Chamwe Kaira
Namibia’s financial system remained stable in 2025, although global uncertainty and rising links between government finances and the financial sector continue to pose risks.
The Bank of Namibia (BoN) and Namibia Financial Institutions Supervisory Authority (Namfisa) released the April 2026 Financial Stability Report outlining conditions across the system.
The report shows that risks in key areas, including the economy, household debt, public debt, banking, corporate debt, payment systems and non-bank financial institutions, remained largely unchanged during the year.
BoN and Namfisa said external shocks, cyber threats and closer ties between government and the financial sector remain key risks.
The report identified a high probability of cyber risk materialising in 2026. Climate-related risks were assessed as moderate with a low short-term impact.
Namibia also made progress in anti-money laundering reforms. The country addressed all 13 deficiencies identified by the Financial Action Task Force after submitting its fourth progress report in November 2025.
The banking sector remained stable, with strong capital, liquidity and profitability. Asset quality improved in the second half of the year.
The non-performing loan ratio declined to 4.3% from 5.1%. Return on assets rose to 2.8% from 2.6%, while return on equity increased to 21.5% from 20.2%.
The capital adequacy ratio eased to 17.3% from 18.1% but remained above the minimum requirement of 12.5%.
Liquidity remained strong, with the liquidity coverage ratio at 145.6%, down from 169%. Stress tests showed banks can withstand severe economic shocks.
The non-bank financial sector also grew. Total assets increased by 16.6% to N$552.8 billion by the end of 2025.
The sector’s funding position improved to 101.4% from 101.1%, while the solvency ratio rose to 119.9% from 117%.
Payment systems remained stable. The Namibia Interbank Settlement System recorded 99.56% availability, slightly below the 99.90% benchmark due to system migration.
BoN and Namfisa are working to strengthen oversight. A new countercyclical loan-to-value regulation has been approved to replace the current framework.
Caption
Bank of Namibia and the Namibia Financial Institutions Supervisory Authority says the financial system remains stable.
- Photo: Bank of Namibia
