The Development Bank of Southern Africa (DBSA) yesterday released its reviewed condensed interim financial statements for the six-month period ended September 30, 2024, showing resilience amidst global economic challenges.
Despite macroeconomic headwinds, DBSA reported a marginal increase in net profit and strong asset quality metrics.
For the period under review, DBSA's net profit rose by 1%, reaching R2.2 billion, compared to R2.1bn in the prior year. However, operating income saw a slight decline of 2.8%, dropping to R3.6bn from R3.7bn in 2023. Sustainable earnings, a key metric for the bank, surged by approximately 32%, amounting to R2.5bn.
DBSA's improved its cost-to-income ratio, which decreased to 21.5%, compared to 22% in the prior year. The bank’s focus on operational efficiency continues to pay off, keeping the ratio well below the 35% threshold.
Asset growth was relatively stable, with total assets declining by 1% to R117bn, while development loans and bonds fell by 2% to R112bn. A notable achievement was the increase in disbursements, which grew significantly by 61% to R7.1bn. Additionally, cash flow from operations surged by 60% to R3.2bn, driven by strong cash collections.
DBSA’s asset quality remained robust, with the gross non-performing loan (NPL) ratio improving to 3.14% from 3.9% in March 2024. The net NPL ratio also decreased to 1.08% from 1.5%. Impairment losses were reduced by 27.5%, falling to R502 million from R693m in the prior year.
The bank's liquidity position remained solid, with total liquid assets increasing by 12% to R12.1bn.
Looking ahead, the DBSA said, “The global economic outlook remains lacklustre, with risks to the growth outlook shifting to the downside, including the speed at which central banks will reduce borrowing costs, the escalation of geopolitical tension, and the possible changes in industrial and trade policies, which could see a sharp increase in trade tariffs.”
Economic growth in Africa is expected to remain stable. Nonetheless, ongoing risks to the region include sovereign debt challenges, double-digit inflation, climate risks and uncertainties related to the political environment, it said.
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