The world economy is living through a time of uncertainties. This year, those countries – including Angola – whose oil is their main export have suffered because of excessive exposure to the consequences of a near 50 percent fall in the price of the crude barrel. As a result, the Angolan economy now faces two scenarios: one of challenges and one of opportunities. After all, it is at times of crisis that economies reinvent themselves and market players tend to get more creative, building strategies that ensure greater sustainability and investing in innovation.
The main challenges faced by the Angolan economy concern the funding of a significant number of the programmes and projects that comprise the Angola National Development Plan (PND) 2013-2017. Once peace had been fully achieved in 2002, the government started financing a substantial part of the national reconstruction and infrastructure programme using funds from the oil sector. However, the fall in the price of oil and the slowdown in cash inflows have meant the country has had to cut back on public spending and prioritise its outgoings.
We participated as the financial advisor in the requalification of Luanda Bay – a strategic project for the country, particularly for the Angolan capital
Another challenge is related to the need to continue the work done through the programme to combat poverty, provide support to rural women, pursue the policy to build new homes and increase the level of schooling. There is also the ongoing concern to improve medical and medicinal assistance. The banks are going to face their biggest challenges through their work within communities and with the less well-off sections of society.
Emerging opportunities
Nevertheless, this has presented several opportunities in other sectors. The reduced cash flows on the country’s commercial balance sheet will allow Angola to implement a broadening of its tax base and, as a result, increase revenue through fiscal reform.
Besides this, Angola also has an opportunity to speed up its economic diversification policy and reduce its dependence on the oil sector. As a result, attention will now be turned to the agricultural and industrial sectors, which will both play a key role in increasing the revenue stream.
At the same time, this diversification will require a significant investment in human capital, particularly as regards the training of Angolan workforce. In such a context, the robust and dynamic leveraging provided by the banking system is all the more important, as it serves as a way of helping both entrepreneurs and companies face up to these new challenges.
Local market knowledge
Banco Privado Atlântico is one of Angola’s leading financial operators. Founded in 2006, we were the first bank in Angola offering an investment and relational banking product mix based on a high-level of financial expertise and in-depth local market knowledge. Our business model focuses on specialised services to corporate, private, affluent and emerging affluent clients. We aim to cover the segments most likely to benefit from Angola’s macroeconomic framework.
Headquartered in Luanda, we have created a significant footprint in Angola since the bank was founded. We operate through a network of 60 branches and corporate business centres – aiming to reach 70 by the end of 2015. Our customer base consists of more than 153,000 clients. We have hired highly talented and skilful personnel from the major financial markets and currently have a team of 814 employees.
For us, being a major player in the Angolan financial service sector and, simultaneously, maintaining a consolidated international presence means: being a leader in innovative customer services; maintaining continuous staff training and development; making a strong commitment to create value for our shareholders; and being a player in Angola’s sustainable economic growth.
Over the nine years since the bank was founded, we have experienced positive growth. We began operating with $35.1m in assets. In less than a decade, the results reveal a successful strategy: in 2014, assets reached $3.65bn, operating income amounted to $81.8m and net profits totalled $62m, representing a return-on-equity of 15.1 percent and a cost-to-income ratio of 58 percent. In keeping with our continuously improving performance, at the end of first quarter of 2015, assets reached $3.93bn, operating income was $68m and net profit was $25m (see Fig. 1).
Consequent to this significant growth, we are now the fifth largest financial institution in Angola by assets and deposits, according to the Angolan Banking Ranking compiled yearly by Deloitte. In terms of loans, we have a consolidated position making us the fourth largest Angolan bank in the banking sector (in a universe of 24 banks). We attained these results through our strategy of being a financial institution committed to sustainable development and value creation for the Angolan economy. Guided by this goal and supported by the fast growth of Angola’s GDP, we have been in the forefront of financing extensive public infrastructures, of establishment PPPs and of supporting business growth in the private sector. Thus, in nearly a decade of activity, we have gained a position in the frontline, both in Angola and internationally, consolidating our expertise in a wide range of diverse banking operation areas.
Investment projects
We are committed to being a catalyst for Angola’s development and, at the same time, also a financial and technical partner for investors by providing a range of solutions allowing them to benefit from investment banking services, structuring investment projects and also from corporate advisory throughout the whole investment cycle. From the beginning, we have been supporting the task of redefining and improving management practices, as well as implementing investment projects. These tasks have been carried out by structuring funding models for companies and by providing services to support development in various areas, such as infrastructures, agro-industry, manufacturing industry, transport and others.
We have gained expertise in several fields through our experience in investment banking and follow a different approach tailored to each market segment, always aware of diverse customer needs and constraints. As an example, we tailor our services to the type of organisation we are dealing with, whether it is the central government, public companies or local administration departments. In the private sector, we deem it important to be the financial advisory for private equity houses, sovereign funds or infrastructure funds, as it helps multinationals, large companies and small- and medium-sized companies, or even high-net-worth individuals and family offices.
We have not only the financial expertise to ensure excellence in our approach to the submitted project, but also knowledge of the local market, which is essential for the success of the respective projects. As an example, in 2012 we participated as the financial advisor in the requalification of Luanda Bay – a strategic project for the country, particularly for the Angolan capital. Additionally, also in 2012 and in keeping with our innovative and pioneer profile, we led the first subordinated bond issue in Angola made by an Angolan bank.
Our investment banking team has its decision centre and base structure in Angola but also includes an international network and members based in Banco Privado Atlântico Europa, in Lisbon. Banco Privado Atlântico Europa was founded in 2009, as the first step of our internationalisation strategy. The goal was to streamline the Portuguese and Angolan corporate structure, as well as their respective partnerships by providing relationship and investment banking services.
Therefore, we are able to embrace and cover any geographical segment, in terms of implementation of mandates. Moreover, we have taken on the role of a financial partner that supports trade and financial flows to and from Angola, focusing on the regions with the closest links to the country. We have been developing a solid relationship network through partnerships with key financial institutions in Africa, Europe, America and Asia. This year, the group is expanding its international presence to Namibia and Mozambique.
Financial performance
In the corporate finance business segment, our financial advisory services help companies and » institutions grow, both in the private and public sectors and in a broad range of business areas. One of these services is consultancy for mergers, acquisitions and joint ventures by assisting the client in all process stages. This includes services such as identifying a purchasing or merging target, support to negotiations, operational design, and coordination with external consultants and other parties involved in the transaction. We also play a key role in company restructuring processes arising from either over-indebtedness or the need to adjust to a new business paradigm.
In privatisation situations, we coordinate the sale of public sector companies to private institutions and investors, aligned with their business diversification and growth strategies, providing assistance for structuring, organising and managing the sale process.
As an investment bank with a wide range of products and services, we play a major role in structured finance. In this field, we have consolidated expertise for defining and implementing the different structures of highly complex financial services and products and also the capacity to provide financing. Whether as an advisor or lender, we may operate alone or in partnership with national or international entities that may contribute with recognised added value in the different operations in which we participate.
Consequently, we provide project finance and PPP structuring services, in order to obtain and place non-recourse financing, with resources in cash flows generated by the project and with the possibility to syndicate a loan facility. Typically, these types of operations are carried out in the infrastructure sectors, such as water, sewerage, energy production and transport, waste collection and treatment or transports.
In leverage and acquisition finance, we also substantially support investors in their specific expansion processes or in their investments in the capital of companies. Normally, this support consists of guidance and structuring of non-recourse financing for the acquisition of companies, with a possibility of underwriting, where the reimbursement of the debt depends on the performance of the purchased company and the cash flows generated by it.
In the capital markets area, we are seen as a pioneer and innovator in the local market. With the launch of the stock exchange (BODIVA) in Angola towards the end of 2014, we have a strong foothold to leverage our position as a key player in this newly developing market, which will be an important alternative means of financing the economy.
We act in the arrangement and placement of corporate bond issues, and have structured and placed Angola’s first corporate bond issue. We also have expertise in sovereign and public finance structuring, and in the arrangement and placement of sovereign bond issues.
In equity, we carry out structuring, arrangement and placement of securities in regulated markets, including initial public offers, secondary share offers, public takeover bids and private placements, and fixed income investments.
Striking partnerships
We have a shareholding structure of reference with a strong base of Angolan capital and the participation of leading companies in this activity sector, such as Millennium BCP Group, the owner of, among other institutions, the largest Portuguese private bank.
We have a wide network of international contacts and relations established with institutions of various types of profiles, through which it is possible to establish business partnerships when our in-house expertise needs to be complemented. We work with international investments banks based in London, New York, Sao Paulo and Johannesburg, with commercial banks, with Angolan or foreign financial advisors, M&A boutiques and the ‘Big 4’ consulting firms. We also work with Angolan and foreign law firms on a regular basis, including the main international offices and institutional investors.
Banco Privado Atlântico was founded with a corporate social responsibility policy as part of its development strategy. In 2008, we created the LOGOS project, which aims to increase the quality of life of the most disadvantaged communities and children, through support based on psycho-pedagogical programmes in sports, education, arts and cultural areas. Currently, the project assists more than 4,000 participants ranging from six to 18 years of age. In 2015, we aim to support over 5,000 Angolan children in all the 18 provinces of the country.
At the same time, we have always focused on improving the financial literacy of Angola’s population, an interest shared with the Angolan Government. Angola’s rapid economic and social development has boosted a huge evolution in several contexts; including the way Angolans address available banking services and products. Therefore, we continuously create campaigns and tools to help and support the population’s financial literacy needs.
