Governor of Bank of Namibia upbeat about banking industry’s future

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WINDHOEK, March 31 (Xinhua) — Namibia’s banking industry remained resilient despite the low demand for credit and heightened loan defaults in 2020, the country’s central bank governor, Johannes Gawaxab, said Wednesday.

In addressing the launching ceremony for the Bank of Namibia’s (BoN) 2020 Annual Report in Windhoek, Gawaxab said that the BoN, like other international regulatory bodies, also faced the challenge of increasing the level of surveillance of banking institutions, while at the same time trying to relax some regulatory requirements to be more forbearing, in order to lessen the impact of the COVID-19 pandemic.

“The commercial banks continued to be steadfast and posted smaller, but still healthy profits and kept robust capital levels despite a challenging environment,” he said.

The rising level of non-performing loans, however, continued to be a regulatory concern since they reached an unprecedented level of 6.4 percent across the banking industry during 2020 and breached the crisis benchmark of 6 percent, the governor said.

“Although lack of liquidity was expected to become a major risk due to market uncertainty, the lower demand for credit coupled with the fiscal stimulus to support the economy ensured that the liquidity position for the banking industry remained strong for most of 2020,” he said.

Meanwhile, Gawaxab said the expected return to growth in the global and domestic economy in 2021, anchored by the progress with COVID-19 vaccines and their distribution, offers a ray of hope and makes Namibia optimistic about the future. Enditem

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