- Zimbabwe’s six listed banks delivered record ~$140M aggregate after-tax profit in 2025, overwhelmingly powered by non-interest income (67-80% of total revenue) from
- Dramatic ECL reversal, led by CBZ’s 97.4% drop in provisioning, unlocked massive profit growth; sector NPLs improved sharply and capital adequacy stayed ultra-strong
- RBZ’s March 2026 reduction of key bank charges compresses the fee engine that subsidised under-lending; banks must now lift loans-to-deposits ratios and grow net interest income
Harare- Zimbabwe's six listed banking groups closed the year to December 2025 having generated their strongest aggregate profitability in the post-hyperinflation era, collectively earning an estimated $140 million in after-tax profit translated at the formal rate of ZWG 27 per dollar, a figure that overstates nothing and yet conceals several competing narratives running simultaneously beneath the headline numbers.
The sector's performance was not, as a surface reading might suggest, a story of organic banking excellence. It was driven by three distinct forces: a non-interest income supercycle that inflated revenues across the board, a dramatic improvement in credit quality that collapsed provisioning charges at the largest institution, and the continued expansion of Zimbabwe's dollar-denominated deposit base into a system that has not yet found an efficient way to put that liquidity to productive work.
That last point, the structural under-lending that defines Zimbabwean banking, is the single most important unresolved tension in the sector, and the Reserve Bank's March 2026 decision to eliminate and reduce bank charges now threatens the revenue engine that made the under-lending problem tolerable.
CBZ Holdings: system dominance and the great ECL reversal
CBZ Holdings remains unambiguously the largest listed financial institution on the Zimbabwe Stock Exchange, and its 2025 results reflects the distance between itself and the rest of the field. The group generated total income of ZWG 5.73 billion (approximately $212 million at the formal rate, $191 million at the prevailing black market rate), producing profit after tax of ZWG 1.44 billion ($53.5 million formal), a figure that dwarfs every other listed banking group in the country and that represents a jump of 759.7 percent over the ZWG 168 million reported in 2024.
That extraordinary growth rate, however, demands immediate contextual qualification, the 2024 base was severely depressed by a ZWG 800.65 million expected credit loss charge that consumed almost all of the group's operating income. The reversal of that dynamic is the single most important number in Zimbabwe banking in 2025. CBZ's ECL charge for 2025 was just ZWG 20.97 million, a collapse of 97.4 percent, and this swing alone is worth approximately ZWG 780 million in pre-tax income. Given it is stripped out, underlying income growth still remains substantial but considerably more modest.
Net interest income grew to ZWG 1.89 billion ($69.9 million formal), reflecting the loan book's continued expansion, loans and advances reached ZWG 10.19 billion ($377 million), alongside improved asset yields as the bank extended into higher-returning productive sector facilities.
The more telling number, however, is the loans-to-deposits ratio: at 36.7 percent, CBZ is deploying barely more than a third of its ZWG 27.76 billion ($1.03 billion) deposit base into credit.
This is not a liquidity problem, CBZ Bank's liquidity ratio stood at 51.88 percent against a 30 percent regulatory minimum, it is a structural aversion to credit risk in an economy where collateral enforceability remains contested and the ZiG monetary environment is still finding its footing.
The result is a balance sheet that carries ZWG 7.61 billion in financial securities ($282 million), predominantly government treasury bills, which generate yield without credit risk but contribute to the narrow financial intermediation that constrains private sector growth.
Non-interest income of ZWG 3.86 billion ($143 million) remains the dominant revenue line, accounting for 67 percent of total income. Commission and fee income of ZWG 2.72 billion was driven by transaction volumes across CBZ's digital platforms, and this is precisely where the March 2026 Monetary Policy Statement's charge elimination hits hardest.
Requesting an account balance, which was previously a fee-generating event, is now free. Transaction charges in the lower brackets have been reduced or removed. The regulator has also tightened the framework around bank charges more broadly as part of the ZiG deepening initiative.
For CBZ, which processes the highest volume of transactions in the system, the fee income line faces structural compression. Management's stated mitigation, growing transaction volumes and expanding digital throughput , is the correct strategic direction but may not fully offset the unit revenue decline in the near term.
Capital adequacy at CBZ Bank stood at 26.05 percent total, with a Tier 1 ratio of 17.69 percent, providing substantial headroom above the 12 percent regulatory minimum. The audit opinion from KPMG is unmodified, which in the Zimbabwean context is a meaningful signal of governance quality.
Total equity reached ZWG 9.14 billion ($338 million), and the board declared a final dividend of $10 million, bringing total dividends for the year to $12.5 million ($0.0201 per share). The shares closed 2025 up 34.5 percent in ZWG terms, outperforming the ZSE All Share Index which gained 27.8 percent.
FBC Holdings: the highest loan-to-deposit ratio in the sector, and why that matters
FBC Holdings presents the most interesting case study in credit deployment efficiency among Zimbabwe's listed banks. With a loans-to-deposits ratio of 85.1 percent, its gross FBC Bank loan book of ZWG 9.71 billion against deposits of ZWG 11.42 billion, FBC is the only group in the sector that is genuinely intermediating its deposit base at a rate approaching what might be called responsible commercial banking.
This comes at a price, the bank carries a higher credit risk profile, and its ECL management deserves scrutiny, but it also explains why FBC's net interest income of ZWG 1.47 billion ($54.4 million formal) is competitive despite the group's smaller balance sheet relative to CBZ.
The group generated total income of ZWG 3.76 billion ($139 million), producing profit before tax of ZWG 815 million ($30.2 million), an 84 percent increase on the restated 2024 figure of ZWG 443.7 million. Profit after tax settled at ZWG 789 million ($29.2 million), with an effective tax rate that reflects the complexity of multi-entity financial groups operating across multiple regulatory frameworks.
The cost-to-income ratio of 78 percent is the headline management challenge, and it sits above the sector's better performers in part because the group's restructuring, merging FBC Bank and FBC Building Society, establishing FBC Properties as a separate entity, generated one-off rationalisation costs during the year. Operating costs declined from ZWG 4.58 billion to ZWG 2.64 billion, and the chairman's narrative of cost savings from automation and digital transformation is consistent with that trend, though 78 percent still indicates that the group consumes more than three quarters of each revenue dollar before reaching the bottom line.
The group adopted the United States Dollar as its functional currency with effect from 1 January 2025, making its translated ZWG results subject to IAS 21 translation mechanics. The audit opinion from Axcentium is unmodified on the general purpose financial statements, which provides assurance, though the auditor's report on the abridged translated results notes an emphasis of matter regarding the special purpose basis of preparation.
A prior period adjustment of ZWG 1.18 billion arising from the rebasing of transactions within the FBC Bank core banking system is a notable disclosure, it reduced opening retained earnings materially and is a reminder that functional currency transitions in the Zimbabwean context carry significant accounting complexity. The group is also under review from tax authorities for income tax liabilities covering 2019 to 2024, with provisional assessments of USD 9.4 million and ZWG 49.4 million outstanding, a contingent liability that investors should carry in their analysis.
FBC's insurance subsidiaries made a positive contribution for the first time in topical memory, with the consolidated insurance service result swinging from a loss of ZWG 48.6 million to a profit of ZWG 107.9 million. The non-performing loan ratio at FBC Bank, Stage 3 loans of ZWG 479.9 million against gross advances of ZWG 9.71 billion, representing 4.9 percent, is the cleanest NPL position among the groups with meaningful credit exposure.
The board declared a final dividend of US$0.32 cents per share, consistent with its commitment to returning capital while preserving growth-oriented resources.
ZB Financial Holdings: the qualified opinion and what it reveals about Zimbabwe's accounting inheritance
ZB Financial Holdings delivered headline numbers that look competitive, profit after tax of ZWG 679.2 million ($25.2 million formal), total income of ZWG 3.89 billion ($144 million), net interest income of ZWG 1.2 billion ($44.5 million), but the group's audited results carry the most significant audit qualification in the sector, and that qualification speaks to persistent structural issues in how post-hyperinflation accounting adjustments have been handled across Zimbabwe's financial system.
Ernst & Young issued a qualified opinion on the consolidated financial statements, citing non-compliance with IAS 21 in the translation of opening balances at the functional currency change date, material misstatements arising from the incorrect classification of matured treasury bills in Stage 2 rather than Stage 3 under IFRS 9 (overstating treasury bills by ZWG 425 million, understating loan impairment charges by ZWG 282 million), an inability to obtain sufficient audit evidence on ZWG 450 billion in trade and other receivables under investigation, and a separate qualification on the IFRS 9 ECL model for loans and advances where the LGD model was not functioning as intended.
The cumulative quantified misstatements are material. ZB Bank's non-performing loan ratio, Stage 3 advances of ZWG 852.5 million against gross advances of ZWG 3.5 billion, representing 24.3 percent, is the highest in the sector by a wide margin, though both management and auditors note that the ECL modelling issues mean the underlying credit quality cannot be assessed with full confidence. Investors should treat ZB's income metrics with the appropriate discount until the qualification is resolved.
The business itself has genuine strengths. Net interest income has grown ZWG 1.2 billion against ZWG 474.5 million in 2024, reflecting both the improved rate environment and a restructured loan portfolio. The banking subsidiary's liquidity ratio of 66 percent and capital adequacy ratio of 25.86 percent (Tier 1 of 22.26 percent) demonstrate that solvency is not the issue.
The insurance cluster contributed meaningfully, ZB Reinsurance posted profit after tax of ZWG 121 million ($4.5 million), up from ZWG 36 million in 2024, and P&C Reinsurance in Botswana improved to USD 1.34 million from USD 1.0 million, adding geographic diversification that is genuinely valuable. ZB Life's contribution was subdued, with a qualified audit of its own relating to prior-period IAS 21 non-compliance inherited from the parent's position. The decision to surrender ZB Building Society's banking licence, approved by shareholders in March 2026 and now in supervised liquidation, is strategically sound as it concentrates capital, simplifies the regulatory structure, and removes a capital allocation that was generating suboptimal returns.
The board declared a final dividend of USD 0.84 cents per share.
Earnings per share of 350 ZWG cents ($12.96 at formal rate) look exceptionally strong relative to peers, but this reflects the smaller share count rather than superior underlying returns on equity, and the qualified audit means the numerator carries measurement risk.
First Capital Bank: the VFEX dollar advantage and the intermediation model
First Capital Bank, Zimbabwe's only major commercial bank reporting in US dollars on the Victoria Falls Stock Exchange, occupies a distinct position in the competitive landscape precisely because its functional and reporting currency are aligned with the economic reality of its client base. Serving primarily corporate, institutional, and high-net-worth clients whose transactions are predominantly USD-denominated, First Capital generated approximately $37 million in total revenue for the year ended December 2025, with net interest income of roughly $18 million reflecting a lending book of approximately $145 million deployed against deposits of around $330 million, a loans-to-deposit ratio of approximately 44 percent that sits in the middle of the sector range.
Profit after tax of approximately $13 million represents a cost-to-income ratio estimated at around 55 percent, the most efficient in the sector, which reflects First Capital's narrower but more focused business model. The bank does not operate in mass retail and does not carry the infrastructure overhead of a branch-heavy distribution network, allowing it to generate competitive returns with a leaner cost structure.
Capital adequacy has consistently exceeded 25 percent, and the VFEX listing gives the bank access to a dollar-denominated shareholder register that is more naturally aligned with the bank's asset and liability structure. The primary structural risk for First Capital is concentration, its deposit base is less granular than CBZ or FBC, making it more sensitive to large account movements, and its loans portfolio reflects corporate-weighted credit risk that moves more correlated with the macroeconomic cycle than a diversified retail book would.
The fee compression headwind from the 2026 MPS hits First Capital less severely than its domestically focused peers because a meaningful share of its transaction income derives from cross-border and corporate treasury services that sit outside the domestically regulated charge framework. However, the removal of balance enquiry fees and lower transaction bands will still register, and any tightening of the corporate margins that have supported interest income will require the bank to find alternative deployment channels.
NMB Bank: the digital pivot and the productive sector credit story
NMB Bank navigated 2025 with a performance broadly consistent with the sector's improving trend, generating total income of approximately ZWG 1.4 billion ($51.9 million formal) and profit after tax of approximately ZWG 380 million ($14.1 million). The bank's loans-to-deposits ratio of approximately 50 percent places it in the upper half of the intermediation range for the sector, and its productive sector lending, weighted toward agriculture and manufacturing, reflects a deliberate credit strategy that accepts somewhat higher risk in exchange for higher asset yields. The cost-to-income ratio of approximately 72 percent points to ongoing investment in digital infrastructure that has not yet fully translated into the cost efficiencies that digital transformation ultimately promises.
NMB's capital adequacy ratio remains comfortably above the 12 percent minimum, and the bank has maintained a clean audit opinion, which is a differentiating positive in a sector where qualified opinions have become more common. The fee income compression from the 2026 MPS will affect NMB proportionately, the bank has built significant revenue from transaction-based digital banking services, but management's investment in the lending book positions the bank to partially substitute falling fee income with expanding net interest income over the medium term, provided that credit quality is maintained.
TN CyberTech Bank: the structural reinvention and the lending gap
TN CyberTech Bank, formerly Steward Bank, completed a period of radical strategic repositioning in the ten months to December 2025, a period that is not directly comparable to any prior full-year result and that reflects the combined effects of a change in financial year-end, a change in functional currency to USD effective 1 March 2025, and the disposal of the mobile money, insurance, and health subsidiaries to Econet Wireless Zimbabwe in early 2024.
The bank that remains is smaller, simpler, and more focused than its predecessor, but it is also carrying the deepest structural tension in the listed banking sector, a loans-to-deposits ratio of just 18.6 percent.
TN CyberTech Bank held ZWG 4.56 billion ($168.9 million formal) in customer deposits at December 2025 but had only ZWG 849.7 million ($31.5 million) deployed as loans and advances. This is not a credit underwriting failure as it reflects the concentration of TN's deposit base in transactional accounts tied to digital wallet ecosystem, deposits that are highly liquid, short-tenor, and often held by customers who are simultaneously managing airtime, remittances, and small cash positions rather than seeking long-term borrowing relationships. The bank is, in effect, a payment infrastructure business with a banking licence, and its revenue composition confirms this, non-interest income of ZWG 684 million dominates the ZWG 176 million of net interest income by a ratio of approximately four to one. The 2026 fee reduction from the RBZ is therefore a more acute structural threat to TN CyberTech than to any other listed institution. Cash withdrawal income, which grew 332 percent during the period driven by ATM network expansion, is precisely the category of income most directly exposed to the new charge framework.
The group reported bank-level profit after tax of ZWG 129 million ($4.8 million formal) for the ten-month period, which included a ZWG 64.4 million fair value loss on investment properties arising from the functional currency change, a technical accounting effect that management characterises as non-recurring and which, excluded, would produce an adjusted profit of ZWG 190 million.
Capital adequacy at 34 percent is the strongest in the sector and reflects the bank's deliberately conservative balance sheet posture. TN CyberTech's Hyperintegration strategy, expanding ATM networks with smart terminals, partnering with mobile money providers and health services, building nano-loan capacity with over 612,000 disbursements during the period, is conceptually well-positioned for a market where financial inclusion and digital penetration are genuine opportunities. But the execution challenge is converting payment infrastructure scale into credit origination at a margin that can replace the fee income the regulator is removing.
The structural themes that define the sector
Three patterns run across all six groups with enough consistency to constitute sector-level findings rather than individual firm stories. The first is the universal dominance of non-interest income, which ranges from 67 percent of total income at CBZ to 80 percent at TN CyberTech. This is a legacy of the hyperinflation era, when transaction fees were the only reliable real-value revenue source, and it persists because the loan-to-deposit ratios across the sector, averaging roughly 44 percent, have not yet generated enough net interest income to rebalance the revenue mix. The second pattern is the extraordinary capital adequacy across the board, every bank in the sector sits between 25 and 34 percent total capital adequacy against a 12 percent minimum. This overcapitalisation is not prudence for its own sake, it reflects an inability to deploy capital into credit assets at a rate that would bring capital ratios down toward more efficient levels. The sector collectively holds capital that is generating regulatory comfort rather than productive financial intermediation.
The third pattern is the deposit dollarisation that is both the system's greatest strength and its most persistent challenge. Foreign currency deposits account for approximately 82 percent of broad money supply M3, according to CBZ's chairman, and this structure anchors the system against ZiG devaluation risk. But it also means that the marginal ZWG deposit growth the RBZ is targeting through its ZiG deepening initiative competes with a deeply entrenched USD preference among depositors who have vivid institutional memory of what local currency deposits have historically done to their purchasing power.
The 2026 fee compression: the only number that matters for next year's results
The Reserve Bank's February 2026 Monetary Policy Statement eliminated balance enquiry fees, capped withdrawal fees at lower levels across retail brackets, and reduced a range of transaction charges that had accumulated as informal cross-subsidies across the system. For the banking sector, this is not a marginal adjustment, it targets the highest-volume, highest-frequency revenue line across every institution. The commercial banking rationale for those fees was never merely about recovering cost, it was about subsidising the expensive physical and digital infrastructure required to deliver financial services in a market where minimum balances are low, transaction sizes are small, and the average customer's account generates negligible net interest income for the bank holding their deposits.
With the fee income pillar under compression, the arithmetic of sustainable banking in Zimbabwe changes structurally. Net interest income must grow to compensate, which means the loans-to-deposit ratios that have defined the sector's conservative posture must rise. That requires either more aggressive credit origination at acceptable risk standards, which in turn requires collateral frameworks, credit bureaux data, and macroeconomic stability that reduces default risk, or a structural reduction in deposit costs, which would require either shorter-term liabilities or a deposit repricing that the competitive market may not easily sustain. Banks that have made the deepest investments in their lending infrastructure, FBC at 85 percent loan-to-deposit and, to a lesser extent, First Capital at 44 percent and NMB at 50 percent, are better positioned for this transition than those whose revenue models remain most heavily fee-dependent.
The sector enters 2026 well capitalised, provisioning costs at their lowest in years, and audit quality improving at the better-managed institutions. It also enters 2026 facing the first genuinely structural test of its business model since the 2019 currency reforms. The institutions that will widen the gap on their peers are those that resolve the loans-to-deposit paradox, not by taking imprudent credit risk, but by building the analytical capability, digital credit infrastructure, and sectoral expertise to deploy the dollar liquidity sitting on their balance sheets at rates that the post-fee-compression income statement can sustain.
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