Two Banks. One Trillion Each. Should We Be Worried?

Banks in Tanzania have started releasing their 2025 performance results, and—as expected—the top two spots are firmly occupied by CRDB and NMB, leaving a wide gap between them and the rest of the pack.

This wasn’t surprising.

What did raise my eyebrows, however, was that both banks crossed the TZS 1 trillion Profit Before Tax mark.

That milestone sparked heated debate among fellow banking colleagues. Predictably, the country’s deeply rooted socialist instinct—especially its suspicion of monopolies—began to surface in some of the reactions.

As an observer who is admittedly biased toward viewing events through a marketing lens, I want to explore the idea of monopolies: what they actually do for a market, why they attract so much criticism, and whether they are inherently good or evil.

I’ll leave that final judgment to you.

Arguments For Monopolies

1. Benefits on the Inside

Peter Thiel, in Zero to One, and Charlie Munger, in his famous talk A Lesson on Elementary Worldly Wisdom, argue that monopolies can be surprisingly healthy—internally.

According to Thiel, businesses without monopoly power are trapped in what he calls a “daily brute struggle for survival.” He uses restaurants as an example: fierce competition forces them to offer affordable food with razor-thin margins. The result? Minimum wages, understaffed operations, unpaid family labor, and unsustainable working conditions.

Even at the high end, competition can be brutal. Michelin ratings, for instance, have created intense psychological pressure. In 2003, French chef Bernard Loiseau tragically took his own life after losing a star—an extreme but telling example of what relentless competition can do.

By contrast, a monopoly like Google has the luxury of breathing space. It can focus on ethics, employee wellbeing, product quality, and long-term impact. Google’s famous motto—“Don’t be evil”—wasn’t just branding. As Thiel puts it, it reflected a business “successful enough to take ethics seriously without jeopardizing its own existence.”

2. Advantages of Scale

Monopolies enjoy scale, and scale unlocks several powerful advantages:

a) Cost & Efficiency

Scale allows specialization, efficiency, and ultimately cost reduction.

Charlie Munger gives a great example using early TV advertising. When network television emerged, it was incredibly expensive—but also incredibly powerful.

“If you were Procter & Gamble, you could afford it because you were selling so damn many cans and bottles. Some little guy couldn’t. And there was no way of buying it in part.”

b) Informational Advantage

Munger also explains informational scale using Wrigley chewing gum:

When a consumer sees Wrigley next to an unknown brand, they instinctively choose the familiar one—even if it costs more.

“Am I really going to put something I don’t know into my mouth for a lousy dime less?”

Brand familiarity itself becomes a competitive moat.

c) Psychological Advantage (Social Proof)

Humans follow humans. If many people use something, it must be good—at least subconsciously.

Coca-Cola’s near-global availability is a classic example. Achieving that level of distribution takes decades, and once it exists, it becomes extraordinarily difficult to dislodge.

d) Nature of the Business

Some industries naturally drift toward dominance. Newspapers are a good example: advertisers prefer the paper with the largest audience, which in turn attracts more readers—creating a winner-take-all effect.

Verdict (So Far)

CRDB and NMB may not be famous for iconic TV campaigns, but they clearly enjoy:

• Informational authority (“If CRDB/NMB said it, it must be legitimate”)

• Psychological trust

• Unmatched geographic coverage

As a result, much of the country’s business naturally gravitates toward them.

Benefits to the World

Thiel goes further and argues that monopolies are so beneficial that governments actively create them—through patents—while simultaneously claiming to fight them through antitrust laws.

Why?

Because monopolies:

• Create new categories

• Drive innovation

• Reward real value creation

Apple’s iPhone is a perfect example. Apple wasn’t rewarded for creating artificial scarcity, but for creating such overwhelming abundance of value that customers were happy to pay monopoly-level profits.

Monopolies also drive progress because the promise of years—sometimes decades—of monopoly profits incentivizes deep innovation. Apple’s iOS weakened Microsoft’s operating-system dominance, which itself had once displaced IBM’s hardware monopoly.

Innovation is cyclical.

“So why are economists obsessed with competition as an ideal state?” — Peter Thiel

Verdict

Both CRDB and NMB have made meaningful improvements, especially in digital banking experiences. NMB’s recent Tap & Pay wearable solution with Mastercard stands out.

That said, it’s difficult to point to a single, category-defining innovation that can be uniquely attributed to either bank.

How Do Monopolies Die?

According to Munger, monopolies don’t usually die because of competitors—they die because of bureaucracy and complacency.

“As you get big, you get bureaucracy.”

Thiel agrees. In a dynamic world, monopolies are eventually out-invented. IBM lost to Microsoft. Microsoft was challenged by Apple. The cycle continues.

Arguments Against Monopolies

To avoid this article sounding promotional, it’s important to acknowledge public criticism.

In fact, this piece was inspired by a message shared in a WhatsApp group by a seasoned finance practitioner after one of the banks announced its results. I’ll keep identities anonymous. Here’s what Mr. M wrote:

“Today I was listening to Bank X’s performance and felt very sorry for our banks. All they talk about is profitability numbers!! But what are they doing about:

1. Financial inclusion?

2. Public cost of being bankable?

3. Financial literacy?

4. Corporate governance?

5. Using technology as a support tool rather than selling it as a product?

6. Compensating inefficiencies with accountability instead of charging customers?

7. Creating more corporate customers rather than depending on government business?”

These are fair—and necessary—questions.

Is There Hope for the Small Guys?

Absolutely.

In fact, I dedicated an entire chapter in my recently released book to exactly this question: how small companies with limited resources can turn their weaknesses into unfair advantages.

📘 Marketing on Steroids: A Guide to an Unfair Advantage in the Marketplace

👉 Grab your copy here: https://www.marketingonsteroidsbooks.com/