• Digital Transformation Success: Non-funded income surged to ZWG 1.9 billion in HY 2025, driven by innovative digital platforms
• Robust Financial Growth: Interest income rose 63% to ZWG 973 million, supported by a 20.5% increase in deposits and an 18.1% loan portfolio growth
• Strategic Expansion: CBZ targets the informal sector and regional markets

Harare- CBZ Holdings, Zimbabwe’s largest bank by assets, and deposits, has reported a significant surge in non-funded income, rising from ZWG 1.5 billion in the first half of 2024 to ZWG 1.9 billion in the first half of 2025 reflecting the bank’s aggressive push toward digitalisation, aligning with global banking standards.

In 2024, CBZ was recognised as Zimbabwe’s most innovative and digitised bank according to Equity Axis Research, outpacing competitors like NMB Holdings.

The bank introduced a suite of innovative financial solutions, including the Paycare healthcare payment service, Comfortsure funeral cover, and a partnership with Afreximbank to secure USD 80 million for financial restructuring.

Additionally, CBZ launched offers for Starlink subscribers paying with Visa, enabling seamless international transactions and reinforcing its alignment with global digital trends.

The introduction of the CBZ Digital Mall, a transactional platform integrating bill payments and shopping for both CBZ and non-CBZ customers, alongside upgrades to Zikimall and enhancements to digital platforms, has further strengthened its digital ecosystem, including  enabling local ATM cards for international transactions at Visa-enabled terminals and ATMs.

According to Joel Makombe, CBZ’s Chief Finance Officer, “The growth in non-funded income was largely driven by the positive impact of ongoing digital transformation efforts, which enhanced transaction volumes and contributed to higher commission and fee income across key channels.”

In addition to non-funded income, CBZ saw robust growth in interest income, the traditional cornerstone of banking revenue in a normal functional economy.

Interest income rose sharply to ZWG 973 million in the first half of 2025, up from ZWG 596 million in the same period the previous year, contributing to an after-tax profit of ZWG 868 million.

This growth on interest income was underpinned by a deposit base that expanded to ZWG 25.9 billion from ZWG 21.5 billion and a loan portfolio that increased to ZWG 9.8 billion from ZWG 8.3 billion year-on-year.

However, the loan portfolio faced challenges due to high borrowing rates, with local currency loans priced at 35%, while CBZ offers loans at a competitive 15%.

The Reserve Bank of Zimbabwe (RBZ) has been unable to lower interest rates due to persistent annual inflation at 95% and a 21% market premium, which constrains monetary policy flexibility.

Despite these challenges, CBZ’s financial performance signals a recovery in public trust in the banking system, which has been eroded since 2008 due to economic instability and abrupt policy changes, such as the overnight devaluation of the ZiG currency in September 2024.

From a technical analysis perspective, CBZ’s financial metrics reflect a strong upward trajectory in key performance indicators. The 29% growth in non-funded income and 63% increase in interest income highlight operational efficiency and successful digital transformation.

The deposit base expansion by 20.5% and loan portfolio growth by 18.1% demonstrate sustained customer confidence and credit demand, though high borrowing rates pose a risk to further loan growth. The bank’s ability to maintain competitive lending rates at 15% against a market rate of 35% suggests a strategic focus on affordability to capture market share, but this could pressure margins if inflation and funding costs remain elevated.

The failure to merge with ZB Bank, a notable setback, may have limited CBZ’s ability to consolidate market dominance but has not materially impacted its financial performance or strategic momentum.

Looking ahead, CBZ is strategically targeting the informal economy, which it estimates accounts for 76% of Zimbabwe’s economic activity, as a key pillar of its growth strategy. By integrating this sector into its formal banking channels, CBZ aims to tap into a vast, underserved market, potentially driving further deposit and loan growth.

However, challenges such as high inflation, currency volatility, and the inability to reduce borrowing rates due to macroeconomic constraints could temper growth prospects.

CBZ’s focus on digitalisation, informal sector inclusion, and regional expansion positions it well for long-term growth, provided it navigates Zimbabwe’s complex economic landscape effectively.

Equity Axis News