Zimbabwe’s banking sector loans reached approximately ZiG85 billion by the end of June 2026, driven by sustained credit demand across key economic sectors.

According to the 2026 Mid-Term Budget and Economic Review, foreign-currency-denominated loans continued to dominate, accounting for about 90% of total banking sector lending.

“The banking sector continues to support the productive sectors of the economy, with 74.8% of total loans channelled towards the productive sector as of end June 2026,” Minister of Finance, Economic Development and Investment Promotion Professor Mthuli Ncube said in the Mid-Term Budget and Economic Review.

Financial institutions directed the majority of their loan portfolios toward key economic drivers, including agriculture, mining, manufacturing, and distribution.

Treasury added that the banking sector’s liquidity position remained satisfactory, enabling the sector to provide financing to the productive sectors of the economy.

Total banking sector deposits amounted to ZiG148.1 billion as at June 2026, dominated by foreign currency deposits, which accounted for 80% of total deposits.

Banks maintained prudent underwriting standards throughout the review period, ensuring that credit growth was accompanied by manageable asset quality metrics, controlled non-performing loan (NPL) ratios, and adequate capitalisation across the banking architecture.

The quality of the banking sector’s loan portfolio remained satisfactory as at March 31, 2026, with the average non-performing loans to total loans ratio at 3.6%. Treasury said the NPL ratio remained within the internationally acceptable threshold of 5%.

The banking sector remained adequately capitalised to absorb potential losses and maintain solvency during periods of stress.

As of March 31, 2026, average capital adequacy and tier 1 ratios stood at 29.1% and 23.2%, exceeding their respective regulatory minimums of 12% and 8%.

The sector recorded a profit of ZiG1.5 billion for the three months ended March 31, 2026, compared to ZiG2.6 billion recorded in 2025.

“The decline in aggregate net income for the banking sector is mainly attributed to reduced revaluation gains on foreign exchange and investment properties previously arising from foreign exchange fluctuations. On aggregate, the quality of earnings, however, improved as a result of stability in the exchange rate over the past year,” the Mid-Term Budget and Economic Review said.

During the period under review, fees and commissions and interest income on loans and advances were the key drivers of banking sector income, accounting for 47.5% and 40.9% of total income, respectively.

In response to public calls for lower transaction costs across the economy, the Reserve Bank introduced new measures to reduce bank charges, effective March 31, 2026.

Cash withdrawals and ZIPIT charges are now capped at 2%, while Point-of-Sale, Bank-to-Wallet, Wallet-to-Bank, and Send Money fees are capped at 1.5% (subject to a maximum ceiling of US$20 or its ZiG equivalent).

Additionally, balance inquiries and cash deposits are now free, bank card fees are limited to cost recovery, accounts with balances below US$100 are exempt from charges, and POS transactions under US$5 incur no fees.

Historically, financial institutions derived a significant portion of their income from transaction fees, digital service commissions, and non-interest streams.