Africa-Press – Namibia. Fitch Ratings on Saturday affirmed the Development Bank of Namibia’s (DBN) Long-Term Issuer Default Rating (IDR) credit rating at BB- with stable outlook.
However, the rating agency kept DBN’s National Long-Term Rating at AA+, noted the statement from Fitch.
“DBN’s BB- Long-Term IDRs are driven by potential support from the Namibian authorities, as expressed by its Government Support Rating (GSR) of bb-.
“DBN’s Long-Term IDRs and GSR are equalised with Namibia’s BB- Long-Term IDRs. The Stable Outlook on DBN’s Long-Term IDRs mirrors that on Namibia’s Long-Term IDRs. DBN’s National Long-Term Rating of AA+(zaf) is equalised with that of Namibia and reflects the bank’s creditworthiness relative to that of issuers in South Africa and Namibia,” the rating agency noted.
According to Fitch, the stable outlook reflects that on Namibia’s National Long-Term Rating.
“The Namibian government has a high propensity to support DBN, in our view, given the bank’s important policy role, 100% state ownership and significant share of government-guaranteed funding. However, the sovereign’s ability to provide support is constrained by its own creditworthiness, as indicated by its IDR,” Fitch said.
Fitch also noted that the DBN’s impaired loans ratio increased to 33% at end-March 2023 but eased slightly by end-December 2023 due to write-offs and some recoveries.
“The sharp deterioration reflects DBN’s weak risk profile due to its development lending focus and weak economic conditions, due partly to the pandemic, weighing on borrowers’ repayment capacity,” Fitch noted.
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