Tanzania’s banking sector recorded total assets of TZS 79.4 trillion in 2025, while net income after tax rose 21% to TZS 2.62 trillion, up from TZS 2.16 trillion in 2024. The growth reflects strong profitability, increased credit expansion, and growing market concentration led by CRDB and NMB Banks.
According to an analysis by AML Finance Limited, the sector’s performance was supported by improvements in digital banking, enhanced transaction infrastructure, and sustained economic growth.
These factors allowed banks to expand balance sheets, strengthen efficiency, and accelerate the adoption of automated systems for customer onboarding and service delivery.
Market concentration remained a defining feature of the industry, with the two largest banks, CRDB and NMB, together holding nearly half of the sector’s total assets.
Deposit concentration followed a similar trend, with leading institutions controlling more than half of total deposits.
This scale advantage allows the top banks to offer competitive loan pricing, invest in technology, and absorb rising regulatory and compliance costs more effectively than smaller banks.
Meanwhile, many smaller banks remain below TZS 1 trillion in assets, reinforcing a widening divide in operational scale and efficiency and signaling a shift toward platform-based banking where size amplifies the benefits of technology investment.
Profitability remained strong among leading banks, with CRDB reporting net income of TZS 724.6 billion and NMB posting TZS 749.8 billion.
Major banks reported returns on assets as high as 5.3% and return on equity above 29%, reflecting strong income conversion and effective cost management.
However, growth across the sector was uneven. While banks such as Equity, Letshego, and Azania recorded double-digit profit increases, others, including Standard Chartered, Absa, Ecobank, and Citi, experienced declines, highlighting differences in business models, operational efficiency, and risk management practices.
The sector continues to rely heavily on interest income, reflecting the central role of credit intermediation, but non-interest income is increasingly significant.
Leading banks are generating substantial revenue from transaction services and fees, stabilizing earnings across economic cycles.
International and corporate banks, such as Standard Chartered, have seen a majority of their revenue come from non-interest sources, highlighting the growing importance of transaction-based income.
Operating efficiency has emerged as a key competitive differentiator. Larger banks report significantly lower cost-to-income ratios than smaller institutions, reflecting strong operating leverage and the ability to scale revenue without proportional cost increases.
Digitization, automation, and technology investment are key drivers of this efficiency, enabling top banks to achieve higher productivity per employee despite Tanzania’s comparatively lower labor output.
Asset quality remains strong among major banks, with non-performing loan ratios generally below 3%, reflecting strengthened underwriting standards and improved recovery capacity.
By contrast, smaller banks face higher credit risk, with some recording non-performing loans above 10%, indicating vulnerability where elevated credit risk combines with weaker profitability and higher operating costs.
The trends observed in Tanzania are consistent with developments across East Africa, where large platform banks increasingly dominate deposits, credit, and payments while smaller institutions face rising compliance and technology costs.
Credit to the private sector grew 16.2% in 2025, slightly below the 17% growth in 2024, indicating continued lending activity.
Looking ahead, consolidation is expected as larger banks continue to dominate mass-market lending, while smaller institutions focus on niche segments.
Future competitiveness will increasingly depend on digital systems, automation, data analytics, and technological innovation, alongside traditional financial capital, shaping a banking landscape defined by efficiency, scale, and technological capability.