What is the background of Banco BiG Mozambique?
The main shareholder of BiG Moçambique is Banco de Investimento Global, headquartered in Lisbon, Portugal. BiG Portugal is a privately-held, specialized financial institution, operating in three major business segments: Specialized Retail, Institutional Banking and Treasury and Capital Markets. The bank was founded in 1999 by a group of experienced banking executives and a number of key shareholders. Among the founding shareholders are the current Chairman and Vice-Chairman of the bank, who began their banking careers in New York more than 30 years ago. They, and many other still connected with BiG, were responsible for launching the first private bank to be established in Portugal following the liberalization of the banking laws and the opening of the finance sector to private initiative in 1984. That wholesale corporate/institutional bank was responsible for many innovative changes to the Portuguese banking market during the 1980's-1990s and was the most successful and most profitable foreign-owned/publicly traded banks in Portugal during the period of 1984-1996. Two years after the unit was sold to a major Portuguese economic and financial group, the bank's management and a group of shareholders joined forces to establish BiG – a well-capitalized, specialized retail investment/savings bank. BiG Moçambique started operations in March 2016, following the authorization granted by Banco de Moçambique in 2014 for the establishment of a banking unit in the country. The Group's entry in Mozambique through the establishment of a subsidiary, is the logical outcome of the monitoring of Mozambican market development and the maturity reached by the operation in the country of origin. We were able to break-even in only 9 months, even considering all the Capex related to the set-up of the operation and 24 months' of Opex. During 2017 and 2018 the Bank kept its growth trajectory, and 2019 has maintained the same positive trend. Assets under management total at MZN10.4 billion (Dec-2018: MZN4.2 million; Dec-2017: MZN2.6 billion), net income is MZN241 million (Dec-2018: MZN 161 million; Dec-2017: MZN 50 million), and average ROE is 20.6% (Dec-2018: 25.7%; Dec-2017: 9.7%).
You entered the market possibly at the worst time. How did you manage to achieve this impressive growth?
We started looking at Mozambique in 2013, at a time when the macroconditions looked extremely positive. However, by the time we set up the bank, the financial bubble had already started bursting, so we needed to be very focused implementing our strategy and business model. We grew despite market challenges because of the innovative alternatives that we offered to our Clients, and our unique and specialized positioning in granting access to capital market products and providing dedicated asset management services to the main institutional investors in the country. Despite being able to provide all services available to the banking sector in Mozambique, we have built a dedicated team of young individuals, who are trained and focused in providing capital markets and financial advisory services to Clients, which clearly distinguishes us from other Banks in the market.
What are your sectors of activity, and what the main milestones?
BiG Moçambique provides specialized investment banking services, including financial advisory services and investment and savings solutions for institutional and individual clients. The Bank has already a relevant presence in Investment Banking in Mozambique, namely in capital markets, advisory and corporate finance, having participated in the main operations that occurred in those segments, being of note the arrangement and placement of corporate bond issuances for Bayport Financial Services, amounting to c. MZN 1,4 billion, and the recently completed IPO of 4% of HCB's share capital. Both transactions are claimed to be the largest (debt side and equity side) in the Mozambican capital markets. In 2019, BiG Moçambique implemented a capital increase of MZN 600 million through a private placement. The transaction included further investment from the Portuguese-based parent Banco de Investimento Global S.A. and welcomed 3 well-known Mozambican entities as new shareholders: EMOSE, Hollard Moçambique and Global Alliance (in the capacity of manager and on behalf of two local pension funds). In the first quarter of 2020, BiG Moçambique implemented a new capital increase of MZN 528.7 million, subscribed by all shareholders, reinforcing their commitment towards the Bank.
What improvements would you like to see in the capital markets?
Capital markets in Mozambique are still only starting, so there is a great deal to do. On the supply side, there is a lack of investment alternatives, so we need to bring more issuers to the market both on the debt and equity side, while on the buy side clients still need information and formation on local and international capital markets. They still need help to understand their savings and investments possibilities in order to increase profitability and manage risk. The liquidity of the market is also a major challenge to the development of itself, and the development of liquidity provider programs or other investment services like wealth management are essential to fulfill this need. Finally, it is essential to put more effort into selling Mozambique as a positive story with an exceptional growth potential to the outside world, since most stories about Mozambique that hit international newspapers are the bad ones, but there is a growing positive story, often ignored, that needs to be told.