• Deposits reached ZWG5.07bn while gross customer loans remained below ZWG1bn
• Non-interest income supplied 85% of core banking income during the half year
• Regulatory NPLs remain low, although Stage 3 exposures increased sharply

Harare- TN CyberTech Bank has closed the first half of 2026 with ZWG5.07 billion in customer deposits against only ZWG928.8 million in gross loans, leaving customer credit equivalent to about 18.3% of deposits.

That places TN below every institution in the banking peer set among listed banks and POSB on conventional credit deployment. CBZ Bank sits at about 34%, ZB around 49%, POSB around 55%, First Capital at 66%, FBC Holdings around 77% and NMB Bank above 100%, although FBC is reported at group level and NMB also uses substantial non-deposit funding. 

TN's balance sheet therefore adds another model to the increasingly divergent Zimbabwean banking sector. NMB is using a highly credit-intensive balance sheet to drive funded earnings, First Capital has produced a more balanced combination of lending, interest income and transaction earnings, while TN is operating much further towards the opposite end: abundant liquidity, limited conventional loan deployment and an earnings model increasingly dependent on non-funded activity.

Deposits increased 7.9% from December while gross loans rose just 3% and net loans 2.5%. At the same time, TN's regulatory liquidity ratio stood at 89%, almost three times the 30% minimum, while capital adequacy reached 41% against the 12% regulatory floor.

That creates considerable capacity for growth, but also raises the hurdle for management. Excess liquidity protects depositors and gives TN room to scale. It earns shareholders less if the bank cannot convert an increasing proportion of that balance sheet into appropriately priced earning assets.

The missing credit deployment does not mean deposits are sitting entirely idle. Financial assets held at amortised cost increased by more than 50% from ZWG1.17 billion to ZWG1.77 billion between December and June. Cash and cash equivalents were another ZWG2.78 billion. Together those two asset pools were equivalent to almost 90% of customer deposits.

TN has therefore directed considerably more of its balance-sheet growth into liquidity and financial assets than into customer credit. This distinguishes it even from POSB and CBZ, the two other institutions in our sample operating with comparatively low loan-to-deposit ratios. POSB sits near 55%, while CBZ is around 34%. TN's 18% ratio leaves substantially more balance-sheet capacity unused for conventional lending.

The opportunity is obvious. A bank carrying 89% liquidity does not need faster deposit growth as urgently as it needs profitable deployment of the funding already mobilised. The Bank appears to recognise that, identifying growth in quality earning assets as an H2 priority.

The earnings model is already moving beyond interest. The bank should not be assessed exclusively through conventional lending ratios. Net interest income was ZWG92.1 million, while non-interest income reached ZWG516.7 million. Non-funded income therefore represented roughly 85% of the combined net interest and non-interest income generated by the bank.

Administration fees contributed ZWG146.7 million, transactional processing fees ZWG120.2 million, dealing income ZWG158.8 million and commissions ZWG37.9 million.  That makes TN one of the clearest examples of a Zimbabwean bank attempting to build earnings around distribution and transactions rather than balance-sheet intermediation alone.

The composition still deserves interrogation. Transactional processing fees declined from ZWG133.3 million in the comparative period to ZWG120.2 million, while account-maintenance income also fell. Dealing income rose substantially to ZWG158.8 million and administration fees increased to ZWG146.7 million.

Because TN's comparative period covers March to August 2025 rather than the same six months of the previous year, those movements should not be read as clean year-on-year growth rates. The current structure is more useful. TN earns considerably more from services and transactions than from the net interest spread.

Embedded banking is producing scale, although mostly outside the balance sheet. TN's embedded-banking strategy provides one explanation. The bank disbursed more than 725,000 small-value loans worth approximately US$7.9 million to more than 50,000 individuals during the half year. The implied average loan was only about US$10.90.  That means the bank is demonstrating the ability to originate extremely high numbers of small transactions without requiring conventional branch economics.

There is an important distinction, however, between distribution scale and balance-sheet scale. 725,000 loan transactions are a compelling operational number. Gross loans of ZWG929 million against ZWG5.07 billion of deposits show that this activity has not yet converted TN into a major credit intermediary.

That becomes the commercial test for the embedded model. TN has to prove that partner access and digital distribution can increase customer lifetime value, transaction income and quality earning assets faster than the technology and operating costs required to support the ecosystem.

Meanwhile, the Bank reported regulatory NPL ratio of 1.5%, up from 0.5% in December but still comfortably below the 5% regulatory ceiling.  Gross Stage 3 loans increased from ZWG3.4 million in December to ZWG27.6 million in June, while Stage 2 exposures declined from ZWG73.4 million to ZWG62.3 million. Stage 3 and the regulatory NPL ratio are different measures and should not be treated as interchangeable, but the increase in credit-impaired exposures deserves monitoring as TN accelerates small-ticket and corporate lending.

Credit risk is therefore still low on the regulatory measure, although H2 needs to show that the rapid increase in Stage 3 balances does not continue.

However, it does not displace First Capital as the cleanest balanced earnings conversion because First Capital simultaneously expanded deposits, lending, funded income and fees while reducing impairment charges. It also does not challenge NMB on funded-income conversion. NMB remains the strongest lender in the sample, with net interest income rising 52.7% and loans exceeding deposits.

TN occupies a third position. It has the lowest loan-to-deposit ratio, highest disclosed liquidity ratio among the reviewed institutions and one of the strongest capital buffers, while deriving the overwhelming majority of its core banking revenue from non-interest activities. That can become a genuine competitive advantage if embedded banking allows TN to monetise customers without carrying the credit risk and physical infrastructure associated with a traditional banking model.

It can equally become a capital-allocation weakness if deposits continue accumulating faster than productive earning assets. H2 therefore has a measurable test. The Bank needs the 89% liquidity position to begin producing more revenue-generating assets without sacrificing the 1.5% regulatory NPL ratio. The success of embedded banking will ultimately be judged less by the number of digital transactions originated and more by whether that reach raises sustainable earnings on the capital and liquidity already sitting inside the bank.