Fitch assigns Banco Angolano B

Fitch Ratings said it assigned Banco Angolano de Investimentos a long-term issuer default rating of B. The outlook is negative.

The bank's IDR reflects a limited probability of support from the Angolan authorities. According to Fitch’s criteria, ratings of domestic systemically important banks in countries where support propensity is high are typically equalized with sovereign ratings in the B category. “In our view, the authorities' propensity to support the bank is high but their ability to do so is limited, as indicated by the sovereign's long-term foreign-currency IDR (B negative), Fitch said in a press release.

Fitch believes the sovereign has a reasonable propensity to support the bank and the sector in foreign currency because a high proportion of foreign currency deposits held in the banks are from the public sector and strategic oil-related segment.

The government's ability to provide foreign currency support to the bank, and more broadly to the banking sector, is also reasonable for the sovereign's current rating. The size of the banking sector is low in relation to GDP (at around 35%), dollarization in the sector has been declining and the sovereign's foreign currency reserves are still sizeable relative to the banking sector's foreign currency liabilities, Fitch said.

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