Angolan Bank Profits, Sovereign Debt and Credit to Business

What drives Angolan bank profits

The earnings story is straightforward once you see the components.

Sector net profit expanded 82% in 2024 to around Kz 905,6 billion. Momentum carried into 2025: commercial bank profits jumped 63% in the first half alone, to Kz 539,3 billion.

A note on the 2025 total. Published figures diverge. The BNA's annual report puts sector profit at roughly Kz 951 billion. Analysis covering the 19 banks that published accounts arrives at a figure above Kz 1 trillion, which is where the widely quoted "one trillion kwanza" milestone comes from. The difference is which institutions are counted and on what basis. Both show strong growth; the headline number depends on the source you cite.

Three drivers account for most of it.

Interest income from treasury securities, which grew around 25% in 2024. This is the largest single contributor and the reason the rest of this page matters.

Foreign exchange and trade finance, up roughly 65% in 2024 and reaching about Kz 429,3 billion in 2025. In a market with a managed exchange rate, a persistent parallel premium and restricted access to hard currency, intermediating foreign exchange is highly profitable.

Fee income, up around 41%, reflecting the migration of transaction volume onto digital channels.

Profitability is heavily concentrated. Five institutions — BFA, BAI, Standard Bank Angola, BPC and Banco Keve — accounted for between 75% and 78% of all commercial banking profit.

Banks hold more government debt than private loans

Here is the structural fact.

Commercial bank holdings of government treasury debt reached approximately Kz 9,1 trillion in 2025, up 22% year on year, representing between 32% and 35% of total bank assets. In the first half of 2025 alone those holdings grew 21%.

Total credit to the economy stood at roughly Kz 6,8 trillion in 2025, rising to somewhere around Kz 7,4 trillion by mid-2026. So the banking system has lent the government over Kz 2 trillion more than it has lent to every private business and household in the country combined.

The credit transformation ratio — loans as a share of customer deposits — sits between roughly 31% and 45%. For every kwanza deposited, well under half comes back out as a loan.

Private credit represents under 9% of Angolan GDP. Across sub-Saharan Africa the figure is above 25%.

At the individual bank level the pattern is visible but not uniform. BFA holds around Kz 2,05 trillion in government securities against roughly Kz 875 billion in credit to customers — more than twice as much lent to the state as to the economy. BAI holds a comparable sovereign portfolio, but has been moving the other way, growing its credit book 45% year on year to about Kz 1,37 trillion. Standard Bank increased treasury holdings by around 123% in a year. (Published figures differ on which of BAI and BFA currently holds the larger sovereign portfolio, and the ranking moves between quarters.)

Why banks prefer government debt to business lending

It is worth being clear that this behaviour is rational rather than negligent.

Government securities carry a zero risk weighting for capital purposes, are liquid, and have been paying high yields in a high-rate environment. Lending to an Angolan business means credit risk in a market where around one loan in six is non-performing, weak collateral enforcement, and borrowers exposed to currency and commodity cycles.

Supply matters too. The government has been issuing heavily — around Kz 1,7 trillion in the primary market in the first half of 2025, 26% more than the year before. The paper is there, and the banks buy it.

The consequence is crowding out. Public borrowing absorbs the liquidity that might otherwise finance private investment, and the financial system ends up funding the state rather than growth. It is the single largest structural constraint on Angola's diversification agenda, and it cannot be resolved by the banking sector alone.

The BNA's mandatory lending rules

Faced with an incentive problem it could not remove, the central bank imposed quotas.

Aviso n.º 10/2024 — credit to the real economy

Commercial banks must allocate at least 2,5% of total net assets to financing priority productive sectors: agriculture, manufacturing, livestock, fisheries, healthcare, pharmaceuticals and associated logistics.

Pricing is capped. Total credit cost, interest plus commissions, cannot exceed 7,5% per year for long-term investment and 10% for working capital and raw material purchases — well below prevailing market rates.

The incentive is a reserve offset: banks can deduct up to 80% of eligible disbursements from the mandatory reserves they hold at the BNA, which makes compliance considerably cheaper than it first appears. Operations under the Aviso have come to represent around 81,7% of all real-economy credit in the system.

Aviso n.º 09/2024 — housing and construction

A parallel subsidised regime for residential mortgages, housing construction and tourism infrastructure, with total interest capped at 7% per year and the same 80% reserve deduction mechanism.

Do the mandatory quotas work?

Partially, and it is worth being honest about the limits. Mandated lending at capped rates directs credit that would not otherwise flow, and the reserve offset makes participation attractive rather than purely punitive. But a 2,5% quota against net assets is modest set against a sector holding 35% of assets in government paper. Administrative allocation can move volume; it does not change the underlying risk-return calculation that produced the imbalance.

The more durable fix would be a sovereign issuance path that competes less aggressively for bank liquidity, alongside credit infrastructure — collateral registries, enforcement, credit information — that makes private lending less risky. Neither is in the BNA's gift alone.

Bad loans fell in 2025 but are rising again in 2026

The bad loan story has a turn in it that most coverage has missed.

The long trend is genuinely good. Non-performing loans peaked at 34,5% of gross credit in June 2019. By December 2023 the ratio was 15,6%.

Then it worsened. It rose to 19,2% by December 2024, and the cause is instructive: the BNA's own tightening. Two policy rate increases in March and May 2024, combined with a suspension of central bank lending to commercial banks, pushed banks into the interbank market. Overnight Luibor went from 4,00% to a record 32,6% in early September 2024, closing December at 22,7%. Loan repayments rose steeply and borrowers defaulted. The monetary response to inflation created the bad debt.

Through 2025 the ratio came down again, to 15,78% by December on the BNA's measure — achieved through write-offs of legacy exposures, IFRS 9 provisioning, transfers to Recredit and a growing loan base.

But it has started rising again. In the first quarter of 2026 the ratio increased 0,4 percentage points to 16,2%. Gross credit stood at Kz 9,5 trillion in March, of which just over Kz 1,5 trillion was non-performing — an increase of Kz 87 billion since December.

What makes this notable is the context. It is happening while the economy grows, inflation falls sharply and the BNA eases policy. Deteriorating asset quality in improving conditions is not what you would expect, and it suggests the 2025 improvement owed more to balance sheet management than to underlying borrower health.

Provision coverage remains strong across major banks, and Recredit continues to recover — Kz 28,19 billion in the first half of 2026, 94% of its full-year target. But the direction of the headline ratio is the thing to watch, not the level.

BODIVA is almost entirely a government bond market

Angola's exchange reflects the same imbalance.

Over 99,9% of trading volume on BODIVA consists of public debt. Non-adjustable treasury bonds account for around 77,6% of volume, foreign currency treasury bonds about 17,1%, and treasury bills roughly 4,6%. The repurchase agreement market is the largest single segment, reaching about Kz 2,38 trillion in the first half of 2026 — banks swapping government bonds for short-term liquidity.

The equity segment is small but no longer negligible. Market capitalisation reached around Kz 4,09 trillion, roughly USD 4,5 billion, with five listed entities: BAI, BCGA, BFA, ENSA and BODIVA itself. BFA's September 2025 IPO raised about Kz 220,9 billion and was the largest operation in the market's history.

Five listings is a small equity market. It is also five more than existed a few years ago, and the demand at the BFA and ENSA offerings suggests domestic appetite is real. Further PROPRIV listings, including the state's Standard Bank Angola stake, would deepen it.

Four things to watch next

Whether the NPL ratio keeps climbing. A second and third consecutive quarterly increase would mean the 2025 improvement was cosmetic.

Government issuance. Bank appetite for private credit will not change materially while the state is offering high-yield, zero-risk-weight paper in volume.

Whether BAI's shift is copied. One large bank growing its loan book 45% while holding sovereign exposure flat is a data point. Two would be a trend.

The equity market. More listings would give banks and savers an alternative to treasury paper, and would be the slowest but most durable route out of the current pattern.