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Economist Heitor Carvalho believes that the merger between Access Bank Angola and Standard Chartered Bank Angola (SCBA), recently approved by the Competition Authority (ARC), will bring more benefits than challenges to the financial market
Heitor Carvalho understands that the mergers between small banks into medium-sized ones are a key step in strengthening the robustness of the Angolan banking system and he stresses that the greatest danger from the banking sector’s point of view is not to carry out mergers, an operation that would only strengthen the national financial system.
The economist said that the merger operation does not pose a monopoly threat, as the two banks are relatively small and will create a medium-sized institution. The expert stressed that the Angolan financial system is designed to accommodate larger banks, leaving little space for smaller banking operations, mainly regional ones, which find it difficult to stand out in the current context. “This merger is good for our financial system.
It not only brings more stability, but also greater adaptability to the Angolan market”, he added. Carvalho stressed that Angolan banks have a high level of capital in general and that this merger does not represent a risk of undercapitalization in the sector.
“It is important to understand that the Angolan banking system is solid and this merger contributes to strengthening this characteristic. The National Bank of Angola (BNA) strategy has worked effectively in promoting larger and stronger banks.
However, there may be a parallel strategy to develop smaller banks, but the BNA does not seem to see it as a priority at the moment. For economists, the purpose of mergers is precisely to minimize risks.
He explained that by joining forces, two smaller banks with lower transaction volumes and less capital will become a stronger entity, better equipped to operate efficiently in a market that is increasing competition and focusing on local banks.
The economist said that the merger between Access Bank Angola and SCBA, as well as the recent authorization of Carrinho into Banco Keve, are in line with the consolidation trend in the banking sector.
He mentioned that Carrinho’s entry into Keve could be seen as a quasi-merger, given that the new major shareholder intends to dominate the bank’s activities. “These operations have the potential to increase market competition, as they replace small, fragile banks with stronger medium-sized institutions.”
However, the problem is that there is no clear strategy for the development of small and local banks, which are essential for the development of specific regions and cities in the country”, he warned. Heitor de Carvalho regrets that the National Bank of Angola has not shown interest in promoting the creation and strengthening of local banks, which he considers important for regional development.
Merge History
The history of bank mergers in Angola dates back to 1975, shortly after the country’s independence. The first major merger took place between Banco Totta & Açores and Banco Comercial de Angola, which resulted in the creation of Banco Totta & Açores de Angola.
In 1991, following economic reforms aimed at liberalizing the economy, Banco de Poupança e Crédito (BPC) and Banco People de Angola (BPA) merged.
Another important example is the merger of Banco Africao de Investimentos (BAI) and Banco Português do Atlântico (BPA) in 2001. This merger was part of a strategy to strengthen BAI, which became one of the largest private banks in Angola, with a strong presence in the market and an important role in financing large infrastructure projects in the country.
The last major merger to take place in the national financial market was that between Millennium Angola and Banco Atlântico, which gave rise to the new Millennium Atlântico. With the recent merger of Access Bank Angola and SCBA, Angola has seen a number of banking mergers, reflecting the market’s continued adaptation to the needs of a globalized and competitive economy.
By Francesca Parente
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