The most profitable, most efficient, cleanest-credit bank in Tanzania — growing the fastest — and yet the cheapest of the big two. That combination is rare.
NMB delivered FY2025 profit after tax of TZS 760bn (+17.5%) — the highest in the banking industry — on a 27.0% return on equity, a 4.7% return on assets, a 38.0% cost-to-income ratio, and a 2.5% NPL ratio, all while growing assets 28% to TZS 17.6tn and deposits 31% to TZS 12.52tn. Capital is fortress-like (24.8% total CAR). On almost every quality and growth metric, NMB leads.
And it is cheaper than its larger rival: ~8.6× trailing earnings and ~2.3× book, versus CRDB’s ~9.6× / ~2.5× — despite NMB’s higher ROE, lower NPLs, better efficiency, and faster growth. On a justified price-to-book (ROE ~27%, cost of equity ~17%, growth ~12%) of roughly 2.8–3.0×, our value sits around TZS 15,800–16,900 — implying ~20–29% upside, on top of a 4.7% dividend.
Four pillars — quality leadership, fastest growth, a valuation discount, and compounding-plus-yield.
The industry’s highest profit (TZS 760bn), a best-in-class 38.0% cost-to-income ratio, 27.0% ROE and 4.7% ROA — NMB simply earns more on every shilling of equity and assets than its peers.
Assets up 28% and deposits up 31% in FY2025 — the quickest expansion among the majors, powered by a leading retail, mobile and agent-banking franchise.
~8.6× earnings and ~2.3× book — a discount to CRDB’s ~9.6× / ~2.5× despite higher ROE, cleaner credit (2.5% NPL) and faster growth. The market is under-pricing the best bank.
A 27% ROE at a ~40% payout compounds book ~16% a year and pays a 4.7% dividend — a high-teens-to-low-twenties total return, with re-rating optionality on top.
A fast-growing, profitable, still-underbanked banking sector in a ~6% GDP economy — with NMB the single most profitable institution.
| Tanzanian banking · CY2025 (Bank of Tanzania) | Value |
|---|---|
| Banking-sector assets | TZS 79.4tn |
| Sector profit (YoY) | TZS 2.62tn · +21% |
| NMB — industry profit rank | #1 (TZS 760bn) |
| GDP growth · inflation | ~6% · ~3.3% |
The structural story is formalisation and digitisation — a young, growing, still-underbanked population moving onto digital banking and credit. NMB’s leading mobile and agent network positions it to capture low-cost deposits and high-volume retail lending faster than peers; its sector-leading profitability shows it already does.
A leading retail and digital bank with the country’s broadest branch and agent network — fortress-capitalised and highly efficient.
| Corporate snapshot | |
|---|---|
| Listing | DSE: NMB |
| Shares in issue (~) | 500 million |
| Market cap (~, May 26) | ~TZS 6.6tn |
| Total capital adequacy | 24.8% |
| Year-end | 31 December |
| Balance sheet (FY2025) | |
|---|---|
| Total assets | TZS 17.6tn (+28%) |
| Customer deposits | TZS 12.52tn (+31%) |
| Shareholders’ funds (~) | ~TZS 2.8tn |
| NPL ratio | 2.5% |
| Loan-to-deposit · cost-to-income | 86% · 38% |
NMB combines a dominant retail franchise with strong corporate and treasury operations and the leading digital/agent-banking footprint in Tanzania. Fortress capital (24.8% CAR) and a low cost-to-income ratio give it both the firepower to keep growing and the efficiency to convert that growth into sector-leading profit.
An illustrative five-year model anchored to FY2025 actuals — profit growth tapering from the high-teens as the (rapidly grown) book scales, ROE held near the mid-to-high 20s.
| Driver | FY26E | FY27E | FY28E | FY29E | FY30E |
|---|---|---|---|---|---|
| PAT growth | +18% | +16% | +15% | +14% | +13% |
| ROE | 27% | 26% | 26% | 25% | 25% |
| Dividend payout | ~40% | ~40% | ~40% | ~40% | ~40% |
| TZS bn | FY25A | FY26E | FY27E | FY28E | FY29E | FY30E |
|---|---|---|---|---|---|---|
| Profit after tax | 760 | 897 | 1,040 | 1,196 | 1,364 | 1,541 |
| EPS (TZS) | 1,519 | 1,794 | 2,081 | 2,392 | 2,727 | 3,082 |
| DPS (TZS) | 610 | 718 | 832 | 957 | 1,091 | 1,233 |
| ROE | 27% | 27% | 26% | 26% | 25% | 25% |
| Total assets (TZS tn) | 17.6 | 20.2 | 23.0 | 26.2 | 29.7 | 33.6 |
Illustrative only — projections rest on assumptions that may not be realised. PAT taper from the FY2025 base; EPS on ~500m shares; DPS at a ~40% payout; assets compounding ~14% (below the FY2025 +28% pace). FY2025 figures are audited reported results.
The return is created internally — a sector-leading ROE compounded through fast, efficient growth — and amplified by the valuation gap to peers closing.
27% ROE at a ~40% payout grows book ~16% a year — the strongest compounding engine among the majors.
A 38% cost-to-income ratio means more of each shilling of revenue reaches profit; scale and digital widen the gap.
The leading mobile and agent network funds growth with low-cost deposits and reaches the formalising mass market first.
A ~40% payout on compounding earnings delivers a 4.7% yield that grows year after year.
Trading below CRDB on superior metrics, NMB has re-rating optionality the bigger bank no longer offers — a free option on top of the compounding.
The main watch-items are the durability of fast growth and credit quality — valuation is a support here, not a risk.
| Risk | Severity | Mitigant |
|---|---|---|
| Fast growth strains credit quality | MEDIUM-HIGH | NPLs actually fell to 2.5%; 24.8% CAR and 38% cost-to-income give ample buffer to absorb a cycle. |
| Rate cycle / NIM compression | MEDIUM | Low-cost deposit base and efficiency cushion margins through the BoT cycle. |
| Deposit competition | MEDIUM | Leading digital/agent network defends the low-cost funding edge. |
| TZS depreciation (USD-equivalent return) | MEDIUM | Domestic earner; returns underwritten in TZS; size within a diversified sleeve. |
| Valuation — re-rating fails to materialise | LOWER | The compounding + 4.7% yield underwrites a strong return even with no multiple change. |
| Regulation / capital requirements | LOWER | Fortress capital (24.8% CAR); established regulatory standing. |
A liquid large-cap and the higher-conviction of the two banks — accumulate with less need to wait for weakness than CRDB.
| Term | Proposed approach |
|---|---|
| Instrument | Ordinary shares — DSE: NMB |
| Stance | Accumulate; higher conviction than CRDB on the valuation gap |
| Accumulation zone | ~TZS 12,000–13,500 (below ~9× earnings) |
| Trim zone | ~TZS 18,000+ (toward ~12× earnings / parity with CRDB) |
| Liquidity | Among the most liquid DSE names |
| Income | ~40% payout; 4.7% yield, rising |
| Horizon | Multi-year core holding — a compounder |
Indicative only; subject to diligence, prevailing DSE liquidity, transaction charges and final approval.
Valued on earnings, book and dividends. The standout is that NMB’s superior quality is available at a lower multiple than its peer.
| Input | Value |
|---|---|
| Sustainable ROE | ~27% |
| Cost of equity (TZS) | ~17% |
| Long-run growth (g) | ~12% |
| Justified P/B = (ROE−g)/(COE−g) | ~2.8–3.0× |
| Implied value (BVPS ~5,626) | ~15,800–16,900 |
Justified P/B of ~2.8–3.0× vs a current ~2.3× implies ~20–29% upside — the discount is to NMB’s own quality, not a value trap.
| Method | Implied |
|---|---|
| P/E 8× (FY25 EPS 1,519) | 12,152 |
| P/E 10× | 15,190 |
| P/E 12× | 18,228 |
| P/B 2.9× (justified) | 16,315 |
| Current market | ~13,110 |
NMB trades at the low end of the 8–12× peer band on superior ROE and credit — the clearest mispricing among the big banks.
| Metric | NMB | CRDB | Sector |
|---|---|---|---|
| FY25 profit (TZS bn) | 760 (#1) | 724.6 | 2,620 (total) |
| Total assets (TZS tn) | 17.6 | 22.2 | 79.4 |
| ROE | 27.0% | ~26% | — |
| NPL ratio | 2.5% | 2.97% | — |
| Cost-to-income | 38.0% | 41.7% | — |
| Trailing P/E | ~8.6× | ~9.6× | 8–12× |
NMB leads on profit, ROE, asset quality, efficiency — and valuation; CRDB leads only on absolute scale (assets). The higher-quality bank is the cheaper one.
Scale 0–18,000. The market (~13,110) sits below the fair-value zone — unlike CRDB, where price already sits inside it. NMB carries both compounding and valuation upside.
| Scenario | Exit P/E | EPS CAGR | Exit price | Total return p.a. |
|---|---|---|---|---|
| Downside | 7× | +12% | ~14,900 | ~9% |
| Base | ~8.5× | +16% | ~20,300 | ~21% |
| Upside | 10× | +18% | ~25,000 | ~29% |
Base: P/E roughly held, EPS compounds ~16%, plus a ~4.7% rising dividend → low-twenties total return; the upside adds a partial re-rating toward CRDB. Returns in TZS; USD outcomes lower by expected currency depreciation.
We recommend accumulating NMB as a core, multi-year compounder and the higher-conviction of the two big banks. It is the most profitable (TZS 760bn), most efficient (38% cost-to-income), cleanest-credit (2.5% NPL), fastest-growing (+28% assets) and best-capitalised (24.8% CAR) major bank in Tanzania — and it trades cheaper than CRDB on both earnings and book. On a justified price-to-book the shares are worth ~TZS 15,800–16,900 against ~13,110 today, ~20–29% upside, before a 4.7% dividend.
Arthur G. Kanza