Regulatory Alerts2020-10-29
Directive No. 01/DSB/2020 on Property Valuation
The Banking Supervision Department (DSB) of the National Bank of Angola mandates that banking financial institutions utilize qualified, independent appraisers registered with the Capital Markets Commission to conduct property valuations. The directive requires all valuation reports and corresponding accounting records to reflect values exclusively in national currency, prohibiting foreign-currency indexing, while obligating institutions holding existing foreign-currency valuations to obtain compliant national-currency assessments. Non-compliance constitutes a punishable offense under the Basic Law of Financial Institutions, with unresolved interpretive matters reserved to the National Bank of Angola.
GOVERNOR DIRECTIVE NO. 01/DSB/2020 ORIGIN: Banking Supervision Department (DSB)
DATE 30/10/2020 SUBJECT: Property Valuation
Whereas Instruction No. 08/2019, dated August 27, on Impairment Losses for the Credit Portfolio, requires that property valuations be conducted by qualified independent appraisers, with no single appraiser concentrating more than 33.33% of the valuations to be performed or more than 33.33% of the valuation amounts; Pursuant to Law No. 12/15, dated June 17, the Basic Law of Financial Institutions; This Directive serves to establish the following:
- Valuation Reports 1.1. Banking Financial Institutions may only consider valid valuation reports issued by qualified independent appraisers that reflect property valuations in the national currency, without any reference to a foreign currency. 1.2. Banking Financial Institutions must record in their accounting records the property values stated in appraisers' reports in the national currency, and these may not be indexed to any foreign currency. 1.3. Any increase in the value of a property registered as collateral must be supported by a new valuation report issued by a qualified independent appraiser, adequately justified.
DIRECTIVE NO. 01/DSB/2020 Page 2 of 3 1.4. Banking Financial Institutions that are using, as of the effective date of this Directive, valuations with values defined in foreign currency must obtain new valuations with values defined in the national currency, to be conducted by appraisers who comply with the provisions of subpoint 2.1 of this Directive. 2. Appraisers 2.1. Banking Financial Institutions may only engage appraisers who: a) Are registered with the Capital Markets Commission (CMC), authorized to conduct valuations of properties for collective investment schemes; b) Are independent, meaning they cannot be related parties of the Banking Financial Institution. 2.2. Banking Financial Institutions that have recorded property values pledged as collateral based on reports from appraisers who do not comply with the requirements set forth in subpoint 2.1 of this Directive must obtain new valuations from appraisers who meet the aforementioned requirements. 3. Appraisers' Reports 3.1. In addition to the provisions of Annex V (Valuation of Received Collateral) of Instruction 8/2019 dated August 27, appraisers' reports must comply with the provisions of Annex I to Regulation 1/14 dated January 31 of the Capital Markets Commission. 4. The values of properties pledged as collateral in the accounting records of Banking Financial Institutions at the end of the current fiscal year must comply with the requirements defined in this Directive.
DIRECTIVE NO. 01/DSB/2020 Page 3 of 3 5. Non-compliance with the provisions established by this Directive constitutes an offense punishable under Law No. 12/2015, dated June 17, the Basic Law of Financial Institutions. 6. Doubts and omissions arising from the interpretation of this Directive are resolved by the National Bank of Angola. 7. This Directive enters into force on the day following its publication. Luanda, October 30, 2020. BANKING SUPERVISION DEPARTMENT
ELAVOKO CHAVES JOÃO -Director-