Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube has said Zimbabwe’s banking sector remains stable, well-capitalised and free of stress.
He also said the sector was supported by strong foreign currency buffers and sustained growth in deposits.
Presenting the 2026 National Budget last week, Minister Ncube said the banking sector remained safe and sound, with no elevated stress conditions, while the sector’s capital position remains well above regulatory thresholds, reflecting resilience amid ongoing economic reforms.
Zimbabwe’s bank capitalisation thresholds are set by the Reserve Bank of Zimbabwe and align with the Basel III framework, with specific minimums for different bank types.
For example, the minimum capital for commercial banks is currently US$30 million, while deposit-taking and building societies require 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 minimum capital adequacy ratio of 12 percent and the tier 1 capital ratio of 8 percent, respectively,” he said.
He added that aggregate core capital reached ZiG33,1 billion as at June 30, 2025, largely driven by the capitalisation of retained earnings.
According to the finance minister, as at September 30, 2025, the sector comprised 14 commercial banks, four building societies and one savings bank.
The microfinance sector 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,” said Minister Ncube.
He also highlighted that domestic credit increased by 38,3 percent from ZiG102,3 billion in December 2024 to ZiG141,5 billion in September 2025, and credit to the private sector increased by 28,5 percent to ZiG66,4 billion.
The average month-on-month growth in credit to the private sector declined from 13,2 percent recorded in the second half of 2024 to 2,8 percent in the first 9 months of 2025.
“The stabilisation of the growth in credit to the private sector was largely due to the central bank’s tight monetary policy stance, which is consistent with the objective of sustaining currency and exchange rate stability,” he said.
Credit to the private sector was mainly channelled to households, agriculture, manufacturing and distribution, which received 25,8 percent, 16,9 percent, 14,0 percent and 13,7 percent of the total credit, respectively, while the mining sector received 9,0 percent.
“Credit to the private sector was largely utilised for recurrent expenditures (35 percent), inventory build-up (21,3 percent) and fixed capital investments,” reads part of the 2026 budget statement.
As at June 30, 2025, total banking sector loans and advances amounted to ZiG67,5 billion, compared to ZiG27,5 billion as at June 30, 024, mainly driven by an increase in foreign currency-denominated loans, which accounted for 88,4 percent of total loans and advances.
Minister Ncube noted that the banking sector continues to play an important role in supporting the productive sectors of the economy and loans to the productive sectors accounted for 76,7 percent of total loans as at June 30, 2025.
The sector’s strength and stability have anchored profitability, with aggregate profit amounting to ZiG4,96 billion for the half year ended June 30, 2025, compared to ZiG10,40 billion reported in the corresponding period in 2024
The sector’s exposure to credit risk remains low, as evidenced by a non-performing loans ratio of 2,9 percent as at June 30, 2025, which compares favourably with the international best practice threshold of below 5 percent.
The income mix of banking institutions has increasingly shifted from revaluation gains towards fees and commissions. The continued ZiG stability will bolster the quality and sustainability of banking institutions’ earnings.
Thus, the Reserve Bank continues to engage the banking sector to adopt strategies that ensure affordable access to banking products and services in line with the national drive to reduce the cost of doing business.
Meanwhile, Minister Ncube said monetary conditions remained broadly aligned with policy targets, and the stock of reserve money was ZiG26,2 billion as of September 2025, reflecting an increase of 28,6 percent from ZiG20,4 billion recorded in December 2024.
He noted that reserve money is made up of 82,1 percent foreign currency and 17,9 percent local currency, with the local currency component rising to ZiG4,7 billion, a 33,7 percent increase consistent with the targeted inflation.
“Crucially, the ZiG remains strongly backed. As of September 30, 2025, the ZiG reserve money was covered by the foreign reserves by about five times, and the Government, through the Reserve Bank of Zimbabwe, will continue to strengthen foreign currency reserves to sustain confidence in the local currency,” said Minister Ncube.
Broad money supply also grew, reaching ZiG99,5 billion in September 2025, up 26,1 percent from ZiG78,9 billion in December 2024, with the increase driven by both foreign currency deposits and local currency components, which expanded by 28,1 percent and 17,5 percent, respectively.
According to the finance minister, as at September 2025, broad money consisted of 82,9 percent foreign currency deposits, 15,4 percent local currency deposits, 1,6 percent negotiable certificates of deposit and 0,1 percent local currency in circulation. – Herald
