According to the National Bank of Angola, Angola’s economy grew at around 4.9 percent in 2015. However, the country’s economic stability has been challenged recently by global uncertainty, which has adversely affected the price of oil (falling around 55 percent since January 2014). This is particularly important for the Angolan economy due to its dependence on raw materials; the sector represented about 35 percent of the Angolan GDP in 2014.
As a result, the Angolan government is now focused on diversifying the economy and reducing dependence on the oil sector, together with exchange rate stabilization measures. Given the worsening expectations of the current account balance and trade balance, budget execution will also be a key factor supporting the economic development of the Angolan economy in the coming years.
While the executive government has made efforts to reduce public spending, it is clear that the timing of the oil price recovery will be a critical factor that could significantly impact the state’s ability to support the movement to diversify the economy. The past few years have seen the adoption of a more pronounced regulatory environment, aimed at empowering the institutions for future challenges, supported by a variety of different initiatives and led by the National Bank of Angola.
The Central Bank is currently focused on processes related to accounting and prudential, fiscal and compliance aimed at improving the robustness and resilience of institutions (through Asset Quality Assessment – Phase 2 and notices about capital ratios) and increasing internal comparability. Focus is also being placed on international stakeholders (IFRS, notices about capital ratios and FATCA) and increasing the capacity of financial institutions to engage with their international partners (AML/CFT and Sanctions).
The deceleration in economic growth has spread to the Angolan banking sector and no new financial institutions have been licensed by the BNA since 2013 (even though the regulator expects there to be 29 institutions by the end of this year). However, the evolution of the financial system in Angola in recent years has been instrumental in the country’s consolidation. The Angolan banking sector is viewed as an ‘empowering engine’ and as the most important sector of the Angolan economy due to its role in supplying resource development and talent in Angola.
Channel usage and preferences Customer loyalty Branches remain the preferred channel for Angolan banking customers. Angolan financial institutions offer a range of different channels, largely in line with those offered in most mature banking centers. However, it appears that customers still prefer to visit a branch, often to the detriment of other channels. Indeed, customers reported a preference for using a branch for every type of interaction except cash withdrawal and balance enquiry (where ATMs were the predominant preference).
Customer loyalty Branches remain the preferred channel for Angolan banking customers. Angolan financial institutions offer a range of different channels, largely in line with those offered in most mature banking centers. However, it appears that customers still prefer to visit a branch, often to the detriment of other channels. Indeed, customers reported a preference for using a branch for every type of interaction except cash withdrawal and balance enquiry (where ATMs were the predominant preference). Angola Africa 26% 54% 57% 74% 10% 33% 7% 6% 7% 4% 2% 6% Percentage of respondents that use each channel at least once per week Branch ATM POS Internet Mobile Call center Despite the high level of competitiveness of the banking sector, Angolan banking customers seem loyal to their bank; eighty percent of respondents said they would not consider changing their institution and 78 percent said they would recommend their bank. That being said, 20 percent of respondents said they would consider leaving their financial institution. Factors driving this churn include the quality of service, followed by the proximity of ATMs and competitive pricing in both commissioning and rates charged.