VZCZCXRO0112
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHLU #0763 2041614
ZNR UUUUU ZZH
R 231614Z JUL 07
FM AMEMBASSY LUANDA
TO RUEHC/SECSTATE WASHDC 4191
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHHK/AMCONSUL HONG KONG 0005

UNCLAS LUANDA 000763 
 
SIPDIS 
 
STATE FOR AF/S 
JOHANNESBURG FOR USFCS 
CAPETOWN FOR USFCS 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958 
TAGS: EFIN ECON SNAR AO
SUBJECT: ANGOLA'S EXPANDING BANKING SECTOR 
 
 
¶1. (SBU) Summary.  The Angolan banking sector continues its rapid 
growth with two new Angolan-owned banks opening in June, bringing 
the total number of banks to seventeen, a thirty-five percent 
increase over two years ago.  In addition, Angola's Banco BIC will 
expand to open a new Portuguese bank.  The Angolan banking sector is 
also expanding to the provinces but the range and quality of 
services is limited.  End Summary. 
 
President's Daughter Expands into Portuguese Banking 
--------------------------------------------- ------- 
¶2. (SBU) According to the Portuguese newspaper, Diario de Noticias, 
Isabel dos Santos, daughter of Angolan President Jose Eduardo dos 
Santos, and Americo Amorim of the Portuguese Amorim Group have 
received approval by the Portuguese Central Bank to open a bank in 
Portugal.  The bank, Banco Bic, will operate as a branch office of 
the Angolan Banco Bic, but will in fact be incorporated in Portugal. 
Isabel dos Santos and Amorim are also the principal shareholders in 
Angola's International Bank of Credit, Banco (BIC), which in two 
years has become Angola's third largest bank. Isabel dos Santos and 
Amorim are the major shareholders of the Portuguese Banco Bic and 
have already announced that Mira Amaral, a former Portuguese 
Minister of Finance, will serve as CEO of the Bank.  Isabel dos 
Santos and Amorim are partners in many Angolan businesses, from 
banking to cement manufacturing, and are also starting up an 
insurance company. 
 
Fininbanco 
---------- 
¶3. (U) The Portuguese Bank Finibanco announced on June 14 that it 
had received approval from the Angolan Council of Ministers to 
establish a bank.  Finibanco Angola will have starting capital of 
USD 10 million.  Finibanco-Holding owns 60 percent of the shares; 
the Portuguese group Iberpartners 7.5 percent, and Angolan private 
businesses 32.5 percent.  Finibanco Angola will be an investment 
bank offering corporate and asset management services. 
 
BANC Bank 
--------- 
¶3. (SBU) The new Angolan Bank of Trade and Business (BANC) opened 
its doors on June 15.  BANC started with USD 5 million in 
capitalization and aims to be a new strategic partner in countries 
such as Portugal, Brazil and Spain.  Stanley Ho's Geocapital was 
slated to go in with a fifty percent stake but pulled out of the 
deal at the last minute.  (Note:  Stanley Ho is a prominent Macau 
businessman whose properties include, among others, Macau's Lisboa 
Hotel and Casino and the Emperor casino in North Korea's 
Rajin-Sanbon Special Economic Zone.  End note.)  The bank now plans 
to sell 40 percent of its shares to an unidentified international 
partner.  However, rumors identify Minister of Finance Jose Pedro de 
Morais as both the new Bank's landlord and a principal shareholder. 
Note: Angola has no conflict of interest statutes or regulations in 
place. End note. 
 
How much growth is too much growth? 
----------------------------------- 
¶4.  (SBU) While the banking system is holding USD 10 billion in 
deposits, according to the government-owned Jornal de Angola, the 
banking system is only offering 40 percent of that in credit. 
Speaking at the inauguration of BANC, Deputy Prime Minister 
Aguinaldo Jaime gave a much lower figure of three percent.  The new 
Angolan banks appear to be looking to overseas investments in order 
to offer their depositors some return on their money. 
 
¶5. (SBU) Comment:  Angola's banking sector is expanding by leaps and 
bounds, the number of banks growing by one-third from 2005 to July 
¶2007.  Still, the range of banking services is weak and customer 
service even weaker.  Looking at the phenomenal rise of Banco BIC, 
it is easy to assume that clients moved their business to BIC to 
support the President's daughter.  While probably true, industry 
insiders also credit Banco Bic's success to management's hiring 
top-notch bankers, offering a wider range of banking services and 
providing better service delivery through an expanded network of 
retail branches sprouting up around the countryside.  It is 
difficult to say for how long the sector can support this 
accelerated level of growth; Angola's dearth of skilled labor will 
certainly hamper provincial expansion.  Sector experts expect that 
the next step will be mergers and acquisitions within the current 
pool.  However, for banks to play a greater role in the country's 
economic development further reform of the financial sector will be 
necessary. 
FERNANDEZ