Operating environment

The macro-economy was markedly more stable, supported by strong performance in the agriculture and mining sectors. Resilient foreign currency inflows were sustained by firm mineral prices, export growth and diaspora remittances. Accordingly, the exchange rate remained stable, moving from ZwG26.95 to ZwG26.77 over the twelve months. Annual inflation fell from 92.5% in June 2025 to 4.7% in June 2026. Whilst geo-political tensions triggered an increase in international oil prices, Government initiatives helped moderate the pass-through effect, with a modest impact on inflation. With inflation anchored, the Reserve Bank of Zimbabwe reduced its ZwG policy rate from 35% to 30% in June 2026. The approval of the International Monetary Fund's first review of the Staff-Monitored Programme confirmed progress in fiscal and monetary developments in the country. The banking sector recorded notable growth on the back of gains in the macro-economy, although constrained liquidity and subdued lending growth remain challenges to be managed.

Against this backdrop, InnBucks MicroBank remained focused on delivering innovative financial solutions and grew across several measures during the reporting period.

Financial performance

The MicroBank posted a profit after tax of ZwG235.3 million for the year ended 30 June 2026, which is up 216% from ZwG74.6 million in the previous annual reporting period. Total assets grew to ZwG6.7 billion from ZwG2.5 billion. The increase in profit was driven by growth in the lending book, underpinned by sustained deposit inflows. Surplus liquidity was deployed into short to medium-dated Government instruments. These instruments have performed in line with their terms. Asset quality remained sound through a period of rapid lending growth, with the non-performing loans ratio at 1.4% against a regulatory threshold of 5%.

Capital and Liquidity

InnBucks MicroBank's core capital position closed at ZwG663.0 million as at 30 June 2026, comfortably above the current minimum regulatory requirement of ZwG133.8 million (US$5.0 million USD equivalent). The MicroBank's capital adequacy ratio remained strong, closing the period at 19.1% (15% regulatory minimum), up from 17.6% for the comparative period. The MicroBank also maintained a liquid assets ratio of 37%, well above the regulatory minimum of 30%, providing capacity to support further lending. The MicroBank continues to manage its funding mix and maturity profile conservatively.

I would like to thank our Shareholders for injecting additional capital amounting to ZwG104.4 million to expand credit underwriting capacity.

Dividend

No dividend has been declared for the period under review. The Board considers it appropriate to retain earnings in full to fund lending growth and to maintain capital buffers comfortably above regulatory minimums. The Board will keep the dividend position under review as the capital base builds.

Directorate

There were no changes to the composition of the Board during the period under review, ensuring continuity and stability in the MicroBank's leadership. The Board comprises five independent Non-Executive Directors, one non-independent Non-Executive Director and four Executive Directors, whose names are set out in the Corporate Governance Statement. The Board keeps its composition and committee structures under regular review, so that the balance of skills and experience remains aligned to the MicroBank's strategy and in compliance with regulatory requirements.

Commitment to compliance

Commitment to compliance is a core principle at InnBucks MicroBank. The MicroBank complied with the Reserve Bank of Zimbabwe's prudential requirements throughout the year, other than the disclosure matter set out in the Corporate Governance Statement. Our organisation prioritises transparency and accountability, and regular training and awareness programmes ensure that all employees understand their roles in maintaining compliance.

Sustainability

The Board is committed to building an inclusive and sustainable institution that creates long-term value for shareholders while safeguarding the interests of depositors, customers, employees, regulators and the wider community. We recognise that the sustainability of our business is anchored in prudent risk management, strong corporate governance, ethical conduct, and responsible financial inclusion. The Board continues to integrate Environmental, Social and Governance (ESG) considerations into strategy, lending practices, and operations in line with Reserve Bank of Zimbabwe guidance and international best practice.

Outlook

Economic growth is forecast to be 5% for 2026, moderating from 8.3% in 2025. The lower forecast is premised on El Niño conditions expected for the 2026/27 rainfall season. A weaker agricultural year would weigh on incomes, export earnings and the wider economy. The Government has begun rolling out drought mitigation measures to reduce the impact.

The MicroBank's response is to continue strengthening the balance sheet through sound asset creation, tighter credit selection and a level of liquidity appropriate to its operations. The Board anticipates further capital during the coming year to support both lending capacity and regulatory buffers. At the same time, the MicroBank is focused on scaling efficiently by containing cost growth and automating front and back-office processes, so that the growth already achieved is sustainable and converts into stronger returns.

Appreciation

On behalf of the Board, I would like to express my sincere gratitude to the MicroBank's management and staff for their dedication and contribution. The Board also extends its appreciation to the MicroBank's customers and partners for their continued support.