Fitch affirms Development Bank ratings with stable outlook
Fitch Ratings on 22 March affirmed the Long-Term Issuer Default Ratings (IDR) of Development Bank of Namibia Limited (DBN) at ‘BB-‘ and its National Long-Term Rating at ‘AA+(zaf)’, with a Stable Outlook.
This affirmation underscores Fitch’s confidence in DBN’s creditworthiness and its strategic importance in Namibia’s financial landscape.
The ‘BB-‘ Long-Term IDRs reflect the potential support DBN could receive from the Namibian government, given its critical policy role and 100% state ownership. DBN’s strategic focus on financing infrastructure and developmental projects aligns with national objectives, further reinforcing its significance in driving economic growth and social development.
Despite challenges posed by weak economic conditions and the COVID-19 pandemic, DBN remains resilient with strong capitalization and significant state funding guarantees. However, the bank faces pressure from weak asset quality, as evidenced by an increase in impaired loans.
Looking ahead, Fitch expects DBN’s profitability to improve as the bank addresses asset quality issues and completes its lending book clean-up. Any downgrade in Namibia’s sovereign ratings or a reduced propensity of the authorities to support the bank could negatively impact DBN’s ratings.
The affirmation of DBN’s ratings underscores Fitch’s recognition of the bank’s pivotal role in advancing Namibia’s development agenda. Despite challenges, DBN continues to uphold its commitment to promoting economic prosperity and social well-being in the country.
