Total assets across Namibia’s financial system expanded sharply in 2025, with banking sector assets rising to N$188.2 billion and non-bank financial institutions (NBFIs) surging to N$552.8 billion, even as regulators warn of growing external risks.
The latest Financial Stability Report by the Bank of Namibia and the Namibia Financial Institutions Supervisory Authority shows a system that is holding firm, but increasingly exposed to global shocks.
Banking sector assets grew by 5.1%, driven by lending, advances and investment securities, while the NBFI sector posted stronger growth of 16.6%, reflecting improved market conditions and investor activity.
“The Namibian financial system remained stable, sound and resilient, with no major disruptions or disorderly functioning of key financial services despite the moderation in economic growth and ongoing geopolitical uncertainty,” the report said.
Banks remain the backbone of stability, supported by strong capital buffers, liquidity and profitability, alongside improving asset quality.
“The banking sector remained well capitalised, profitable and liquid, with notable improvement in asset quality, supported by sufficient provisions and strong capital buffers, while stress test results confirmed the sector’s ability to absorb shocks across a range of scenarios,” the report said.
But the positive picture is not without pressure points.
Regulators flagged rising global risks, including geopolitical tensions, volatile commodity prices and tightening financial conditions, all of which could test the system.
“Risks to the macroeconomic environment have increased due to heightened geopolitical tensions, volatile commodity prices and tighter global financial conditions, although most other risk indicators remained relatively stable,” the report said.
At a domestic level, some pressure is easing. Household debt growth slowed significantly, with annual indebtedness declining to 2.1% by the end of 2025, largely due to reduced activity in microlending.
“Annual household indebtedness declined to 2.1% by the end of 2025, driven by a contraction in the microlending segment, reflecting improved repayment trends and reduced pressure on household balance sheets,” the report said.
The NBFI sector continues to benefit from improved conditions, including lower inflation, recovering regional equity markets and stronger domestic demand, which have supported savings and insurance uptake.
The property market has also remained resilient, with rising house prices and stable mortgage structures, while the national payments system continues to function without disruption.
Despite the current stability, regulators are preparing for a more uncertain environment, with additional tools being introduced to strengthen oversight.
“The current macroprudential policy tools, alongside existing microprudential measures and enhanced financial sector surveillance, are considered sufficient for the prevailing environment, with additional frameworks such as the countercyclical capital buffer and loan-to-value tools being operationalised to enhance policy response capacity,” the report said.
