LOAN impairments at EswatiniBank have hiked from E7.1 million in 2025 to E45.6 million for the 2026 financial year.
This surge in bad debt provisions has pushed credit impairments to 8.6% of the bank’s total loan book, a sharp climb from the 6.3% recorded during the previous 12 months.
Domestically, though they reported impressive economic growth digits, the bank has seen skewed economic sectoral performance and low employment growth. This is after some of their customers reported to have lost their jobs, hence failing to honour the obligations and fiscal pressures affected the banking sector, particularly borrowers’ capacity to repay loans.
Climate related shocks and weather conditions affected the agriculture sector, while delayed payment of suppliers occasioned by government fiscal constraints continued to weigh on economic activity affecting most small and medium enterprises (SMEs) and their retail customers. Lastly, mining sector challenges affected the transport and logistics sector, raising expected credit losses and consequently asset quality.
In addition to the above, the global geopolitical developments continued to exert pressure on the domestic economy, feeding into higher inflation and input costs.
EswatiniBank Chief Financial Officer (CFO) Siboniso Mdluli said the bank was the most affected by suppliers’ late payment. He explained that this was because they fund some sectors and high-risk businesses which other banks do not, in line with the developmental mandate.
However, Mdluli reconfirmed that the bank remains resilient. He highlighted the agricultural portfolio which represents a massive portion of their developmental lending. The CFO added that severe climate change shocks forced farmers to completely miss their harvesting schedules.
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“Jumping from E7.1 million to E45.6 million in impairment provisions is a heavy hit to our performance, driven by a number of factors. With these customers failing to honour their obligations and relegated to the non-performing loan (NPL) portfolio in line with international financial reporting standards, the bank is required to suspend booking interest income in the income statement. This, then aggressively shoot up its expected credit loss provisions, hurting overall performance,” Mdluli said.
The CEO said the bank also experienced elevated non-performing loans, with the ratio exceeding 20% at one stage. In response, he said it has implemented targeted credit risk management and recovery initiatives to improve asset quality, strengthen portfolio performance, and support its long-term financial resilience.
As part of its strategic transformation programme, EswatiniBank has been working closely with the Central Bank of Eswatini (CBE) to strengthen governance, enhance credit recovery efforts and reinforce the bank’s financial resilience. This collaborative initiative includes the engagement of independent specialists to support loan restructuring, optimise recovery strategies and contribute to the Bank’s long-term sustainability.
These measures are intended to strengthen operational resilience, improve financial performance and position the bank for sustainable growth while maintaining the confidence of customers and other stakeholders.
EswatiniBank’s high NPLs are largely concentrated in a few specific industry facilities rather than system-wide consumer defaults. The bank is aggressively pursuing collections, liquidating collateral and restructuring facilities.
