Millennium bim, one of Mozambique’s largest commercial banks, has decided to suspend the distribution of dividends from its 2024 profits, opting instead to strengthen its capital reserves following the downgrade of the country’s sovereign debt.
The decision came just days after credit rating agency Standard & Poor’s downgraded Mozambique’s debt rating from CCC- to SD (Selective Default), following a domestic debt swap operation.
Initially, the bank’s board of directors, controlled by the Portuguese group Millennium BCP, had proposed distributing 13.8 million US dollars (992.6 million meticals), equivalent to 30% of the profits. However, the general assembly held on March 31 approved the proposal to retain the entire 2024 earnings to strengthen the balance sheet and ensure the institution’s financial soundness.
In 2024, Millennium bim’s net profits fell by 54%, amounting to 46 million US dollars (3.3 billion meticals), compared to 100.4 million US dollars (7.2 billion meticals) recorded in the previous fiscal year. The drop was mainly driven by an increase in impairments and provisions.
The bank allocated 15% of its net profits to legal reserves and 85% to free reserves, as part of a strategy to strengthen its capital base.
Despite the decline in profits, Millennium bim saw its solvency ratio rise to 36.7%, well above the regulatory minimum of 12%, reflecting the bank’s resilience.
In terms of its balance sheet, total assets grew by 6.1% to 2.8 billion US dollars (202 billion meticals), while customer deposits increased by 7.1%, reaching 2.2 billion US dollars (156.8 billion meticals). Net loans to customers rose by 2.2%, standing at 629 million US dollars (45.2 billion meticals).
Net credit impairments rose to 2.5 million US dollars (178 million meticals), reflecting lower credit recoveries compared to 2023.
Millennium bim’s equity fell by 6.3%, reaching 481.8 million US dollars (34.6 billion meticals), impacted by the distribution of dividends from 2023 profits and the decline in earnings in 2024.
Founded in 1995, Millennium bim ended the year with over 2.1 million clients, 195 branches, and 2,625 employees.
As of December 31, 2024, the bank’s share capital amounted to 62.6 million US dollars (4.5 billion meticals), with BCP África holding 66.69% of the capital, followed by the State of Mozambique, the National Institute of Social Security, and the Mozambican Insurance Company.
