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DIDBS - Audited annual financial statements for the year ended 31 March 2026
Development Bank of Southern Africa Limited
(Reconstituted and incorporated in terms of section 2 of the Development Bank of Southern Africa Act, 1997)
Registration number: 1600157FN
JSE company code: DIDBS
LEI code: 25490071AZ4HOFUNIH94
(the “DBSA” or the “Bank”)
AUDITED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026
Overview
The DBSA is a development finance institution; whose only shareholder is the Government of the Republic of South
Africa. This summary of the annual audited financial results for the year ended 31 March 2026 (the “results”) is
published on the JSE Limited (“JSE”) Stock Exchange News Service (“SENS”) to provide the financial information to the
holders of the Bank’s listed debt securities. The results are prepared in accordance with the requirements of
International Financial Reporting Standards (“IFRS”) and its interpretations as issued by the International Accounting
Standards Board (“IASB”), the presentation requirements of IAS 1 and the requirements of sections 27 to 31 of the
Companies Act of South Africa (Act No.71 of 2008) (the “Companies Act”), these being the relevant and corresponding
sections specified in the Development Bank of Southern Africa Act (Act No. 13 of 1997) (the “DBSA Act”) and the JSE
Debt and Specialist Securities Listings Requirements (the “JSE DSS Requirements”). The annual financial statements
and annual report of the Bank for the year ended 31 March 2026 (“annual financial statements” or “AFS”) are
available on the DBSA website at: https://www.dbsa.org/investor-relations and may also be viewed or downloaded
from the JSE Cloudlink at the following link:
https://senspdf.jse.co.za/documents/2026/JSE/ISSB/BIDBS/DBSAAFS2026.pdf
Key impressions of the financial results and activities - building on strength and development impact:
Highlights from the financial results:
The key financial indicators for the year under review are:
Solid earnings and continued profitability
• Net interest income increased by 5.6% to R8.9 billion (31 March 2025: R8.4 billion).
• Operating income increased by 21.7% to R10.6 billion (31 March 2025: R8.8 billion).
• Net profit increased by 47.0% to R7.8 billion (31 March 2025: R5.3 billion).
• Sustainable earnings increased by 44.6% to R7.4 billion (31 March 2025: R5.1 billion).
• ROE on sustainable earnings increased to 12.0% (31 March 2025: 9.3%).
• ROE on net profit increased to 12.7% (31 March 2025: 9.7%).
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• Interest expense decreased by 11.2% to R4.5 billion (31 March 2025: R5.1 billion).
Effective cost optimization strategies
• Cost to income ratio improved to 20.3% (31 March 2025: 22.0%).
Asset growth and strong disbursements levels
• Total disbursements (loans and equities) increased by 18.3% to R20.7 billion (31 March 2025: R17.5 billion).
• Total assets increased by 7.8% to R130.5 billion (31 March 2025: R120.9 billion).
• Total gross development loans and development bonds held at amortised cost increased by 5.1% to R120.4 billion
(31 March 2025: R114.6 billion).
• Equity investments increased by 20.8% to R5.5 billion (31 March 2025: R4.6 billion).
Strong cash collections from development loan book
• Cash flow generated from operations increased by 3.0% to R7.0 billion (31 March 2025: R6.8 billion).
• Total loan book repayments decreased by 12.1% to R24.1 billion (31 March 2025: R27.4 billion).
• Total Liquidity holdings decreased by 8.8% to R13.7 billion (31 March 2025: R15.0 billion)
Asset quality - continued resilience of asset portfolio under challenging operating environment
• Gross NPL% ratio increased to 3.9% (31 March 2025: 3.2%).
• Net NPL% ratio improved to 1.17% (31 March 2025: 1.2%)
• Impairment losses decreased to R930 million (31 March 2025: R1.5 billion).
• Unrealised fair value adjustments on equity investments amounted to a gain of R832 million (31 March 2025:
loss R215 million).
Capital adequacy and leverage ratios well within regulatory limits.
• Debt-to-equity ratio excluding R20 billion callable capital improved to 95% (31 March 2025: 105%).
• Debt-to-equity ratio including R20 billion callable capital improved to 73% (31 March 2025: 78%).
• Capital ratio, as a percentage to unweighted total assets, increased to 50% (31 March 2025: 48%)
• Capital asset ratio, as a percentage to unweighted development loans increased to 64% (31 March 2025: 59%).
• Callable capital is authorised shares but not yet issued. Debt to equity ratio is within the Bank’s regulatory limit of
250%.
Audit of the annual financial statements
The annual financial statements have been audited by the Bank’s auditor, the Auditor-General of South Africa
(hereafter referred to as the “AG”). The AG in her audit report, which is available for inspection at the Bank’s
Registered Office and in the annual financial statements that are available on the DBSA website, stated that her audit
was conducted in accordance with the International Standards on Auditing and has expressed an unqualified audit
opinion on the annual financial statements with no modifications and no restatements from the previous year.
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Context of the annual financial statements
The macroeconomic landscape deteriorated with the global growth outlook revised lower, as reciprocal tariffs
introduced new challenges in 2025, changed the global trade dynamics, increased geopolitical tensions, led to higher
costs of doing business, disrupted market access and global supply chain. This was worsened by the sharp escalation
of the geopolitical tensions in early 2026 which culminated in the war within the Gulf Region. This resulted in damage
to oil infrastructure, disrupted the key trade route of the Strait Hormuz and disrupted trade, resulting in oil price
increases which pushed global inflation above central bank targets.
The sovereign debt vulnerabilities remain elevated on the rest of the African continent, impacting long-term growth
and social fabric as more resources are channeled toward debt service rather than investment in social and human
capital development. Additionally, the oil price shocks for importers has placed additional pressure on the fiscus of
oil importing countries. In South Africa, economic growth remains unsatisfactory, with reforms underway in sectors
with long standing structural constraints such as the port and railway challenges that until the recent past created
bottlenecks and curbed mineral exports. Leveraging the private sector participation and other reforms in the sectors
currently underway should mitigate these challenges.
There were additional challenges associated with the geopolitics and in particular the US-South Africa relations which
impact on sentiment and future economic growth. Municipal credit risk remains elevated, as municipalities continue
to face significant financial distress, with issues such as financial mismanagement, poor audit outcomes,
infrastructure vandalism, 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 risks, financial market indicators showed some resilience. The rand strengthened on the back of a
weaker US dollar, government bond yields declined, foreign bond inflows increased, and business confidence
improved.
The DBSA's growth strategy remains focused on catalysing development, fostering partnerships, and mobilising
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 development and strategic
partnerships within the confines of our balance sheet.
Preparation of the announcement
The directors take full responsibility for the preparation of this announcement and confirm that financial information
has been correctly extracted from the underlying audited annual financial statements for inclusion in this
announcement.
Basis of preparation
The annual financial statements have been prepared in accordance with the recognition, measurement and
disclosure requirements of IFRS, the Public Finance Management Act of South Africa (Act No. 1 of 1999) (the “PFMA”),
sections 27 to 31 of the Companies Act, the DBSA Act and the JSE DSS Requirements. Except for where indicated in
the annual financial statements available on the DBSA website, the accounting policies and practices applied during
the financial year ended 31 March 2026 (“current year” or “year under review”) are in all material respects consistent
with those applied in the annual financial statements for the financial year ended 31 March 2025 (“prior year”, “last
year” or “2025 financial year”).
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The annual financial statements are prepared on a historical cost basis except for the following assets and liabilities
that are stated at their fair value: derivative financial instruments, financial instruments held at fair value through
profit and loss, financial instruments designated at fair value through profit and loss, land and buildings and equity
investments. The preparation of the annual financial statements requires management to make judgments,
estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets
and liabilities, income and expenses. Actual results may differ from these estimates.
Income statement commentary
Profitability & efficiency
Net profit for the current year increased by 47.0% from R5.3 billion to R7.8 billion. The increase in net profit for the
current year stems from an increase in net interest income of 5.6%, increase in operating income of 21.7%, increase
in the Bank’s asset base of 7.8% and a 38% reduction in impairment provisions of approximately R570 million. Other
interest income for the year increased by 133.2% to R469 million (31 March 2025: R201 million), coupled with positive
fair value gains of R1.4 billion (31 March 2025: R31 million) that arose from the Bank’s financial instruments measured
at fair value through profit and loss. Return on equity on net profit increased to 12.7% when compared to 9.7% for
the prior year due to higher levels of profitability and increased equity base.
The Bank, by virtue of business operations, has a net foreign currency asset position (i.e. total foreign currency asset
minus total foreign currency liabilities) amounting to equivalent USD144 million (31 March 2025: USD151 million).
Given the ZAR appreciation against the USD and Euro during the current year when compared to the prior year,
foreign currency exchange rate loss in the income statement amounted to R78 million (31 March 2025 :R55 million
loss ). Whilst the net foreign currency position is not fully hedged, the Bank closely monitors and manages its exposure
to foreign exchange rate risk using natural hedges and derivative hedging strategies. The Bank remains efficient in
managing operational costs and the cost optimization strategy continues to be effective. The total cost-to-income
ratio for the current year improved to 20.3% (31 March 2025: 22.0%) and the ratio continues to be well below the
limit of 35%.
Balance sheet commentary
Funding and liquidity management
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 debt capital markets, bilateral
engagements with commercial banks and international development finance institutions, bond market, money
market and private placements. As at 31 March 2026, the 30-day liquidity coverage ratio amounted to 256% (31
March 2025: 1 510%). In 2026, the Bank’s total debt redemptions amounted to approximately R11.3 billion. Liquidity
holdings remained within policy parameters with total liquid assets of R13.7 billion as at 31 March 2026, down from
R15.0 billion as at 31 March 2025.
Leverage ratio and capital adequacy.
The Bank continues to have strong capital buffers for unexpected loss events. The Bank’s capital base increased by
R7.7 billion (to a total equity base of R65.6 billion). As a result, the debt-to-equity ratio, including the R20 billion
callable capital as at 31 March 2026 improved to 73% (31 March 2025: 78%), and remains well below the Bank’s
regulatory debt-to-equity ratio cap of 250%. The Bank’s capital ratio increased to 50% as at 31 March 2026 from 48%
as at 31 March 2025. The capital to unweighted ratio increased from 59% to 64%. Overall, the Bank remains well
capitalized.
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Unlisted equity investments-valuation
The Bank’s equity portfolio comprises predominately of unlisted equity investments and is denominated in ZAR, EUR
and USD. As at 31 March 2026 the equity portfolio increased by 20.8% to R5.5 billion (31 March 2025: R4.6 billion).
Unrealised fair value adjustments for the year amounted to a gain of R832 million when compared to the R215 million
loss reported in the prior year. The appreciation of the Rand against the Dollar and Euro resulted in foreign currency
loss of R113 million (R134 million loss in the prior year), which was partially offset by new disbursements of R323
million (31 March 2025 R166 million).
Loan asset quality and expected credit loss provisions (impairments)
The single largest risk faced by DBSA from its lending activities is credit risk. The Bank has continued to be proactive
in cash collections and equally conservative in credit loss provisioning. DBSA remains proactive in loan portfolio
management given the current economic environment. The Bank has considered IFRS 9 forward looking information
in the estimation of expected credit losses on the development loan and bond book. In doing so, the Bank is required
to make reasonable forward - looking assumptions. However, forecasting under the current environment is complex
and expected credit loss provisions by nature have a potential for variability because of many factors (eg. war in the
gulf region and impact on oil price, increased risk in the municipal sector in RSA, tariff risk, threatening export
revenues and exacerbating job losses in vulnerable sectors, continued slow pace of debt reform for the G20 OCC
sovereign loan restructures, climate risks and high consumer indebtedness and currency movements).
For the year ended 31 March 2026, the Bank experienced an increase in expected credit loss (on development loans
and bonds) of approximately R795 million from R14.9 billion (31 March 2025) to R15.8 billion (31 March 2026). The
increase is in response to changes in the credit risk profile, growth in the loan book and the challenging macro-
economic environment. The cash collections from the loan book for the year under review amounted to R24.1 billion
(comprising interest R10.2 billion and capital R13.9 billion) with total loan cash disbursements amounting to R20.4
billion when compared to R16.3 billion in the prior year. In South Africa, the municipal sector continues to face
headwinds.
The expected credit loss coverage ratio on the total development loan and bonds book increased from 13.0% (31
March 2025) to 13.1% (31 March 2026) in response to the changes in the risk profile of the book. The IFRS 9 stage 1
loans decreased to 46% of the loan book from 48% in prior year due to risk migration and loan book growth. The IFRS
9 Stage 2 loans ratio increased marginally to 50% (31 March 2025: 48%) in prior year and South African exposures in
the transport, municipal, energy sectors comprise a significant proportion of the stage 2 loans.
The IFRS 9 Stage 3 gross non- performing loan ratio for development loans increased to 3.85% (31 March 2025: 3.25%)
due to loan migration. IFRS 9 stage 3 gross municipal loans non-performing loan ratio increased from 0.13% as at 31
March 2025 to 0.17% as at 31 March 2026. Despite the increase in the respective ratios, the Bank remains committed
to effective portfolio management, ensuring strong cash collections in a difficult operating environment. Overall, in
response to the novel risks associated with the sectors DBSA operates in, the Bank continues to make use of overlays
to ensure proactive responsiveness to emerging risk during the year end reporting. The expected credit loss
provisions remain adequately, and appropriately conservative.
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Total assets
The Bank’s total asset base increased by 7.8% from R120.9 billion (31 March 2025) to R130.5 billion as at 31 March
2026. Cash and cash equivalents decreased by 8.8% from R15.0 billion to R13.7 billion, in line with the Bank’s liquidity
risk management policy and loan disbursement requirements. The decrease in cash and cash equivalents was offset
by an increase in investment securities of R4.4 billion mainly due to the acquisition of government bonds.
Development Results – Delivering impact in a challenging environment
The highlights of development results are summarised in the table below:
Total infrastructure Development Support
Total infrastructure development support comprising of:
R62.4 billion
• Infrastructure valued at R6.5 billion delivered
• R20.7 billion loans and equity disbursements
• R17.0 billion in prepared projects approved, and programmes enabled
• R3.5 billion Infrastructure unlocked for under-resourced municipalities
• R14.7 billion funds catalysed
Development Outcomes
11 867 Learners benefitted from 27 newly built schools
12 869 Learners benefitted from 20 refurbished schools
6 854 Learners benefitted from 83 improved sanitation facilities through DBE SAFE programme
2 606 Learners benefitted from improved sanitation facilities in 18 schools financed through
provincial budget allocations
586 Local SMMEs and contractors employed in the construction of projects
R5.3 billion Value of infrastructure delivered by black-owned entities, of which R4.0 billion was
delivered by black women-owned entities
R510 million Benefit accrued to local small, medium, and micro enterprises (SMMEs) and subcontractors
employed in the construction projects
19 963 Temporary and permanent jobs facilitated
1 046 Youth trained in future skills through the DLabs programme
165 Start-up enterprises supported through the DLabs programme
Fund managers contribution
3 800 000 Tonnes of food and food-related products delivered
110 940 Total smallholder farmers and microentrepreneurs impacted
15 499 Permanent jobs sustained in the different sectors sector
47 545 Kilometres of fibre built
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STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2026
31 March 2026 31 March 2025
in thousands of rands
Audited Audited
Assets
Cash and cash equivalents at amortised cost 13 692 162 15 017 755
Trade receivables and other assets 349 905 320 172
Investment securities 5 052 363 608 667
Derivative assets held for risk management purposes 574 684 223 981
Other financial assets 42 229 38 534
Development loans held at fair value through profit or loss 42 134 12 877
Equity investments held at fair value through profit or loss 5 533 013 4 581 600
Development bonds at amortised cost 1 455 009 1 542 364
Development loans at amortised cost 103 225 662 98 142 797
Property, equipment and right of use of assets 464 112 450 485
Intangible assets 51 578 52 794
Total assets 130 482 851 120 992 026
Equity and Liabilities
Liabilities
Trade other payables and accrued interest on debt funding 1 486 620 1 280 726
Derivative liabilities held for risk management purposes 103 503 94 578
Liability for funeral and post-employment medical benefits 50 803 47 184
Debt funding held at amortised cost 62 365 972 60 769 422
Provisions and lease liabilities 74 356 154 175
Deferred income 783 433 702 447
Total liabilities 64 864 687 63 048 532
Equity and reserves
Share Capital 200 000 200 000
Retained income 50 658 771 43 489 498
Permanent government funding 11 692 344 11 692 344
Other reserves 201 892 182 392
Reserve for general loan risk 2 865 157 2 379 260
Total equity and reserves 65 618 164 57 943 494
Total equity reserves and liabilities 130 482 851 120 992 026
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CONDENSED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2026
31 March 2026 31 March 2025
in thousands of rands
Audited Audited
Interest income 13 353 906 13 448 739
Interest expense (4 503 265) (5 068 902)
Net interest income 8 850 641 8 379 837
Other operating income 1 798 491 372 062
Operating income 10 649 132 8 751 899
Total expenditure (2 830 182) (3 432 982)
Profit for the year 7 818 950 5 318 917
STATEMENT OF OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2026
31 March 2026 31 March 2026
in thousands of rands
Audited Audited
Profit for the year 7 818 950 5 318 917
Items that will not be reclassified to profit or loss
Gain on revaluation of land and buildings - 82
(Loss)/ Gain on remeasurement of funeral and post-employment
(4 212) 845
medical benefit liabilities
Total items that will not be reclassified to profit or loss (4 212) 927
Items that may be reclassified subsequently to profit or loss
Unrealised gain on cash flow hedges 601 766 239 805
(Gain)/loss on cashflow hedges reclassified to profit or loss (582 266) 391 494
Total items that may be reclassified subsequently to profit or loss 19 500 631 299
Other comprehensive gain 15 288 632 226
Total comprehensive income for the year 7 834 238 5 951 143
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CONDENSED STATEMENT OF CHANGES IN EQUITY AS AT 31 MARCH 2026
31 March 2026 31 March 2025
in thousands of rands
Audited Audited
Balance as at 1 April 57 943 494 52 040 646
Profit for the year 7 818 950 5 318 917
Gain on revaluation of land and buildings - 82
(Loss)/ Gain on remeasurement of funeral and post-employment medical (4 212) 845
benefit liabilities
Unrealised gain on cash flow hedges 601 766 239 805
(Gain)/loss on cashflow hedges reclassified to profit or loss (582 266) 391 494
Dividend Payable/ Paid (159 568) (48 295)
Balance at end of year 65 618 164 57 943 494
CONDENSED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2026
31 March 2026 31 March 2025
in thousands of rands
Audited Audited
Cash flows from operating activities 6 958 860 6 757 797
Cash (used in)/generated from development activities (6 752 032) 198 558
Cash flow from investing activities (4 346 799) (201 793)
Cash flow from/(utilised by) financing activities 3 126 728 (2 464 574)
Net (decrease)/ increase in cash and cash equivalents (1 013 243) 4 289 988
Effect of exchange rate movements on cash balances (312 350) (76 005)
Movement in cash and cash equivalents (1 325 593) 4 213 983
Cash and cash equivalents at the beginning of the year 15 017 755 10 803 772
Cash and cash equivalents at the end of the year 13 692 162 15 017 755
Outlook
Despite the challenging economic environment, a 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.
14 September 2026
Debt Sponsor: The Standard Bank of South Africa Limited
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Date: 14/09/2026 07:05:00
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