'Zimbabwe banking sector safe, sound, well capitalised'

Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube says Zimbabwe's banking sector remains stable, well-capitalised and free from financial stress, supported by strong foreign currency buffers and sustained deposit growth.

Presenting the 2026 National Budget last week, Minister Ncube said the sector continues to demonstrate resilience amid ongoing economic reforms, with all key indicators reflecting soundness and regulatory compliance.

He noted that Zimbabwe's bank capitalisation thresholds, set by the Reserve Bank of Zimbabwe and aligned with the Basel III framework, provide a solid foundation for financial stability. Commercial banks are required to hold a minimum of US$30 million in capital, while deposit-taking and building societies must maintain at least US$20 million.

"The banking sector was adequately capitalised with average capital adequacy and tier 1 ratios of 33.8 percent and 25.3 percent, against the prescribed minimums of 12 percent and 8 percent, respectively," he said.

Aggregate core capital reached ZiG33.1 billion as at 30 June 2025, largely driven by retained earnings. As at 30 September 2025, the sector comprised 14 commercial banks, four building societies and one savings bank.

The microfinance industry also expanded, with 296 credit-only microfinance institutions-up from 259 last year-alongside eight deposit-taking microfinance institutions and four development finance institutions.

"The overall indicators demonstrate strengthened financial stability, supported by strong liquidity, robust capital positions and reinforced foreign currency reserves," Minister Ncube said.

He reported that domestic credit rose by 38.3 percent, from ZiG102.3 billion in December 2024 to ZiG141.5 billion in September 2025. Credit to the private sector increased by 28.5 percent to ZiG66.4 billion over the same period. Month-on-month private-sector credit growth slowed from an average of 13.2 percent in the second half of 2024 to 2.8 percent in the first nine months of 2025 due to the Reserve Bank's tight monetary policy stance.

Households received the largest share of private-sector credit at 25.8 percent, followed by agriculture (16.9 percent), manufacturing (14 percent), distribution (13.7 percent) and mining (9 percent). Credit was mainly used for recurrent expenditures (35 percent), inventory build-up (21.3 percent) and fixed-capital investments.

As at 30 June 2025, total banking sector loans and advances stood at ZiG67.5 billion, up from ZiG27.5 billion a year earlier, with 88.4 percent of loans denominated in foreign currency. Loans to productive sectors accounted for 76.7 percent of total loans.

The sector's profitability remained strong, recording aggregate profits of ZiG4.96 billion for the half-year ending 30 June 2025, compared to ZiG10.40 billion during the same period in 2024. Non-performing loans stood at 2.9 percent, comfortably below the international best-practice ceiling of 5 percent.

Minister Ncube said banking institutions' income composition is shifting from revaluation gains toward more sustainable sources such as fees and commissions, a trend supported by the continued stability of the ZiG. The Reserve Bank, he added, is working with the sector to promote affordable access to banking services and reduce the cost of doing business.

He also reported that monetary conditions remain in line with policy expectations. Reserve money stood at ZiG26.2 billion in September 2025-an increase of 28.6 percent from December 2024-with 82.1 percent held in foreign currency. The local-currency component rose to ZiG4.7 billion, in line with targeted inflation trends.

"Crucially, the ZiG remains strongly backed. As of September 30, 2025, the ZiG reserve money was covered by foreign reserves by about five times, and the Government will continue strengthening foreign currency reserves to sustain confidence in the local currency," he said.

Broad money supply grew to ZiG99.5 billion in September 2025, up 26.1 percent from ZiG78.9 billion in December 2024. Foreign-currency deposits accounted for 82.9 percent of broad money, with local-currency deposits at 15.4 percent, negotiable certificates of deposit at 1.6 percent and local-currency cash in circulation at 0.1 percent.