Mozambique bails out bank to prevent bankruptcy

MOZAMBIQUE’S central bank has bailed out the country’s fourth largest commercial lender in a move it said was needed to prevent the failure of its banking system.

The country has been grappling with a liquidity crunch, exacerbated by the International Monetary Fund and foreign donors cutting off support over loans that were not approved by parliament or disclosed publicly.

Banco de Mozambique governor Rogério Lucas Zandamela said the central bank had injected 8-billion meticais (R1.5-billion) to recapitalise Moza Banco, which is 49% owned by Portugal’s Novo Banco, to avoid a run from depositors and creditors.

“It would have had a cost of incalculable dimensions. It is frightening when such an institution falls into bankruptcy,” he said.

The central bank has guaranteed all deposits at Moza Banco, fired its board and taken over its day-to-day operations.

Moza Banco got into difficulties this year due to a rapid expansion of its branch network and an incomplete recapitalisation from shareholders.

The central bank said that it would appoint an evaluation committee and set up a general meeting for the recapitalisation or sale of Moza Banco.

● Valentina Guebuza, the influential businesswoman daughter of former Mozambican President Armando Guebuza, was shot dead by her husband in their apartment in a wealthy neighbourhood of the capital, Mozambican police said on Thursday.

Guebuza, a member of the ruling Frelimo party’s Central Committee and ranked as one of Africa’s most powerful women, was rushed to hospital after being shot four times but died en route, police spokesman Orlando Mudumane said.

Her husband, Zofimo Muiuane, had confessed to the murder, saying the couple had of late been living a tumultuous relationship, Mudumane said. — Reuters