09 Jul 2019 17:00pm
WINDHOEK, 08 JUL (NAMPA) The Development Bank of Namibia (DBN) reported a sound financial position during the 2017/18 financial year (FY) with loans and advances increasing to N.dollars 7.7 billion from N.dollars 6.7 billion the preceding financial period.
The information is contained in DBNs 2018 annual report which was recently submitted to the National Assembly (NA) by Finance Minister, Calle Schlettwein.
In the report, DBN board chairperson Tania Hangula acknowledges that the Namibian economy paused during the period of reporting, adding that the impact of the stagnant economy had a minimal impact on DBNs operations.
She attributed this to the prudent management of DBNs operations and risk aversion.
Total assets increased to N.dollars 8.8 billion, an increase of 13 per cent compared to 2017, and an increase of more than 7 times compared to total assets of N.dollar 1.2 billion reported in 2010, Hangula said.
The bank also recorded a profit of N.dollars 219.5 million during the year under review.
A component of this profit is reserved for servicing the banks 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, DBNs chief executive officer, Martin Inkumbi said in the report
He added that loan approvals for enterprises and infrastructure development are the first measure of the DBNs projected development impact.
However, in 2018, private sector demand for finance was subdued due to prevailing economic conditions, particularly in the manufacturing, tourism, transport and logistics and construction sectors, the bank's head acknowledged.
In addition, the bank made material strides to diversify its sources of finance with an N.dollars 2.5 billion medium-term program which is listed on the Namibia Stock Exchange (NXS).
The debut bond on the NSX was initially expected to attract N.dollars 200 million in the subscription but was oversubscribed at N.dollars 290 million.
Two additional subscriptions grew the total by N.dollars 210 million, the report further revealed.
The program seeks to provide the bank with a pool of capital at relatively short notice adding to the range of financial products available in the Namibian market.
Also during the period under review, DBN approved N.dollars 2.5 million in projects that contribute to development.
The bank also approved monies to service a total of 100 hectares of land and 850 residential units.
These approvals by DBN are expected to create 1546 permanent jobs and 2862 temporary jobs.