Namibian Banks Cycle From $12 Million to $101 Million in Impairments

Namibia’s banking sector moved through a sharp credit stress cycle during and after the Covid-19 pandemic, with impairments peaking above $100 million before easing in line with economic recovery, underscoring how lenders absorbed a rapid deterioration in asset quality and only gradually returned toward more contained loss levels.

Namibia’s four largest commercial banks saw loan impairments surge during the Covid-19 pandemic before gradually easing in the post-pandemic period, according to a new banking sector report by Cirrus Capital.

The report shows combined impairments at First National Bank of Namibia, Bank Windhoek, Nedbank Namibia and Standard Bank Namibia rising from about $12.3 million in June 2015 to a peak of roughly $101 million in December 2020.

It said the sector’s impairment cycle over the past decade can be divided into three phases.

Between 2015 and 2018, impairments remained relatively contained at between about $11.2 million and $20.8 million, supported by steady though slowing economic growth.

From 2019, impairments began rising sharply as the Covid-19 pandemic disrupted economic activity and forced lenders to recognise higher expected credit losses. Combined impairments more than doubled from about $34.9 million in June 2019 to $101 million by December 2020.

The report said impairments began to ease from 2021 as economic conditions recovered and credit losses normalised. By 2022, combined impairments had fallen to about $43.6 million.

Since then, impairments have gradually increased again, rising to about $60.1 million by June 2025 before easing to $51.8 million by the end of the year.

The banks showed divergent trends over the period. First National Bank of Namibia recorded the largest increase, with impairments rising 777% between June 2015 and December 2025. Bank Windhoek’s impairments rose 252%, while Nedbank Namibia increased 167%.

Standard Bank Namibia was the only major lender to post lower impairments at the end of the period compared with the start, with a decline of 35%.

The report said First National Bank of Namibia is the only bank currently experiencing what it described as a “second cycle” of rising impairments, with levels rebounding 547% from a December 2022 low.

Bank Windhoek, Nedbank Namibia and Standard Bank Namibia remain below their pandemic-era peaks, with Nedbank Namibia’s impairments largely returning to pre-pandemic levels.

The report said the broader trend shows the banking sector absorbed a major credit shock during the pandemic, worked through elevated losses over several years, and is now operating with impairment levels that remain above pre-pandemic levels but still contained.

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