Zimbabwe’s biggest banking group is pressing the pedal on growth, chasing an ambitious US$500 million loan book within the next 12 months as it secures fresh credit lines to power industry, agriculture, and infrastructure. Presenting half-year results last week, CBZ Holdings Limited unveiled a bold plan to double its balance sheet over five years, signalling its intent to move beyond transactional banking. For chief executive officer Lawrence Nyazema (LN, pictured), this is not just about expanding CBZ’s footprint — it is about rewiring the financial engine of an economy still shackled by liquidity shortages and policy uncertainty. He spoke to our chief reporter, Melody Chikono (MC), after the presentation:
MC: Following the publication of your H1 results, both the top line and bottom line declined. Can you explain this?
LN: The decline compared to last year is largely due to the fact that the prior period was characterised by several technical factors, which resulted in exchange gains that bolstered both the top line and bottom line. In contrast, this year’s performance, while lower, reflects a more sustainable trajectory as the exchange rate has remained relatively stable, allowing us to focus on the core strength of our underlying operations. Excluding the technical adjustments from H124 (first half of 2024), our profit after tax grew by 11%, supported by an increase in commission and fee income on the back of increased transaction volumes on our digital platforms.
MC: During the analyst briefing, you indicated that one of the reasons you were hesitant to quickly grow your lines of credit is around lending rates. How has this impacted you?
LN: Lending rates have a direct impact on our strategy for expanding credit lines. Higher rates, largely reflecting the risk environment from a global perspective, make rapid growth more challenging as we balance affordability for our customers with sustainable returns. Interest rates are influenced by market risk, and to manage this, we continue leveraging our long-standing relationships with funders while actively scouting for alternative sources and competitive rates. As a result, we are deliberate in scaling our credit lines, focusing on sustainable, long-term funding that supports both our balance sheet growth and the sectors we serve.
MC: Are you looking at going beyond the US$200 million in terms of credit lines?
LN: Yes, our five-year strategy is to double the balance sheet, and this cannot be achieved without expanding long term, sustainable funding. We are therefore looking beyond the current US$200 million mark in credit lines and intend to grow affordable, sustainable funding that supports our customers, key sectors, and contributes to national development.
MC: Which areas have you supported through these lines and what can you say about the returns?
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LN: Through these credit lines, we have supported a range of sectors, including exporters, multinational corporations, and most recently, the tobacco industry, marking an important milestone. Overall, returns have been in line with expectations. We continue to actively engage with our funders to expand support across all sectors, including local businesses, ensuring sustainable and inclusive growth for our clients.
MC: With most businesses operating informally, how do you plan to bring these players into the financial system while balancing the risks of lending to largely undocumented enterprises?
LN: Bringing informal businesses into the formal financial system requires balancing inclusion with risk management. We ensure thorough client on-boarding and KYC (know your client) processes, while our subsidiaries offer bundled, SME friendly products that combine banking, insurance, and investment solutions tailored to the sectors we serve. These bundles make services more accessible and affordable, supporting business growth, promoting financial inclusion, and enabling responsible lending across largely undocumented enterprises.
MC: You mentioned moving from payroll lending to deeper SME and informal sector coverage. What structural changes in your microfinance model will ensure this transition is sustainable and profitable?
LN: Our transition from primarily payroll lending to deeper coverage of SMEs and the informal sector is underpinned by structural changes in our microfinance model. We are enhancing risk assessment frameworks, strengthening client on-boarding and KYC processes, and introducing tailored, sector-specific products, including bundled solutions from our subsidiaries. These changes ensure sustainable and profitable growth, while maintaining affordability. At the same time, we continue to support individual clients through targeted offerings, ensuring that no segment of our customer base is left behind as we expand our reach.
MC: Concerning FMHL (First Mutual Holdings Limited), you mentioned that it remains a strategic asset, and that you are also looking into the region. Can you shed more light on this?
LN: FMHL remains a key strategic investment and an important part of our portfolio. We believe the asset is well-positioned within its markets to grow beyond current business size and enhance the investment value placed. We are also working on expansion into the broader markets we serve.
MC: What is the potential investment returns from the group’s property portfolio, particularly from gated communities in terms of rental income and capital gains?
LN: The group’s property portfolio continues to deliver strong potential returns. While the property market in Zimbabwe is relatively limited, recent trends show growth, particularly on residential portfolios and the group has benefited from property appreciation on its own portfolio. We continue to achieve high yields and occupancy rates across our own portfolios. Additionally, the group manages developments on behalf of clients, particularly gated communities such as Northgate and Dabuka, which have recently attracted strong market attention.
MC: How do gated communities in Zimbabwe compare to other types of investments, such as stocks or bonds, in terms of risk and potential returns?
LN: While the group itself does not invest directly in gated communities, we do manage such developments on behalf of our clients. Generally, residential property, especially in gated communities, has shown strong uptake in Zimbabwe, largely driven by the housing shortages in Harare. Compared to traditional investments such as stocks or bonds, property tends to offer more stable long-term capital appreciation and rental income, though it is less liquid. Stocks and bonds, on the other hand, may provide quicker returns, but often carry higher volatility. In Zimbabwe’s context, residential property continues to be viewed as a relatively secure investment option.
MC: What can you say has been driving CBZH group growth over the years?
LN: Over the years, CBZH growth has been anchored on our strong local market presence, a solid balance sheet, and a customer centric approach that delivers seamless, affordable, solution-oriented products. Coupled with our diversification into new markets, these strengths continue to drive our sustainable growth story.
MC: What can you say have been your key milestones?
LN: Over the years, we have achieved important milestones, establishing the group as a market leader within the markets we serve. Our customers’ successes, made possible through our tailored financial solutions, remain central to our story, and we continue to evolve by expanding our offerings across banking, insurance, investments, and lending, underpinned by technology and innovation. The group’s ability to adapt to a highly-dynamic environment and the capability to grow our capital base to above US$300 million is testament to our success. Our footprint in the Environmental Social Governance sphere demonstrates our commitment to the development of the communities that we operate in, as well as the strong affinity to uphold good corporate governance tenets. These ideals make the group attractive to international financiers who also share the same principles.
That journey has not been without challenges. Market-wide liquidity constraints and rising operating costs, have all periodically created a demanding environment. However, these challenges have strengthened our resilience, sharpened our agility, and reinforced our commitment to delivering value for our customers, shareholders, and communities.
MC: Can you unpack your long-term growth prospects?
LN: Our long-term growth prospects are anchored on expanding our asset base and sustainable earnings, supported by four strategic pillars: strengthening our foundation through operational efficiency, driving regional expansion and capitalisation, investing in digital transformation and technology, and unlocking new revenue streams through alternative markets while leveraging the full power of the group ecosystem.
