The Development Bank of Southern Africa (DBSA) has emerged as a pathfinder and grounder-breaker for development over 25 years of existence. It has transformed itself from an Apartheid institution tasked with financing homelands to a vibrant development finance institution with a more hands-on approach to accelerate service delivery to deepen the development impact in the region through expanded access to development finance, and the effective integration and implementation of sustainable development solutions.

Speaking at the media launch of the DBSA 2008/09 annual financial results in Sandton, the Chief Executive of DBSA, Mr. Paul Baloyi said the bank’s financial performance for the year under review has yielded results that are historically a watershed, amid the impact the global financial crisis that has been widespread, but equally penetrative in depth, in particular within the financial sectors of the developed economies.

“Whilst the region, particularly South Africa, escaped the primary and secondary effects of the crisis, the scarcity of liquidity and its costs have adversely affected most sectors of economy. The DBSA has fared better and by contrast ended the year with improved results compared to the previous year”, he added.

The Bank’s financial results demonstrate a healthy growth in the balance sheet, mainly from income earning assets (development loans and equity investment). The disbursement of development loans and equity investments grew by 51%, from R6, 160 billion to R9, 3 billion in the year under review. Another impeccable growth trend is in the income-earning assets, which grew by 26% to R32 billion, and this was the major contributor to the total assets to R40 billion  compared to R33,246 billion (up by 21% from the previous year).

The debt-to-equity ratio increased from 108% (2007/08 financial year) to 131% (2008/09 financial year). However, the non-performing book debt as a percentage of total book increased marginally and remains managed at a level of 5, 4% in the year under review compared to 5, 2% in the previous year. The DBSA’s profit for the year under review grew by 13% to R1, 4 billion compared to R1, 266 billion in the 2007/08 financial year.

Commending the DBSA on its year-end financial results, the outgoing Governor of the Bank, Minister Trevor Manuel said: “it is very encouraging that the financial results of the Bank shows acceleration in its development financing, as well as its support for institutional capacity building and implementation. It has also been gratifying to watch it to transform and expand, adopting a more hands on approach and assuming a larger, more complex and demanding roles of catalyst, implementer and integrator. The institution can now face the development challenges of the present and the future with greater confidence and capacity”.

Meanwhile, the new Governor of the DBSA, Minister Pravin Gordhan said the results achieved by the bank are sound and the DBSA has built a strong foundation for accelerated delivery. As a result, government will expand the callable capital of the DBSA from R4, 8 billion to R20 billion, enabling the bank to expand its loan book by a further R108 billion over the next five years.

The Chief Executive of the DBSA, Mr. Paul Baloyi acknowledged that if this R20 billion callable capital injection is properly leveraged, the bank could double or even quadruple its financing over the next three to five years.

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Mr Jacky Mashapu:

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