Online Reporter
Nqobile Bhebhe
Senior Business Reporter
SHAREHOLDERS of local banks are enjoying lucrative returns following solid performances that are driving profitability.
However, depositors continue to raise concern over steep fees and charges.
Central bank statistics indicate that, at 22 percent of total earnings, fees and charges came only second to revaluation of foreign currency assets, which accounted for 34,42 percent in 2024, when it came to source of income.
Banks made only 13,1 percent from interest income, which is earned from loans and advances.
Most banks have been declaring dividends, which are profits that are paid out to shareholders.
When a business earns a profit, it can either reinvest the profit in the business or pay a proportion as a dividend to shareholders.
Ecobank Zimbabwe, for example, will be paying out ZiG139,58 million (US$4,39 million) for the period ending December 31, 2024.
FBC Holdings declared a final dividend of US$0,25 and ZiG3,9 per share.
“This is in addition to an interim dividend of US$0,25, which was paid in October 2024. The dividend is payable to shareholders registered in the books of the company at the close of business on April 17, 2025,” the bank said.
CBZ Holdings has proposed to pay US$10 million or US$1,61 per share.
Further, the National Building Society (NBS) confirmed an interim dividend of US$420 000, which was declared and paid to its shareholder — the National Social Security Authority (NSSA) — through the Accident Prevention and Workers’ Compensation Scheme (APWCS) and the Pension and Other Benefits Scheme (POBS).
Financial health
Local banker Mr Clifton Dube said the declaration of dividends by banks underscores the health of the country’s financial services sector.
“In recent years, Zimbabwe’s banking sector has demonstrated remarkable resilience amid economic volatility, currency fluctuations and inflationary pressures. The sector has remained profitable, with several banks posting strong financial results driven by increased lending activity, diversified income streams and prudent cost management,” he said.
“Notably, the adoption of digital banking platforms has expanded financial inclusion and operational efficiency. Regulatory oversight by the Reserve Bank of Zimbabwe has also contributed to improved capitalisation and liquidity ratios across the sector.
“The consistent declaration of dividends by leading banks not only reflects strong balance sheets but also signals growing investor confidence in the sector’s long-term stability and potential for growth.”
Bankers Association of Zimbabwe (BAZ) president Mr Lawrence Nyazema, who is also the group chief executive officer of CBZ Holdings, said the biggest earnings for most banks came from revaluation gains for assets and forex due to exchange rate movements and inflation.
“Careful analysis of the numbers is needed as there are so many distortions arising from applying global accounting standards on our environment, which has undergone so many changes,” he said.
“There are entities in other sectors of the economy that are way more profitable than banks, which means they also make margins from carrying out their business.”
On the issue of banks disproportionately relying on fees and charges, Mr Nyazema said: “There are at least 16 banks which provide competition and options for our customers and clients to opt for the best offering.”
Complaints
The banking public continues to complain about limited financial products, steep account maintenance and transaction fees, minimal international transacting capacity and high interest rates.
Customers have also reported poor customer service, including erratic network availability for digital platforms and unexplained transactions on customers’ accounts.
In a recent intervention, the Reserve Bank of Zimbabwe (RBZ) directed banks to increase interest on savings and time deposits.
It also ordered the removal of all transaction fees for payments valued at US$5 and below, or the equivalent in Zimbabwe Gold (ZiG) currency. Data from the RBZ’s latest Monetary Policy Statement reveals a concerning trend: banking fees accounted for 22 percent of banks’ income, while income from lending — from lenders’ core business — stood at just 13,46 percent. Economist Ms Alice Chikonzi said a multifaceted approach aimed at restoring balance, promoting financial inclusion and stimulating productive lending must be adopted to address the issue of huge profits driven largely by non-core banking activities such as fees and commissions.
“Authorities could introduce incentives for banks to focus more on lending to the productive sectors of the economy, such as agriculture, manufacturing and SMEs (small and medium enterprises),” he said.
“This might include risk-sharing schemes, interest rate subsidies or tax incentives for loans tied to economic development.
“Facilitating the entry of more fintech players and smaller banks could help disrupt the dominance of a few large institutions. Increased competition often leads to innovation, lower fees and improved customer service.”
By reorienting the banking sector towards its core function, mobilising savings and extending credit, she said, monetary authorities can help build a more resilient, inclusive and development-driven financial system.
Bongani Ndlovu