Banco Comercial e de Investimentos S.A. Your Financial ... · pau preto, and ntondo chanfuta ......

Banco Comercial e de Investimentos S.A.

Your Financial Partner in Mozambique

Maputo | Wednesday, October 9th, 2013

Index

I – Geographic location

II – Macroeconomic Overview

III – Investing in Mozambique

IV – Introduction to Banco Comercial e de Investimentos S.A.

I – Geographic location

Location Natural Potential

Invest in Mozambique with the Best Commercial Bank Maputo| Wednesday, October 9th, 2013

Geografic Location of Mozambique

Location: Southwest Coast of Africa

Capital: Maputo City

Approximate area: 799 thousand sq. km of which about 786 thousand sq. Km is the land and 13 thousand sq. Km is sea area.

Borders: Mozambique has borders with the following countries:

North: Republic of Tanzania;

Northwest: Republic of Malawi and Republic of Zambia;

West: Republic of Zimbabwe;

South: Republic of South Africa and Kingdom of Swaziland.

Tracks and Ports highlight:

South Line (Maputo Port) – connects to the town of Ressano Garcia (Border with the Republic of South Africa), the kingdom of Swaziland and Republic of Zimbabwe;

Beira Corridor (Sena Line) – connects the city of Moatize to Beira Port. This line is very important for encouraging new investments in coal mining in Tete;

Northern Line – Serves Port of Nacala.


Mozambique: Natural Potential

Mozambique has considerable reserves of natural resources and minerals,

most notably gold, coal, iron, silver, graphite and natural gas.

The country also has forest resources, such as umbila, miombo,

pau preto, and ntondo chanfuta.

The agricultural sector accounts for over 1/3 of the Gross Domestic Product

(GDP) of the country, highlighting the following products: cotton, tobacco,

sugar cane, cashew nuts, copra, tea, citrus fruits, and cassava. There is also

a high potential for the production of rice, soybeans and potatoes.

The country also has heavy sands and fish products (prawns and lobster

being the main export products).

Given its geographical conditions, natural beauty and warm climate,

Mozambique is among the main tourist destinations in Southern Africa.

Major attractions are the beaches (Bazaruto, Tofo, Wimbe, Inhaca, Ponta

D'ouro, Quirimbas Island, among others), and parks and nature reserves

within the country like the world famous Gorongoza National Park.


II – Macroeconomic Overview

The current situation and projections Risks and Opportunities


III – Investing in Mozambique

Business opportunities Current and Future Projects Capital Markets


Mozambique: Business Opportunities (I)

Mozambique is currently seen as a country with one of the most attractive economies in the world to invest, it is expected

that by 2015 it will be one of the most dynamic in the world. Heavy investment of large multinational companies has been

targeted for coal and natural gas, placing the country in the 5th position among the countries that attract foreign

investment.

Other sectors that provide opportunities for foreign companies are: Agriculture, Energy, Public Works and Construction,

Metalworking, Logistics, Training and Education, Consulting, Information Technology and Communication.

Recent research indicates that the country has sufficient gas reserves to supply Germany and France for about 20 years

and coal reserves can supply, at the current pace, the European Union market for about 25 years.

There is abundant arable land in Mozambique, water resources and fertile land to practice agriculture, livestock, agro-

industry and agro-forestry. The Zambezi Valley offers the greatest opportunities for investment, given the nature of the land

in this region and the irrigation facilities.


Mozambique: Business Opportunities (II)

The Government of Mozambique (GoM) in partnership with the private sector has invested in the development of public infrastructure (roads, bridges, telecommunications, energy and other) thus providing great opportunities for exploitation of comparative advantages in key sectors of the economy. According to forecasts, the construction sector is expected to grow significantly in the coming years, driven by ongoing investments, with emphasis on rehabilitation and construction of infrastructures.

The country also has a strong financial system, with know-how reinforced by outside shareholders, and subject to international best practices in terms of risk management.

Global production in the country is expected to grow at 8.4% in 2013, according to Government projections based on expected positive performance in the areas of Construction, Transport and Communications, Industry, Commerce, Agriculture, Fisheries and Financial.


Mozambique: Investments, Current and Future Projects (I)

Coal (thermal and metallurgical)

Project Location Investment Capacity/Reserves Production

Start

VALE Moatize, Tete

$2,0 thousand million by 2012; Expansion Plans for the next 4 years of

$4,0 thousand million.

Total capability of 25 million ton/year (made 0,6 ton in 2011 and projected an increase up to

22 million tonnes by 2014) 2011

RioTinto/ Riversdale

Benga, Tete $1,0 thousand million

Total capability: Benga 10 million tonnes; Zambeze 25 million tonnes and Tete 10

million tonnes.

2012

Aluminum

Project Location Investment Capacity/Reserves Production

Start

Mozal Mozal II Mozal III

Zona franca Industrial de Beluluane, Maputo

$2,1 thousand million 245.000 ton/year 245.000 ton/year

2000 2003

Source: Emerging Exploration of Natural Resources in Mozambique, CTA 2012


Mozambique: Investments, Current and Future Projects (II)

Electricity

Project Location Investment Capacity/Reserve Production

Start

Hidroeléctrica –Barragem de Cahora

Bassa

Cahora Bassa CB-Norte $800 million HCB 2075MW

CEZA/HCB 1245MW

1998 Start 2011

Conclusion 2017

CESUL Projecto de Transmissão

Tete connection to the southern provinces

$2,5 thousand million

Phase I (3100MW) anchored to the Cahora Bassa Dam

and Mphanda Nkuwa. Phase II (6000MW)

docked at thermal coal power plants from Vale/Rio Tinto.

Start 2011 Conclusion 2016 (Phase

2 depends on investments made by

Vale/Rio Tinto)

Projecto de Energia de Benga

Coal reserve of Benga, Tete

$1,3 thousand million

Phase I 600MW Phase II 2000MW

2013

Hidroeléctrica de Mphanda Nkuwa, SA

Tete $2,0 thousand

million

1500MW Phase I of electrical energy 100%

ecological, 20% of which is consumed in the country and the rest exported to neighboring countries like South

Africa.

Start 2017

Source: Exploração Emergente de Recursos Naturais em Moçambique, CTA 2012


Mozambique: Investments, Current and Future Projects (III)

Natural Gas


Start

Sasol/ENH 50% Expansion

Pande, reserves of natural gas of Temane, Inhambane

$2,1 thousand million 154GJ (gigajoules) 231GJ (gigajoules)

2004 2011-16

Anadarko ENI

Bacia do Rovuma $15 thousand million-$20 thousand million

Exploration of central GNL planned in 2 units.

TCF of gas discovered offshore.

The first gas 2018

Natural Gas (Pande and Temane)

Inhambane

Phase I $265 million Phase II $400 million

From 120 million to 183 million MGJ/year. Started January

2004

Heavy Sands


Start

Kenmare Resources Moma Nampula $460 million

900 thousand to 1,3 million ton/year

2007

Corridor Sands

Chibuto, Gaza province

$1,0-$2,0 thousand million- thousand

million

Still searching for new investors. -

Source: Exploração Emergente de Recursos Naturais em Moçambique, CTA 2012


Mozambique: SME Potential

The variety of large projects being developed in the country

presents an oportunity for SME’s to grow their business, as

suppliers of these projects along the value-chain.

The government is investing in the development of the

SME segment, through institutions such as GAPI and

IPEME.

The SME segment is still very dormant, with reduced

technical skills and business knowledge.

Strong need for financing in order to grow, however, lack of

real guarantees and feasible business plans often restricts

access to finance.


Mozambique’s Stock Exchange was founded in 1998, by publication of the Law-Decrees nr. 48/98 and 49/98.

The market capitalisation of the BVM is currently MZN 32 million.

There is still very little activity and turnover in the BVM, with a lack of national and international investors. The companies currently quoted on the stock exchange are:

CDM – Cervejas de Moçambique;

CMH – Companhia Moçambicana de Hidrocarbonetos;

CETA – Construção e Serviços.

There is a reasonable number of bonds quoted in the exchange, however, the secondary market is still not very active. In the last two years there has been an increase in the issuance of bonds by private companies, as they seek alternative sources of financing.

Foreign investors are allowed to invest in the stock exchange – the funds entering the country must be registered with the Central Bank, in order for capital and profits to be remitted back to its origins ( Foreign Exchange Law Decree nr. 83/2010 ).

Capital Markets


IV – Banco Comercial e de Investimentos S.A.

A brief history Shareholder structure Geographical coverage Market shares and financial indicators Experience in Mozambique International recognition


BCI was established in January 1996 by a group of Mozambican

investors, as a small bank concentrating on businesses and

individuals with high incomes.

Currently, it’s shareholder structure is composed of two large

Portuguese financial and a Mozambican financial group, and

for the last four years the bank has been undergoing a

profound transformation in order to become a universal retail

bank.

Although the main shareholders are Portuguese groups, 85%

of the bank’s higher management is composed of Mozambican

professionals.



1996 - BCI’s Origins

• January 17, 1996 – Foundation of BCI as a small investment bank, initially denominated “AJM - Banco de Investimentos”. Renamed in June to “Banco Comercial e de Investimentos, SA”.

1997 - Entry of CGD

• April 18, 1997 – Entry of the portuguese group CGD after a capital increase from 30 to 75 millions of Meticais.

• New shareholder structure:

• CGD (Caixa Geral de Depósitos) – 60%

• SCI – Sociedade de Controlo e Gestão de Participações, SA (most of initial investors) - 38,63%

2003 - Merger with Banco de Fomento

• December, 2003 – Merger with Banco de Fomento (BF) through the integration of its assets into BCI and the extinction of BF. Adoption of commercial name “BCI Fomento”.

• This enabled the entrance of another large Portuguese group - BPI - with 30% of total shares.

2007 – Entry of INSITEC • 2007, November - Exit of SCI and entrance of INSITEC Group, with 18,12% of the shares. CGD ‘s stake decreased to 51% while Group BPI kept 30% of the shares. • New shareholder structure: •CGD– 51% •BPI – 30% •INSITEC – 18,12% Various small stockholders – 0,88%


A brief history


BCI: Shareholder Structure

CGD GROUP

Equity 30,00%

INSITEC GROUP

18,12%

BPI GROUP

51,00%

Nationality Portuguese Mozambican Portuguese

Business

CGD Group is the

largest banking and

insurance group. It is

present in all areas of

the financial sector,

including Retail and

Commercial Banking,

Investment Banking,

Insurance, Asset

Management,

Brokerage, Leasing

and Factoring, Venture

Capital and Real

Estate.

BPI Group is the third largest Portuguese private banking group. This group is also active in a perspective of universal banking, through a multichannel distribution network fully integrated, covering all parts of the banking business.

Insitec Group is a Holding company with interests in areas of IT, Construction and Consulting.

PRIVATE

0,88%

Mozambican

Several national

private investors.


BCI: Network of Branches, ATMs and POS

Description 2007

June 2013

ATM 85 324

POS 882 4.167

BRANCHES 41 129

CLIENTS 90,000 626,000

Universal Branches and Exclusive Centres (121)

Corporate Centres (8)


5,96%9,23% 8,37%

5,89%

5,52% 6,46%

29,51%28,43%

28,81%

30,28% 32,43%29,48%

Barclays

Standard Bank

BCI

Millennium BIM

Assets

2,56% 3,08%

5,88%

15,36%

Loans

2,56% 3,62%

Others

12,49%

FNB

Banco Único

Moza Banco 5,73%

Deposits

2,56% 3,62%

5,06%

17,11%

As at 31st July 2013


Market Shares

Financial Performance (I)

Invest in Mozambique with the Best Commercial Bank

Income Statement Dec.11 / Dec.12

Financial Performance (II)


Balance Sheet

Jul-11 / Jul-12 Jul-12 / Jul-13

Abs % Abs %

149.556 229.094 249.886 Cash and Cash Equivalents 79.538 53,2% 20.792 9,1%

122.414 354.955 339.351 Loans and Advances to Credit Institutions 232.541 190,0% -15.604 -4,4%

1.114.476 1.200.744 1.347.377 Loans & Advances to Customers 86.268 7,7% 146.633 12,2%

96.504 179.189 479.020 Available for Sale Financial Assets 82.685 85,7% 299.831 167,3%

96.242 104.980 113.606 Tangible and Intangible Assets 8.738 9,1% 8.626 8,2%

58.690 61.086 91.379 Other Assets 2.396 4,1% 30.293 49,6%

1.637.883 2.130.050 2.620.619 Net Total Assets 492.167 30,0% 490.569 23,0%

1.231.111 1.547.383 1.933.064 Customer Deposits 316.272 25,7% 385.682 24,9%

140.870 151.588 135.637 Loans and Advances from Other Institutions 10.718 7,6% -15.951 -10,5%

26.439 26.100 25.553 Subordinated Loans -338 -1,3% -547 -2,1%

5.882 127.362 229.342 Consigned Resources 121.480 2065,3% 101.981 80,1%

94.766 121.028 112.594 Other Liabilities 26.261 27,7% -8.434 -7,0%

138.815 156.589 184.428 Share Capital 17.775 12,8% 27.838 17,8%

1.637.883 2.130.050 2.620.619 Total Liabilities and Share Capital 492.167 30,0% 490.569 23,0%

27,51 28,42 30,02 End of Period Exchange Rate USD/MZN

USD' 000 Variation

Jul-11 Jul-12 Jul-13 Indicators

Financial Performance (III)


Income Statement Jul.11 / Jul.12 / Jul.13

Jul-11 / Jul-12 Jul-12 / Jul-13

Abs. Var. % Abs. Var. %

55.697 46.536 48.235 Net Interest Income -9.160 -16,4% 1.699 3,7%

23.218 29.070 40.078 Net Commssions + Exchange Gains 5.851 25,2% 11.009 37,9%

4.751 10.855 7.088 Other Income 6.104 128,5% -3.767 -34,7%

83.666 86.461 95.401 Operating Income 2.795 3,3% 8.941 10,3%

51.446 59.878 65.411 Structure Costs 8.431 16,4% 5.533 9,2%

6.935 3.503 2.485 Credit Impairment -3.433 -49,5% -1.018 -29,1%

-1.191 560 569 Net Provisions 1.751 -147,1% 9 1,5%

26.475 22.520 26.937 Income Before Taxes -3.955 -14,9% 4.417 19,6%

21.801 18.552 22.370 Net Income -3.249 -14,9% 3.818 20,6%

27,51 28,42 30,02 End of period exchange rate USD / MZN

Jul-11 Jul-12 Jul-13 Indicators

USD' 000 Variation

Jul-12 Jul-13 Jul-12 / Jul-13

RENDIBILITY

Return Before Taxes

1,87% 1,85% On Assets

24,77% 25,48% On Equity

Return After Taxes

1,54% 1,54% On Assets (ROA)

20,41% 21,16% On Equity (ROE)

FUNCTIONING

69,25% 68,56% Cost to Income (%)

33,62% 42,01% Net Commissions'+ Exchange Gains / Operating Income

79,49% 70,86% Loans to Customers (net) / Customer Deposits

28,42 30,02 Exchange Rate USD / MZN

-8,63 p.p

Variation

-0,02 p.p

0,70 p.p

-0,01 p.p

0,75 p.p

-0,69 p.p

8,39 p.p

Financial Performance (IV)


Key Ratios

Jul-12 Jul-13 Jul-12 / Jul-13

12,95% 10,07% Solvency Ratio

1,40% 2,06% NPL / Total Credit

170,41% 79,09% Provisions for Impairment / NPL -91,32p.p

Variation

-2,88pp

0,67p.p

USD' 000

OTHER INDICATORS

Project Finance and Investment Banking

BCI’s Project Finance team is focused in the organisation and structuring of project finance operations on a project risk basis. Its intervention ranges from advisory services up to the supervision of the project’s life cycle.

In accordance with each specific project/enterprise, the Project Finance team provides several services whose first stage consists of developing a financial model and optimising the financial structure, identifying and managing/allocating all risks concerning the project, in addition to negotiating partnership and finance solutions to ensure the operation’s success.

The range of products offered can be applied to several sectors, namely infrastructures, energy, environment, natural gas, real estate, transportation, health, communications, water and sewage, among others.

PROJECT FINANCE

Transport Infrastructure

Communications Water and Basic

Sanitation

Natural Gas Energy

Construction and Public Enterprises


Experience in Investment Banking and Project Finance

In the Mozambican Market, BCI has become an important reference for Investment Banking and Project Finance due to its leading role in several Project Finance and Corporate Finance transactions. The most relevant projects in Mozambique had BCI partnership:

Maputo-Catembe Bridge and Maputo Ring Road

BCI was the financial consultant and leader of a banking syndicate that financed the USD 63 Million State contribution to this project. BCI participation in the syndicate reached USD 45 Million (71%).

Maputo Corridor Toll Route

BCI contributed to this project as Financial Advisor, partnerships developer and as fund raiser of ZAR 198.000.000 (about USD 30 million) to the project’s capital share, which reached USD 171 million.

BCI also participated in the development of SDCM financial structure, a Mozambican company that acquired 10% share capital of Trans African Concessions (TRAC – the Toll Route operator) and structured the financial operation that allowed the company to raise about USD 8 million as equity.



Mozambique Equity Fund (MEF)

BCI made a USD 10 million contribution to the foundation of an Equity Fund Company, MEF, that involved several international financial institutions such as European Investment Bank, FMO from Netherlands, Caixa Geral de Depósitos and IPE from Portugal, and USAEDF from South Africa.

Public cellular phone provider – Mcel

Project Finance of USD 20 million with Development Bank of South Africa and European Investment Bank guarantee.

Fuel import

Participation in banking syndicates for Fuel import, in partnership with Caixa Geral de Depósitos, BCI’s majority shareholder.

Cuamba-Interlagos Railway

BCI issued a bank guarantee for a USD 2,5 million loan from foreign financial institutions to Mozambican Railway Company (CFM).



Beira Grain Terminal

BCI financed USD 12 million for the construction and the equipment of the first grain processing factory in Mozambique, in which participated some of biggest companies in the country, such as CFM, Cornelder-Mozambique, Merec and Nestlé.

Other Projects led by BCI

Designing and structuring credit lines aimed to promote the development of proximity business (shops, restaurants, etc.);

Structuring co-financed operations though credit lines such as USCAJU, USAID, APAD, PODE and BEI, designed to support the commercialisation of farming products;

Designing and structuring credit lines aimed to promote the development of the land transportation sector.



In Mozambique, BCI also finances large projects, such as:

• LAM – Mozambican Airlines ;

• CEZA - Companhia Eléctrica do Zambeze. Owned by the Mozambican state-owned electricity company EDM in partnership with HCB in its Social Responsibility component.

And various projects in the construction sector:

• Norbert Odebrecht, SA (heavy construction, Brasil)

• Camargo Correia (heavy construction, Brasil);

• Development of Nacala and Beira rail and port corridors .

In the field of Capital Markets, which it still developing in Mozambique, BCI led the Public offer of ENH-CMH shares, and other two Private Stock Offering and Stock Market admission processes for Subordinated Bonds (BCI-2008-2018) and Regular Bonds (BCI-2011).


International Recognition (I)

BCI was distinguished by various international and national institutions, bearing witness to its extraordinary contribution to the economic development of Mozambique:

• “Best Bank in Mozambique in 2012” awarded by the Banking and Finance Review, a prestigious international publication specializing in the financial area;

• “Best Commercial Bank in Mozambique in 2012” awarded for the second consecutive year by World Finance, one of the most prestigious worldwide publications in this area;

• “Best Bank in Southern Africa”, African Banker Awards 2012 (Arusha, May 2012);

• “The New Era Award for Technology, Innovation & Quality” (Berlin/Germany, 26 March 2012);

• “International Diamond Prize for Customer Satisfaction 2012”, awarded by ESOR – European Society for Quality Research (Rome, June 2012);

• “International Quality Summit Award (IQS)” awarded by BID - Business Initiative Directions (New York, May 2012);


International Recognition (II)

• “European International Trophy for Quality” awarded by Global Trade Leaders’ Club (Madrid, May 2012);

• “International Arch of Europe (IAE)” awarded by BID – Business Initiative Directions (Frankfurt, April 2012);

• “Golden Arrow Award 2012” as the “Best Bank in Mozambique”, awarded by PMR.africa (Maputo, May 2012);

• “Certificate of Merit” awarded by the World Customs Organization for the bank’s contribution to streamlining the State’s revenue collection – on 26 January 2013 – World Customs Day (BCI was the only Mozambique Commercial Bank to be awarded this distinction).


International Recognition (III)

This year, the awards granted by PMR.africa increased to 4, as follows:

• In the Business Sector: Banks (Business Banking) in Mozambique, BCI was the highest rated and received the Diamond Arrow Award;

• In the Business Sector: Banks (Personal Banking) in Mozambique, BCI was the highest rated and received the Diamond Arrow Award;

• In the category Companies/ Institutions Demonstrating Exceptional Managerial and Corporate Governance Qualities in Mozambique, BCI was the highest rated and also received the Diamond Arrow Award;

• In the category Outstanding Service And Contribution To The Economic Growth And Development Of Mozambique By Business Persons During The Past 12 Months, Dr. Ibraimo Ibraimo – Former CEO of BCI was the highest rated and received the Diamond Arrow Award.


BCI Identity

Founded in 1996, BCI is both a young and an experienced Bank.

Our mission is to actively contribute to the economic and social development of Mozambique,

creating value and generating satisfaction for our Customers, Shareholders, Employees, Partners

and Community in general, in a socially responsible and sustainable manner.

Our vision is to be the preferred bank for most Mozambicans and a reference to the financial

system in the application of best practices, competitiveness and innovation, aiming to achieve

market leadership.

BCI: Your partner in Mozambique

16 years Investing in Mozambique.

Useful Links

Government of Mozambique http://www.portaldogoverno.gov.mz/

National Institute of Statistics (INE)

http://www.ine.gov.mz/

Bank of Mozambique

http://www.bancomoc.mz/

Mozambique Chamber of Commerce - Brazil

http://www.ccmobra.org.mz/ccmobra/home/index.php

Chamber of Commerce, Industry and Agriculture Brazil - Mozambique

http://cciabm.com/

Confederation of Economic Associations of Mozambique http://www.cta.org.mz/

Invest in Mozambique

http://www.cpi.co.mz/


http://www.portaldogoverno.gov.mz/

http://www.ine.gov.mz/

http://www.bancomoc.mz/

http://www.ccmobra.org.mz/ccmobra/home/index.php

http://cciabm.com/

http://www.cta.org.mz/

http://www.cpi.co.mz/

Thank You

Headquarters

Av. 25 de Setembro

Prédio John Orr’s, n. 1465

Maputo | Mozambique

T: +258 21 353700

F: +258 21 309831

[email protected]

www.bci.co.mz

Your Financial Partner in Mozambique

Banco Comercial e de Investimentos S.A. Your Financial ... · pau preto, and ntondo chanfuta ......

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