Namibia’s banking sector expanded its asset base to N$195.1 billion during the first quarter of 2026, while maintaining strong capital and liquidity buffers and recording an improvement in asset quality, the Bank of Namibia (BoN) has said.
The Bank’s Macroprudential Oversight Committee (MOC) said total banking sector assets increased by 3.8%, driven primarily by growth in net loans and advances, supported by higher holdings of short-term negotiable securities.
Bank of Namibia Governor Ebson Uanguta said the sector remained well-capitalised, profitable and liquid despite a moderation in earnings.
“The banking sector remained well capitalised, profitable and liquid during the first quarter of 2026, with notable improvement in asset quality. Total banking sector assets increased by 3.8% to N$195.1 billion, driven mainly by growth in net loans and advances, supported by higher holdings of short-term negotiable securities,” Uanguta said.
The central bank also reported an improvement in credit quality, with the non-performing loan (NPL) ratio declining from 4.3% in the fourth quarter of 2025 to 4.2% in the first quarter of 2026. The improvement was largely attributed to write-offs and recoveries in the mortgage loan portfolio.
While profitability remained strong, key returns softened during the period. Return on assets (ROA) declined from 2.8% to 2.3%, while return on equity (ROE) fell from 21.8% to 18.1%, reflecting lower net interest income and weaker net trading income.
“Although profitability remained strong, the return on assets declined from 2.8% to 2.3%, while the return on equity decreased from 21.8% to 18.1% during the first quarter of 2026, mainly reflecting lower net interest and net trading income. Credit risk continued to improve, with the non-performing loan ratio declining from 4.3% in the fourth quarter of 2025 to 4.2% in the first quarter of 2026, largely owing to write-offs and recoveries in the mortgage loan portfolio,” he said.
Despite the moderation in profitability, the MOC said banks remain well positioned to absorb potential shocks.
Liquidity indicators continued to strengthen, with both the Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR) remaining comfortably above minimum regulatory requirements.
The sector’s capital adequacy ratio remained broadly stable at 17.2%, while the latest macro-stress tests confirmed that banks would remain adequately capitalised even under severe macro-financial scenarios.
“Liquidity remained adequate, with both the liquidity coverage ratio and net stable funding ratio improving further while remaining comfortably above the minimum regulatory requirements. This confirms that banks have sufficient liquidity buffers to withstand potential funding pressures and continue to meet funding obligations. Capital levels also remained strong, with the capital adequacy ratio broadly stable at 17.2% in the first quarter of 2026. Moreover, the latest macro-stress testing results confirmed that the banking sector remains resilient under severe macro-financial scenarios, with capital adequacy remaining above the prudential requirement,” Uanguta said.
