Angola has introduced tougher regulations for banks on ownership disclosure, auditing and risk management, responding to international calls for increased transparency and supervision in the oil-rich country's booming financial sector.
Riding on the coat-tails of an oil boom - Angola is Africa's No 2 crude producer - the country's banking sector has posted rapid growth in the last decade and attracted foreign players. However, the expansion has raised questions about transparency, an area in which rights groups and international organisations have urged Angola to improve its record.
The new regulations, issued by the central bank, come in response to recommendations from the IMF and the World Bank, a senior executive in the sector told Reuters. "This will help reduce questions about transparency in the sector and strengthen the central bank's supervisory capacity," said Joao Fonseca, executive director at Banco Angolano de Investimentos, the top bank in terms of assets.
Angola's banking market is dominated by five banks, including units of Portugal's Banco BPI and BES . But with deposits rising by a third and assets by a fifth in 2011, overseas players such as Standard Bank and Russia's VTB are expanding their presence. Under the wide-ranging new corporate governance code, banks will have to publish information about their shareholding structures, including details about who owns direct and indirect stakes. Rights groups have criticised opaqueness in a system in which large stakes are owned by secretive offshore companies.
If an Angolan bank opts to have non-executive directors on its board, it must also appoint an executive board to handle day-to-day management in a transparent and responsible manner and one independent board member to oversee it. "The rules are very demanding and will require banks to strengthen management capacity," Fonseca said, adding that the deadline for implementation by the end of 2014 had been agreed with the sector association ABANC.
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