Namibian banks in healthy state

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Atlas Namibia
Atlas Namibia

Bank of Namibia governor Johannes Gawaxab said Wednesday he is happy with the liquidity and capitalization of the country’s commercial banks even as he raised concerns about rising non-performing loans (NPLs) and low appetite in lending.

Speaking to media during a virtual press conference, Gawaxab said all Namibian banks including South African owned FNB, Standard Bank and Nedbank, are well capitalized and have sufficient excess liquidity.

The industry’s capital adequacy ratio stood at 15.3 percent at the end of June 2020, more than the apex bank’s requirement of 10 percent, he said, while the liquid asset ratio stood at 17 percent compared to a statutory requirement of 10 percent.

The governor, however, expressed concern over rising non-performing loans, which as a percentage of total loans and advances, stood at 5.7 percent at the end of June, up from 5.2 percent in March 2020.

“There are clear signs of a COVID-19 induced asset quality deterioration in NPLs and we are watching this,” Gawaxab said.

He also expressed concerns about the low appetite for lending by banks.

“High economic uncertainty is triggering a shift towards money holdings for precautionary reasons,” he said. Enditem

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