Bank of Africa (BOA) Mali, which recorded a significant deterioration in its
loan portfolio at the end of 2019, will experience a capital increase at the "end of the second half" of 2020
of the subsidiary, said Abderrazak Zebdani, deputy general manager of BOA Group, on Friday.
Mr. Abderrazak Zebdani was speaking at an online press conference organized by the
BOA Group, via the Microsoft Team platform. He indicated that this increase in the capital of BOA Mali
should take place “towards the end of the second half” of 2020.
Customers in growing difficulty who were unable to meet their commitments, increased the costs of
BOA Mali (the oldest subsidiary of the banking group) which has "10 to 20 large customers who
represent 30% of the portfolio” in the bank.
At the end of the 2019 financial year, the subsidiary recorded a loss of 6.9 billion CFA francs. Despite net banking income
growing by 7.8%, shareholders will not benefit from dividends. The bank's performance
were annihilated by the level of provisions for exceptionally high risk (17 billion FCFA of
downgraded receivables including 75% on 5 files).
The decline in the banking margin is due in particular to significant downgrading of loan files,
partially composed of income from investment securities. This decrease is largely made up of the
increase in commissions (+23% in particular on transactions and foreign exchange).
A BOA Mali remediation plan has been put in place, involving the change and reduction of
head office staff. In addition, a plan to reduce the bank's charges was launched at the end
2018. This should allow a restructuring of equity.
These measures were discussed by the Board of Directors in February 2020 and subsequently voted on by
the general Assembly. Being listed on the Regional Stock Exchange (Brvm), the increase in
capital will have to follow a process before its effectiveness.
According to Mr. Abderrazak, a return to profitability is expected at the end of 2020. With the remediation plan, the group
bank wants to enable its subsidiary to comply with all the regulatory ratios, which has forced it to
launch a capital increase to be able to regain the bank's dynamism.
He also pointed out that the Covid-19 health crisis had no impact on the forecasts for the
group. But, the section that is affected is obviously that of the commission with the closing of the
borders.
This, he will say, is due to the fact that there is less international trade, less transfers abroad
and transactions. However, the BOA Group figures are "in line with the budget and forecasts
budgets adopted at the end of 2019”.
The BOA Group, which is still in good health, exceeded the bar of 4 million accounts at the end
2019. It is first in number of accounts with a market share in the Uemoa space which exceeds the
17%.