• RBZ’s aggressive multi-year fee compression culminating in the absolute elimination of balance enquiry and cash deposit fees effectively kills the transactional rent-seeking model, forcing institutions to transition toward traditional interest income from risk-based lending
• Q1 2026 results expose structural vulnerability across the sector; CBZ Holdings saw its profits drop 32.8% due to a low 36.9% loans-to-deposits ratio (LDR), while FBC Holdings remains highly insulated thanks to a proactive, sector-leading LDR of 85.1%
• TN CyberTech faces the sector's most severe challenge, as its non-interest reliance exceeds 80% and its core expansion vehicle, ATM withdrawal charges has been capped at 2% by the central bank

Harare- For the better part of a decade, Zimbabwe’s banking sector operated on a model that would be unrecognisable in most developed financial markets. Fees and commissions, not interest income from lending, were the primary earnings engine. In a system where making loans was risky, where the currency was unstable, where legal recourse on defaulted collateral was slow, and where a depositor’s trust in the banking system was fragile enough that even a rumour could trigger a run, banks did the rational thing, they collected fees on every transaction, every enquiry, every withdrawal, every deposit, and built profitability on volume of activity rather than credit risk.

By 2025, this model had delivered Zimbabwe’s banking sector its strongest aggregate profit in the post-hyperinflation era, with six listed groups earning an estimated USD 140 million in after-tax profit, overwhelmingly powered by non-interest income representing between 67% and 80% of total revenue. The Reserve Bank of Zimbabwe’s 2025 MPS had already named the problem, fees and commissions accounted for 22% of banking sector income, while lending contributed just 13.46% of income.

In most countries, that ratio is reversed. The RBZ decided, in its February 2026 Monetary Policy Statement, to force the reversal. The Q1 2026 results are the first evidence of what that decision has cost the sector, and they reveal, with precision, which banks built their business on sand and which built it on stone.

RBZ Banking Reform Timeline: The Escalating Compression of Fee Income, 2024–2026

Source: Reserve Bank of Zimbabwe MPS 2024, 2025, 2026, Equity Axis.

What the RBZ Actually Did

The February 2026 Monetary Policy Statement, delivered by Governor John Mushayavanhu, was the culmination of a multi-year campaign to force Zimbabwe’s banking sector back toward its primary economic function. The 2026 MPS went further than any prior intervention. It removed account balance enquiry charges on all banking and mobile platforms entirely. It scrapped cash deposit fees across the board. It capped cash withdrawal charges at 2% of the withdrawn amount, a measure with direct and severe implications for any bank whose business model depends on withdrawal transaction income, and it directed all banks and deposit-taking microfinance institutions to implement the new fee structure by 31 March 2026.

The deadline was significant, it meant the full first quarter of 2026 was partially operating under the old charge framework, with the new caps only fully operational from 31 March. The Q1 2026 results therefore capture only a portion of the annual revenue impact. Q2 2026 will be the first full quarter under the complete new framework, and it will show a deeper compression than Q1.

The 2026 MPS followed two earlier rounds of fee intervention. In April 2024, the RBZ introduced zero maintenance and service fees for low-balance ZiG and foreign currency accounts. In February 2025, it eliminated bank and point-of-sale charges on all transactions below USD 5, targeting the micro-transaction fee income that had become a significant revenue line for banks with large retail and digital customer bases. Each intervention progressively narrowed the fee income base.

The 2026 MPS did not add a new layer to that progression. It made the progression structural and irreversible by targeting the highest-volume, highest-yield transaction categories: cash deposits, balance enquiries, and withdrawals. Pre-reform modelling by analysts estimated that a 50% cut in fees could erase between a quarter and a third of operating income across CBZ, NMB, and FBC, with the actual impact at CBZ specifically estimated at a 12 to 15% reduction in operating income through the elimination of approximately ZWG 300 to 460 million annually in fee revenue. That modelling has now made contact with reality.

CBZ

CBZ Holdings entered Q1 2026 as Zimbabwe’s dominant banking group by every measure that matters: total assets of ZWG 40.81 billion, customer deposits of ZWG 27.83 billion, a 21.4% share of system deposits, and a 30% share of US dollar point-of-sale transaction volumes. It exited Q1 2026 with profit after tax of ZWG 361.34 million, a 32.8% decline from ZWG 537.53 million in Q1 2025. Total income fell 5.7%. Non-funded income declined 6.4% to ZWG 878.09 million. The group attributed the non-funded income decline primarily to the non-recurrence of once-off treasury bill gains in the prior year, which is accurate but incomplete. The RBZ charge caps, effective 31 March 2026 for the full new framework, compressed the recurring fee income base that sits beneath those once-off items. Commission and fee income grew 4.9% to ZWG 524.17 million, which looks contradictory until the context is understood, the treasury bill gains are gone, and the charge caps arrived on the last day of the quarter. The full quarterly impact of the 2026 MPS will land in Q2 2026, not Q1.

The most structurally important number in CBZ’s Q1 2026 results is not the profit decline, but  the loans-to-deposits ratio of 36.9%, up marginally from approximately 34.9% in the prior period. CBZ is lending 37 cents of every deposit dollar and holding the rest in government securities, treasury bills, and liquid assets. In the fee-income era, that conservatism was rational: the bank earned more than enough from transaction volumes to generate competitive returns without taking credit risk. The 2026 MPS has ended that logic. Net interest income, which grew 4.9% to ZWG 658.48 million, is the income line that must now expand to compensate for the fee income compression. Growing net interest income requires deploying more of the deposit base into loans, which means CBZ must move its loans-to-deposits ratio from 36.9% toward the 50 to 60% range that would produce meaningful net interest income growth. That is a shift measured in ZWG billions of credit extension into an economy still characterised by high default risk, inadequate collateral frameworks, and a currency environment that makes long-term lending structurally difficult.

NMB: The Acquisition That Bought Time

NMB Holdings reported the most dramatic headline profit improvement in the sector for Q1 2026, with profit after tax surging to USD 8.3 million from USD 2.52 million in Q1 2025, a 229% increase. Operating income rose 59% to USD 24.2 million. Those numbers look, on first reading, like evidence that NMB has navigated the fee income headwind successfully. They are not. Embedded in the Q1 2026 profit is a non-recurring gain of USD 3.8 million arising from the consolidation of EFC Zambia, which NMB acquired to expand its regional footprint and its microfinance and MSME lending capabilities. Strip out that acquisition gain and Q1 2026 PAT falls to approximately USD 4.5 million, a still-improved performance on USD 2.52 million in Q1 2025, but one that tells a different story than the headline number suggests.

NMB’s underlying position is among the sector’s most exposed to the fee income reform. In the first half of 2025, NMB’s fees and commissions of ZWG 623 million were nearly three times its net interest income, a ratio that makes the 2026 MPS charge caps more structurally threatening to NMB than to any other bank except TN CyberTech. The EFC Zambia acquisition is strategically sound, adding MSME lending capacity and a regional revenue stream outside Zimbabwe’s domestic regulatory environment, both of which reduce NMB’s dependence on domestic fee income. But the acquisition gain is a one-time item. The fee income compression is permanent. NMB’s Q2 and Q3 2026 results, without the acquisition gain to cushion them, will be the true measure of how effectively the group has pivoted toward interest income from its lending book.

FBC: The One Bank That Was Already Ready

FBC Holdings’ position in the Q1 2026 fee reform environment is the most instructive case study in the sector precisely because it demonstrates what a bank looks like when it has already made the transition that the RBZ is now forcing on everyone else. FBC ended FY2025 with a loans-to-deposits ratio of 85.1%, the highest in the sector by a substantial margin, meaning it lends 85 cents of every deposit dollar into the real economy. Its profit before tax grew 84% in FY2025 to ZWG 815.2 million, despite total income declining 34% due to a reduction in non-core revaluation gains. The profit growth came not from fees but from core trading income, which surged 34% and now dominates the revenue mix. FBC’s non-funded income accounted for 61% of total income in the nine months to September 2025, still above what ideal banking intermediation looks like but materially lower than CBZ’s 66% or NMB’s approximately 75%.

The 2026 MPS fee caps are not painless for FBC. A 50% fee reduction was modelled to strip away approximately ZWG 930 million in operating revenue, equivalent to roughly a quarter of operating income, from FBC in the pre-reform analysis. That is a material number, but for a bank earning net interest income from an 85.1% loans-to-deposits ratio, the proportional impact on total profitability is smaller than it would be for a bank with a 36.9% loans-to-deposits ratio earning proportionally more of its income from fees. FBC has also completed the integration of FBC Crown Bank, formerly Standard Chartered Bank Zimbabwe, acquired in 2024, and merged FBC Building Society into FBC Bank Limited with effect from 30 December 2025. Those structural consolidations concentrate regulatory capital and lending capacity into a smaller number of vehicles with a cleaner governance structure. FBC enters the full-fee-reform era in a stronger structural position than any other group in the sector.

TN CyberTech

TN CyberTech Bank, formerly Steward Bank, renamed on 30 May 2025 following the rebranding of its parent EcoCash Holdings, presents the most extreme case study in fee reform vulnerability in the sector. Its loans-to-deposits ratio of approximately 18.6% is the lowest in the sector, meaning it lends less than 19 cents of every deposit dollar. Its non-interest income share of total revenue exceeds 80%, higher than any other listed banking group. Its most recent disclosed growth driver, ATM withdrawal income, which grew 332% through ATM network expansion, is the revenue line most directly targeted by the RBZ’s 2% cash withdrawal charge cap. A bank whose fastest-growing income stream is ATM withdrawal fees, operating in a regulatory environment that has just capped those fees at 2% of the transaction value, is a bank whose business model is under direct and existential challenge from the reform framework. TN CyberTech has not yet published its Q1 2026 results at the time of this analysis, but the structural arithmetic of its position is clear from the data available.

The path forward for TN CyberTech requires one of three responses: accelerate credit deployment from an 18.6% loans-to-deposits ratio toward the sector average and beyond, which requires a fundamental change in the risk appetite and credit infrastructure of a bank built on transaction volume rather than lending; develop new revenue streams outside the transaction fee categories targeted by the 2026 MPS; or accept a structural compression of profitability until one of the first two responses produces results. None of those paths is easy for a bank whose core infrastructure was built around the EcoCash mobile money ecosystem rather than around a traditional banking lending franchise.

Across the sector, the single metric that most clearly separates the banks that will navigate the reform era successfully from those that will not is the loans-to-deposits ratio. It is the measure of how much of the deposit base a bank is actually deploying into productive lending, and it is the structural indicator of how much net interest income the bank can generate as fee income falls. The sector average loans-to-deposits ratio of approximately 44% represents a sector that has historically lent less than half of what its depositors have entrusted to it.

The RBZ’s intent is explicit and has been stated repeatedly by Governor Mushayavanhu: banks must move toward genuine financial intermediation. The 2026 MPS fee reform is not primarily a consumer protection measure, though it has that effect. It is a structural incentive to force credit deployment. A bank that earns enough from fees to sustain profitability on a 36.9% loans-to-deposits ratio has no urgent commercial reason to lend more. Remove enough of those fees, and lending becomes the only sustainable path to profitability. That is the mechanism the RBZ has activated.

It is blunt, consequential, and correct in its diagnosis. Whether it succeeds depends on factors the RBZ does not control: the availability of bankable credit demand in an economy where 76% of businesses are informal, interest rates are capped at 35%, the adequacy of the credit bureau and collateral registration infrastructure, and the willingness of bank boards to absorb higher credit risk in an environment where currency stability remains untested across a full credit cycle.

Table 4: Zimbabwe Banks Q1 2026 — Fee Reform Winners and Losers

Source: Analysis incorporating Q1 2026 results (CBZ, NMB), FY2025 results (FBC), sector analysis (Equity Axis, African Financials), and RBZ 2026 MPS.

The Q1 2026 reporting season has produced a sector picture that is more differentiated than the record 2025 aggregate profit suggested it would be. CBZ is under near-term profit pressure from the combination of fee income compression and a loans-to-deposits ratio that must rise substantially to compensate. NMB has bought a quarter of breathing room from the EFC Zambia acquisition gain but faces the same structural fee income challenge in the quarters ahead. FBC is demonstrably the best-positioned group in the sector for the reform era, having built its lending franchise before the regulatory pressure arrived. TN CyberTech faces the most fundamental business model challenge. First Capital and ZB Financial sit in a middle ground of moderate exposure and structural simplification.

The sector’s aggregate trajectory for 2026 will depend on two variables that are not yet resolved. The first is how quickly the banks with the lowest loans-to-deposits ratios can expand credit deployment without generating non-performing loan ratios that offset the interest income gains. The second is whether Zimbabwe’s economic environment, with its 7.5% GDP growth in 2025, bumper agricultural season, record gold revenues, and advancing debt clearance dialogue, provides the bankable project pipeline that credit expansion requires. Those conditions are more favourable than they have been at any point in the past decade. g sector in 2026.

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