The Bank of Mozambique (BoM) acknowledged a worsening in non-performing loans (NPL) in national banking in the first half of the year, which went from moderate to high risk, according to information released on Tuesday, December 5.
In the Financial Stability Bulletin for the first half of the year, the BdM states that in June “credit risk remained at a moderate level, despite the worsening of the NPL in the first half of the year, which moved from moderate risk in December 2022 to high”.
“The maintenance of credit risk at the moderate level was favoured by the continued fall in the ratio of credit to the economy in relation to Gross Domestic Product (GDP) to negative levels, showing that this ratio remains below its long-term trend,” it reads.
According to the central bank, the ratio of NPLs to total credit granted rose at the end of the first half to 10.58 per cent, compared to 8.97 per cent in December. In June 2022, the NPL ratio was 10.02% and a year earlier it was 9.92%.
Last June, the banks’ NPL coverage ratio was 70.61 per cent, down from 71.84 per cent in December 2022, but up from 67.99 per cent a year ago.
Earlier this month, BdM governor Rogério Zandamela said that the national banking sector is “solid and well capitalised”, but warned that non-performing loans remain at high levels.
“The ratio of non-performing loans remains at relatively high levels,” he described, pointing out that it stood at 9.1 per cent of the total in September, compared to 9.3 per cent in the same month last year.