The year was 1996, the war was raging, the political situation had gone from fuzzy to opaque, and the country's economic indicators were virtually flattened. Not a propitious moment to be launching Angola's first private banking venture.
But a select group of Angolan and foreign shareholders saw things differently and put their money down to prove it by endowing the Banco Africano de Investimentos (BAI) with start-up capitalization that exceeded the government-set requirements by a factor of eight.

The spirit of confident dynamism has kept BAI at the forefront

MÁRIO APM PALHARES Executive Chairman of the Board, Banco Africano de Investimentos

That spirit of confident dynamism has kept BAI at the forefront of the small but intensely committed core of Angola's private bank sector. Talent certainly helped (a former governor of Portugal's central bank is on the board of directors) as did the fact that many of the foreign partners were companies that had been operating in Angola for some time previously and had an insider's idea of the potential that was buried under discouraging official statistics.
The original partners were Portuguese, South African, and French. But to hear the bank's executive chairman of the board Mário APM Palhares tell it, the fact that over half the owners are Angolan is what makes the big difference.
"Our headquarters are here and our decisions are taken here. In my view, managers who are based abroad are not ideally situated to take or approve investment decisions."

During an initial period of building up and consolidating its operations in Angola, BAI took on more commercial and trade-related services like opening letters of credit and brokering foreign currencies for importers. "Given the current state of the economy, this is what is needed. It also puts us in touch with future clients of our investment banking services, which is what we should be doing and want to be doing."

BAI has branched out into other countries of southern African, investing in mining and breweries.

Mr. Palhares is convinced that a bank of those characteristics has to position itself regionally and accordingly has got involved in syndicated operations such as financing breweries in Mozambique and Guinea, and part-funding a copper exploration survey in Zambia.

"People see there is an aggressive bank open for business in Angola and the profits we make outside can be repatriated and reinvested at home," says Mr. Palhares, pointing to the US$12 million that has been sunk into the fishing industry and funding for an air charter company to acquire a couple of Boeings, a submarine cable for Angola telecom, Coca-Cola, "and any other project with a major focus on Angola's development. "We feel that our natural scope would be to the countries of the region wherever there is a chance of bringing profits to the bank, so that we are in a better position to mobilize investments for Angola."