Financial sector given clean bill of health
The Deputy Governor of the Bank of Namibia, Mr. Ebson Uanguta this week gave the banking and non-banking financial sectors a clean bill of health when he presented the Financial Sector Financial Stability Report for 2016.
He made the presentation to a packed audience in the Bank of Namibia’s auditorium, highlighting that both sectors remained profitable and posed no systematic risks to the economy. Of concern to Uanguta however was the level of household and corporate indebtedness which he said required continuous monitoring.
Said Uanguta, “the overall assessment concludes that the financial sector is robust, healthy and resilient to any shocks, but continuous monitoring of risks to financial stability from the domestic, regional and global environments is needed as a prudent measure.” Added Uanguta, “since the last Financial Stability Report, the Namibian financial system remained robust, despite a rise in household indebtedness. The Namibian financial system remained stable in 2015, characterised by a sound, profitable and adequately capitalised banking sector with a relatively low level of Non-Performing Loans. Moreover, the performance of the non-banking financial sector was strong during 2015, as its balance sheet remained robust.” He pointed out that there was a need for continuous monitoring in the level of household and corporate indebtedness as well as the concentration of banking assets in mortgages. Said Uanguta, “this (areas) is something we need to pay attention to, (although) the banking sector will remain healthy and sound for the near future. The Return-On-Equity for our banks was more then 30%, the global norm was (circa) 4%. This shows the strength of our banking sector. Added Uanguta, “I also do not see a housing bubble in the foreseeable future.” He made the remark in response to a question from the floor on an International Monetary Fund report which warned of an impending housing bubble.