Chamwe Kaira
The Macroprudential Oversight Committee of the Bank of Namibia (BoN) met last week for its second review of the year to assess risks in the financial system.
BoN deputy governor Ebson Uanguta said the committee found the system stable after assessing global and domestic developments.
“After a thorough assessment of the global and domestic macro-financial developments and their potential impact on domestic financial stability, the committee concluded that the domestic financial system remains sound and stable, and it continues to operate without disruptions. Both the banking and non-banking financial sectors remained sound and well capitalised with sufficient levels of capital and liquidity buffers to absorb any potential losses,” he said.
He said payment infrastructure and operations also remained efficient.
Uanguta said the committee expects regulatory work underway to support resilience.
“The MOC further reaffirms its commitment to closely monitor developments from both the global and domestic markets that may affect the safety and soundness of the Namibian financial system and to intervene where necessary,” he said.
Since the last meeting in July 2025, the global financial system has held steady.
Global financial market volatility has eased since peaking in April 2025. Uanguta said financial conditions improved with accommodative monetary policies in major economies, while asset valuations remain high in the United States.
The global economy is projected to moderate to 3.2% and 3.1% in 2025 and 2026, compared to 3.3% in 2024. Namibia’s real GDP growth is expected to slow to 3.5% in 2025 before rising to 3.9% in 2026.
Uanguta said weaker growth in 2025 will come from a contraction in the livestock agricultural subsector due to drought and a continued decline in the diamond mining sector caused by weak demand, trade tariffs and competition from lab-grown diamonds.
He said weak diamond export earnings will weigh on the economy, but stronger uranium and gold exports could help offset the impact.
The banking sector remained well capitalised, profitable, and liquid in the third quarter of 2025. Total banking sector assets grew by 3.1% to N$184.7 billion. Uanguta said return-on-assets was unchanged, while return-on-equity rose from 19.8% to 20%, driven by higher net interest and trading income.
The total risk-weighted capital ratio dropped from 18.1% in the second quarter of 2025 to 16.6% in the third quarter due to dividend payments but remained above the 12.5% prudential requirement.
The liquidity coverage ratio and net stable funding ratio also stayed above minimum requirements.
Uanguta said asset quality continued to improve. The NPL ratio fell from 4.9% to 4.8%, driven by write-offs and recoveries in mortgage loans, though it remains above pre-pandemic levels.
He said the non-bank financial institution subsector remained sound through the third quarter of 2025.
Corporate mortgage lending kept contracting, while household mortgage credit showed a modest improvement but stayed below its long-term average.
Caption
Ebson Uanguta
