'Namibia's financial system resilient in 2018': Uanguta

02 May 2019 16:10pm
WINDHOEK, 02 MAY (NAMPA) - The Namibian financial system was resilient in 2018 despite the quality of banking assets going down, household debt increasing and the Namibia Dollar depreciating against major currencies.
The Bank of Namibia’s (BoN) Deputy Governor Ebson Uanguta revealed this during the launch of the Financial Stability Report for 2018 here on Thursday.
Non-banking financial institutions’ assets grew by 0,9 per cent in 2018, driven by slow growth in pension fund assets.
Uanguta said the banking sector remained profitable, liquid and well capitalised, notwithstanding further deterioration in asset quality, as measured by the non-performing loans ratio.
“Moreover, banks continued to register positive growth, despite a challenging economic environment over the period under review,” he stated.
He indicated that banks had non-performing loans of 2,5 per cent in 2017, whereas they ranged around 1,5 per cent before the economic contraction in 2016.
“In 2018, non-performing loans moved to around 3,5 per cent. You see that the quality of assets is deteriorating because of the contraction and the mode in which the economy is operating,” he said.
The level of household indebtedness rose slightly as a result of increased demand for short-term credit facilities and overdrafts on loans.
Household debt increased by seven per cent in 2018, from 6,7 per cent in 2017.
“The household debt to disposable income ratio moderated due to the disposable income increasing at a faster pace than household debt,” Uanguta said.
Namibia’s financial stability risk also went up in 2018 as a result of a global economic slowdown, depreciation of the Namibia Dollar against major currencies, and the possibility of sovereign credit downgrades from international ratings agencies.
Uanguta said continued weakening of the Namibia Dollar against other currencies could cause instability.