Notice No. 04/2012 of March 28

Published in the Official Gazette of the Republic, First Series, No. 60, on March 28

NOTICE NO. 04/2012 of March 28

Considering the need to establish rules regarding the maintenance of adequate solvency levels for credit cooperatives; Considering further the need to harmonize current regulations in the Angolan financial system with international standards; In accordance with Article 107 of Law No. 13/05 of September 30, the Financial Institutions Law, combined with Article 41(1) of Presidential Decree No. 22/11 of January 19, the Banco Nacional de Angola (BNA) is responsible for ensuring the solvency and liquidity of non-bank financial institutions, as well as establishing prudential limits on operations that credit cooperatives are authorized to conduct; In the exercise of the competence attributed by Article 1(f) of Law No. 16/10 of July 15 - Banco Nacional de Angola Law,

DETERMINE:

Article 1 (Minimum Regulatory Solvency Ratio) Authorized credit cooperative societies operating under the Banco Nacional de Angola (BNA) must maintain a capital level compatible with the nature and scale of their operations, as well as inherent risks, maintaining the Regulatory Solvency Ratio (RSR) equal to or greater than 12%.

Article 2 (General formula for calculating the Regulatory Solvency Ratio)

1. The Regulatory Solvency Ratio (RSR) corresponds to the ratio between Regulatory Own Funds (ROF) and the value of equity exposed to risks inherent in operations conducted by credit cooperative societies.
2. For calculation purposes, risk values are segregated according to exposure, following the formula: RSR = (ROF / APR) * 100

Where: RSR = Regulatory Solvency Ratio. Regulatory Own Funds (ROF) = Base Own Funds (Level 1) + Supplementary Own Funds (Level 2). Risk-Weighted Assets (RWA/APR) = Risk-Weighted Assets, corresponding to asset and off-balance sheet values exposed to credit risk weighted by their respective risks. Minimum Regulatory Solvency Ratio = limit fixed at 12% to determine the minimum necessary value of ROF relative to the amount of equity exposed to risks inherent in operations conducted.

Article 3 (Elements for calculating Regulatory Own Funds)

1. Base Own Funds (Level 1) consist of the algebraic sum of elements referred to in 1.1 minus those referred to in 1.2: 1.1 - Elements to aggregate: a) paid-up social capital; b) carried-forward results from previous fiscal years; c) legal, mutualism, statutory reserves and other reserves arising from undistributed results or established for capital increases; d) current fiscal year net income. 1.2 - Elements to deduct: a) loans granted with capital nature; b) value of shareholdings/participations; c) other net intangible assets after amortization; d) other values determined by the Banco Nacional de Angola.

2. Supplementary Own Funds (Level 2) consist of the algebraic sum of: a) social fund; b) other funds; c) revaluation reserves for fixed assets; d) other values authorized by the Banco Nacional de Angola.

Article 4 (Eligibility of Supplementary Own Funds to compose ROF) Supplementary Own Funds may correspond to a maximum of 100% of the value of Base Own Funds, net of deductions provided in Article 3(1.2), and meeting other conditions set forth in this Notice.

Article 5 (Compatibility with asset risk levels) Credit cooperatives, regardless of minimum capital and own funds, are required to maintain the value of their own funds compatible with the risk degree of their asset structure, which must be weighted in accordance with the Credit Risk Weighting Schedule to be established by specific regulation.

Article 6 (Credit operations) All credit operations conducted by credit cooperatives with their members must be carried out solely in the national currency.

Article 7 (Limits on investments/applications) Credit cooperatives must observe the following limits: a) 15% of ROF in investments in securities and financial instruments issued by the same company, affiliated companies, and their subsidiaries; b) 25% of ROF in credit operations and guarantee grants to a single member.

Article 8 (Classification and provisioning of credits)

1. Credit cooperative societies must classify granted credits and provided guarantees, creating respective provisions based on the assumed risk level, according to the table below:

RISK LEVEL	MATURITY PERIOD	PROVISION RATE
None	0 to 7 days	0%
Very Low	8 to 15 days	1%
Low	15 to 30 days	3%
Moderate	30 to 45 days	10%
High	45 to 75 days	20%
Very High	75 to 90 days	50%
Loss	Over 90 days	100%

2. For provision calculation, accounting balances of credits are considered.
3. The Banco Nacional de Angola may, upon finding inadequate credit methodology or high overall portfolio risk, determine additional provisions to the levels established in this article.
4. Credit cooperatives must write off credits classified at Risk Level "E" that have been in default for more than 360 days, with a minimum monthly frequency.

Article 9 (Accounting)

1. Credit cooperative societies must record their operations in accordance with the current Financial Institutions Chart of Accounts, adopting headings that address these operations according to the format provided in Annex I to this instrument.

Article 10 (Information reporting)

1. Credit cooperative societies must submit quarterly trial balances to the Banco Nacional de Angola, according to the format in Annex I.
2. The aforementioned annex may be amended via BNA Instruction.
3. For this purpose, reference dates are March 31, June 30, September 30, and December 31, with information submitted by the 8th of the following month in XML format through the Financial Institutions Supervision System - SSIF.
4. Credit cooperative societies must annually publish by April 30 of the following year the balance sheet and income statement for each fiscal year in an easily accessible publication medium for their shareholders/members and clients, as well as submit these to the Banco Nacional de Angola by that date.
5. Credit cooperative societies must appoint a qualified liaison officer responsible for answering potential questions regarding information reported to the Banco Nacional de Angola.
6. Credit cooperative societies must ensure permanent availability of the designated liaison, obligatorily appointing 1 (one) substitute, permanent or temporary, in case of the liaison's impediment.

Article 11 (External audit)

1. Credit cooperative societies must submit their financial statements annually to external audit, conducted by 1 (one) independent auditor.
2. The independent auditor must report to the Financial Institutions Supervision of the Banco Nacional de Angola on developed work and results, infractions, and facts that may affect the continuity of the credit cooperative's activity.
3. For this article, the independent auditor may be a duly authorized audit firm or a certified accountant registered with the competent authority.

Article 12 (Entry into force) This Notice enters into force 30 days after its publication date.

PUBLISHED Luanda, June 29, 2011

THE GOVERNOR JOSÉ DE LIMA MASSANO