Banking profitability in Cape Verde slowed in 2025, with a return on equity (ROE) of 18.08% before taxes, down from 18.52% the previous year, the Bank of Cape Verde (BCV) announced.
Nevertheless, 2025 was the second-best year for the indicator in the series that began in 2010, according to BCV data, as reported by Lusa.
Return on assets (ROA), which measures efficiency, stood at 1.94% before taxes in December 2025, also the second-best year for this indicator, surpassed only by the 1.96% recorded in 2024.
Net interest income continued to account for more than 80% of banking revenue, highlighting the importance of traditional intermediation activities.
At the same time, liquidity in the Cape Verdean banking system increased in 2025, with the ratio of liquid assets to total assets rising to a historic high of 28.30%, according to the central bank’s series beginning in 2010.
The indicators show an increase from 25% at the end of 2023 and 25.89% in December 2024, reflecting the ability to meet short-term obligations.
Meanwhile, the ratio of liquid assets to short-term liabilities reached 35.40%, another all-time high. In contrast, the transformation ratio (loans to deposits) fell to 52.19%, the lowest figure in the series.
The same banking sector indicators report shows that the sector’s solvency ratio rose to a record high of 24.82% in December 2025, and the non-performing loan ratio fell to 5.11%, one of the lowest levels on record.
Despite the improved strength of banking indicators, some international partners have warned of vulnerabilities linked to risks from state-owned enterprises and the fact that the economy is concentrated in a handful of sectors (tourism, construction, and trade) that are sensitive to external shocks.
The International Monetary Fund (IMF), the World Bank (WB), and the Budget Support Group (Luxembourg, Portugal, Spain, the European Union, the African Development Bank, and the WB itself) have advocated for economic diversification and public sector reforms.
Cape Verde has eight banks open to the public, four of which are “systemically important,” according to the BCV, meaning they are required to maintain a reserve to absorb any shocks.
Source: Lusa
