Maihapa Ndjavera
WINDHOEK – The Development Bank of Namibia (DBN) has reported sound financial results for the year ending March 2018. This was revealed in its annual report that was recently released and submitted to Parliament this week. In the report, Martin Inkumbi, the DBN’s chief executive officer noted that the profit for the year amounted to N$219.5 million, which is an increase of 28 percent compared to 2017.
“The component of this profit is reserved for servicing the bank’s debt, which consists of obligations to its new bond subscribers, as well as other obligations. Subject to shareholder approval, the balance will be apportioned between reapplication for projects and transfer into reserves,” stated Inkumbi.
Tania Hangula, DBN chairperson, in the same report said 2018 provided the bank with clear goals and she is pleased that it made strides that are reflected in its results. “The upshot is that the bank has progressed not only financially but also in attaining fitness for its purpose,” said Hangula while promising DBN shareholder (the Ministry of Finance), stakeholders and borrowers to expect more.
Hangula further noted that even though the Namibian economy had paused, it had limited impact on DBN’s performance, due to prudent management of its operations and risk. She added that while 2018 was characterised by a higher level of non-performing loans, DBN counterintuitively posted sound results.
The report indicated that loans and advances increased by 15 percent to N$7.7 billion, up from N$6.7 billion reported in 2017. Total assets increased to N$8.8 billion, which is an increase of more than seven times compared to total assets of N$1.2 billion reported in 2010. Hangula stated that the bank has reflected and evolved to proactively prepare for similar circumstances that will emerge given cyclical fluctuations in economic activity and the shifting needs of development.
“The bank’s assumption of debt obligation is in line with its object of mobilising financial resources for development, and has been an objective of the bank since its inception,” Hangula added.
During 2018 DBN issued a N$2.5 billion medium-term note programme on the NSX, which provided the bank with the ability to raise capital on relatively short notice, based on forecasted loan book growth requirements. This, Hangula noted, gives the bank a further measure of flexibility in its capacity to meet financing commitments for projects of economic significance, previously vested only in its capital and reserves.
Commenting on the bond, Inkumbi said it also has another purpose to further develop Namibia’s financial markets and divert a portion of investment capital that may previously have flowed across the border. He concluded that investments in local productive capacity further strengthen the economic environment to the benefit of the local financial industry.