Banking activity in the country grew significantly in the first half of 2024, with the sector’s total assets reaching 961.7 billion meticals (15 billion dollars), representing an increase of 8.4 per cent over the same period last year.
According to the financial stability bulletin released by the Bank of Mozambique (BoM), this performance was driven by the increase in investments in credit institutions and the appreciation of financial assets held for trading.
The report details that the growth in investments in credit institutions is the result of operations on the Interbank Money Market, purchases with a resale agreement and investments made in credit institutions abroad and in the institutions’ head offices.
On the other hand, the increase in financial assets held for trading reflects the positive dynamics of public debt securities. Despite this progress, the credit portfolio, which is a crucial element for the sector’s performance, contracted by 4.87 per cent in the first half of 2024, compared to the same period in 2023.
In the same period, the banking sector’s total liabilities grew by 8.72 per cent to 795.3 billion meticals. Deposits, which continue to be the main source of funding for banking activity, accounted for 82.69 per cent of total liabilities, although their weight fell slightly compared to the previous year.
In absolute terms, deposits grew by 10.64 per cent to 642.6 billion meticals, driven mainly by the evolution of deposits from residents, associated with a competitive dynamic in attracting funds.
The banking sector remained profitable and stable during the period under review, with adequate levels of capitalisation and liquidity. The overall solvency ratio stood at 26.33 per cent, significantly above the regulatory minimum of 12 per cent, demonstrating the financial institutions’ ability to withstand financial shocks and imbalances.
The report also emphasises that the positive evolution of public debt securities and operations in the interbank market contributed to the sector’s stability and growth, even in the face of a contraction in the credit portfolio.
The Bank of Mozambique concluded that the banking sector’s performance reflects its resilience and its central role in the national economy. However, it warns of the importance of effectively managing internal and external challenges in order to ensure continued growth and stability of the financial system in the future.
