Fitch Ratings has affirmed the Development Bank of Namibia’s (DBN) Long-Term Issuer Default Rating (IDR) at ‘BB-’ and its National Long-Term Rating at ‘AA+(zaf)’, both with a Stable Outlook, reflecting continued confidence in the bank’s strong government backing and strategic development role.
According to Fitch, despite recent losses, the DBN returned to profitability in the 2024 and 2025 financial years as loan impairment charges eased.
The agency also highlighted the bank’s solid capital position, noting a total capital adequacy ratio of 79% and a tangible leverage ratio of 42.7%, which provide a significant buffer against potential future losses.
Government-guaranteed funding remains a dominant feature of DBN’s balance sheet, accounting for 96% of total liabilities as of end-March 2025, including a 17-year African Development Bank credit line maturing in 2033.
Fitch said this strong funding profile underpins the bank’s liquidity and reinforces its policy-driven mandate.
“DBN’s ‘BB-‘ Long-Term IDRs are driven by potential support from the Namibian authorities, as expressed by its Government Support Rating (GSR) of ‘bb-‘. DBN’s Long-Term IDRs and GSR are equalised with Namibia’s ‘BB’ Long-Term IDRs. The Stable Outlook on DBN’s Long-Term IDRs mirrors that on Namibia,” the agency stated.
Fitch described DBN as Namibia’s flagship policy bank, playing a key role in supporting economic growth and social development.
However, it cautioned that the bank’s asset quality remains weak, with impaired loans rising to 38% by end-March 2025, reflecting the country’s challenging economic environment and the higher-risk nature of its development lending portfolio.
The agency said DBN’s ratings remain closely aligned with Namibia’s sovereign ratings, as the government retains full ownership and a high propensity to support the institution.
The Ministry of Finance’s 100% shareholding underscores the state’s long-term commitment to DBN’s policy mandate, which focuses on financing infrastructure, industrial, and development projects in line with national growth priorities.
The Stable Outlook indicates that DBN’s rating will likely remain unchanged unless there is a shift in Namibia’s sovereign rating or a significant reduction in government support.
Fitch further noted that DBN’s Environmental, Social, and Governance (ESG) relevance score of ‘4[+]’ reflects its efforts to promote access to finance for underbanked communities and small businesses, which positively influences its credit profile.
“DBN’s Long-Term IDRs are also sensitive to a reduced propensity of the authorities to support the bank. This could be indicated by an adverse change in DBN’s policy role, a material reduction in the proportion of state-guaranteed funding, or a sharp reduction in government ownership,” Fitch added.
