Tanzania's two largest banks, which are the most valuable listed lenders by market cap in East and Central Africa, have published their first-quarter earnings in 2026, with CRDB Bank growing profit nearly four times faster than NMB Bank.
- •Rising funding costs and a stronger shilling squeezed both institutions, exposing differing degrees of balance sheet resilience.
- •CRDB's total assets expanded 7.1% in a single quarter as its deposit mobilization ran at more than double NMB's, whose assets grew by against NMB's 1.7%.
- •Both banks absorbed significant FX income compression: CRDB's foreign currency dealings gain fell 40.3% year-on-year to TZS 30.82 billion, linked to a TZS appreciation of approximately 0.8% against the dollar during the period per Bank of Tanzania data.
CRDB reported group profit after tax of TZS 206.20 billion for the quarter ended 31 March 2026, up 18.9% year-on-year.
Net interest income expanded 26.2% to TZS 388.75 billion, supported by 31.6% growth in interest income to TZS 563.98 billion. The result was delivered despite interest expense rising 45.4% to TZS 175.22 billion, a pace that outstripped income growth and signals net interest margin compression even as absolute NII expanded on volume.
Net loans and advances grew 6.8% from December 2025 to TZS 14.66 trillion, with customer deposits up 9.0% to TZS 16.03 trillion.
The non-performing loan ratio improved to 2.85% from 2.89% the prior quarter, and total assets reached TZS 23.89 trillion, up 7.1% in a single quarter.
NMB reported profit after tax of TZS 193.09 billion, up 4.9% year-on-year, as net interest income rose 12.9% to TZS 318.64 billion on interest income growth of 20.2%.
- •NMB's interest expense also surged 45.9%, compressing the funding cost advantage both banks previously enjoyed.
- •Non-interest income grew just 1.8% to TZS 165.83 billion despite a 13.7% rise in fees and commissions, as foreign currency dealings income fell 18.0% to TZS 27.53 billion.
- • More pressingly, non-interest expense rose 16.3% against that 1.8% non-interest income growth, a negative jaws position that will require attention if fee income momentum does not accelerate.
NMB's NPL ratio edged up to 2.6% from 2.5% in December 2025. The Bank of Tanzania imposed a TZS 20 million penalty on NMB during the quarter relating to computation of the liquidity coverage ratio.
The divergence in growth rates reflects balance sheet dynamics as much as operational performance.
NMB's cost-to-income ratio of 38% remains tighter than CRDB's 41.6%, reflecting a digital model in which over 94% of transactions occur outside branches. CRDB's higher ratio reflects ongoing investment in a new core banking system and the establishment of a Dubai representative office.
Return on equity told a more sobering story at both institutions: CRDB's ROAE fell to 28.0% from 30.0% a year earlier, while NMB's dropped more sharply from 28.0% to 24.0%, signaling that balance sheet growth is outpacing earnings accretion at both banks.
CRDB's gross loans-to-deposits ratio improved to 92.8% from 94.5% in December 2025, indicating improving funding headroom. NMB's ratio stood at 86%, reflecting a more conservatively funded book.
Together, the two banks account for nearly half of Tanzania's TZS 79.4 trillion in banking sector assets, a concentration their Q1 results suggest is widening.
With the Bank of Tanzania holding its Central Bank Rate at 5.75% and GDP growth projected at 6% for 2026, the operating environment remains supportive, though the pace at which funding costs are rising warrants close monitoring through the remainder of the year.
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