Record DBSA profit

The Development Bank of Southern Africa (DBSA) has reported a record net profit of R3.8 billion for its financial year to the end of March 2022.

Releasing its annual results on Friday, the state-owned development financier noted that the net profit represents a 168% rise on the previous period, boosted by growth in net interest income, increase in cash collections and repayments for development loans and better cost containment measures.

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The DBSA noted that the successful financial period has seen it allocating a total of R33.4 billion worth of infrastructure support during the period.

Over R15 billion of this was allocated to “catalysing infrastructure development”. Loan disbursements amounted to R12.9 billion, while R3.3 billion went towards delivering infrastructure implementation support and R2.1 billion allocated towards infrastructure for under-resourced municipalities.

“We are pleased with such a positive result coming out of our 2021/22 financial year,” says DBSA CEO Patrick Dlamini.

“It is testament to the resilience of the DBSA, its governance structures, and the duty of care with which all our teams continue to approach our mandate… The DBSA’s strong leadership and management team has steered the Bank through a challenging economic climate, whilst following principles of good corporate governance,” he adds.

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While the DBSA is a development finance institution that is wholly owned by the South African government, it provides development finance solutions to South Africa and other Southern African countries.

Its key focus areas include providing support to local government, the energy sector (by developing and funding renewable energy projects), as well as the transport, education, water and sanitation, and the ICT sector.

According to its latest financials, the DBSA increased its total equity base by R3.8 billion to R42.9 billion during the period.

The bank further improved its debt-to-equity ratio to 88% from 101% in the previous – an improvement it says will aid it in financing infrastructure investment in the coming year.

Strong balance sheet

The institution’s liquidity and capital positions continue to show consistency and remain strong, partly due to the banks ability to raise funding from international and local commercial banks as well as from the local fixed-income market.

DBSA says during the period it lowered total debt funding to R56 billion from R59 billion in the previous financial year.

“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,” Dlamini says.

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Looking ahead, the DBSA says it remains in a strong position to purse growth in the next financial year. The bank adds that through its strong balance sheet as well as through partnering with local and international partners, it hopes to increase its developmental impact.

“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,” says Dlamini.

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