• First Capital Bank added US$36.6 million to its gross loan book in the first half of 2026, with about US$23.5 million, or 64%, going into trade and services
• The shift reduced household lending from 55% to 47% of the book, although agriculture, industry and transport remain materially below their 2022 shares
• Non-performing loans have risen from US$506,000 in the historical 2022 comparative to US$7.52 million, with industrial and trade borrowers now carrying most of the stress

Harare- First Capital Bank has started putting its rapidly growing deposit base to work, although the destination of that money gives a more precise picture of the strategy than the headline 28% increase in lending.

Gross loans and advances increased by US$36.62 million in the six months to June, from US$131.99 million at December 2025 to US$168.62 million. Almost two thirds of that incremental lending went into a single category.

Trade and services exposure increased from US$16.64 million to US$40.17 million, absorbing US$23.52 million of the new credit and increasing its share of the total loan book from 13% to 24%. Physical persons received another US$7.49 million. Light and heavy industry added US$3.70 million. Agriculture received less than US$1 million of incremental lending, while transport increased by US$475,000 and energy and minerals by US$907,000. Financial services exposure actually declined.

The numbers give First Capital’s H1 balance sheet expansion a much narrower character than a general description of lending to mining, agriculture, manufacturing, services, tourism and households would imply.

The historical 2022 comparative shows a US$66.97 million loan book distributed relatively evenly across several parts of the economy. Physical persons accounted for 26%, light and heavy industry 22%, agriculture 21%, transport and distribution 17%, and trade and services 13%. Financial services and energy were negligible. 

By December 2025 that structure had changed materially. Physical persons had grown to US$72.70 million, equivalent to 55% of First Capital’s US$131.99 million gross book. Agriculture accounted for 14%, industry 13%, trade and services 13% and transport just 4%.

First Capital had therefore become much more dependent on household lending than it had been in 2022.

The H1 2026 expansion starts to reverse that concentration. Physical persons still increased in absolute terms to US$80.18 million, but their share of the book fell eight percentage points to 47% because corporate lending expanded faster. Trade and services became the principal counterweight, moving from 13% to 24% of the portfolio in six months.

That is commercially rational. Household credit can provide attractive yields and repayment visibility where salaries are routed through the bank, although it concentrates the portfolio around employment income and consumer balance sheets. Trade and services lending brings businesses, transaction flows, deposits and working capital into the banking relationship and can create additional fee and foreign exchange income around the loan.

It also offers First Capital a relatively fast route for deploying the deposits that had been accumulating faster than lending earlier in the year.

Customer deposits reached US$248.76 million by June from US$200.06 million at December. Corporate and investment banking demand deposits alone increased by more than US$43 million to US$151 million. First Capital therefore entered H1 with growing funding capacity and found most of its incremental credit demand among commercial borrowers.

Net interest income increased 15% to US$21.71 million as the larger lending book expanded the bank’s earning asset base. The loan-to-deposit ratio moved from roughly 64% at December to 66% in June while liquidity remained comfortably above regulatory requirements.

The allocation still raises a deeper question about the kind of credit expansion Zimbabwe’s improving macroeconomic environment is producing. First Capital’s 2022 book placed 60% of lending across agriculture, industry and transport before trade and services was included. By June 2026 those three categories together accounted for only 27%.

Agriculture has moved from 21% of the portfolio in the historical 2022 comparative to 11%. Light and heavy industry has moved from 22% to 12%. Transport has dropped from 17% to 4%. Trade and services has moved in the opposite direction, from 13% to 24%.

The transformation means First Capital has substantially enlarged its balance sheet while the sectors most directly associated with fixed productive capacity hold smaller proportional positions than they did four years earlier.

That does not mean trade credit is economically unproductive. A manufacturer requires distributors. Agriculture requires inputs, warehousing and merchants. Importers finance equipment and raw materials. Exporters require working capital. Service businesses employ labour and generate foreign currency.

The distinction lies in the duration and transmission of the credit. A loan financing inventory or short term commerce can recycle quickly through the banking system. A loan financing machinery, irrigation, mine development or industrial capacity can remain tied to productive assets for several years and expand the economy’s future output.

First Capital’s H1 numbers show where bankable demand currently sits. It is overwhelmingly easier to deploy incremental capital into trade and established household cash flows than into long tenor productive investment.

That pattern is visible beyond First Capital. Zimbabwe’s banking system reported 70.92% of lending to productive sectors at June 2026, with commercial activity accounting for 19.93%, agriculture 15.57%, manufacturing 12.96% and mining 7.35%. Around 90% of the sector loan book remained foreign currency denominated.

First Capital’s own structure sits differently within that broader pattern. Its 24% trade and services exposure is larger than the banking system’s commercial lending share on a broadly comparable basis. Agriculture at 11% is below the sector’s 15.57%. Light and heavy industry at 12% is close to the system’s manufacturing allocation. Energy and minerals represent only 1% of First Capital’s book despite mining being one of Zimbabwe’s principal sources of foreign currency and one of the sectors management identifies as a lending priority.

In the bank’s historical 2022 comparative, non-performing loans were only US$506,000 against a US$66.97 million gross book, a ratio of about 0.8%. More than half of those bad loans were attached to physical persons at US$275,000, while light and heavy industry accounted for US$223,000. Transport contributed only US$8,000. Trade and agriculture recorded no disclosed non-performing loans in that table.

The risk map is very different in 2026. Non-performing loans reached US$7.52 million at June against US$6.86 million at December 2025. Light and heavy industry carried US$3.10 million, trade and services US$2.47 million and physical persons US$1.96 million. Agriculture, energy and minerals, transport and financial services recorded no non-performing balances.

The composition produces an important result. First Capital is directing most of its new corporate lending into a segment that already carries a meaningful stock of bad loans. Trade and services received US$23.52 million of incremental credit in six months while its US$2.47 million non-performing balance remained unchanged from December.

That matters in two ways. The larger denominator has reduced the apparent risk ratio in the segment. Trade and services NPLs are now equivalent to roughly 6.1% of loans in that category, compared with almost 15% at December when the same US$2.47 million of bad loans sat against a much smaller US$16.64 million book.

The same issue appears in First Capital’s overall asset quality. Gross NPLs increased from US$6.86 million to US$7.52 million, yet the NPL ratio improved from approximately 5.2% to 4.5% because the total loan book expanded much faster. That is a legitimate improvement in portfolio quality by ratio, but is not evidence that the stock of problem credit has fallen.

Light and heavy industry deserves greater attention. Its US$3.10 million of NPLs sit against a US$20.24 million loan book, producing a sector NPL ratio of roughly 15%. It represents only 12% of gross loans but more than 40% of total disclosed NPLs.

Agriculture offers the opposite picture. First Capital carried US$19.11 million of agricultural loans at June and reported no non-performing exposure in the sector.

There may be valid explanations in pricing, collateral, tenor, seasonality and borrower demand. Agriculture also carries climate risk and concentrated repayment cycles that are not visible from a point-in-time NPL number.

Banks lend where they can price risk, find acceptable collateral, obtain reliable cash flows and recover capital within the tenor they are willing to carry. Trade and services currently offers that environment at scale. The H1 shift can therefore be read as First Capital moving toward a more commercial corporate book rather than executing a broad productive-sector rotation.

That is an important distinction for judging management’s strategy. The bank began 2026 with substantial liquidity, a 27% capital adequacy ratio and customer deposits growing quickly. Its immediate problem was no longer access to funding, but finding enough assets capable of absorbing that funding at acceptable risk adjusted returns.

Credit losses recognised through profit fell from US$2.90 million to US$355,000. The bank therefore enters H2 with strong profit growth partly dependent on unusually light impairment expenses at the same time that its loan book has expanded by nearly 28%.

The two stories are connected. New lending expands net interest income immediately. Credit losses usually arrive later. First Capital’s strongest H1 achievement is that it has begun deploying deposits that were previously growing faster than the loan book.

If the trade and services expansion produces strong repayment behaviour, recurring transaction income and higher net interest earnings, First Capital will have found a commercially efficient route for deploying its growing funding base.

For now, the most important figure is not the 28% loan growth. It is where the US$36.6 million went, and nearly two dollars in every three went to trade and services.

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