the policies followed are consistent with those applied in previous years.
4.Considering that the documents referred to in (2) allow for the comprehension of the overall financial position and financial results of the Bank, we propose:
(a) The approval of the Management Report of the Board of Directors and accounts for the financial year of 2012;
(b) The approval of the proposed appropriation of the net income for 2012, included in the Report of the Board of Directors.
5.And last, but not least, we express our gratitude to the Board of Directors and to all the employees we contacted, for their valuable collaboration.
Luanda. 22 March 2013
The Audit Board
Jaime de Carvalho Bastos
Domingos Lima Viegas
(Member)
Júlio Sampaio
(Member)
165
166
Geographical Presence and Distribution Channels
16
167
Isaac João Lucas – Joy
Acrylic on Canvas
168
16. Geographical Presence and Distribution Channels
Geographical Presence and Distribution Channels
Cunene
Luanda
Luanda
Lunda Sul
1 Central Service Branch
47 Hoji-Ya-Henda Rangel Branch
101 Ondjiva Branch
2 Head Office Branch/Largo Atlético
48 Entrep. Aduaneiro - Luanda Branch
102 Santa Clara Branch
3 Alameda Branch
49Deolinda Rodrigues Branch
Lunda Norte
103 Alfândega Sta. Clara Branch
4 Kinaxixi Branch
50Zona Especial Económica Branch
76 Dundo Branch
5 Africampos Branch
51 Morar Branch
77 Lukapa Branch
Kuando Kubango
6 Aeroporto Branch
52Camama Ii Branch
78 Cafunfo Branch
7 Imbondeiro Branch
53ISPTEC Branch
8 Amílcar Cabral Branch
54Patriota Branch
Moxico
Service Points
9 Prenda Branch
55Ingombota Branch
10 Talatona Branch
11 Kikolo Branch
75Saurimo Branch
79 Luena Branch
104 Menongue Branch
1 Boavista - Luanda
2 Sonils - Luanda
Business Service Centre (CAE)
Bié
3 Clínica Girassol - Luanda
12 Valodia Branch
56CAE - Sonangol (Luanda)
4 Porto Cabinda - Cabinda
13 Monumental Branch
57 CAE - Head Office (Luanda)
14 Mulemba Branch
58CAE - SGEP (Luanda)
15 Miramar Branch
16 Avenida Branch
17 SIAC Branch
18 Cidadela Branch
19 Morro Bento Branch
20Porto Seco Branch
21 Samba Branch
BAI Directo
85Sumbe Branch
22 Camama Branch
86Porto Amboim Branch
23 Viana Branch
24 Cacuaco Branch
Cabinda
Benguela
25Guiché Único Branch
63 Correios-Cabinda Branch
87 Benguela Branch
26 Ilha do Cabo Branch
64Marien N’gouabi Branch
88 Baía Farta Branch
27 Golfe Branch
89 Coringe Branch
28 Nova Marginal Branch
Zaire
90Acácias Rubras Branch
29 Maianga Branch
65Mbanza Congo Branch
91 Benguela Branch
30Missão Branch
66Soyo Branch
92 25 de Abril Branch
31 Manuel Van-Dúnem Branch
67 Base do Kwanda Branch
93 1º de Dezembro Branch
32N’gola Kiluange Branch
94 Independência Branch
33Porto de Luanda Branch
Uíge
95CAE Lobito
34 Boavista Branch
68Uíge Branch
35Revolução de Outubro Branch
69SIAC Uíge Branch
Huíla
36Che Guevara Branch
96 Mapunda Branch
37 SIAC - Zango Branch
Bengo
97 Hojy Ya Henda Branch
38 Corimba Branch
70Caxito Branch
98 Entreposto Lubango Branch
39Avenca Branch
71 SIAC Bengo Branch
99Arco-Íris Branch
40Viana Park Branch
41 Nova Vida Branch
Kwanza Norte
Namibe
42SIAC Cazenga Branch
43Mabor Branch
44Senado da Câmara Branch
Malange
45Atrium Branch
73 Malange Branch
46Comandante Loy Branch
74 SIAC Malange Branch
80Kuito Branch
5 Porto Lobito - Benguela
Huambo
6 Posto Sonangol - Luanda
59CAE - Viana Park
81 Huambo Branch
7 Base Kwanda - Zaire
60CAE - Bellas Business Park
82 Caála Branch
8 Correios de Luanda - Luanda
83 Cidade Alta Branch
Private Banking
84 SIAC Huambo Branch
61 Banca Privada Missão (Luanda)
Kwanza Sul
62 BAI Directo (Luanda)
72 Ndalatando Branch
100 Namibe Branch
169
170
171
172
Rua Major Kanhangulo, nº 34, Luanda - Angola
www.bancobai.ao

Annual Report

Transcrição

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