Commercial banks operating in Mozambique performed well in 2018, with profits rising by 28% from 13.4 billion meticais in 2017 to about 17.2 billion meticais, according to a study released in Maputo by KPMG Auditors and Consultants.

The study, conducted in partnership with the Mozambican Banking Association, reveals that cost containment, stable inflation, reduced deposit accounts and high net interest margins are among the factors that positively influenced the performance of the banking sector in that year.

The document, quoted by Mozambican newspaper O País, showed that the number of banks with negative results improved compared to 2017, and of the 19 institutions analysed, only five closed 2018 “in the red,” two fewer than in the previous year.

Société Générale Moçambique, First National Bank Moçambique, Banco Terra, Banco Mais and Moza Banco are the five banks that posted losses in 2018.

The recorded loss improved, as in 2017 it was 2.5 billion meticais, which according to the study shows, “that the profitability of the sector as a whole proved to be more solid compared to the previous period.”

Millennium bim was the bank with the highest profits in 2018, with 6.3 billion meticais, followed by Standard Bank with 5.5 billion meticais and Banco Comercial e de Investimentos (BCI) with over 4 billion meticais.

Total bank deposits rose by 11% in 2018 from 374 billion meticais in 2017 to 416 billion due to the increase in money supply as Mozambique’s economy grew by only 3.5% and the metical depreciated against the dollar.

The document also reports that credit overdue for more than 90 days or non-performing loans registered an annual increase of 16%, from 18.6 billion meticais in 2017 to 21.5 billion meticais in 2018.