Friday, September 24, 2021

“Digitalisation and technological transformation are vital to BFA

Interview with Luís Roberto Gonçalves, CEO of Banco de Fomento Angola (BFA)

Ricardo David Lopes

The pandemic defined his first year in the leadership of the BFA Executive Commission, a situation he defined as “challenging” to which the Bank responded with “resilience and adaptation”. The priority attributed to digitalisation is to be strengthened this year in conjunction with the development of human capital and improving the efficiency of internal processes, said Luís Gonçalves, the first Angolan to lead BFA, a house that he knows very well after 27 years of employment there.

If you could summarise 2020 in just a few words, for the positive and the negative, which would you choose? Why?

For the negative, challenging; for the positive, I would consider resilience and adaptation. Covid-19 was completely unexpected, I would say it also caught us totally unprepared. In a country like mine – Angola -, where we have already experienced enormously challenging events, having to deal with a pandemic, with a major capacity for contagion and fatalities demands tremendous efforts, both financial and organisational. For the sake of all the challenges that we are going through, only with a great capacity for adaptation and a high ability for resilience would it have been possible, despite everything, to manage this crisis.

You’ve been serving as CEO for less than a year but know the “house” extremely well after many years of experience in the Bank. Is this experience across different internal areas bringing you added value for your management? In what sense?

There is no doubt that past experiences, whether intra-organisational or acquired elsewhere, all help immensely but do not account for everything. For senior management positions, and especially when dealing with an organisation such as BFA, there is a need to undertake the role in order to understand the scale of the challenge. Another aspect with a major impact on the performance of this function is the team that you’re working with and, in this facet, I may say that I have the good fortune and privilege to have at my side highly qualified professionals deeply committed to the Bank.

You’re the first Angolan national to run the bank. Did you think it was time BFA was led by national citizens?

I consider the quality of the people more important. In my opinion, the origins or nationality does not matter so much. In this field, the decisions taken by the shareholders have been extremely well targeted. Over the course of the 27 years of BFA operating, the Bank’s management teams have been of great quality and competence, which has reflected in the strong financial performances of the Bank. The BFA results are proof at this.

What balance would you make of the first year of your mandate?

Despite all the limitations and restrictions, I consider the first year of my BFA mandate as extremely stimulating and gratifying. I hope to continue contributing over the forthcoming years to the growth and expansion of this great institution whose cause has been my own since 1996.

What are the greatest priorities for the forthcoming years?

When you are in a Bank with the scale of BFA, the level of ambition is always extremely high, that is to guarantee that the Bank remains one of the largest in the system and recognised by its Clients as a core partner. For the next few years, we shall continue to implement the initiatives that are set out in our Strategic Plan that highlights the investment put into strengthening the internal competences of our human capital, improving the efficiency of internal processes, and greater proximity to our clients and partners.

In theory – as this depends on a shareholder decision –, a bank with the profile of BFA might be a candidate for listing on the stock market?

I would respond positively. BFA brings together the requirements so that, whenever its shareholders deem the moment opportune to disperse its capital on the stock market, this may happen successfully. However, I do not consider this urgent: BFA has a very solid shareholder structure and with which the management bodies maintain excellent relationships.

The results fell back in 2020 with provisions for credit imparities weighing negatively. Were the profits greatly below those expected?

The results were around 20% below those budgeted for. This reduction essentially corresponds to reinforcing the imparities for the Angolan state debt portfolio. In 2020, Angola saw its sovereign debt rating reviewed downwards by various international agencies, which resulted in a deterioration in the state’s credit position. In our case, this generated the need to strengthen the equivalent in kwanzas to US$ 70 million and that penalised the results.

“DESPITE ALL THE LIMITATIONS
AND RESTRICTIONS, I CONSIDER
THE FIRST YEAR OF MY BFA
MANDATE AS EXTREMELY
STIMULATING AND GRATIFYING.”

Will 2021 be any different in terms of bad loans and will the economic situation prevailing continue to hinder?

I am cautiously confident that 2021 may represent the beginning of a new cycle of Angolan economic growth. However, this growth is not going to have any immediate impact in terms of an upwards revision in the sovereign debt rating of Angola and, therefore, I consider that the levels of imparities for credit risks, especially those associated with the state, are going to remain high.

For the obvious pandemic reasons, remote working has gained greatly in prominence. How is BFA approaching this new reality?

When I indicated this as one of the positive aspects to adaptation, I was referring to our capacity to tailor our organisational and functional structure to the new context of the working regime imposed by the measures necessary to combatting Covid-19. Prior to the pandemic, we did not have members of staff working in shifts or working from home. Following the decreeing of the first state of emergency, we were confronted with the need to implement a procurement and distribution program for portable computers for our members of staff and incorporate our internal processes and systems in order to enable our operations to advance without major setbacks. Today, over one year later, I can affirm that we are capable of, first and foremost, protecting the health of our employees and their families and, secondly, guaranteeing the maintenance of the Bank’s operations with an appropriate level of service quality for all our clients. I believe that, even after this pandemic passes, remote working is going to continue to be important to our operations and life in the Bank.

“The BFA is a very dynamic player and one of the most relevant drivers of the capital matket in Angola”

BFA, especially through its asset management division, has taken a leading role in the capital markets even while still fairly limited in terms of the range of instruments available. What is your vision of the national capital markets, especially in the wake of the announcement of privatisations?

The capital market in Angola is making its own way and, in my perspective, in a very interesting way – the volume of business and the levels of liquidity on Bodiva demonstrate this. Now, there is a need to take the next steps. The privatisations program for public companies and the adjustments to the monetary and fiscal levels may provide the driver that is lacking for the next phase, which involved having corporate operations in the market. The BFA is a very dynamic ‘player’ and one of the most relevant drivers of the capital market in Angola. The founding of our asset division, BFA Gestão de Activos, which is a management company for collective investment entities, was more a stage in expanding our footprint in a market we believe is of great relevance to the country. In the capacity of consultant to client-companies interested in placing operations on the market, we are also developing initiatives that may leverage market growth.

Do you think we shall see listings on the stock market this year?

I don’t think it is very likely we get any flotations this year. My conviction would be that the first operations come about in 2022 or 2023.

Digitalisation is naturally one of the Bank’s investments. What is under preparation in this field?

The investments in digitalisation and technological transformation are vital to the ongoing development and competitiveness of the Bank. The technological developments, whether in terms of processes, or the means of reaching out to Clients, current and future, in formats other than the in-person, are going to significantly improve the banking experience and what both our teams and our clients feel in relation to the bank. In this field, we are developing various initiatives that range from improving the information technology infrastructure, replacing equipment and developing new solutions for clients. It is our expectation that through to the end of this year many of these shall be completed and the results already visible.

The BFA holds a very important role from the perspective of social responsibility in Angolan society. Which are the actions that you wish to develop?

Ever since its foundation, the BFA has supported various initiatives within the social field. In April 2005, the BFA Board of Directors, in reflection of the depth of its commitment to the economic and social development of Angola, approved the launching of a Social Fund, which currently redirects its investment exclusively towards ‘Children’, one of the most vulnerable groups in our society. The Bank understands that the development of children and young persons aged under 18 is critical to the future of the country and that, through support for initiatives and projects focusing on healthcare, education and social and financial inclusion, it is possible to improve the living conditions of families, guaranteeing their resilience, sustainability and faith in the future. This is the genuine commitment of the Bank to the society, institutions and citizens of Angola.

Would you like to highlight some initiatives?

There are countless initiatives receiving financial support from BFA but we might choose the following examples:

• +Saúde Huambo, a program that began in 2018 and supports the Central Hospital of Huambo in improving the conditions on the pediatric ward, including the acquisition of medication, materials and hospital equipment;

• BFA + Nutrir, which consists of support for the national program to counter infant malnutrition in Angola in partnership with UNICEF – the United Nations children’s agency;

• BFA + Água + Vida, which seeks to guarantee access to drinking water in 15 schools and communities in the municipality of Ombadja, ensuring the retention and performance of the children in the schools as well as improving the living conditions of their families. This initiative is under implementation in partnership with UNICEF and the provincial government of Cunene;

• The CAPRI project, supporting the empowerment of primary school teachers in the province of Luanda under the auspices of the Ministry of Education;

• The BFA Solidário program that supports nonprofit organisations acting in the sectors of education, health and fostering the social and financial inclusion of children and young persons.

These actions fall within the scope of a broad range of initiatives undertaken by BFA with the objective of assisting in improving the living conditions of Angolans.

Finally, we would also mention how, in 2020, we provided relevant support to the Government of Angola within the scope of its initiatives to combat and prevent Covid-19. 

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