DBSA’s Moody's ratings upgrade boosts infrastructure development efforts

THE Development Bank of Southern Africa (DBSA) has confirmed that Moody’s Ratings Agency (Moody's) has upgraded its long-term foreign-currency issuer rating to Ba2 from Ba3.

- BANELE GININDZA

The bank said this reflects its improved funding and liquidity profile, sustainably strong capital buffers, and its ability to maintain low levels of nonperforming loans—around 3.8% of gross loans—despite high asset risks and a fragile operating environment.

The bank’s standalone assessment has also been upgraded to ba3 from b1, and the long-term national scale issuer rating to Aa2.za from Aa3.za.

DBSA Chief Economist and Group Executive for Strategy and Sustainability, Zeph Nhleko, said the confirmed stable outlook acknowledges the strong capital buffers that cushion assets from risks and pressures in the current low economic growth environment. He added that this is in line with the stable outlook on the sovereign rating, given that the DBSA is 100% government-owned.

“As such, the bank could be upgraded further if the operating environment improves, the sovereign rating is upgraded, and the bank's funding profile or credit concentration improves,” Nhleko said.