The Development Bank of Southern Africa (DBSA) has reported a sharp increase in profit for the financial year ending March 31, 2026.
The state-owned development finance institution posted net profit of R7.8-billion, up 47% from the previous year’s R5.3-billion.
Sustainable earnings, which reflect the bank’s underlying operational performance, rose 45% to R7.4-billion.
A key driver of the improved performance was growth in revenue generated from the bank’s lending operations. DBSA earns interest on loans provided for infrastructure, municipalities, energy, water, transport, and other development projects. In 2026, net interest income increased to R8.9-billion, making it the largest contributor to earnings.
The bank generated R10.6-billion in operating income.
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DBSA controlled its operating expenses effectively. Its cost-to-income ratio improved from 22.0% to 20.3%, meaning it spent less to generate each rand of income. Better efficiency translated directly into higher profits.
Total assets grew to R130-billion, an increase of 8%. A larger asset base helps the bank to generate more interest and investment income over time.
The debt-to-equity ratio improved from 105% to 95%, indicating stronger capital management and a healthier balance sheet. Efficient funding structures can lower financing costs and improve profitability.
Although non-performing loans increased, DBSA managed credit risk through provisions, risk overlays, and monitoring mechanisms. Net impairments remained contained at 1.2%, helping protect earnings.
DBSA also earns returns from investments, cash management, and treasury operations. These activities supplement lending income and contribute to overall profitability.
Revenue growth driven by lending activities
Net interest income increased 6% to R8.9-billion, while operating income reached R10.6-billion. This reflects continued demand for infrastructure financing and effective management of the institution’s funding base.
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The bank also expanded its balance sheet during the year, with total assets rising 8% to R130-billion, providing a larger platform from which to generate future earnings.
Efficiency gains boost bottom line
Tighter cost controls and operational efficiency improvements further supported DBSA’s profitability.
The cost-to-income ratio improved to 20.3% from 22.0% in the prior year, indicating that the bank spent less to generate every rand of revenue.
At the same time, the institution strengthened its capital position, reducing its debt-to-equity ratio, excluding callable capital, to 95% from 105% a year earlier.
The stronger balance sheet provides additional capacity to fund future development projects while maintaining financial sustainability.
Development impact remains central
While delivering strong financial results, DBSA continued to channel capital into developmental initiatives.
The bank disbursed R20.7-billion in loans and equity investments during the year. Infrastructure projects worth R6.5 billion were delivered, surpassing annual targets, while R2.9-billion was directed towards under-resourced municipalities and R2.3 billion was invested in climate and environmental projects.
The institution said its funding activities facilitated nearly 20,000 jobs, highlighting the broader economic impact of its investments beyond financial returns.
Credit risks remain under scrutiny
Despite the robust earnings performance, challenges remain.
The gross non-performing loan ratio increased to 3.9%, reflecting pressure on some borrowers amid difficult market conditions. DBSA responded by maintaining prudent risk-management practices and strengthening credit-loss provisions.
The bank also maintained significant risk overlays and impairment provisions to guard against potential future economic shocks.
The financial statement showed that the bank maintained strong governance and compliance standards during the year, achieving a clean audit and receiving an unqualified audit opinion from the Auditor-General. The Auditor-General reported no material non-compliance with selected legislative requirements and identified no significant deficiencies in internal controls.
The bank also ensured that all PFMA submissions were processed within stipulated timelines, reflecting a strong commitment to oversight, accountability and regulatory compliance.
On governance and ethical conduct, the DBSA reported that 0% (R313,893) of expenses were classified as irregular, unauthorised, fruitless and wasteful expenditure, a negligible proportion of total expenses.
The bank said decisive consequence management was implemented in nine cases involving unethical behaviour. Despite these incidents, the institution sustained robust governance practices, with the Auditor-General finding no material losses through criminal conduct and confirming that the DBSA’s governance, risk management and compliance frameworks remained effective during the year.
- The Development Bank of Southern Africa (DBSA) reported a net profit of R7.8 billion for the financial year ending March 31, 2026, a 47% increase from the previous year.
- Net interest income rose 6% to R8.9 billion, driven by lending operations in infrastructure, municipalities, energy, water, and transport.
- Total assets increased by 8% to R130 billion, and the bank's debt-to-equity ratio improved from 105% to 95%.
- The cost-to-income ratio improved to 20.3% from 22.0%, reflecting enhanced operational efficiency.
- DBSA maintained strong governance, receiving an unqualified audit opinion with no material non-compliance or significant deficiencies in internal controls.
Sustainable earnings, which reflect the bank's underlying operational performance, rose 45% to R7.4-billion.
A key driver of the improved performance was growth in revenue generated from the bank's lending operations. DBSA earns interest on loans provided for infrastructure, municipalities, energy, water, transport, and other development projects. In 2026, net interest income increased to R8.9-billion, making it the largest contributor to earnings.
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DBSA controlled its operating expenses effectively. Its cost-to-income ratio improved from 22.0% to 20.3%, meaning it spent less to generate each rand of income. Better efficiency translated directly into higher profits.
Total assets grew to R130-billion, an increase of 8%. A larger asset base helps the bank to generate more interest and investment income over time.
DBSA also earns returns from investments, cash management, and treasury operations.
Revenue growth driven by lending activities
Net interest income increased 6% to R8.9-billion, while operating income reached R10.6-billion.
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Tighter cost controls and operational efficiency improvements further supported DBSA's profitability.
At the same time, the institution strengthened its capital position, reducing its debt-to-equity ratio, excluding callable capital, to 95% from 105% a year earlier.
While delivering strong financial results, DBSA continued to channel capital into developmental initiatives.
Despite the robust earnings performance, challenges remain.
On governance and ethical conduct, the DBSA reported that 0% (R313,893) of expenses were classified as irregular, unauthorised, fruitless and wasteful expenditure, a negligible proportion of total expenses.
