• RBZ fee caps are shifting banks from price-led revenue towards transaction volumes, lending and product diversification
• POSB’s fee income fell 15.1%, while NMB increased net interest income 52.7% as lending replaced part of the lost fee revenue
• First Capital and CBZ show how higher transaction volumes can offset lower charges, making scale increasingly important to banking economics

Harare- The Reserve Bank of Zimbabwe’s intervention in banking charges is beginning to alter the economics of Zimbabwe’s transation-banking franchises, although H1 results show that lower regulated prices have produced very different revenue outcomes across banks. In February, RBZ directed banks and deposit-taking microfinance institutions to reduce cash-withdrawal charges to a maximum of 2%, cap point-of-sale charges at 1.5% of transaction value with a US$20 ceiling, abolish balance-enquiry charges and cash-deposit fees, and restrict card issuance and replacement fees to cost recovery. The measures were to be implemented by 31 March 2026.

That timing is important. H1 contains only three months of full implementation, meaning the June results provide an early test rather than a complete measurement of the policy's impact. H2 2026 will be the first reporting period spent entirely under the revised charging structure.

The early evidence nevertheless shows a meaningful split. FBC is a consolidated financial-services group and should not be read as a standalone FBC Bank comparison. The result is more complicated than a simple decline in bank fees. RBZ capped selected transaction prices, while fee and commission revenue also contains account services, credit-related fees, guarantees, international banking, cards, brokerage and other products. Banks can therefore lose pricing power on one transaction and still increase total fee revenue through higher volumes or a different revenue mix.

That is exactly what H1 is beginning to expose. POSB shows the vulnerability of a fee-heavy model. It has one of the clearest exposures to the regulatory intervention. Total fee and commission income fell 15.1%, from ZWG525.2 million to ZWG445.7 million. Retail banking fees, which dominate the fee line, declined almost 16% to ZWG422.6 million. The concentration matters. Retail banking charges account for almost 95% of POSB's fee and commission income. POSB therefore had relatively little protection when transaction economics weakened. Net interest income also declined 2.7%, meaning funded income did not compensate for weaker fees. PAT consequently fell 42%.

That makes POSB an important test case for RBZ's intervention. A bank whose income structure is heavily dependent on retail transaction charges has to replace lower pricing through either significantly greater transaction volume, more credit deployment or new fee-generating products. POSB did not achieve enough of any of those during H1 to prevent earnings compression.

NMB replaced part of the lost fee income through lending, NMB Bank took a different route. Standalone fee and commission income declined 11%, from ZWG659 million to ZWG586.4 million. Net interest income, however, increased 52.7%, from ZWG246.4 million to ZWG376.2 million. The underlying operating data make the transition more interesting. NMB reported a 137% increase in POS transaction volumes, 69% growth in card transaction volumes and a 214% increase in bulk-payment values.

Yet aggregate bank fee income still declined. The numbers should not be used to claim that fee caps alone caused the fall. The wider NMBZ disclosure shows weaker international banking commissions and credit-related fees alongside relatively resilient retail and digital revenues. What can be established is that NMB is reducing its dependence on fee growth as the principal driver of operating income. Lending expanded strongly enough for funded income to absorb the weaker fee result. That is one of the more sustainable adaptations available to banks under the new regime, provided credit quality remains controlled.

CBZ however, shows that lower POS pricing does not automatically mean lower POS revenue, CBZ provides perhaps the most useful evidence against reading fee caps mechanically. Gross fee and commission income declined only 1.4%, but fee expenses increased 41%, causing net fee income to fall 7.7% to ZWG1.19 billion.

The components moved in very different directions. Cash-withdrawal fee income fell about 6% to ZWG451.2 million and service-fee income declined around 7% to ZWG379.6 million. POS income, however, increased 22.4%, from ZWG188.2 million to ZWG230.4 million. That is important. RBZ capped POS pricing at 1.5%, yet CBZ generated more POS revenue. Higher aggregate revenue under a lower price ceiling requires some combination of greater transaction volume, larger transaction values or a change in the mix of activity.

The policy therefore changes the competitive equation. Banks can no longer rely as heavily on the price charged per transaction. Scale increasingly determines the economics. CBZ's difficulty is that funded income did not provide much additional support: NII was almost unchanged. Lower net fees combined with flat funded income left the bank more exposed to higher costs and credit impairments.

First Capital provides the clearest evidence of volume replacing price. First Capital's H1 disclosure is perhaps the strongest evidence that fee compression does not necessarily require fee-income contraction. Net fee and commission income increased 3.1% to US$16.36 million, while gross fee income increased almost 11%. Management explicitly attributes the outcome partly to higher transaction volumes despite reduced bank charges.

The fee mix reinforces that explanation. Account-maintenance income increased about 32%, card transaction fees about 41%, and transfer-related fees around 7%. Cash-withdrawal income fell approximately 15%.First Capital is therefore moving away from extracting more revenue from cash withdrawal and towards generating more revenue from greater account and payment activity.

It also grew net interest income 14.8%. Among the institutions reviewed, First Capital currently offers the cleanest example of how a bank can absorb lower transaction pricing, increase activity per customer while simultaneously expanding funded income.

ZB protected fees, but fee resilience could not repair the banking spread. ZB Bank's commission and fee income increased modestly by about 1.5% to ZWG864.7 million. Digital-channel income rose 7.7%, service-fee income increased slightly and other commissions were broadly unchanged. That demonstrates some transactional resilience under the new charging environment.

The wider earnings result, however, shows why fee resilience alone is insufficient. ZB's net interest income fell almost 49% to ZWG203.8 million, leaving commission income more than four times the size of funded income. The bank therefore enters H2 with a revenue structure in which transaction and commission income carries an unusually large share of the earnings burden. RBZ's fee policy makes that dependence more consequential. If regulatory pressure continues shifting transaction economics towards lower unit pricing, ZB needs funded income to recover rather than requiring fee growth to compensate indefinitely for a weak banking spread.

FBC's diversified model provides more room to move around capped charges. FBC Holdings produced the strongest fee growth in the sample, with net fee and commission income increasing 12.4% to ZWG793.3 million. Its composition illustrates why the RBZ rules should not be treated as a cap on all fee income. Retail service fees increased about 9% to ZWG762.2 million, while credit-related fees rose almost 67% to ZWG64 million. FBC also operates a much wider financial-services model. Its commercial banking segment generated ZWG633.9 million in net fee income during H1, while wholesale banking contributed another ZWG160.8 million.

That breadth allows the group to earn fees from credit, institutional activity and other financial services beyond the narrow transaction charges targeted by RBZ. Its challenge sits elsewhere: operating expenditure increased 34%, much faster than fee or total income growth. Fee diversification protected revenue, but cost growth reduced the benefit.

TN CyberTech’s H1 numbers show a distinctly non-funded earnings model emerging within the banking sample.  Non-interest income rose 24.2% to ZWG516.7 million, while net interest income declined 13.4% to ZWG92.1 million, leaving non-interest income more than five times the size of funded income. The underlying composition is important: administration fees contributed ZWG146.7 million, transaction-processing fees ZWG120.2 million, dealing income ZWG158.8 million and commissions ZWG37.9 million.

The result fits TN CyberTech’s technology-led banking model, where transaction activity and digital services carry a much larger role in the revenue structure. Its loan book remained relatively small against deposits, while the bank processed more than 725,000 small loans during the period, showing that its digital infrastructure is generating substantial customer activity without yet producing a comparable expansion in interest income.

For the wider banking comparison, TN therefore adds a different dimension to the fee-cap story. Its earnings are already weighted towards non-interest activities, giving the bank less immediate dependence on conventional lending income for revenue generation. The harder test is whether this non-funded income can remain scalable and recurring while the bank gradually converts its large transactional reach into a larger, higher-quality loan book and stronger funded income.

The policy is changing the source of bank revenue rather than eliminating fees

Three different responses are emerging from the H1 numbers. Volume substitution is visible at First Capital and within CBZ's POS business. Lower transaction pricing is being offset through greater activity.

Funded-income substitution is strongest at NMB and First Capital. Both expanded net interest income as transaction economics came under pressure. Product diversification is most apparent at FBC, where credit-related and wider financial-services fees allow the group to generate non-funded income outside the specific charges RBZ capped. POSB currently has the weakest buffer against the intervention because retail banking charges remain heavily concentrated within its income mix and funded earnings also declined.

ZB managed to preserve commission income, but the deterioration in funded income leaves it unusually dependent on those fees. That is a far more useful reading of the policy than asking whether total bank fees went up or down.

H2 will test the policy’s effectiveness.  RBZ's intervention was intended to make formal banking more affordable and support financial inclusion. The first objective can be assessed directly through lower regulated charges. The second requires greater usage. The Mid-Term Monetary Policy Statement says the proportion of active POS terminals remained at only about 36% of total deployments, despite efforts to expand digital payments.

That creates the next policy test. If banks can replace lower transaction prices through greater volumes, customers receive cheaper unit pricing while institutions preserve revenue through scale. First Capital's H1 performance provides early evidence that this model is possible. If transaction activity does not expand sufficiently, the economics become harder. Banks can respond by deepening lending, broadening financial products, cutting operating costs or trying to migrate fee income into services outside the regulated categories.

H2 will provide the first full six-month period under the new charges and therefore a cleaner test. The important numbers will no longer be aggregate fee income alone. They will be transaction volumes, fee revenue per active customer, the share of earnings coming from lending, digital adoption and the cost required to service each transaction. RBZ has reduced the ability of banks to grow revenue simply by charging more for basic transactions. The H1 results show that some institutions have already begun replacing that pricing power with scale, credit and broader products. Others still have considerably more work to do.

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