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Since 2022, the Russian-origin bank has been unable to increase its capital to meet the minimum required social capital of 15 billion Kz. Tiago Dias states that the BNA is awaiting the shareholders’ decision.
The Russian-origin bank, VTB Africa, may be the next banking institution to leave the Angolan financial system, as the governor of the National Bank of Angola (BNA) has indicated that the bank’s operation in the national banking market is under review. The issue at hand is the capital increase required by the central bank, as the institution has been unable to meet the minimum 15 billion Kz requirement since 2022.
“VTB has not yet done [the capital increase] because what is under review is whether the bank will continue operating in the Angolan banking market,” said the central bank governor, Tiago Dias, stating that “this is a matter currently being assessed by VTB’s own shareholders,” and that the BNA will continue to monitor the situation.
The fact is that the sanctions imposed on Russia have made operations difficult for Russian financial institutions worldwide, as many of them are unable to process transfers in dollars or euros. This has, in turn, affected VTB’s operations in Angola, which are closely linked to the diamond business.
For instance, sanctions on Russia have caused problems for the Russian multinational Alrosa, a partner in the Catota Mining Society, which has already faced difficulties in moving capital out of Angola, particularly in transferring dividends and paying salaries in foreign currency to Russian employees and foreign suppliers of equipment and services. Until the start of the war in Ukraine, these transfers were made through the Luanda branch of the Russian bank VTB. However, the bank has since been cut off from the Swift system and, as a result, is unable to transact in dollars or euros. These difficulties have persisted since 2022, and according to Expansão, the multinational has attempted other solutions, such as turning to VTB in South Africa, but without success.
The central bank issued Notice No. 17/2022 on October 5, requiring shareholders of commercial banks in operation to adjust their regulatory capital by October 5, 2023.
However, the bank continues to operate with a social capital of 7.5 billion Kz, which is below the 15 billion Kz minimum required by the central bank. So far, 15 months have passed, and the bank has yet to meet the regulatory requirement.
Losses of 670.3 Million Kz in 2024
In 2024, according to the fourth-quarter balance sheet, VTB Africa once again recorded losses, posting a net negative result of 670.3 million Kz. Nonetheless, this result represents an improvement compared to the 2.477.7 million Kz loss registered in 2023. The bank’s assets grew by 3% to 137.0 billion Kz, supported by a 52% increase in liquidity applications and a 220% rise in other assets. However, investments in public debt securities dropped by 42% to 5.8 billion Kz, and loans to clients plummeted by 53% to 4.2 billion Kz (a 4.7 billion Kz decrease compared to 2023).
The bank’s liabilities also increased, rising from 124.9 billion Kz to 129.8 billion Kz, which justifies the 6% growth in deposits to 120.5 billion Kz. Meanwhile, equity stands at 7.9 billion Kz.
The bank, which began operations in Angola in 2006, has VTB Moscow (Russia’s second-largest bank) and António Sumbula as its shareholders, holding 50.1% and 49.9%, respectively. The bank has yet to publish its 2023 report and accounts.
