Chart of the Week: A decade of bank impairments
Cirrus released our banking sector report recently, and it offers an interesting look at impairments across the sector. Loan impairments at Namibia's four largest commercial banks (FNB Namibia, Bank Windhoek, Nedbank Namibia and Standard Bank Namibia) offer a useful lens on the credit cycle. Together, their combined impairments rose from around N$230 million in June 2015 to a peak of roughly N$1.5 billion in December 2020, before easing back to N$760 million by December 2025.
The cycle splits into three clear phases. From financial year (FY) 2015 to FY 2018, sector impairments sat in a relatively contained range of N$210 million to N$390 million, consistent with steady, if slowing, economic growth. From FY 2019 onward, the trend turned sharply higher, with combined impairments more than doubling from N$620 million in June 2019 to N$1.5 billion by December 2020, as the pandemic and associated payment-relief measures forced banks to recognise materially higher expected credit losses.
From that peak, impairments unwound through FY 2022 to a low of around N$640 million, as the economy reopened and credit losses normalised. Since then, the picture has been one of gradual rebuild. Combined impairments climbed back to roughly N$880 million by June 2025, before moderating to N$760 million at year-end, leaving the sector well below its December 2020 peak but meaningfully above pre-pandemic levels.
The four banks have not travelled the same path. Across the full decade (June 2015 to December 2025), FNB Namibia impairments grew 777%, Bank Windhoek 252%, and Nedbank Namibia 167%, while Standard Bank Namibia is the only name lower than where it started, down 35%. The more telling split is post-peak: FNB is the only bank running a clear second cycle, with impairments rebuilding 547% from a December 2022 trough, whereas Bank Windhoek, Nedbank and Standard Bank are all well below their pandemic peaks, with Nedbank essentially back to pre-pandemic levels.
Taken together, the chart tells a story of a banking sector that absorbed a significant credit shock, worked through it over two to three years, and is now operating with a structurally higher, but still contained, level of impairments.
