ZB Financial Holdings says its diversified business model helped soften the impact of weaker lending income in the first quarter to 31 March 2026, as liquidity pressures across the banking sector constrained asset growth.
In its latest trading update, the financial group said stronger contributions from non-funded income streams, property operations and insurance helped offset reduced earnings from its core lending business.
Commission and fee income rose seven percent to ZiG378,22 million from ZiG365,86 million recorded in the same period last year, supported by higher transaction volumes.
Group general counsel and board secretary Tinashe Masiiwa said constrained liquidity conditions had limited the bank’s ability to grow its loan book.
“This was primarily due to reduced asset creation arising from liquidity constraints within the group’s banking operations,” Masiiwa said.
He added that returns from government securities also weighed on earnings.
“The decrease was further attributable to the maturity and reissuance of Treasury Bills at a zero percent coupon rate,” he said.
The performance reflects the increasingly difficult environment facing Zimbabwe’s banking sector, where tight liquidity and elevated borrowing costs continue to suppress credit expansion.
The central bank has maintained the policy rate at 35 percent as part of efforts to control money supply growth and contain inflation, a move that has increased pressure on traditional interest-based banking income.
As a result, financial institutions are placing greater emphasis on alternative revenue streams such as transaction fees, insurance products, digital financial services and property investments.
The group’s property division posted notable growth during the quarter, with income rising 27 percent to ZiG58,48 million from ZiG46,02 million in the comparable period last year.
Masiiwa attributed the improvement to stronger rental earnings and increased activity in property management.
“The property income increased by 27 percent from ZiG46,02 million in 2025 to ZiG58,48 million in 2026 year-on-year, driven largely by growth in rental income and property management services,” he said.
The group’s insurance business also recorded solid gains, with revenue climbing 21 percent to ZiG41,06 million from ZiG33,84 million a year earlier, supported by stable premium inflows and disciplined underwriting.
“The segment continues to play a strategic role in diversifying the group’s revenue streams and enhancing its earnings stability,” Masiiwa said.
Looking ahead, the group said it would continue pursuing strategies aimed at maintaining resilient earnings and improving long-term shareholder returns.
“The group will continue to pursue sustainable revenue generation strategies, diversify its investment portfolio and enforce effective cost management measures to enhance shareholder value while adapting to the evolving macroeconomic and regulatory landscape,” Masiiwa said.