Staff Writer
The Development Bank of Southern Africa (DBSA) says the global economy remains sluggish, even though the impact of recent global trade tariffs has been smaller than expected. The bank said reciprocal tariffs disrupted trade, raised geopolitical tensions and increased the cost of doing business.
Across Africa, economic prospects have improved slightly, but high debt continues to weigh on governments. DBSA warned that debt repayments are diverting funds away from development and social services, putting long-term growth at risk.
In South Africa, the bank described the economic environment as fragile.
Growth is held back by weak investment, persistent unemployment, inequality and rising public debt. The bank also pointed to risks linked to US trade tariffs imposed on South Africa, which have created uncertainty for local industries.
DBSA said it remains committed to supporting development, strengthening partnerships and mobilising resources to unlock Africa’s economic potential.
It said its priority is to deliver sustainable infrastructure projects and development outcomes across the continent.
The bank’s total assets grew 1% to N$122 billion by 30 September 2025, driven by a N$1.8 billion increase in investment securities. Development loans and equity disbursements rose sharply to N$11.1 billion from N$7.1 billion a year earlier.
The equity investment portfolio increased nearly 10% to N$5 billion due to fair value gains, capital redemption, new disbursements and favourable currency movements.
Cash reserves dropped 25% to N$11.3 billion as the bank increased lending and followed its liquidity management policies. Net profit surged 91.2% to N$4.1 billion, supported by stronger net interest income and higher gains on financial assets and liabilities.
Net interest income rose 9.3%, slightly above the pace of the previous interim period, while the annualised return on equity climbed to 13.8% from 8.1%.
The stronger rand also helped the bank record a foreign exchange gain of N$52 million, reversing the N$217 million loss recorded a year ago.
DBSA said many of its assets and liabilities are held in US dollars and euros, and it manages this exposure through natural and derivative hedging.
Operational efficiency improved, with the cost-to-income ratio easing to 20.1% from 21.5%, well below the bank’s 35% threshold. DBSA said this reflects the success of its cost-optimisation efforts.
Caption
The Development Bank of Southern Africa (DBSA) says reciprocal tariffs have raised geopolitical tensions and pushed up the cost of doing business.
Photo: Contributed
