LIisbon: Angola lags behind its African peers in the number of bank accounts per capita, showing its banking sector has room to grow by reaching outside the capital, according to a study published on Wednesday by global audit firm KPMG. Angola's oil-fuelled economic growth since the end of a civil war in 2002 has allowed lenders to expand rapidly, with the sector jumping 21 percent in total assets and 24 percent in net profits last year, KPMG said.
According the study, Angolan banks have invested in their networks, with the number of branches rising 22 percent to 830 in 2010 and ATMs in the country increasing by a quarter.
Despite this growth, only 11 percent of the former Portuguese colony's 18 million people has a bank account, compared to an average of 20 percent in other African frontier markets, KPMG said.
"The level is below those in other African countries, which shows the growth potential of the Angolan banking sector," KPMG said in the study.
Central bank Governor Jose de Lima Massano said this week 13 percent of Angolans had bank accounts, compared to 9 percent in 2009.
One of the reasons for the relatively low level of banking access is that over half of Angola's bank branches are in Luanda, the commercial heart of southern Africa's second-biggest economy after South Africa.
"We believe the main opportunity for opening more branches is now in the other provinces, first those on the coast and later those in the interior," KPMG said.
Other challenges include helping Africa's second-biggest oil producer diversify from hydrocarbons, develop investment banking services and increase a loans-to-deposits ratio averaging a comparatively low 60 percent, the study added.
Banco Africano de Investimentos - whose biggest shareholder is state oil company Sonangol - had the most total assets with around 775 billion kwanza ($8.1 billion) at the end of 2010, while the local unit of Portuguese bank Banco Espirito Santo posted the largest profit.
Around 80 percent of the market is controlled by the largest five of the country's 23 banks, but smaller rivals are gaining market share, KPMG said.
"It's still too early, however, to talk about possible consolidation moves as there is much room for organic growth," said Vitor Ribeirinho, KPMG Head of Audit in Lisbon.
* Reporting by Shrikesh Laxmidas; editing by Ed Cropley and David Dolan
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