Namibia’s banking sector remains profitable in 2021: report

WINDHOEK, April 1 — Namibia’s banking sector in 2021 remained profitable, liquid, and resilient, despite a strained economic environment, according to the central bank’s annual report for 2021 released Thursday in Windhoek.
The banking sector remained profitable and held adequate levels of capital to cushion against possible shocks to the economy, the central bank, Bank of Namibia (BoN) Governor, Johannes Gawaxab said in the report.
“The sector’s profitability as measured by the return on equity increased to 13.6 percent in 2021, from 10.9 percent in 2020, while the capital position remained healthy, with the capital adequacy ratio remaining above the statutory minimum requirement, and in fact increasing slightly in 2021 compared to 2020,” he added.
On the other hand, Gawaxab said the asset quality, measured in the level of non-performing loans (NPL), deteriorated further in the third quarter of 2021, when it peaked at 6.9 percent, though it tapered slightly towards the end of the year to 6.4 percent.
“This NPL ratio level exceeded the crisis benchmark of 6.0 percent and requires close monitoring,” he added.
Looking forward, Gawaxab said Namibia needs to map out strategies for the post-COVID-19 era to drive economic recovery.
“The new plan must vigorously pursue economic diversification, improve productivity and competitiveness, and enhance resource allocation to productive sectors. Namibia must raise the momentum of COVID-19 vaccine uptake to increase herd resistance,” he concluded.  (Xinhua)