Angola seen to dodge Banco Espirito Santo meltdown

The IMF said on Tuesday that the collapse of Banco Espirito Santo should have a “limited impact” in Angola, where a subsidiary was one of the country’s biggest lenders.

Angola put the failed Portuguese bank’s local operations under administration last month, ordering an audit of Banco Espirito Santo Angola’s (BESA) books that is expected to be filed soon.

“At this moment, we are pretty much satisfied with the way the authorities are working on this issue,” said Naoyuki Shinohara, deputy managing director of the IMF.

“The impact on the market was very limited partly because of the prompt actions taken by the authorities.”

Espirito Santo collapsed following allegations of accounting fraud in its parent companies, leading to a 4.9-billion-euro bailout.

According to Angolan business paper Expansao, BESA needs to increase capital by around 2.7 billion euros in response to huge losses and a deteriorating loan book.

Angola’s oil-rich government appears ready to step in to guarantee capital for the subsidiary, which is 55.7-percent owned by the Portuguese group.

“We are pretty confident that the authorities will come up with necessary measures to take care of the situation,” said Shinohara.