Angola Banking & Financial Services Q4 2018
Key View :
Despite its prospects improving this year, Angola's banking and financial services industry remains in its infancy. Theindustry's development has been held back by its exposure to the struggling oil sector and to corruption. Going forward, in terms ofits contribution to the overall economic output of the Angolan economy over the next five years, in USD terms, the size of the
Angolan banking and financial services sector as a whole is expected to grow by an average year-on-year increment of around 7.2%.The outlook for the sector for 2018 is better than 2017, given that global crude prices are trading higher and the newly electedAngolan president has so far demonstrated a greater commitment to reform and tackling corruption than many expected. Positivecontributions so far have seen the amendment of Angola's exchange rate regime, which will ease FX liquidity and bring much reliefto the domestic banking sector, as well as the February 2018 announcement that the selling of a minority share in AngolaTelecom (the state-owned telecoms company) would most likely be the Angolan bourse's first IPO. While the overall outlook hasimproved, we caution that longer-term growth opportunities within the commercial banking (which is the most developed of thefour sectors on a comparative basis), insurance and asset management sectors will likely be significantly limited until their exposureto the oil sector is reduced. Furthermore, other pertinent structural barriers are hindering growth opportunities within these sectors.
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