In November 2019, Angola issued its first bonds since securing an International Monetary Fund (IMF) support package in 2018 – raising $3bn from yield-hungry investors attracted by yields of 8% and 9.125%, respectively – and tentative signs of progress in its economy.
Since taking office in 2017, president João Lourenço has embarked on efforts to diversify Angola’s economy away from a heavy dependence on oil, but there is still considerable work to be done on improving its economic outlook. For instance, in 2018, Angola’s national debt stood at around 89% of GDP.
Something of a turnaround is also needed for Angola’s banks. Asset quality has continued to be impaired, with non-performing loan (NPL) levels creeping up in the years following the 2014 oil shock. The NPL ratio across all of the country’s banks stood at 31.2% in 2018, with state-owned Banco de Poupança e Crédito (BPC) topping the list with a ratio of 40.2%.
Angola’s central bank is currently assessing asset quality in the banking sector and is expected to announce increased capital requirements for some banks at the end of 2019. Tier 1 capital has decreased at four out of five of the biggest banks since 2016, matching an overall decrease in total assets on banks’ balance sheets over the same time period.