Cape Verde’s financial stability index rose throughout 2024, surpassing the values recorded the previous year, the central bank announced in its latest bulletin on the subject, consulted today by Lusa.
“The financial stability index increased throughout 2024, reversing the downward trend previously observed,” the document from the Bank of Cape Verde (BCV) states.
The improvement, it added, “was due to the strengthening of banking soundness, the positive development of the financial development index, and the improvement of the external economic climate.”
There was a 5.7% year-on-year increase in bank revenues, “reaching the highest level ever,” which translated into a 7.2% rise in net profits compared to December 2023, according to the BCV.
In terms of scale, total banking sector assets grew by 5.5% in December 2024, year-on-year.
According to the BCV, this means that total bank resources at year-end represented around 127.7% of the Gross Domestic Product (GDP), whose nominal value is expected to exceed 2.5 billion euros this year, according to government projections.
Other data presented by the regulator show a “slight improvement in credit portfolio quality indicators by the end of 2024, with the NPL ratio [non-performing loans] falling below double digits.”
The central bank also reports that “the level of banking concentration in the credit market remains high.”
On the other hand, customer deposits (other residents, emigrants, and the public sector), which make up 80% of banking funding, continued to grow.
Still, the BCV highlights some risks: “the five largest depositors account for almost 23.3% of total deposits,” and liquidity risk “remains strongly tied to the institutional concentration of banking sector funding.”
In its summary, the BCV states that the data confirm a “strengthening” of the capital, financial, and prudential robustness of banks and insurers, as well as an “increase in the solvency and profitability capacity of the banking sector and the maintenance of a comfortable liquidity position.”
The solvency ratio of the banking sector reached 23.8% at the end of December 2024, “significantly above the regulatory minimum of 12%.”
Source: Lusa
