Another state-owned entity reports profit: Here’s how many schools DBSA built
· Citizen
The Development Bank of South Africa (DBSA) recorded a 47% increase in net profit for the 2026 financial year; however, the State-Owned Entity (SOE) warned that the ongoing Middle East conflict threatens growth.
DBSA focuses on accelerating sustainable socio-economic development and improving quality of life by funding infrastructure projects in South Africa, the Southern African Development Community (SADC) region, and across the rest of Africa. The bank has highlighted how many projects it has successfully completed, including schools.
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According to financial results for the year ended 31 March 2026, the entity recorded a net profit of R7.8 billion, significantly higher than the R5.3 billion it recorded in 2025. DBSA has joined other SOEs such as Eskom and Transnet in delivering a profit for the financial year 2026.
Middle East conflict hurts economic growth
DBSA noted on Monday that the macroeconomic landscape deteriorated, with the global growth outlook revised lower, as reciprocal tariffs introduced new challenges in 2025, changed global trade dynamics, increased geopolitical tensions, raised the cost of doing business, and disrupted market access and global supply chains.
This was further worsened by the escalation of the Middle East conflict. The entity said the conflict damaged oil infrastructure, disrupted the key trade route of the Strait of Hormuz, and disrupted trade, resulting in oil price increases that pushed global inflation above central bank targets.
Despite this, DBSA said it remains committed to creating lasting sustainable development outcomes through infrastructure development and strategic partnerships within the confines of its balance sheet.
Uncertainty grows due to Middle East conflict
DBSA said sovereign debt vulnerabilities remain elevated across the rest of the African continent, affecting long-term growth and the social fabric as more resources are channelled toward debt service rather than investment in social and human capital development.
Additionally, the oil price shocks for importers have 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,” the state-owned entity added.
“Leveraging the private sector participation and other reforms in the sectors currently underway should mitigate these challenges.”
Municipalities in financial distress
The state-owned entity noted additional challenges associated with geopolitics and, in particular, US-South Africa relations, which affect 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,” it said.
“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.”
Development results
According to the entity, it delivered total infrastructure development support of R62.4 billion during the period. This included R20.7 billion in loans and equity disbursements, R17.0 billion in approved prepared projects, programmes enabled, and R3.5 billion in infrastructure unlocked for under-resourced municipalities, among others.
DBSA added that 11 867 pupils benefited from 25 newly built schools, while 13 170 pupils benefited from 23 refurbished schools. The SOE also facilitated 19 963 temporary and permanent jobs.
“Despite the challenging economic environment, a strong leadership and management team has steered the Bank through these challenges, whilst following the principles of good and strong corporate governance,” said DBSA.
“The Bank has a resilient balance sheet and continues to play a significant role in infrastructure development through lending and non- lending activities.”
Financial performance highlights
- 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%).
- Interest expense decreased by 11.2% to R4.5 billion (31 March 2025: R5.1 billion).