Angola: Banks appeal to government for bailout package
Banks called for bailout packages as oil slumps cut liquidity.The chairman of the Association of Angolan Banks, Amilcar Silva in an interview in Luanda called on the Angolan government to organize a bailout package for banks in order to preserve account holders following a consistent fall in oil prices. "Banks must be helped because they have liquidity problems that can cause negative situations in the whole system, putting its credibility at stake. What we need to do is look at the matter in-depth and then decide the best way," Silva said. According to Angola's Central Bank financial stability report, almost half of the nation's banks would fail a stress test of holding 10 percent capital reserves if their loan book was lowered by two notches out of the seven risk levels. The report also made it known that risk adjustment will reduce the banking industry's 141.3 billion kwanzas net profit to a loss of 413.7 billion kwanzas. Since mid-2014, falling oil prices have crippled Angola's economy, with a significant impact on
the banking sector. Non-performing loans have soared, tripling to 15 percent of total credit last September. Angola's kwanza also weakened 20 percent against the dollar in 2016. Oil revenues form the major source of revenue for Angola, and it is uncertain the Angolan government will be able to provide bailout package for the banks because of fall in oil prices.