• Zimbabwe's banking sector shows resilience in Q1 2025, adapting to the complexities
• Major banks like CBZ Holdings and First Capital Bank demonstrate varied performances in deposits, loans, and innovations, influencing their market positions
• The sector is poised for growth amid projected 6.0% GDP increase

Harare- Zimbabwe’s banking sector has demonstrated resilience and adaptability in the first quarter of 2025, overcoming a complex economic environment shaped by the ZiG currency’s introduction, inflationary pressures, and global uncertainties. Five key players, First Capital Bank, NMB Bank, CBZ Holdings, ZB Financial Holdings, and FBC Holdings reported varied performances, reflecting their strategic priorities and market positions.

This article compares their Q1 2025 performance across deposits, loans, innovations, digitalisation, non-performing loans (NPLs), and total income, factoring in bank size and market capitalisation (market cap as of 23 May 2025).

With Zimbabwe projecting 6.0% GDP growth in 2025, driven by agricultural recovery and high gold prices, these banks are poised to capitalise on economic opportunities while addressing challenges like currency volatility and regulatory tightening. The analysis highlights how size influences outcomes and reflects the sector’s role in supporting Zimbabwe’s economy.

Zimbabwe’s economic outlook for 2025 is cautiously optimistic, with a projected 6.0% GDP growth fuelled by a post-drought agricultural rebound and rising global commodity prices, particularly gold. The ZiG, introduced in April 2024, aims to stabilise exchange rates and curb inflation but has introduced volatility, impacting banks’ revenue and lending strategies.

The banking sector, historically constrained by high NPLs and low public trust, has seen improvements, with the industry NPL ratio at 2.02% in June 2024, down from higher levels in prior years.

Digitalisation and SME banking are driving financial inclusion, with major banks like CBZ and FBC consolidating market share through acquisitions. This context shapes the Q1 2025 performance of the five banks, each leveraging distinct strengths to navigate economic dynamics.

Bank Profiles and Market Capitalisation

CBZ Holdings dominates as Zimbabwe’s largest banking group, with total assets of ZiG38.75 billion and a market capitalisation of ZiG4.5 billion (approximately US$166.67 million at 27 ZiG/USD). FBC Holdings follows with ZiG19.9 billion in assets and a market cap of ZiG5.1 billion (US$188.89 million). ZB Financial Holdings reports  ZiG13.547 billion in assets and a market cap of ZiG665.7 million (US$24.66 million). First Capital Bank, with assets of ZiG7 billion, has a market cap of US$108 million (ZiG2.916 billion), while NMB Bank, with assets of ZiG7.5 billion, has a market cap of ZiG1.5 billion (US$55.56 million).

CBZ’s scale enables it to lead in deposit mobilisation and income generation, while smaller banks like First Capital and NMB rely on agility and innovation to compete. Market cap reflects investor confidence, with FBC’s high valuation signalling growth potential, though CBZ’s dominance reflects stability.

Deposits: Customer Confidence and Funding Capacity

Deposits are a critical indicator of customer confidence and funding capacity. CBZ Holdings leads with a deposit base of ZiG26.79 billion, accounting for a significant share of the industry’s total, reflecting its market dominance and extensive branch network. First Capital Bank reported a 132% year-on-year deposit increase to ZiG4.1 billion (US$153.9 million, up 18%), showcasing strong customer trust despite its smaller size.

FBC Holdings and NMB Bank did not disclose specific deposit figures, but their asset bases suggest substantial deposits, with FBC likely exceeding First Capital given its larger scale. ZB Financial Holdings, however, saw a 40% deposit decline to ZiG3.287 billion, possibly due to customer caution amid currency uncertainty or competition from larger players.

CBZ’s deposit strength shows its ability to fund lending, while First Capital’s growth highlights its competitive edge among mid-tier banks. ZB’s decline raises concerns about its market position, despite its solid income performance.

Loans: Lending Capacity and Risk Exposure

Loan growth reflects banks’ lending appetite and economic demand. FBC Holdings reported a robust loan base of ZiG9.56 billion, nearly half its ZiG19.9 billion assets, indicating strong lending capacity and confidence in borrower quality.

First Capital Bank’s loan book surged 187% to ZiG3.3 billion (US$122.7 million, up 46%), driven by productive-sector lending, with 59% of loans maturing within 12 months, aligning with industry trends toward short-term lending.

CBZ’s loan figures were not specified, but its historical loan book (US$639.49 million in 2018) and ZiG38.75 billion asset base suggest significant lending, likely exceeding FBC’s.

NMB emphasised prudent lending, with plans to raise US$70 million for productive sectors, but specific loan data was unavailable. ZB’s loan details were also absent, though its asset decline suggests cautious lending.

FBC and First Capital lead in loan growth relative to size, but FBC’s high loan-to-asset ratio (48%) increases exposure to interest rate volatility compared to First Capital’s more balanced approach.

Non-Performing Loans: Credit Quality and Risk Management

NPLs are a critical measure of credit risk in Zimbabwe’s volatile economy. First Capital Bank achieved a remarkable NPL reduction from 7% in Q1 2024 to 3.66% in Q1 2025, outperforming the industry average of 2.02% (June 2024) and reflecting enhanced credit underwriting. NMB’s historical NPL ratio of 0.73% in Q1 2024 (down from 14.9% in 2015) suggests continued strength, likely below First Capital’s.

CBZ and ZB, with historical NPLs of 12% in 2018, likely improved but lack Q1 2025 data; industry trends suggest alignment with the 2.02% average. FBC’s focus on credit quality implies a low NPL ratio, possibly near the industry average.

First Capital’s NPL turnaround gives it a competitive edge, freeing capital for growth, while NMB’s historically low NPLs reflect disciplined risk management. Larger banks like CBZ may face challenges in rapidly reducing NPLs due to scale, but their capital buffers mitigate risks.

Total Income: Revenue Generation and Efficiency

Total income highlights banks’ revenue-generating capacity. CBZ Holdings led with ZiG1.41 billion, driven by non-funded income (ZiG938.03 million, 66% of total) from digital channels and funded income (ZiG486.24 million), with a profit after tax of ZiG537.53 million.

ZB Financial Holdings followed with ZiG839.928 million (up 119%), boosted by net interest margins (ZiG281.997 million) and fee income (ZiG428.3 million), achieving a profit after tax of ZiG261.94 million.

FBC Holdings reported ZiG578 million, with fee income (ZiG337 million) surpassing net interest income (ZiG321 million), and a profit before tax of ZiG94.5 million. First Capital Bank’s income soared 118% to ZiG540.7 million (US$20.5 million, up 12%), while NMB recorded ZiG396 million, with 64% from fees and a profit after tax of ZiG56 million.

CBZ’s scale drives absolute income, but First Capital’s 7.2% income-to-asset ratio (estimated ZiG7 billion assets) outpaces CBZ’s 3.6%, ZB’s 6.2%, FBC’s 2.9%, and NMB’s 5.3%, highlighting efficiency among smaller banks.

Innovations and Digitalisation: Driving Growth and Inclusion

Digitalisation is transforming Zimbabwe’s banking sector, enhancing fee income and operational efficiency.

NMB Bank leads in innovation, with its fintech subsidiary, XPlug Solutions, developing mobile banking solutions, Robotic Process Automation, and continental fintech projects, alongside an upcoming enhanced mobile app.

First Capital Bank leverages its extensive ATM network (48 units) and mobile banking platform, driving fee income, though specific Q1 innovations were not detailed.

CBZ’s digital channels anchor its non-funded income (66% of total), supported by investments in service delivery ecosystems, but it lags NMB in cutting-edge fintech. FBC Holdings’ digital transformation boosts fee income (58% of total), streamlining transactions and customer engagement.

ZB Financial Holdings’ upgraded core banking system enhances revenue collection, contributing to electronic banking earnings, but it trails NMB’s fintech ambition.

Smaller banks like NMB and First Capital use digitalisation to offset scale disadvantages, while CBZ relies on market dominance to drive transaction volumes.

Comparative Analysis: Factoring Size and Market Cap

CBZ Holdings’ size (ZiG38.75 billion assets, ZiG4.5 billion market cap, US$166.67 million) enables it to dominate deposits (ZiG26.79 billion) and income (ZiG1.41 billion), but its efficiency (3.6% income-to-asset ratio) is lower than First Capital’s (7.2%), reflecting scale-related costs.

First Capital (ZiG7 billion assets, US$108 million market cap, ZiG2.916 billion) excels in NPL reduction (3.66%) and loan growth (187%), leveraging agility to outperform larger peers.

NMB (ZiG7.5 billion assets, ZiG1.5 billion market cap, US$55.56 million) shines in digital innovation, with 64% fee income, but its smaller scale limits loan and deposit growth.

FBC (ZiG19.9 billion assets, ZiG5.1 billion market cap, US$188.89 million) balances loans (ZiG9.56 billion) and fees, though its high loan-to-asset ratio risks exposure. ZB (ZiG13.547 billion assets, ZiG665.7 million market cap, US$24.66 million) shows resilience with 119% income growth, but its 40% deposit decline signals challenges.

Smaller banks punch above their weight through efficiency and innovation, while CBZ and FBC’s higher market caps ensure stability.

Outlook and Strategic Implications

Zimbabwe’s 2025 economic growth offers opportunities in agriculture and mining, but currency risks and global uncertainties persist. CBZ is well-positioned for SME and corporate lending, leveraging its deposit base, while First Capital’s NPL turnaround and lending growth enhance its competitiveness. NMB’s digital and funding strategies (US$70 million target) could boost market share, but ZB must address deposit declines.

FBC’s loan-driven model requires robust risk management. Digitalisation and prudent lending will be critical, with smaller banks like NMB and First Capital driving innovation to capture tech-savvy customers. The sector’s consolidation, with FBC’s acquisition of Standard Chartered will reshape competition, emphasizing SME banking and financial inclusion.

Therefore, Zimbabwe’s banking sector in Q1 2025 reflects diverse strengths. CBZ leads in scale with a ZiG4.5 billion market cap, First Capital excels in NPL reduction and growth with a US$108 million market cap, NMB drives digital innovation with a ZiG1.5 billion market cap, FBC balances lending and fees with a ZiG5.1 billion market cap, and ZB shows resilience despite deposit challenges with a ZiG665.7 million market cap.

Size influences outcomes, but smaller banks leverage agility and technology to compete.

Equity Axis News