Portuguese banks look to Africa

LISBON – Faced with declining room to grow at home, the three biggest Portuguese private banks are looking to developing markets in Eastern Europe and former Portuguese colonies in Africa for growth opportunities.

Last month, Millennium BCP, the biggest Portuguese listed bank, was shortlisted along with Austria’s Erste Bank in the race for the privatisation of the biggest Romanian bank, Banca Comerciala Romana (BCR). The Portuguese bank, which already controls a Polish bank, Bank Millennium, and Novabank of Greece, beat cash offers from five other European banks, including BNP Paribas of France and German bank Deutsche Bank.Millennium BCP’s chairman, Paulo Teixeira Pinto, said the bank wanted to ensure that at least one third of its revenues come from abroad by 2008, compared to some 10 per cent today.”We want Portugal to be proud of BCP but what there is to gain in the Portuguese market is not enough to give us a significant role in Europe,” he said in an interview with private television SIC last month.Portugal’s two other main private banks, Banco Espirito Santo (BES) and BPI, have focused on Africa, especially oil-rich Angola whose economy has been one of the world’s fastest growing since the end of a 27-year civil war in 2002.BPI’s unit in the country, Banco Fomento de Angola (BFA), plans to increase the number of its branches to 48 by the end of the year from the 40 it had at the end of September.BFA, in operation since 1990, is the market leader in Angola where it has over 200 000 clients but it is facing growing competition from Millenium BCP, which has three branches in the country and plans to open nine more next year.Millenium BCP’s banking unit in Mozambique, BIM, is the market leader in that former Portuguese African colony and the bank says it intends to become the leader in Angola too.BES meanwhile has six branches in Angola and plans to expand into the archipelago of Cape Verde, a former Portuguese colony off the coast of Senegal.The goal of the three banks is to seek markets where the banking sector is in the initial stages of development and retail lending is largely untapped, much like Portugal just a decade ago, where their experience should help.Analysts welcome the strategy, arguing expansion into fast growing markets will help Portuguese banks make up for sluggish economic growth at home.Angola, fuelled by rising oil exports, expects its gross domestic product (GDP) to expand by 15 per cent this year while Romania’s economic output is estimated to rise 5,5 per cent, one of Europe’s fastest rates.The Bank of Portugal predicts that by comparison the Portuguese economy will grow by just 0,3 per cent this year owing to falling investment and slow export growth.-Nampa-AFPThe Portuguese bank, which already controls a Polish bank, Bank Millennium, and Novabank of Greece, beat cash offers from five other European banks, including BNP Paribas of France and German bank Deutsche Bank.Millennium BCP’s chairman, Paulo Teixeira Pinto, said the bank wanted to ensure that at least one third of its revenues come from abroad by 2008, compared to some 10 per cent today.”We want Portugal to be proud of BCP but what there is to gain in the Portuguese market is not enough to give us a significant role in Europe,” he said in an interview with private television SIC last month.Portugal’s two other main private banks, Banco Espirito Santo (BES) and BPI, have focused on Africa, especially oil-rich Angola whose economy has been one of the world’s fastest growing since the end of a 27-year civil war in 2002.BPI’s unit in the country, Banco Fomento de Angola (BFA), plans to increase the number of its branches to 48 by the end of the year from the 40 it had at the end of September.BFA, in operation since 1990, is the market leader in Angola where it has over 200 000 clients but it is facing growing competition from Millenium BCP, which has three branches in the country and plans to open nine more next year.Millenium BCP’s banking unit in Mozambique, BIM, is the market leader in that former Portuguese African colony and the bank says it intends to become the leader in Angola too.BES meanwhile has six branches in Angola and plans to expand into the archipelago of Cape Verde, a former Portuguese colony off the coast of Senegal.The goal of the three banks is to seek markets where the banking sector is in the initial stages of development and retail lending is largely untapped, much like Portugal just a decade ago, where their experience should help.Analysts welcome the strategy, arguing expansion into fast growing markets will help Portuguese banks make up for sluggish economic growth at home.Angola, fuelled by rising oil exports, expects its gross domestic product (GDP) to expand by 15 per cent this year while Romania’s economic output is estimated to rise 5,5 per cent, one of Europe’s fastest rates.The Bank of Portugal predicts that by comparison the Portuguese economy will grow by just 0,3 per cent this year owing to falling investment and slow export growth.-Nampa-AFP