By no means is it easy for a new business to turn a profit within its first year. Perhaps even more difficult is for a new bank to achieve this and maintain strong growth over the years, while staying true to a clear mission of social responsibility. Yet Banco Espirito Santo Angola (BESA) proved any would-be critics wrong.
When Lisbon-based Banco Espirito Santo established BESA in 2001 to enter and help develop the fast-growing market in the former Portuguese colony of Angola, the founders laid out well-defined objectives. Within just seven months of activity, the bank closed with positive results of some £435,000.
“In 2002, BESA was the only bank in Angola that said exactly where it wanted to be in 2005 and 2008,” recalls Alvaro Sobrinho, the bank’s chairman. “At that moment we said what segments of customers we wanted to work with: great customers, companies, institutional companies and private clients. We weren’t a mass-market bank and so that was defined. Other big priorities at the bank were the profitability, return on equity, the bank’s efficiency and the cost-to-income ratio, all having to have a determined objective.”
He adds that while BESA targeted segments that were underserved by other banks, it also put an emphasis on human resources. “We offered a quality of service that didn’t exist in Angola up until then,” he says.
Thus came BESA’s rapid success, and the pace hasn’t let up since.
Today, the bank enjoys a 10 per cent market share in Angola – making it the second largest in the country after BAI, which doubles BESA in years of operation – and numerous awards that it seems to rack up year after year, including Best Bank in Angola by Global Finance in 2008, 2009, 2010 and 2011. This award was based on criteria including growth, return on assets, competitiveness, customer service and product innovation. The magazine also named BESA Best Foreign Exchange Bank in 2009 in recognition of its performance in the implementation of international transactions.
In a similar line, World Finance magazine named BESA Best Bank in Angola in 2009, thanks to its activity in the Angolan market, marked by the quality of the products and solutions provided to its clients. The judges remarked that the bank also stood out for the constant innovation of its financial structure, which enables the institution to offer high quality services. In this year’s edition, World Finance named BESA Best Commercial Bank in Angola.
While these awards leave no room for doubt of the bank’s capabilities as a financial institution, UNESCO’s 2009 naming BESA Official Bank of the Planet Earth for the next 10 years highlights the importance of social corporate responsibility in BESA’s agenda.
Mr Sobrinho says that from the very beginning, BESA has set out to lead the sector in numbers and by example. “We want to be leaders, to make a financial group where BESA is at the top. There are many markets in which to expand. We believe the growth of Angola, and of private and public investment, is going to need many services, such as project finance, corporate finance, real estate leasing and financial leasing for companies. Therefore we will position ourselves at the top,” he explains.
One of the areas in which BESA excels at leading Angola’s banking and finance sector is in innovation. Besides offering a wide range of products and services for individuals and for corporate clients – from simple savings accounts to access to fixed-income, stock markets, and the most sophisticated derivatives – the bank also launched the first specialised private banking service in the country. The goal of this service is to attract clients’ savings and then reinvest them in financial products that provide a safe and dependable return.
BESA offers Angolan clients access to global currency, equity, fixed income, derivatives, capital and money markets through its trading room, a first in Angola, which has real-time monitoring of international financial and capital markets. The bank also offers cash management services for companies in the public and the private sectors, using BESA’s expertise – which stems in part from the Banco Espirito Santo Group’s presence in 19 countries on all continents – to help clients make the best use possible of global financial markets.
The sheer size of BESA’s parent group permits the Angolan bank to respond promptly and efficiently to requests for cross-border transactions, for example, as well as lending it the capacity to move not only BESA, but also the entire banking sector forward more quickly.
IN THE BEGINNING, BESA TARGETED SEGMENTS THAT WERE UNDERSERVED BY OTHER BANKS AND PUT A STRONG EMPHASIS ON HUMAN RESOURCES
TODAY, THE BANK IS EAGER TO HELP NEW BUSINESSES AND OUTSIDE INVESTORS ENTER THE REAL ESTATE AND TOURISM SECTORS
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“Since 2002, the banking sector in Angola has evolved tremendously: from an increased awareness among the general population of the benefits of banking, to a technological evolution of customer services,” says BESA’s chairman.
“In Angola’s banking sector, as in many sectors of the world, the wheel doesn’t have to be reinvented – it already exists. Therefore there were big banking groups, such as Portuguese banks and specifically Banco Espirito Santo, that brought banking technology here and this helped the Angolan banking sector to evolve very quickly.”
Customer service quality and customer satisfaction are top priorities for BESA and one way the bank wins over the loyalty of its customers is by offering every client personalised services that deliver banking and investment solutions that best suit each individual’s needs.
BESA brings on board only the best employees, mainly from the local labour force, but also from abroad when necessary to ensure service quality is high.
“The bank has an agreement for on-the-job training in the Bank Espirito Santo Group and that allows us to send people to London and Lisbon to be trained,” explains Mr Sobrinho. “This programme enables people to gain skills in different areas of the group. With the Espirito Santo Group as a shareholder, it is easier for us to recruit people to come and work in Angola.”
BESA is constantly on the lookout for areas of the economy where it can help channel investment. The bank has already identified other sectors of Angola’s financial industry that are poised for rapid growth, Mr Sobrinho says, such as insurance. Pension fund management is another area where BESA’s multinational roots give it the depth of experience to grow.
“Today, only the petroleum and other multinational companies have pension funds for their workers,” Mr Sobrinho says, “but Angolan companies are already looking for pension fund management services. Consequently, this is an area for us to explore and see where we can bring our expertise.”
Given the Angolan Govern-ment’s bold investment agenda, construction will be a big sector for many years to come. BESA offers its financing services to Angolan and foreign investors willing to take advantage of the many direct and indirect investment opportunities that arise with the country’s reconstruction programme.
Furthermore, Angola’s real estate and tourist sectors also have great potential and the bank is eager to help new businesses and outside investors enter those markets.
Apart from growing its range of services, BESA is also moving into other African countries. Its internationalisation strategy, at least for the time being, is limited to Portuguese-speaking countries with which Angola shares cultural similarities, such as Mozambique, Cape Verde, Guinea Bissau and São Tome and Principe. According to Mr Sobrinho, it is here that BESA has a strong chance of becoming market leader.
‘Angola offers security. Our track record backs this up’
From real estate to tourism and financial services, Banco Espirito Santo Angola is on hand to help investors untap Angola’s potential in a host of sectors
Chairman of Banco Espirito Santo Angola Alvaro Sobrinho provides an overview of the investment potential Angola offers to the international community.
Why should foreign investors look into Angola?
Some of the reasons to invest here include the political stability of our country, the Government’s objectives, social stability and the social programme of the state. These are the four basic elements that interest people.
For the investor, security is very important. Angola offers security. The Angolan authorities are deeply committed to political stability.
Our track record backs this up: for example, we had free and fair elections in 2008. Without the intervention of the international community, Angolans succeeded in carrying out peaceful elections. I myself voted and waited for 10 hours to do so; with me were ladies, aged people, young people, and all were full of anticipation. This was a signal we gave to the world: there are not many records of elections in Africa that ran so well as the last one in Angola. The level of participation also legitimised the ballot: about 95 per cent of registered people voted.
We have a strong banking sector that is prepared to serve international investors.
Also, the National Private Investment Agency, ANIP, is functioning well already, so the tax incentives for investment in the provinces, etc, are working. Today a project is approved in 15 or 20 days, whereas before it took one or two years; this is a very big development.
Moreover, Angolans are hospitable people who don’t look at Western countries as enemies; quite the opposite, as they travel a lot to foreign countries and Angola is probably the most Western country in Africa.
Which investment opportunities would you highlight?In Europe and the US, markets are very saturated; therefore discovering new markets is necessary. Angola is an emerging market and has a series of interesting sectors in which to get involved, such as tourism, real estate and finance.
Angola has great tourism potential and there is currently nothing set up in this area. So, start-ups could easily invest in this type of activity.
Also, unit trusts could add to their portfolios or venture capitalists could see great returns from the real estate and tourism industries. There is still a great deal of space for the expansion of the real estate sector, but clearly in tourism there is even more room to grow.
In the energy sector, alternative energies have investment potential. For example, Angola has unique conditions in the world for biofuel production.
Other extremely interesting sectors for investment in the future will be in the areas of health care and education.
What potential lies in the banking sector of Angola?When the stock market opens here, I think it will be a very interesting sector for British investors of investment funds, because they are very interested in banks and on average the return on equity in our market is 90 per cent and our rate of return is 25 per cent.
Investing in the banking sector, the first question would be: what is its potential to grow?
The penetration of banking here is currently very low and so there is immense room for growth.
It is important to know that a large part of this potential population is young, very young, who in some five, 10 or 15 years will be excellent bank customers.
The insurance sector is also new territory where everything is yet to be made.
Social security doesn’t exist in Angola and consequently only petroleum and multinational companies have pension funds for their workers: companies such as Angola Telecom, AAA Insurance, the banks and the transport sector, namely the port of Luanda.
However, Angolan companies are already looking for pension funds, such as Angola Telecom, the banks and the transport sector, namely the port of Luanda.
Therefore there are numerous areas for investors or consultants to bring their expertise and find raw potential.
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