19 August 2022
The Development Bank of Southern Africa, (DBSA), a development finance institution wholly owned by the South African government, reported a record R3.8 billion net profit in the financial year ended 31 March 2022. Profitability increased by more than 168% from R1.4 billion to R3.8 billion in the previous financial year.
“Our stellar financial results are truly meaningful when looked through the lens of lives impacted by the Bank. Driven by a concerted effort to bend the arc of history towards shared prosperity, we are pleased that the end of the 2021/22 financial year came with improved livelihoods for many of our citizens,” said Patrick Dlamini, CEO at the DBSA.
Development Impact Highlights:
- The Bank successfully delivered infrastructure to the total value of R33.4 billion, of which R15.1 billion was infrastructure catalysed;
- 13 projects were successfully completed at local government level;
- Infrastructure unlocked within under-resourced municipalities amounted to R2.1 billion;
- Projects approved for Broad-Based Black Economic Empowerment (B-BBEE) entities for project preparation funding amounted to R2.1 billion;
- R2.9 billion of the Bank’s infrastructure spend benefitted B-BBEE companies, 40% of which have women ownership with greater than 30% shareholding;
- 1,543 small, micro, and medium enterprises benefited from the infrastructure that has been delivered to date; 152 of these businesses are women-owned;
- 931 learners received access to a newly built school;
- 56,958 learners are benefiting from 104 newly refurbished schools.
The profit increase was influenced by a solid growth in net interest income from the Bank’s core lending activities amounting to 18% when compared to the prior year. Other factors that influenced the positive results include stabilisation of expected credit losses which reduced impairment charges, increase in cash collections and repayments from the development loans, and effective cost containment strategies.
“We are pleased with such a positive result coming out of 2021/22 financial year. It is testament to the resilience of the Bank, its governance structures, and the duty of care with which all our teams continue to approach our mandate. The economic fallout from the pandemic spurred the implementation of innovative monetary and fiscal policy measures across the world, and we were not spared. While economies deal with the lingering disruption to economic activities such as supply chain issues, it has been prudent to continue to project conservatively as overall recovery might be delayed. That being said, our infrastructure-led recovery has been an important driver of post-lockdown recovery. As the DBSA, we have remained focused on our mandate and pursued our growth strategy, emphasising our catalytic role towards sustainable infrastructure development beyond the confines of our balance sheet,” continued Dlamini.
DBSA continues to have strong capital buffers for unexpected loss events. The total equity base of the Bank increased by R3.8 billion from R39.1 billion as at 31 March 2021, to R42.9 billion as at 31 March 2022. The debt-to-equity ratio improved to 88%, from a prior year ratio of 101%. Overall, the Bank remains well capitalized, and the ratio remains well below its regulatory debt-to-equity ratio cap of 250% per the DBSA Act. This provides the DBSA with an opportunity to gear the capital further in financing infrastructure investments.
The Bank continues to show consistent strong liquidity and capital positions. Liquidity holdings continue to be high relative to the pre-COVID-19 period. Contributing to this is the Bank’s success in raising funding from international and local commercial banks, as well as the local fixed income market. The Bank’s total debt funding decreased by approximately R3 billion, from R59 billion as at 31 March 2021, to R56 billion as at 31 March 2022 due to repayment of debt funding.
Development loan disbursement activities amounted to approximately R12.9 billion, compared to R13.5 billion as at 31 March 2021. Cash collections and client loan repayments on the development loans amounted to approximately R19 billion, of which R12 billion was principal or loan capital repayments, while R7 billion was interest received from clients.
“The DBSA’s strong leadership and management team has steered the Bank through a challenging economic climate, whilst following principles of good corporate governance. We have a resilient balance sheet, and we continue to meet our infrastructure development mandate through lending and non-lending activities across all spheres of government and beyond. Key in our growth strategy is ensuring that we increase developmental impact using our own balance sheet, and through partnering with other local and international players. Looking ahead, we have a healthy pipeline of projects that provide for a solid springboard for success in the future, and we will continue to employ due care as custodians of South Africa’s infrastructure development,” concluded Dlamini.
Annexure A: Audited Financial Results
About the Development Bank of Southern Africa (DBSA)
The Development Bank of Southern Africa (DBSA) is a leading development finance institution (DFI) in Africa. Established in 1983, the DBSA participates across the entire infrastructure value chain and provides planning, project preparation, financing, and implementation support for economic and social infrastructure in South Africa, SADC and the rest of the African Continent. The institution’s mission is to improve people’s lives, boost economic growth and promote regional integration through infrastructure development.
For more information, visit www.dbsa.org
For more information contact:
DBSA Media Relations