The DBSA, has published its financial results for the year ended 31 March 2025 on the JSE Limited’s Stock Exchange News Service (SENS). These results, prepared in accordance with International Financial Reporting Standards (IFRS), provide comprehensive financial information to the stakeholders. The annual financial statements and annual report are available on the DBSA website.

Context of financial performance

Over the 2024/25 financial year, the macroeconomic landscape deteriorated with the global growth outlook revised lower, as reciprocal tariffs introduced new challenges, such as the changed global trade dynamics, increased geopolitical tensions, higher costs of doing business, disruption in market access and global supply chain disruptions.  

Debt vulnerabilities remained elevated on the African continent, impacting long-term growth and social fabric as more resources are channeled toward debt service rather than investment in social and infrastructure development, coupled with lower oil prices which placed additional pressure on the fiscus of oil exporting countries.  

In South Africa, the economic growth rate remained unsatisfactory, with risk factors including long standing structural constraints, such as the port and railway challenges that created bottlenecks and curbed mineral exports. Weak state capacity to implement policies negatively impacted business and financial sentiment.  

In addition, challenges associated with the US-South Africa relations and early-stage challenges around the Government of National Unity threatened to constrain economic growth. Municipal credit risk remained elevated, as municipalities continue to face significant financial distress, with issues such as financial mismanagement, poor service delivery, and budgetary constraints remaining prevalent. These challenges call for businesses to re-assess business strategies and evaluate their strategic, operational and financial vulnerabilities.  

Despite these global and domestic risks, the DBSA's growth strategy remains focused on catalyzing development, fostering partnerships, and mobilizing resources to address developmental challenges and unlocking the full potential of the African continent. The DBSA aims to create lasting sustainable development outcomes through infrastructure financing and strategic partnerships within the confines of our balance sheet.

Financial performance highlights

Solid earnings and continued profitability

• Net interest income increased by 8.6% to R8.4 billion (31 March 2024: R7.7 billion).

• Operating income increased by 12.3% to R8.8 billion (31 March 2024: R7.8 billion).

• Net profit increased by 14.4% to a new record of R5.3 billion (31 March 2024: R4.6 billion).

• Sustainable earnings increased by 13.7% to R5.1 billion (31 March 2024: R4.5 billion).

• ROE on sustainable earnings increased to 9.3% (31 March 2024: 9.0%).

• ROE on net profit increased to 9.7% (31 March 2024: 9.3%).

Effective cost optimisation

• Cost to income ratio marginally increased to 22.0% (31 March 2024: 21.0%).

Asset growth and strong disbursement levels

• Total assets increased by 2.3% to R120.9 billion (31 March 2024: R118.3 billion).

• Total development loans and development bonds marginally decreased by 0.5% to R114.6bn (31 March 2024: R115.2bn).

• Total disbursements (loans and equities) increased by 2.9% to R17.5 billion (31 March 2024: R17 billion).

Strong and record cash collections from loan book

• Cash flow generated from operations significantly increased by 24.5% to R6.8 billion (31 March 2024: R5.4 billion).

• Total loan book repayments increased by 19% to a new record of R27.4bn (31 March 2024: R23bn).

Asset quality - resilient asset portfolio under difficult operating environment

• Gross NPL% ratio decreased to 3.2% (31 March 2024: 3.9%).

• Net NPL% ratio marginally decreased to 1.2% (31 March 2024: 1.5%).

• Impairment losses marginally increased to R1.5 billion (31 March 2024: R1.4 billion).

Capital adequacy and leverage ratios well within regulatory limits.

• Debt-to-equity ratio excluding R20 billion callable capital improved to 105% (31 March 2024: 123%).

• Debt-to-equity ratio including R20 billion callable capital significantly improved to 78% (31 March 2024: 89%).

• Callable capital is authorised shares but not yet issued. Debt to equity ratio is within the Bank’s regulatory limit of 250%.

Income statement commentary

The Bank generated record levels of profitability at R5.3bn, increasing by 14.4% from R4.6 billion. The increase in the net profit for the current year stems from a solid increase in net interest income, positive fair value adjustments, offset by a currency loss reported following ZAR appreciation against the USD. Net interest income increased by 8.6% during the current year. The return on equity for the current year increased to 9.7% when compared to 9.3% for the prior year due to higher levels of profitability and increased equity base when compared to the prior year.  

Balance sheet commentary

The Bank’s liquidity and capital position remains strong, despite the challenging operating environment. DBSA continues to raise funding from a diverse pool of funding sources which include listed debt capital markets, bilateral engagements with international development finance institutions/commercial banks, money market and private placements. As at 31 March 2025, the 30-day liquidity coverage ratio amounted to 958% (31 March 2024: 266%).  

During the year under review, the Bank’s total debt redemptions amounted to approximately R13.2bn. Liquidity holdings remained within policy parameters with total liquid assets of R15.0bn as at 31 March 2025, up from R10.8bn as at 31 March 2024. The Bank’s total outstanding debt funding decreased by R2.9bn from R63.7bn as at 31 March 2024 to R60.8bn as at 31 March 2025. The DBSA’s loan book remained resilient in a difficult economic environment.  

The cash collections from the loan book and for the for the year under review amounted to a record R27.4 billion (comprising interest and fees R11.1 billion and capital R16.3 billion) with total loan cash disbursements amounting to R16.3 billion when compared to the R17 billion in the prior year.

Total assets

The Bank’s total asset base increased by 2.3% from R118 billion (31 March 2024) to R121 billion as at 31 March 2025 mainly due to cash and cash equivalents which increased by 39% from R10.8 billion to R15.0 billion in line with the Bank liquidity risk management policy and loan disbursement requirements. Currency appreciation resulted in the gross loan book net reduction of R860 million. Development loan disbursements decreased from R17 billion in the prior year to R16.3 billion in the current year. As at 31 March 2025, the equity investment portfolio decreased by 4.7%, from R4.8 billion as at 31 March 2024 to R4.6 billion due to fair value adjustments, capital redemption and currency movements.

Development outcomes Achieved

Below is a summary of the development impact over the period, highlighting some of the work done with regards to water and sanitation initiatives:

Contribution to capital formation:

R91.3 billion in total infrastructure development support has been provided comprised of:

• R22.9 billion in funds have been catalysed.

• Total disbursements of R17.5 billion.  

• R5.2 billion in infrastructure implementation support has been delivered.

• R2.6 billion in infrastructure has been unlocked for under-resourced municipalities.

• R0.8 billion in infrastructure has been unlocked in district municipal spaces adopted for a programmatic approach.

• Key projects valued at R39.9 billion enabled and supported by DBSA.  

• Approved projects valued at R2.4 billion prepared.

Development Outcomes with a Focus on Sanitation:

The development outcomes show the positive impact with regards to sanitation facilities in schools:

• Improved Sanitation Facilities (DBE SAFE programme): 22,722 learners benefited from improved sanitation facilities built in 98 schools, funded by 165 DBE SAFE programme.

• Improved Sanitation Facilities (Provincial Budget): 11,397 learners benefited from improved sanitation facilities constructed in 67 schools, funded from provincial budget allocations.

Economic and Social Benefits:

Beyond the direct infrastructure and sanitation improvements, the development initiatives have also generated significant economic and social benefits:

• SMME and Subcontractor Employment: 956 local SMMEs and subcontractors were employed in the construction of projects.

• Value of Infrastructure by Black-Owned Entities: R4.0 billion in infrastructure was delivered by black-owned entities, with R2.6 billion delivered by black women-owned entities.

• Benefit to Local SMMEs: R584 million in benefits accrued to local small, medium, and micro enterprises (SMMEs) and subcontractors employed in construction projects.

• Job Facilitation: 35,154 temporary and permanent jobs were facilitated.

• Youth Training: 1 643 youth were trained in future skills through the DLabs programme.

• Start-up Support: 544 start-up enterprises were supported through the DLabs programme.

Fund Managers Contribution:

• Fund managers supported by the Bank have also contributed to broad development, including essential services and economic growth:

• Food and Food-Related Products: 3,858,409 tonnes of food and food-related products were delivered.

• Smallholder Farmers and Microentrepreneurs Impacted: 109,336 total smallholder farmers and microentrepreneurs were impacted.

• Permanent Jobs Sustained: 15,430 permanent jobs were sustained across different sectors.

• Fibre Built: 47,674 kilometres of fibre were built.

• Towers Built and Acquired: 548,623 towers were built and acquired.

Conclusion

Despite the challenging economic environment, the strong leadership and management team has steered the Bank through these challenges, whilst following the principles of good corporate governance.  

The Bank has a resilient balance sheet and continues to play a significant role in infrastructure development through lending and non-lending activities. The Bank’s continued success hinges on its ability to increase developmental impact using its own balance sheet and partnering with others. Both domestic and global economic factors are critical to the achievement of the Bank’s objectives.  

The Bank has a healthy pipeline of projects that forms a solid foundation for future sustainability. The Bank will continue to focus on disbursing for infrastructure projects within its mandate, that stimulates economic development.