Financial system stable

The yearly Financial Stability Report conducted jointly by the Bank of Namibia and the Namibia Financial Institutions Supervisory Authority has found no risks that could severely affect the financial system. This is according to Bank of Namibia director of research Florette Nakusera, who recently revealed the findings of the report. According to her, since the last Financial Stability Report (FSR), the Namibian financial system continued to prove its resilience as it witnessed an array of adverse developments in the global and domestic economies during the period under review. “Generally, the financial system and markets remained sound, profitable and with no disruptions or disorderly functioning of key financial services despite unfavourable domestic and global economic conditions. The banking and non-banking financial institutions continued to be sound and well capitalised,” she said of the findings of the report. The payment system and infrastructure similarly continued to perform efficiently and effectively and with increasingly robust risk mitigating measures to facilitate safe payments. Since the last FSR, growth in household debt slowed in 2016, in line with the slowdown in economic growth the report had found. “This was mainly due to the slower growth in mortgage lending and instalment sales credit to households over the same period. Growth in household debt will continue to be monitored in line with the policy measures that were introduced during the latter part of 2016 and early 2017,” said Nakusera. This includes the introduction of Loan-to-Value (LTV) ratios and the requirement for a deposit on a vehicle. Commenting on the expected benefit of the newly introduced LTV ratios, she said: “This policy tool was introduced to curb speculation in the residential housing market segment and thereby reduce the exposure of banking institutions to mortgage loans. It is also expected that LTV will promote responsible borrowing while giving preferential access to housing for first time buyers in Namibia.” Commenting on the stability of both banking and non-banking financial institutions, she said: “The performance of the banking sector has been sound, with the banks remaining healthy, profitable and adequately capitalised. The non-banking financial institutions remained sound and do not pose a risk to the country's financial system. The payment system and infrastructure operated effectively and efficiently during the last FSR.” “From a risk profile point of view since the last FSR, most risks have either subsided or remain unchanged, with minimal corresponding impact on the stability of the financial system. These risks to Namibia's financial stability remain low and well absorbed during 2016 when compared to that of 2015,” Nakusera concluded.OGONE TLHAGE

Financial system stable

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Namibian Sun 2025-06-20

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Financial system stable

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Namibian Sun 2025-06-20

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