Staff Writer
Namibia’s four largest commercial banks recorded a sharp rise in loan impairments during the Covid-19 pandemic before conditions gradually stabilised, according to a new banking sector report released by Cirrus Capital.
The report, cited by Fimanekeni Mbodo, shows that combined impairments at First National Bank of Namibia, Bank Windhoek, Nedbank Namibia and Standard Bank Namibia increased from about N$230 million in June 2015 to a peak of about N$1.5 billion in December 2020.
According to the report, the banking sector’s impairment cycle over the past decade can be divided into three phases.
Between 2015 and 2018, impairments remained relatively contained, ranging between N$210 million and N$390 million as the economy continued to grow, although at a slower pace.
From 2019, impairments increased sharply as the Covid-19 pandemic disrupted economic activity and forced banks to recognise higher expected credit losses. Combined impairments more than doubled from N$620 million in June 2019 to N$1.5 billion by December 2020.
The report said impairments started easing from 2021 as economic conditions improved and credit losses normalised. By 2022, combined impairments had declined to about N$640 million.
Since then, impairments have gradually increased again, rising to about N$880 million by June 2025 before moderating to N$760 million by the end of the year.
The four banks recorded different trends over the period. FNB Namibia posted the largest increase in impairments, which rose 777% between June 2015 and December 2025. Bank Windhoek’s impairments increased by 252%, while Nedbank Namibia recorded growth of 167%.
Standard Bank Namibia was the only major bank to report lower impairments at the end of the period compared to where it started, with impairments declining by 35%.
The report further noted that FNB Namibia is the only bank currently experiencing what it described as a “second cycle” of rising impairments, with impairments rebounding 547% from a December 2022 low.
Bank Windhoek, Nedbank Namibia and Standard Bank Namibia all remain below their pandemic-era peaks. Nedbank Namibia’s impairments have largely returned to pre-pandemic levels.
According to the report, the overall trend shows that the banking sector absorbed a major credit shock during the pandemic, gradually worked through elevated losses over several years and is now operating with impairment levels that remain above pre-pandemic levels but are still considered contained.
