Notice No. 5/92 of August 12

NOTICE NO. 5/92 OF AUGUST 12

Considering the need to establish the elements that may constitute the own funds of institutions subject to the supervision of the Banco Nacional de Angola and to define the characteristics they must possess;

In exercise of the competence conferred upon me by Article 60 of the Organic Law of the Banco Nacional de Angola and by Article 20 of the Financial Institutions Law,

I hereby order:

Article 1. For institutions subject to the supervision of the Banco Nacional de Angola, the concept of own funds shall be considered within the limits and conditions set forth in this notice.

Article 2.

1. Unless expressly provided otherwise, the concept of own funds shall include amounts corresponding to the following elements: a) Paid-in capital, including the portion represented by non-callable preference shares; b) Legal, statutory, and other reserves resulting from premiums obtained from the issuance of shares above par and those formed by undistributed earnings; c) Profits and other undistributed results; d) Reserves arising from the revaluation of fixed assets; e) Results carried forward from previous fiscal years; f) Positive results of the current fiscal year; g) Subordinated loans, under conditions to be approved by the Banco Nacional de Angola.
2. Deductions shall always be made for amounts corresponding to the following elements: a) Shares of the institution itself, at their recorded book value; b) Intangible fixed assets; c) Negative results of the current fiscal year; d) Overdue credits that have not been provided for in accordance with established terms.

Article 3 For the purposes of the preceding article, the following are considered: a) Preference shares, as provided in Decree No. 1,645 of June 15, 1995; b) Subordinated loans, contracts that unequivocally establish that in the event of the borrower's bankruptcy or liquidation, the lender's repayment shall be subordinated to the prior repayment of all other non-subordinated creditors.

Article 4 The Banco Nacional de Angola shall not approve subordinated loans that, in particular: a) Establish an initial repayment term of less than 10 years; b) Contain any clause providing for early repayment relative to the maturity date.

Article 5 Amounts corresponding to callable preference shares with a fixed redemption date shall not be considered own funds of institutions when such date occurs before 10 years have elapsed since their issuance.

Article 6. The Banco Nacional de Angola shall establish, for institutions that include in their own funds amounts from callable preference shares with a fixed redemption date and from the incurrence of subordinated loans, a reduction program for these amounts over the five years preceding their respective repayment.

Article 7. In cases where the calculation of own funds is performed on a consolidated basis, to the amounts indicated in Article 2:

1. The following shall be added: a) Minority interests or stakes, if the full consolidation method is used; b) Negative differences from the first consolidation;
2. Positive differences from the first consolidation shall be deducted.

Article 8. The elements indicated in the preceding article shall be calculated in accordance with the standards governing account presentation and supervision systems on a consolidated basis.

Article 9 The Banking Supervision Directorate shall issue the regulations deemed necessary for compliance with the rules of this notice.

Article 10 This notice shall enter into force immediately.

Published, Luanda, August 12, 1992 THE GOVERNOR SEBASTIÃO BASTOS LAVRADOR