Commercial banks rake in N$15.9bn in 2025

Namibia's commercial banks collectively posted a profit of N$15.9 billion in 2025, up almost 10% from N$14.5 billion the previous year, according to the Bank of Namibia's (BoN) annual report.

Net interest income accounted for the bulk of earnings, driven by residential mortgages, fixed-term loans, and other interest-earning assets.

"Net interest income rose by 2.7% to N$9 billion, while operating (non-interest) income increased by 5.4% to N$6.9 billion, reflecting improved fee and trading income, supported by high transactional volumes," the BoN said.

Where the money came from

"Net interest income accounted for 56.3% of total income, largely driven by residential mortgages, fixed-term loans, and other interest-earning assets. Non-interest income accounted for the remaining 43.7% (N$6.9 billion), led by fee income of N$5 billion (31.3%), mainly from transaction fees and service charges," the BoN said.

"Net trading income contributed N$1.3 billion (8.1%), while other income and investment income amounted to N$537.4 million (3.4%) and N$146.7 million (0.9%), respectively," it added.

Net income after tax increased by 6.6% to N$4.7 billion. The sector's return on assets (ROA) remained stable at 2.5%, while return on equity (ROE) edged down slightly to 19.6% from 20.3% the previous year.

"Despite this moderation in the profitability ratios, profitability indicators remained robust and above their long-term historical averages, underscoring the sector's continued resilience and sustained operational efficiency," the BoN said.

Costs rise but stay in check

Operating expenses grew moderately during the period, largely driven by higher staff-related and administrative costs.

Operating expenses rose 3.8% to N$8.6 billion in December 2025, broadly in line with inflation of 3.5% for the year, the BoN said.

"The increase in operating expenses was primarily driven by a 7% increase in staff costs, a 3.3% increase in consultancy and management fees, a 2.4% increase in administration and overheads, and a 2.2% increase in depreciation and amortisation," the BoN said.

"As a result of the growth in total income outpacing the growth in operating expenses, the cost-to-income ratio improved from 57.2% in 2024 to 54.1% in 2025, comfortably below the central bank's benchmark threshold of 65%," it added.