The Development Bank of Southern Africa (DBSA) reported its highest ever net profit of R7.8 billion for the year ended 31 March 2026, as stronger operating income, asset growth and lower impairment provisions supported a significant improvement in financial performance.
The results showed a 47% increase in net profit from R5.3bn in the previous financial year, while the bank reported an increase of 18.3% in total loans disbursed.
The bank said the performance was achieved against a challenging global and domestic economic backdrop, marked by weaker global growth prospects, changing trade dynamics, geopolitical tensions, higher costs and disruptions to supply chains.
The escalation of geopolitical tensions in 2026, including the war in the Gulf Region, also affected global markets.
The DBSA said it continued to focus on catalysing development, building partnerships and mobilising resources to address infrastructure challenges and unlock economic potential across Africa.
DBSA targets more jobs and faster infrastructure delivery
Boitumelo Mosako, CEO, said 19,963 jobs had been facilitated, with the bank planning to increase its focus on employment creation.
Mosako said stronger partnerships would be critical to strengthening the infrastructure ecosystem and accelerating delivery.
“Our aim is to build infrastructure that can withstand any weather system,” Mosako said.
She said the bank's focus was on execution, accelerating and scaling delivery by expanding its infrastructure pipeline, municipal support and regional footprint.
Mosako said partnerships would be particularly important at municipal level, highlighting the DBSA's relationships with organisations such as the Municipal Infrastructure Support Agent.
She emphasised the importance of investing in climate resilient and future ready infrastructure, supported by strong organisational capabilities.
Godongwana calls for faster infrastructure delivery and economic growth
Minister of Finance Enoch Godongwana urged government and business to turn the country's infrastructure backlog into an opportunity to accelerate economic growth.
“We must take this backlog as a challenge and use it to consider how we can use it to grow our economy. We don't know where we will be tomorrow,” Godongwana said.
He said one of the key questions facing government and business was how to achieve economic growth of more than 3%.
“Structural reforms are critical,” Godongwana said.
Water infrastructure a critical priority
Godongwana identified water infrastructure as another major priority, warning that South Africa needed to change its approach to infrastructure maintenance and rehabilitation.
“Water is going to be critical over the next few years. As things stand, we are fixing the leaks only. Parallel to fixing the leaks, we have got to rehabilitate that infrastructure,” he said.
Johannesburg infrastructure needs urgent attention
Godongwana also called for an intensive rehabilitation plan for Johannesburg's infrastructure, saying government intended to remain involved over the next three years regardless of the outcome of future elections.
“We intend to stick around for three years... they will need our support,” he said.
AI requires action, not more meetings
Godongwana also highlighted digital infrastructure and artificial intelligence (AI) as areas requiring faster implementation.
Godongwana said South Africa needed to move more quickly on digital transformation, pointing to the limited number of African countries with dedicated AI strategies.
Ashley.lechman@nationalMG.co.za
Stronger earnings and profitability
The bank reported that its net interest income increased by 5.6% to R8.9 billion, while operating income climbed 21.7% to R10.6 billion.
Sustainable earnings rose 44.6% to R7.4 billion, while return on equity based on sustainable earnings improved to 12%, from 9.3% in the previous year. Return on equity based on net profit increased to 12.7%, compared with 9.7% previously.
Interest expense declined by 11.2% to R4.5 billion.
The DBSA also recorded a significant improvement in its cost to income ratio, which fell to 20.3% from 22%. The bank said its cost optimisation strategy remained effective, with the ratio well below its 35% limit.
The bank's balance sheet continued to expand, with total assets increasing by 7.8% to R130.5 billion.
Gross development loans and development bonds held at amortised cost increased by 5.1% to R120.4 billion, highlighting continued financing activity in infrastructure and development projects.
Total disbursements through loans and equity investments increased by 18.3% to R20.7 billion, compared with R17.5 billion in the previous year.
Equity investments increased by 20.8% to R5.5 billion.
The DBSA also generated R7 billion in cash flow from operations, up 3% from R6.8 billion in the previous year.
Strong capital position
The DBSA's capital and leverage ratios remained comfortably within regulatory limits of 250%, the bank stated.
The DBSA reported that the debt to equity ratio, excluding R20 billion in callable capital, improved to 95% from 105%. Including callable capital, the ratio improved to 73% from 78%.
The capital ratio as a percentage of unweighted total assets increased to 50% from 48%, while the capital asset ratio as a percentage of unweighted development loans increased to 64% from 59%.
Economic challenges remain
The strong financial performance comes as South Africa and the broader African continent continue to face significant economic and structural challenges.
The DBSA highlighted elevated sovereign debt vulnerabilities across Africa, with increased resources being directed towards debt servicing rather than social and human capital development.
"In South Africa, economic growth remains unsatisfactory, while municipalities continue to face financial pressures linked to financial mismanagement, poor audit outcomes, infrastructure vandalism, weak service delivery and budget constraints," the DBSA noted.
The bank also pointed to long standing challenges affecting ports and railways, although reforms and greater private sector participation could help ease these constraints and support economic activity.
"Despite these pressures, financial market indicators showed some resilience during the year. The rand strengthened against a weaker US dollar, government bond yields declined, foreign bond inflows increased and business confidence improved," the DBSA stated.
ashley.lechman@nationalmg.co.za