Ethiopian banks’ revenue grew to 24 percent

Excluding the new private banks, which have not began reporting profits and state-owned Development Bank of Ethiopia (DBE), the total profit of commercial banks in Ethiopia, grew by 24 percent this year as compared to the similar period last year.

Over the past nine months the total revenue of banks reached 2.65 billion birr (around 196 million USD) from the 2.13 billion birr the banks made last year, an official NBE document shows.

Out of this, 79 percent was generated by the state-owned Commercial Bank of Ethiopia (CBE) while eight private banks, which have started making profits, share the remaining 21 percent profit before tax.

CBE, which has the lion’s market share in the industry, made a 2.1 billion birr profit before tax in the last nine months, according to the nine month report.

In its nine month performance report presented to the parliament yesterday June 21, 2010, the total capital of these banks has shown 18.6 percent growth and has reached 10.2 billion birr (754 million USD), NBE indicated.

The report revealed that the number of bank branches grew by about 9 percent to reach 673. 212 of these belong to CBE, which also has a 48.1 percent share of from the total lending in the country. CBE’s reserve has also reached 57.8 percent of the total reserve of the country.



According to industry observers, the credit limitation imposed last year by NBE to reduce the severe inflation the country experienced has negatively affected the performance of private banks whose profit was increasing every year.

NBE’s report also shows that the other state-owned bank, DBE, which is not included in the commercial banks category, made 48 million birr before tax in the past nine months.

When it comes to the eight private banks, which have been reporting an ever-growing profit over the past years, Dashen Bank still leads in making more profits.

The newly established four private banks, Zemen, Oromia International, Bunna and Birhan International have not yet reported making profit.

Currently, there are 15 banks operating in the country out of which 12 are private including the four which have not yet began reporting profit.

In addition, five banks namely Hawassa, Debub, Enat, Abay and Noh banks are offering shares to the public to join the infant private bank industry of Ethiopia, which was began when Awash International Bank joined the market in 1994.

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