Rep office reports

DBSA remains resilient despite profits being dented by Covid-19 outbreak (Economic Division in South Africa)
Kind: Rep office reports  Organization: Department of International Cooperation  Publish Date: 2020-10-28 16:16
THE DEVELOPMENT Bank of SA (DBSA) has said that the Covid-19 outbreak dented its profits in the last quarter for the year to the end of March as the total expected credit loss charge rose to R.63 billion from R1.44bn last year.
The institution on Friday reported R503.93 million in profits during the year, down from R3.10bn reported a year earlier.
The group said it increased its expected credit loss provisions on the performing loan book and this had resulted in higher expected credit loss coverage and lower profitability levels compared with last year.
However, the bank said it had managed to increase its development loan disbursements more than 75 percent to R15.7bn during the year compared with the previous year.
“The bank achieved higher levels of loan approvals and commitments compared with the prior year. Furthermore, it remained focused in line with its mandate on pursuing its growth strategy designed to augment disbursements through emphasis on its catalytic role aimed at contributing to sustainable infrastructure development beyond the confines of its own balance sheet,” the bank said.
Its total asset base increased by 12 percent to R100bn, up from R89bn compared with last year, primarily due to a solid net growth in the development loan book.
The bank said there was, however, a marginal decrease in net interest income because of the SA Reserve Bank interest rate cuts despite the growth in the asset base.
It said its net interest income fell 1.58 percent to R4.42bn.
The DBSA said it delivered infrastructure to the value of R66.3bn in total during the year, of which R43.1bn was infrastructure driven.
“In addition, the bank achieved R2.4bn in projects prepared and committed and was able to unlock infrastructure within under-resourced municipalities amounting to R1.4bn,” the bank said.
Its debt-to-equity ratio, including R20bn callable capital, as at the end of March rose to 108 percent compared with 90 percent reported last year.
Its total debt increased to R61bn, up R51bn from a year earlier.
The bank said it has a strong leadership management team steering it through the challenging Covid-19 period.
It said it had a healthy pipeline of projects that formed a solid springboard for success in the future and would continue to focus on disbursing to infrastructure projects to grow developmental impact in line with its mandate.
“The bank has a resilient balance sheet and continues to play a significant role in infrastructure development through lending and non-lending activities, while making progress in the implementation of the country’s Infrastructure Fund and playing an active role in crafting enhancement of municipal service delivery through the district delivery model,” the bank said.

Update: 2020-04-08
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