Bringing confidence to investors

The EspÌrito Santo Group has interests in Portugal, Europe, Brazil, Angola and numerous other locations around the globe. As analysts predict real growth for Angola’s banking sector this year, World Finance speaks to the CEO of BESA ¡lvaro Sobrinho about the potential of emerging markets


An estimated 7.5 percent of Angola’s population now hold a bank account, compared to only four percent four years ago. Why did the Banco Espirito Santo (BES) Group decide to open a company in an emerging market like Angola?
The post-war period revealed to the world an emerging economy and prosperous market, appealing to foreign investment. Angola’s rising growth in the past few years has led to the consolidation of business structures, financial stability and increased consumption. Furthermore, Angola is historically linked to Portugal and Portuguese investment, sharing the same language and cultural roots.

These circumstances sustained the group’s investment in Angola and the response couldn’t be more successful, as the bank accounts rate increased and the private investment gained breath. We are proud to be a part of Angola’s economic and social maturation, and to contribute to the sustainable development of our country.

Do you think that Banco Espirito Santo Angola (BESA) creating an entirely new bank in the country has had a positive effect on its connections to the global banking markets?
Yes. BESA’s integration in an international group and openness to foreign investment and global markets convey competitive advantages, as Angola is currently one of the most attractive markets to foster investment. This has been one of the most important gears for economic growth and BESA is reinforcing its position as a renowned partner for international business.  

How has BES been recognised for its work in Angola as an emerging market?
BESA bank is recognised for both positive financial performance and a serious commitment towards the sustainable development of Angola. Since its foundation, BESA has assumed social responsibility as one of the main pillars of its strategy, to the extent that we believe economic growth must be accompanied by effective measures for environmental preservation and social support, that only intertwined may ensure a better future for the country.

Financially speaking, the bank has been recognised by international and prestigious awards that honour and encourage us to move forward. Alongside the economic performance, we are proud to be one of the main allies of UNESCO on the promotion of sustainable development, as we were honourably nominated “Official Bank of Planet Earth”, by Planet Earth Institute of UNESCO for the next ten years.

Oil is the backbone of the Angolan economy, with oil production and its supporting activities making up around 55 percent of Angola’s GDP; what other investment opportunities are available to investors in the country?
It’s undeniable that oil has a major importance in the Angolan economy but as the economy stabilises and growth increases, they make room for diversification of production, economic decentralisation and a rise in consumption. The consolidation of important areas such as construction, health, education and the proliferation of tertiary services are triggering new and profitable investment opportunities.

And this is a tendency that will blossom in the following years, creating numerous and advantageous prospects for investors.

Angola’s economy is still deeply dependent on the oil sector, do you think it is necessary to develop industry in order to diversify Angola’s GDP structure and increase the domestic production rate?
The path to progress comprises diverse variables. In order to support growth and development not only should domestic production rate be encouraged, but also services, modern agriculture and basic infrastructures. A modern country and society can’t be anchored on specific sectors of economy, regardless of its worth. We want to grow on all social and economic spheres, and, as I mentioned before, this is currently a reality in Angola, that will only grow in the next few years.

Angola is becoming internationally recognised as one of Africa’s major centres of foreign investment, economic growth, and social development. What is Angola doing as a country to attract and retain foreign investment?
According to the International Monetary Fund (IMF), Angola’s GDP grew by over 20 percent in 2007, making it the second fastest growing economy in Africa and the fourth fastest in the world.

Its prime geographic location on the Atlantic Ocean and its abundant natural and economic development policies focused on private investment appeal to foreign investment.

How do you see Angola’s future in terms of foreign investment?
The State Budget predicts a growth of about 8.5 percent for 2010 and the IMF is more optimistic and predicts a growth of 10 percent. With these scenarios, we can be confident that GDP growth will positively affect the overall economy. Angola has still a wide scope for evolution and consolidation. 2009 was a tough year for the world economy, and Angola was not an exception. But 2010 brings new impetus for investment, market resumption and business development, which will definitely project Angola as one of the most attractive economies for foreign investment.

How has BESA succeeded in attracting some of Angola’s larger companies, giving you a difference clientele than the countries other new banks?
The services provided by BESA are based on a highly personalised relationship with customers. We provide financial advice through a team of highly qualified professionals. With high knowledge on financial market and close attention to the best investment opportunities in accordance with the international context and global economic outlook, these analysts draw up unique strategies to each client.

This costumed and closed client approach strategy has become a competitive advantage for BESA and is highly well accepted by our costumers, making us worthy of their trust and reliance.

How key is the banking sector for the sustainability of the country’s economy?
Financial intermediation is considered the “backbone” of the modern economy, as the financial system has an important role on mobilising and directing resources to productive projects, enabling both investment and productivity increase. An efficient financial system is essential for sustained economic growth. In fact, the contribution of a diverse and modern banking system drives development and if there is a healthy financial system, the circuit savings/ investment/economic growth develops naturally.

The development of the Angolan financial market has experienced successive amendments to its modernisation and adaptation to international financial standards on the one hand, and to meet the requirements that characterise the transition to a market economy, on the other hand. And this shift was crucial on the present economic development. Now, it is important to stabilise and consolidate the financial system, bringing confidence and optimism to investors.

Why do you think BESA is currently one of the most solid and stable banks in Angola?
BESA has positioned itself as the universal bank of reference in the Angolan market, especially to maintain the best levels of profitability and efficiency along with projecting an image of strength, confidence and excellent service to clients.

BESA’s strategy is based on the constant and sustained strengthening of its competitive position in the market, with total respect for the interests and welfare of its customers and employees. Being constantly attentive to the needs of its customers, the bank continuously promotes the development of new products and a wide coverage of the territory by bank branches.

How do you think the company has performed since BESA was first founded in 2001?
Since its foundation, BESA has developed a solid strategy and market approach as a pioneer in the country. From its international integration to its profound knowledge of the Angolan market and its needs, BESA stands out for its credibility, solidness and client care.

Our performance has been increasing year on year, maintaining high rates of profitability and efficiency. We are investing in technological modernisation and better client service, improving excellence and expertise; growing our branches to reach more and more clients. Angola’s fast growth must be sustained on a solid banking and financial system and BESA wants to take part on that development, growing and helping the country to grow.

Now, we are raising the bar and aiming higher as the first consolidated financial group with the diversification of services and inclusion of new business areas for better service, greater value and the overall interest of Angola.

It has been predicted that Angola’s banking system will experience tremendous growth throughout the year. In your opinion, do you think this is a likely forecast?
Yes, certainly. As you mentioned, the population now holding a bank account in Angola has grown significantly in the last few years, but there is still a long way to go. With the rise of investment, employment, business dynamics and consumption, banking will assume an increasing importance on economic and social development, in the way that we are obliged to support that growth and provide the proper financial instruments to a modern and sustainable economy. As the economy grows, banking grows – creating a cycle of progress and modernisation.  

How important is it to BESA that you support local projects and sustainable development in Angola?
The rapid economic development of Angola in the recent years has led to important social and environmental changes that have raised new challenges and responsibilities. These factors show up the continent’s vulnerability to climate change and environmental problems, as a result of the current unsustainable management of natural resources. As a financial institution, BESA has, from the beginning, assumed a compromise not only towards sustainable economic growth but also educational support, cultural preservation and environmental protection.

This is one of the most important pillars of our strategy. We believe that a healthy, long-term development must be based on solid foundations and built from the combined effort of different actors, whether governmental and non-governmental entities, companies or each one of us, individually.

How will BESA play a part in organising the African Forum for Sustainable Development, which is to be held in Luanda, Angola, in 2010?
BESA is the official partner of the Angolan Ministry of Environment on the organisation of first African Forum for Sustainable Development, which will gather high representatives from all African states with the purpose of defining concrete measures to a sustainability strategy at a global scale.

We believe that effective solutions for change can only emerge from the international agreement and the mobilisation of different countries for a common goal. And thus contribute decisively in the implementation of effective measures to address the African continent challenges and define a mutual strategy towards a more sustainable and responsible society.

In the future, how does BESA plan to grow as a financial group in the continent, and how do you plan on boosting your presence in the Angolan market specifically?
Banco Espirito Santo Angola is at an expansive phase, aiming to consolidate our position as a financial reference group in Angola. Currently we have 31 branches, 21 of them in Luanda and our growth strategy foresees that by the end of 2010 we will reach 53 branches across the country. This will mean more jobs, greater geographic coverage and provide better service to our customers.

At the beginning of the year, we launched a new business area dedicated to the management of pension funds and will aim at extending the business areas of the BESA areas of leasing and investment banking.

Furthermore we will invest in excellence service to our customers through personalisation and closer contact with these and affixed to the direct channels, namely the dynamisation of Internet Banking (BESAnet.)