Banking and Financial Services Sector [Archive]

abesha

April 12th, 2010, 09:34 AM

Ethiopian Banking: Moving fast without haste

Ethiopia is quickly becoming an economic star of Africa. It has been averaging 10% growth for the past few years and seems determined to catch up as rapidly as possible with the other African giants. The country’s banking system is also pressing the accelerator, but with due prudence. Tom Minney in Addis Ababa gives an overview of the country’s banking landscape and profiles one of Ethiopia’s most dynamic bankers.

Like much else in Ethiopia, banking is moving quickly to catch up after years of underdevelopment. There are 15 banks and five more were offering shares in the first quarter of 2010. Giant of the sector is government-owned Commercial Bank of Ethiopia, which reported after tax profits of birr 1.9bn (nearly $140m) in the year to June 2009, up 45% on 2008, and had a loan book of $1.3bn. CBE is one of three government banks. By comparison, private Dashen Bank had after tax profits of $18m and loans to customers of $320m for the same period.

Private banks such as United Bank and Bank of Abyssinia made about half Dashen’s profit levels. Ethiopia is sometimes rated as having one of the world’s least-developed financial systems, by comparative statistics such as the number of bank branches per person. Foreigners may not own shares in Ethiopian financial institutions, including banks, which policy-makers hope will boost the local private sector. Nevertheless, banks are often highly profitable, and have paid dividends of more than 30% on the share prices. When shares are on offer, investors often rush to buy them.

At the start of 2010, the planned Hawassa, Debub Global, Enat, Addis Cooperative and Abay banks were offering shares to the public. Buna and Birhan banks were the latest banks to raise capital and complete the road to comply with the central National Bank of Ethiopia (NBE) regulations for licensing. Getahun Nana, head of NBE’s Supervision Directorate, says that total assets, loans and deposits of the banking system increased by an average of about 20% each year between 2003 and 2009. In 1994, there were three state-owned banks: CBE, the Development Bank of Ethiopia and the Construction and Business Bank. Awash International Bank was the first private bank in 1994 but others soon followed.

According to Nana, between 1995 and 2004, profits were not very high and seven new banks were established. The pace accelerated and five private banks opened between 2005 and June 2009. In early 2009, the NBE told banks to cap their lending, cutting new credit for the expanding economy. These caps have since started to ease. Ideas and innovation have been limited, with banks largely recruiting from other banks, including the state banks. Technical assistance has not been widespread. Safety is the watchword, including tight NBE directives regarding loan collateral and dismissals, resulting in criminal prosecutions for bank officers and customers and even prison for loans that go wrong. Bankers tend to follow rules very carefully.

Many banks were lagging behind on technology and competition. However, the NBE is rolling out a settlement and clearing system and has said that banks’ core IT systems should meet appropriate standards by June 2010 if they want to participate. This has led to a flurry of technology upgrades. International interest is picking up, both from within the region and internationally. Economic ties are growing fast with Kenya, with plans to export electricity from Ethiopia and build new road and other links for trade and exports.

http://www.africasia.com/africanbanker/afbnk.php?ID=2791

Rest of the article is in the print edition of the African Banker. This is the cover story for this month's edition.

I'll see if I can find it over the coming weekend.

abesha

April 13th, 2010, 02:31 PM

Ethiopia's Zemen Bank live with CR2 BankWorld ATM
Zemen Bank, the first multi-channel bank in Ethiopia and CR2, the leading global provider of self service banking solutions, have announced that Zemen bank has gone live with CR2's BankWorld ATM.

Zemen Bank is committed to leading the Ethiopian banking industry in self service innovation with its single-branch business strategy. A key requirement for the bank was to provide best of breed electronic services tailored to personal and corporate customers. Focusing on High Net Worth individuals with its Prestige BankingTM and Z ClubTM, the Bank was looking for a way to target niche customers and to deliver tailored products and services through the ATM channel. Driven by a single integrated platform, BankWorld provides Zemen Bank with a 360 degree view of the customer's relationship with the bank which empowers Zemen Bank with the ability to significantly extend the services they can offer at the ATM.

Open a bank account and be issued an ATM card in less than 7 minutes

The Bank's partnership with eVentive and CR2 has provided Zemen Bank with the powerful capability to enable customers to visit the branch for the first time, open an account, make a deposit and be issued with an ATM card in less than 7 minutes. Zemen Bank is enabled by CR2's CardWorld Producer which immediately issues ATM cards to customers upon opening a bank account at the branch. Once the ATM card is in hand, the customer has automatic access to a full range of personalised services available at the BankWorld's driven ATMs. Among the unique services available at Zemen Bank ATMs is the ability to transfer funds electronically to the account of another individual or company at no cost to the ATM user.

Next stages in the roll out of this project will see the Bank also launch POS services driven by CR2.

Mr Martin Dolan, CEO, CR2 comments: "We are pleased to be part of Zemen Bank's strategy to drive innovation within self service banking in Ethiopia; achieving a 7 minute account opening and card issuance would be a challenge for many leading banks. BankWorld will deliver the highest level of customer satisfaction, whilst reducing costs for the bank by migrating transactions from the branch to self service. CR2's solution which is used by more than 130 banks worldwide will greatly assist Zemen Bank achieving its innovative strategy."
http://www.finextra.com/news/announcement.aspx?pressreleaseid=33227

Finally, someone to shake up the slumber of the private banks. This innovative approach is necessary to change the financial services.

abesha

April 21st, 2010, 11:59 AM

Thank God! It's amazing that even though there are several private banks in the country since mid-90s, they only imitate the CBE instead of being proactive and innovative. Time for a quick in the butt to get them moving.

NBE to force banks to network
By Binyam Tamene

The National Bank of Ethiopia (NBE) will soon introduce a mandatory networking regulation.
The law would compel the rapidly growing sector to be networked in order to make monitoring for the sector's regulator, the NBE, easy and quick. Among other things, the regulation, which the bank has not yet given an introduction date for, could prohibit the long standing use of manual transactions.
The Monetary and Banking Proclamation of 1994 established the National Bank of Ethiopia as regulator.
Change Management and Communication Directorate Director at the NBE, Alemayehu Kebede, said the banking industry of the country need to work on their networking system soon or they will not survive after its introduction.
Many banks in the country are lagging behind on technology and competition, however, the NBE is rolling out an automatic check clearing and settlement system.
Clearing and settlement is an interbank process, the rules of which are dictated by banking laws and regulations, and whose operational efficiency is determined by the policies and systems of the utilities that operate the networks and clearinghouses through which payments are cleared and settled.
The Communications Office of NBE said regulations could force banks to look into their technologies that build their networking capacity so the NBE can get information easily.
"This is so the central bank can use this information to take measures related to foreign currency and also take policy decisions," Alemayehu explained.
The communications director said through this connection, NBE plans to conduct a gross settlement system and a national clearing and automatic check clearing system.http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=12672:nbe-to-force-banks-to-network&catid=12:local-news&Itemid=4

abesha

April 26th, 2010, 04:08 PM

Enat Bank starts share sale
By Groum Abate

A bank established by prominent female Ethiopian professionals and entrepreneurs has stated selling its shares.

A promotional meeting for Enat Bank, which is also targeting some of its services at women, was held with interested parties and prominent business people at the Hilton Hotel on Friday April 23.

The organising committee chaired by Meaza Ashenafi (pictured right), consists of Sara Aberra, the designer; Nigist Haile, executive director of the Centre for African Women’s Economic Empowerment (CAWEE); and Mekia Mamiyo the woman behind Mekia enterprise, which runs a vast farm.

According to a speech by Meaza, the bank has a vision to empower women economically by providing easier credit access. She added the organisers decided to donate their shares from establishing the bank to the bank’s women’s department that specifically helps women in business.

The bank has set 4,000 birr as the minimum price to buy a share.

This kind of gender-based bank is familiar in developed countries, but not common in Africa. The first women’s bank in Africa was opened in July 2009 in Tanzania with 70 per cent of the capital provided by the government. The Tanzanian bank aims at promoting economic activities undertaken by women.

According to NBE requirements, a private bank needs a minimum of 75 million birr paid up capital to commence operations. Currently, the number of banks in the country is 15, including 12 private banks, with three other banks under formation, excluding Enat Bank.
http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=12712:enat-bank-starts-share-sale&catid=12:local-news&Itemid=4

abesha

July 9th, 2010, 09:35 AM

NBE green lights Abay Bank

The National Bank of Ethiopia (NBE) has given the green light for Abay, a newly established private commercial bank.

The NBE assessment of the board of Abay and shareholders was recently approved, while the bank is under preparation to open its first branch at the head quarters building called Zekuala Building, located at Jommo Kenyatta Street.

“The first branch will open this September and two will follow in Bahir Dar and Gonder,” Mesenbet Shenkut, the first president of Abay Bank said.

Mesenbet previously was vice president for credit at the Development Bank of Ethiopia (DBE).

According to Mesenbet, additional branches will also open in different area of the capital and regional towns. “I appreciate the NBE evaluation process on the license approval of the new banks, to look after the financial sector of the country,” Mesenbet told Capital.
The bank waited the NBE final approval for the last few months after it had held its general assembly.
The bank’s board has nine members chaired by Tadesse Kassa (Tinkishu), also a member of the executive committee of the EPRDF. The bank has been able to raise 120 million birr in paid up capital and 174 million birr subscribed capital.

Abay’s 817 shareholders is less than other recently established banks. Major shareholders include the four companies that are under Tirat - Dashen Brewery, Tikur Abay Transport, and Zeleke Mechanized Agricultural Development Enterprise, as well as the Amhara Development Association, the Amhara Cooperatives Union, the Amhara Water Works Construction Enterprise, and farmers. The popular individual shareholders are Afewerk Tekle, Haile Gebre Selassie, Bizuayehu Tadele, head of East Africa Holdings, Aquasafe Plc, the water bottling company and KK Plc head, Ketema Kebede.

Abay will be the sixteenth commercial bank in the country. The other commercial bank, Addis International Bank is also undergoing the process to enter into the financial market. Four other banks are under formation.http://capitalethiopia.com/index.php?option=com_content&view=article&id=13034:nbe-green-lights-abay-bank&catid=12:local-news&Itemid=4

So I guess this means that with Addis International + 4 other banks, the total of commercial banks will reach 21.

enkelfam

July 13th, 2010, 05:12 AM

Record profits for Awash Bank

One of the strongest private banks in the country, Awash International Bank (AIB) has registered record profits over the previous fiscal year, which concluded June 30.
AIB’s pretax profits were slightly over 372.5 million birr. That is a 142.7 million birr increase from the previous year. During the 2008/2009 fiscal year the bank grossed slightly under 231.5 million birr.
Previously, in the 2007/2008 fiscal year, AIB had registered a profit but its was a small amount and was not reported. Instead the bank included six months of the previous fiscal year in its last report. As a result, the report announced a pre-tax profit of 380 million birr.
AIB management will announce its official profit at the end of this year. Most of the banks’ profit, nearly 257.5 million birr, has been secured from the International Banking Department. This is approximately a 110.5 million birr difference from the previous fiscal year, according to a source who did not wish to be identified.
Awash is one of the oldest private banks established after the downfall of Derg regime. The bank’s paid up capital has reached 550 million birr.
Currently, AIB has about 64 branches with 2280 employees. The management of the bank has congratulated its employees for the high amount profit registered.

http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=13080:record-profits-for-awash-bank-&catid=12:local-news&Itemid=4

enkelfam

August 8th, 2010, 08:07 AM

ሕብረት ባንክ ከታክስ በፊት ከ283 ሚሊዮን ብር በላይ ትርፍ ማግኘቱን አስታወቀ

ሕብረት ባንክ አክሲዮን ማኅበር በተጠናቀቀው የበጀት ዓመት (እ.ኤ.አ 2009/2010) ከታክስ በፊት ከ283 ሚሊዮን ብር በላይ ትርፍ ማግኘቱን አስታወቀ፡፡ በባንኩ የአሥራ አንድ ዓመታት ጉዞ ከፍተኛ ትርፍ ያስመዘገበበት የበጀት ዓመት መሆኑም ተገለጸ፡፡

ባንኩ በበጀት ዓመቱ በዕቅድ ይዞት የነበረው የትርፍ መጠን ከቀረጥ በፊት 203.6 ሚሊዮን ብር ሲሆን፣ አሁን የተገኘው የትርፍ መጠን ግን በዕቅድ ከተያዘው የትርፍ መጠን ከ80 ሚሊዮን ብር በላይ ብልጫ አሳይቷል፡፡ ባለፈው ዓመት ከታክስ በፊት አትርፎት ከነበረው ጋር ሲነጻጸርም ከ127 ሚሊዮን ብር በላይ ብልጫ አለው፡፡ እ.ኤ.አ በ2008/2009 ከታክስ በፊት ያገኘው ትርፍ 156 ሚሊዮን ብር ነበር፡፡ :cheers:

የባንኩ ፕሬዚዳንት አቶ ብርሃኑ ጌታነህ በተለይ ለሪፖርተር እንደገለጹት፣ ብሔራዊ ባንክ ያስቀመጠው የብድር ጣሪያ መመሪያ ባይኖር ኖሮ እ.ኤ.አ በ2009/2010 የተመዘገበው የትርፍ መጠን ከዚህም በላይ ሊሆን ይችል እንደነበር ጠቁመው፣ የብድር ጣሪያ ገደቡ ቢኖርም ባንኩ ገቢውን የሚያሳድግባቸው ሌሎች የባንክ አገልግሎቶችን በማጠናከሩ ትርፉን ለማሳደግ ችሏል፡፡

ለተገኘው ትርፍ ዕድገት በዋናነት ከቀረቡት ምክንያቶች መካከል፣ በበጀት ዓመቱ ከሚሰጣቸው የተለያዩ አገልግሎቶች 452.5 ሚሊዮን ብር ገቢ ለመሰብሰብ አቅዶ 532.1 ሚሊዮን ብር ማግኘት መቻሉ አንዱ ሲሆን፣ ይህም በዕቅድ ከተያዘው የ11.6 በመቶ ብልጫ አሳይቷል፡፡

ከተለያዩ አገልግሎቶች የተገኘው ገቢ ቀደም ካለው በጀት ዓመት ጋር ሲነጻጸርም የ40.5 በመቶ ወይም በ153.5 ሚሊዮን ብር በልጦ መገኘቱ፣ ባንኩ በበጀት ዓመቱ ላስመዘገበው የትርፍ መጠን አስተዋጽኦ እንዳበረከተ ለመረዳት ተችሏል፡፡

ገቢውን ማሳደግ ከቻለባቸው የአገልግሎት ዓይነቶች ውስጥ አንዱ የውጪ ባንኮች አገልግሎት ነው፡፡ በዚህ ዘርፍ በበጀት ዓመቱ ገቢው 179.7 ሚሊዮን ብር ደርሷል፡፡ ይህም ገቢ ባንኩ ከተለያዩ አገልግሎቶች ከሰበሰባቸው ገቢዎች ውስጥ የ33.7 በመቶ ድርሻ ይዟል፡፡ ... and this will only continue to go higher. They have one agent in DC he probably does millions every year, his place is always packed.

ባንኩ ያበደረው የገንዘብ መጠን በተመለከተም፣በዚህ ዓመት ያበደረውን ጨምሮ በጠቅላላ 2.6 ቢሊዮን ብር አበድሯል፡፡ ከተሰጠው ብድር የተገኘው ወለድ 146.7 ሚሊዮን ብር እንደሆነም ታውቋል፡፡

በየዓመቱ የባንኩ ደንበኞች ቁጥር መጨመርም ለትርፍ ዕድገቱ ሌላው ምክንያት እንደሆነ የተገለጸ ሲሆን፣ በዚህ ረገድም የባንኩ ተቀማጭ ገንዘብ ባለፈው ዓመት ከነበረበት 3.6 ቢሊዮን ብር ጋር ሲነጻጸር በተጠናቀቀው የበጀት ዓመት ከአንድ ቢሊዮን ብር በላይ ጨምሯል፡፡ ይህም እ.ኤ.አ ሰኔ 30 ቀን 2010 በተዘጋው የዘንድሮ በጀት ዓመት የተቀማጭ ገንዘብ መጠኑ ወደ 4.7 ቢሊዮን ብር ደርሷል፡፡

የተቀማጭ ገንዘብ መጠኑ ማደግ ፋይዳ የሚጐላው የደንበኞችን የብድር ጥያቄ በአጥጋቢ ሁኔታ ለመመለስ በዚሁ ሁኔታ ከሚገኘው የገንዘብ ዝውውር ተጠቃሚ ለመሆን ሲቻል መሆኑን አቶ ብርሃኑ ገልጸዋል፡፡

«በአገሪቱ የተከሰተውን የዋጋ ግሽበት ለመቆጣጠር ሲባል በብሔራዊ ባንክ የተጣለብን መመሪያ የፈጠረው የማበደር አቅም ውሱንነት፣ ማበደር የሚቻለንን ያህል ብድር መስጠት አልቻልንም፤» በማለት ተናግረዋል፡፡

የባንኮችን የማበደር አቅም የገደበው የብሔራዊ ባንክ መመሪያ ባይኖር ኖሮ፣ ሕብረት ባንክ አሁን ካበደረው ገንዘብ በላይ በማበደር በበጀት ዓመቱ ከተገኘውን የትርፍ መጠን በላይ ማግኘት ይችል እንደነበር የጠቆሙት አቶ ብርሃኑ፣ ባንኮች የማበደር አቅማቸው እንዲወሰን ያደረገው መመሪያ ሊወጣ የቻለው ግሽበትን ለመቆጣጠር ነው፡፡ በአሁኑ ወቅት ግሽበቱ ይፋ በሆኑና ባልሆኑ የመንግሥትና የምርምር ተቋማት ተቀርፏል የሚሉ መግለጫዎች እየወጡ በመሆኑ፣ የማበደርን አቅም ገትቶ የያዘው የብድር ጣሪያ ይነሳል የሚል ተስፋ አላቸው፡፡

እንደ ባንኩ ፕሬዚዳንት ገለጻ፣ በተጠናቀቀው የበጀት ዓመት ከፍተኛ የሆነ ውጤት ቢመዘገብም፣ የአገሪቱ የባንክ ኢንዱስትሪ የተለያዩ ችግሮችና ፈተናዎች እያጋጠሙት ነው፡፡ ወደፊትም ያጋጥማሉ ብለው የሚያስቧቸው ስጋቶች እንዳሉም ጠቅሰዋል፡፡

በተለይ ከዕለት ወደ ዕለት ወደ ገበያው እየገቡ ባሉ የአዳዲስ ባንኮች ቁጥር መበራከት ምክንያት ሊፈጠር የሚችለው የተጣበበ የገበያ ውድድር አንዱ ሆኖ ተቀምጧል፡፡

መቼና በምን ሁኔታ እንደሚነሳ መገመት ያስቸግራል የሚሉት የብሔራዊ ባንክ የብድር ገደብ ጣሪያ፣ እንዲሁም የውጭ ምንዛሪ እጥረትና ችግር ከወዲሁ ሊተነበዩ በማይችሉ ሌሎች ክስተቶች ምክንያት፣ መጪው ጊዜ አስቸጋሪ መስሎ ይታያል በማለት ስጋታቸውን ገልጸዋል፡፡

«ሆኖም ኢኮኖሚው ከያዘው ቆፈን ተላቆና የዋጋ ንረትን በሚያስተካክልበት ሁኔታ ተሟሙቆ፣ ለብድር ጠያቂዎች በአስተማማኝ ሁኔታ ገንዘብ የምናቀርበበት ቀን ቅርብ ይሆናል፤» ሲሉ እምነት እንዳላቸው አቶ ብርሃኑ ተናግረዋል፡፡

ይህ በእንዲህ እንዳለ፣ የሁሉንም የሕብረት ባንክ ቅርጫፍ ኃላፊዎችን ያከተተ የሥራ አመራሮች የሁለት ቀናት ስብሰባ በአዳማ ከተማ ባሳለፍነው ሳምንት መጨረሻ አካሂዷል፡፡ በዚህ ስብሰባ ላይ እንደተጠቆመው፣ ባንኩ የሚሰጣቸውን ዘመናዊ የባንክ አገልግሎቶችን በማሳደግ ተወዳዳሪነቱን የበለጠ ለማሳደግ የሚያስችሉ አሠራሮችን እንደሚዘረጋ አስታውቋል፡፡

የአዳማው ስብሰባ የተካሄደው «ለተሻለ ውጤት ጥራትን ያገናዘበ የደንበኞች አገልግሎት አሠጣጥን በጋራ ጥረት መፍጠር» በሚል ርዕስ ነው፡፡ በዚህ ስብሰባ ላይ፣ «ጥራት ያለው የደንበኞች አገልግሎት፣ በየጊዜው እየታየ ካለው የግል ባንኮች ቁጥር መበራከትና ከነባር ባንኮች መስፋፋት ጋር አብሮ ተያይዞ የሚመጣውን ጠንካራ የንግድ ፉክክር በአሸናፊነት ለመወጣትና በአስቸጋሪ የኢኮኖሚ ሁኔታዎች ሳይቀር ቀጣይነት ያለውን ዕድገት ለማስመዝገብ እንድንችል ትልቅ አቅም የሚፈጥርልን ቁልፍ መሳሪያ ነው፡፡ በመሆኑም የጥራት ጉዳይ ለባንኩ ቅርንጫፎችና ከደንበኞች ጋር ቀጥታ ግንኙነት ላላቸው ሠራተኞች ብቻ የሚተው ሳይሆን፣ የሁሉም የባንኩ ሠራተኞች ኃላፊነትና ግዴታ ጭምር መሆን እንዳለበት፤» በውይይቱ ላይ ተገልጿል፡፡

በዘንድሮው የበጀት ዓመት፣ በዓለም አቀፍ ደረጃ ተከስቶ የነበረው የኢኮኖሚ ቀውስ በመጠኑም ቢሆን በማገገሙ የመሻሻል አዝማሚያ ያሳየ ቢሆንም፣ በቀውሱ ምክንያት ተፈጥረው ከነበሩ ችግሮች እና ተጽእኖዎች ሙሉ በሙሉ አልተላቀቀም፡፡ ዓለምን ከዳግም የኢኮኖሚ ቀውስ ለመታደግና ለመንሰራራት የሚደረገው ጥረት ግን አዳጋችና ጊዜ የሚወስድ እንደሆነ፣ ችግሩ ጐልቶ የታየባቸው አገሮች አዳዲስ የፋይናንስ መመሪያዎችንና ሕጐችን በማውጣት ተግተው መሥራታቸው ምስክር ነው ተብሏል፡፡

ኢትዮጵያም ከዚህ ዓለም አቀፋዊ ክስተት የተገለለች ባለመሆኗ በአገር ውስጥ የታየውን የዋጋ ንረትና ሌሎች የማክሮ ኢኮኖሚ ሁኔታዎችን ለማስተካከል እየተሠራ ቢሆንም፣ አሁን ባለው የውጪ ምንዛሪ እጥረት ሳቢያና በሁሉም የንግድ ባንኮች ላይ በተጣለው የብድር ገደብ ጣሪያ ምክንያት፣ የባንኮች የንግድ እንቅስቃሴ በመጠኑ ተጐድቶ መታየቱን አስመልክቶ ሰፊ ውይይት ተደርጐበታል፡፡

በዚህ ውይይት ላይም አብዛኛዎቹ ቅርንጫፍ ኃላፊዎች፣ «ማበደር እየቻልንና ጥሩ ጥሩ ፕሮጀክቶች እያሉ በብድር ገደቡ ምክንያት ብድር መስጠት አልቻልንም፤» ሲሉ ተደምጠዋል፡፡

በዚህ ሐሳብ ዙርያ የባንኩ ፕሬዚዳንት በሰጡት አስተያየት፣ መንግሥት በኢኮኖሚ እድገት ምክንያት የመጣውን ከፍተኛ ግሽበት ለመቆጣጠር የተለያዩ ዕርምጃዎችን ወስዷል፡፡ ከእነዚህም ዕርምጃዎች መካከል አንዱ የብድር ገደብ መሆኑን በማስታወስ፣ በዚህ የብድር ገደብና በሌሎች ዕርምጃዎች ምክንያት ውጤት አስመዝግበናል ይላሉ፡፡

«እውነት ለመናገር ከሆነ መንግሥት የወሰዳቸው እነዚህ ዕርምጃዎች ውጤት አስመዝግበዋል፤» የሚሉት አቶ ብርሃኑ፣ «እ.ኤ.አ በ2008 አካባቢ 64 በመቶ የነበረው ግሽበት በ2009 ወደ 36 በመቶ ወርዷል፡፡ ባሳለፍነው ሰኔ ደግሞ ወደ 2.8 በመቶ ሊደርስ ችሏል፤» ብለዋል፡፡

«በመሆኑም መንግሥት ግሽበትን ለመከላከል በወሰዳቸው ዕርምጃዎች ዓላማው በመሳካቱ ግሽበቱን አውርዷል፡፡ ስለዚህ መንግሥት ግሽበቱን እንደገና ተመልሶ እንዳይመጣ በመቆጣጠርና የብድር ገደቡን በማንሳት ኢንቨስትመንት እንዲበረታታ የሚያደርግ ዕርምጃ ይወስዳል የሚል ሐሳብ አለን፤» ሲሉ አክለዋል፡፡

ከውይይቱ ጐን ለጐንም እያንዳንዱ ቅርንጫፍ በዕቅዱ መሠረት ምን ያህል ሥራ ሠርቷል? አሁን ለተገኘው ውጤት ምን አስተዋጽኦ አደረገ በሚለው ጉዳይ ግምገማ ተካሂዷል፡፡

በሥራ አመራሮቹ ስብሰባ፣ ኪሳራ ያሳዩ፣ ከዕቅድ በታች ትርፍ ያተረፉ፣ በተቀማጭ ገንዘብ ከዕቅድ በላይና ከዕቅድ በታች የሠሩ ቅርንጫፎች በሙሉ አንድ በአንድ የተገመገሙ መሆኑንም ለመረዳት ተችሏል፡፡

በዚህም መሠረት ከዕቅድ በላይ የሠሩትን በማመስገን፣ ከዕቅዳቸው በታች ያስመዘገቡትን ደግሞ ችግራቸውን ገምግመው ለሚቀጥለው ዓመት የተሻለ ውጤት እንዲያመጡ የሚያስችል መፍትሔ በማቅረብ፣ ለውጤት እንዲሠሩ መግባባት ደረጃ ላይ የተደረሰ መሆኑን አቶ ብርሃኑ ገልጸዋል፡፡

http://www.ethiopianreporter.com/index.php?option=com_content&view=article&id=3018:-283-&catid=101:2009-11-13-13-45-28&Itemid=621

This profits are just staggeringly high, almost unbelievable when considering most western banks are struggling to make profits upwards of 10% a year.

Yoniii

August 21st, 2010, 01:57 PM

By Asrat Seyoum

Reporter

Zemen Bank, the only Ethiopian bank anchored in the idea of a single branch banking, is to launch a full-blown internet banking, a service new to Ethiopian banking industry, within a month. The bank tested the venture through its first phase of the online service, months before, and now it is to commence the full-fledged version, which is expected to enable customers to make online money transfer freely. Previously, the online banking service, delivered by the bank, only gave access to bank statements and exchange rate information.

The new and never-been-tried service proposed by the bank is to include free account money transfer, corporate payroll uploading system where employers could upload payroll to the system and make payments to individual worker’s accounts online and online utility bill settlement system, when utility companies are ready.

Melaku Kebede, vice-president of technology at the bank, told The Reporter that the service will help to graduate Ethiopian paper-money-based society to plastic and other forms of credit systems.

Meanwhile, the bank also announced that the core banking project, kicked off in June, went operational last week, only after two months of implementation time.

The VP attributed the speedy implementation to the effort of his IT team who took over the implementation of the product, Oracle’s Flexcube, one of the leading core banking moguls in the world.

World Bank supported, National Bank of Ethiopia (NBE’s) project to set up a nation-wide automatic clearing system is expected to become operational in April. According to this timetable, the NBE instructed the commercial banks to go to core banking system that will interface with the grand project.

Melaku said that the product used in more than 100 countries around the world, requires trained professionals to be implemented which is an expensive service to import. “In this regard, Zemen was able to save close to 3.5 million birr in implementation cost by using in-house IT professionals.”

Zemen is the third bank to implement Oracle’s Flexcube, originally an Indian product, next to United and Dashien banks, which installed the system earlier.

At the moment, the banks are busy implementing the core banking mogul to work under the industry’s system. On the other hand, the national switch system, which will enable usage of common ATM machines, implemented by bankers association, is also one of the prospects expected to change the order of business in the Ethiopian banking sector.
Hopefully more banks will follow soon.

abesha

September 7th, 2010, 05:27 PM

Islamic banking comes to Ethiopia

http://capitalethiopia.com/index.php?option=com_content&view=article&id=13375:-islamic-banks-to-enter-financial-sector&catid=12:local-news&Itemid=4

Finally responding to a strong public demand, the National Bank of Ethiopia (NBE) is about to approve a directive that paves the way for the establishment of Islamic banks.

The directive also opens doors for currently operational commercial banks to create an interest-free banking wing. “Existing banks may create interest-free banking windows and Ethiopian nationals may establish a bank exclusively engaged in interest-free banking,” the NBE draft directive reads.

To accommodate muslims, who are by Sharia’h – Islamic law – prohibited from taking or giving interest (riba), commercial banks are currently offering zero interest. However, fully-fledged establishments of Islamic banks, which offers the owners of capital to share the profits made by the entrepreneur who comes up with investment projects, is an untapped concept for the local financial sector. The sector will, according to Prime Minister Meles Zenawi, remain closed from foreign banks involvement.

The 2008 Banking Business Proclamation has already crafted a room for non interest banking. However, particulars on the regulations of such services were left to be covered by National Bank directive which, two years late, has come now.

According to sources, NBE’s two page draft directive entitled Directives for Conducting Interest-Free Banking, has already received feedback from stakeholders and should be approved in a few weeks time.

The impending approval is expected to enable some already under progress initiatives that envisages establishing Islamic banks.

As per the NBE draft directive interest-free banking operations may include modes of advancing funds on a profit-and-loss sharing basis consistent with the Sharia’h law.
Ibrahim Miftah, an economist, explains that what makes profit- sharing permissible in Islam, while interest is not, is that in the case of the former only the profit-sharing ratio and not the rate of return itself is predetermined.

“It has been argued that profit-sharing can help allocate resources efficiently, as the profit-sharing ratio can be influenced by market forces so that capital will flow into those sectors which offer the highest profit sharing ratio to the investor, other things being equal,” Ibrahim in his article, pending printing, explained.

The NBE directive also stipulates that interest-free banking may include the modes of finance which are used for purchase or hire of goods, including assets, and services on a fixed return bases. Among such recognized operations one is Murabahah which means a contract for the purchase and resale of goods with the resale price being determined on a cost plus basis.

IN such arrangements intisar (or Istisna) and salam are also included. The latter is defined to equate a contract featuring advanced payment against delivery of goods: the financing is usually used for commodities. The former – intisar –is a contract under which a buyer place an order for goods to be manufactured for delivery at a future date.

The upcoming directive is expected to boost national savings because first time depositors are expected to be encouraged by the new Islamic bank offering. PM Meles recently said the next five year economic plans to boost the current 9.4 per cent of national saving shares in the economy to at least 17.4 per cent and to 21.3 per cent shares if possible.

Though new for Ethiopia, interest-free banking has long global history. The first private interest-free bank, the Dubai Islamic Bank, was set up back in 1975 by a group of Muslim businessmen from several countries.

After the establishment of the first private commercial bank in Dubai, more than fifty interest-free banks were established in Muslim countries and as well as in European countries such as Denmark, Luxembourg, Switzerland and the UK.

Simfan34

September 7th, 2010, 05:55 PM

If it allow more people access to credit, I'm all for it.

How is microfinance doing in Ethiopia?

mike7743

September 8th, 2010, 01:58 AM

I like how these banks are all posting "record profit". now if they gradually start investing that profit back and make Addis look like mini Manhattan while adding a much needed skyline.

Simfan34

September 8th, 2010, 09:40 PM

I like how these banks are all posting "record profit". now if they gradually start investing that profit back and make Addis look like mini Manhattan while adding a much needed skyline.

Note all the bank towers going up.

abesha

September 18th, 2010, 04:18 AM

NBE latest directive revives ZamZam Bank
By Kirubel Tadesse

ZamZam Bank Share Company, first launched following the 2008 Banking Proclamation, has revitalized its effort to enter the financial sector. When realized ZamZam Bank would become Ethiopia’s first non-interest bank. The 2008 proclamation, for the first time in the country’s modern banking history, opened doors for non-interest banking operation, which is also known as Islamic banking.

After the proclamation, the group of five people, who first went to the government with the proposal, which subsequently was accepted leading to an amendment of the Banking Proclamation, started to mobilize people to back their effort to establish the first full-fledged non-interest bank in Ethiopia.

"In a short span of time more than one thousand pledges were signed by people who have come from every corner of the country to buy shares," Nassir Dino (Assistant Professor), chairman of the organizers of the bank, said this week in an exclusive interview with Capital.

The 2008 Banking Business Proclamation that crafted a room for non interest banking says particulars on the regulations of such services are to be covered by the National Bank’s directive, which should have followed immediately.

"We thought that the directive would subsequently be issued in few months time; that hasn’t been the case," Nassir remarked.

As the NBE directive proved to be not coming any time soon, investment spent to publicize non-interest banking concepts to the local community was halted by the organizers.

"If it was a commercial competition we could have lost big, but that was not our intention, so we waited patiently even if it was for too long," Nassir said adding that some of the people who were first pulled to the idea have left discouraged, believing that the non-interest bank article was either reversed or no longer valid.

Early in June came the much awaited news; NBE issued its first draft directive that would govern operation of banks such as ZamZam.

"Existing banks may create interest-free banking windows and Ethiopian nationals may establish a bank exclusively engaged in interest-free banking," the NBE draft directive reads.

NBE’s draft directive entitled Directives for Conducting Interest-Free Banking, has already received feedbacks from stakeholders in late June, and is expected to be approved before the end of this month.

NBE’s proposal of interest-free banking operations may include modes of advancing funds on a profit-and-loss sharing basis consistent with the Sharia’h law. Sharia’h – Islamic law – prohibits faithfuls from taking or giving interest. To share profit from investments, equally accepting losses, is permissible in Islam while interest is not.
Nassir, in Capital’s interview, detailed how their group was first rather scared to go to the government officials, including the Office of the Prime Minister, fearing that their proposal could be seen as a sectarian approach for the country to consider. He discusses how surprising the PM’s feedback was to the four years ZamZam bank vision yet to be realized. Capital will feature the full interview next week.
http://capitalethiopia.com/index.php?option=com_content&view=article&id=13385:nbe-latest-directive-revives-zamzam-bank&catid=12:local-news&Itemid=4

abesha

September 22nd, 2010, 05:15 PM

Dashen, Zemen Bank Link their ATM Networks

Two Ethiopian private banks, Dashen Bank S.C. and Zemen Bank S.C. today (September 22, 2010) announced linking up of their ATM networks.

The customers of one bank will be able to fully utilize the ATMs of the other bank. This will allow Dashen Bank customers to have the ability to withdraw cash from Zemen Bank ATMs, while Zemen Bank customers will similarly have access to their accounts at all Dashen Bank ATMs.

The agreement means that customers of the two banks will have the benefit of accessing a combined network of 80 ATMs across the country, the press statement newbusinessethiopia.com received from Zemen bank indicated.

Both Banks have also agreed to collaborate on the provision of VISA card services, allowing all Zemen Bank ATMs to be able to process internationally issued VISA labeled debit or credit cards, as is already possible with the Dashen Bank ATM network.

The collaboration between the two banks is in line with the efforts that are being made by the Ethiopian Bankers Association to establish a National Switch System in the near future.

As the number of banks in the country increasing and observing different banks ATM in key hotels and spots in the country has become common. The partnership between the two banks expected to save resource of the country including foreign currency the banks spend for importing the machines.

Currently, Dashen Bank has deployed 55 ATMs, while Zemen Bank is deploying 25 ATMs across various locations in Addis Ababa and major cities outside Addis Ababa.

Lulseged Teferi, President of Dashen Bank S.C. Dashen Bank is quoted as saying: “By joining forces, we believe that we will provide even more convenience to our customers while providing technologically-driven banking services.

The Bank is one of the largest private banks in Ethiopia, operating 58 branches. As principal member of VISA, Dashen Bank became a VISA card issuer and acquirer in Ethiopia since 2004. It has also started acquiring MasterCard as of 2008.

Zemen Bank was founded in October 2008 with a distinctive business model that is based on a single branch whose activities are to be supplemented by multiple service points such as ATMs, POS terminals, Online Banking and Kiosks.

Dashen Bank Share Company, the giant private bank in the country next to the state-owned Commercial Bank of Ethiopia in terms of market share, is founded in 1995 and has now 58 branches in the country.

Prior to the deal between Dashen and Zemen, Awash International Bank S.C., Nib International Bank S.C., and United Bank S.C. have signed a memorandum of understanding in February 2009 to launch common ATM (Fettan ATm), they haven’t be able to realize their agreement so far.http://www.newbusinessethiopia.com/index.php?option=com_content&view=article&id=266:dashen-zemen-bank-link-their-atm-networks&catid=37:finance&Itemid=37

Yoniii

September 22nd, 2010, 06:20 PM

Export-Import Bank of India has opened it's East African regional office in Addis Ababa, glad they didn't choose Nairobi! :D

btoXO6w27ck

Edit: It's not a private bank, but maybe we can use this as a general "bank thread"?

abesha

September 25th, 2010, 11:15 PM

Electronic payment law around the corner

A draft bill that would provide the upcoming national payment and electronic fund transfer systems of the banking industry with the necessary legal framework is set to appear before the legislature soon after the new parliament commences its session early October. One of the prime projects of the National Bank of Ethiopia (NBE) expected to be complete by April 2011 - the National Payment System -would put in place an automatic all-bank clearing house technique. However, National Payment System and the upcoming internet fund transfer systems, both new to the sector, lacked the legal basis for their enforcement to date.

Presently, the banks operating in the country are unable to clear accounts when presented with requests for Cheque payments by other banks. NBE hopes this problem will be solved with the national payment system. Once the system is integrated, electronic cheques and PIN codes, which are recognized by the system, would be issued to customers.

The draft law sets out the responsibilities and obligation of both customers and banks under this new system of banking.

The draft, among others, addresses electronic money transfer transfers either through internet banking system or mobile banking with the aim of mitigating associated risks like fraud and theft.

NBE has already held discussions on the draft law with relevant stakeholders banks – namely - and according to a schedule communicated to the banks, the bill would make its way to parliament and then would be enacted into law soon thereafter.

Meanwhile, Zemen bank has launched its full-fledged internet service packages early this week. Melaku Kebede, Vice president for Technology at the bank, told The Reporter that the new services include the never-tried full account-to-account fund transfers and corporate payroll systems, which would enable corporate employees to upload their payrolls and make online payments to employees.

He also noted that thus far, the internet banking system has been used by customers to check their own accounts only and that now cross-account exchanges have been made possible. “The service would be an important role in developing the culture of an e-commerce in the economy,” he said.

In a related note, Dashen and Zemen banks announced that they have kicked-off a project to integrate their Automated Teller Machine (ATM) on Wednesday. The new collaboration will also enable Zemen, which has not yet started its Visa card payment services, to enter the card payment game.http://www.ethiopianreporter.com/english/index.php?option=com_content&view=article&id=1138:electronic-payment-law-around-the-corner&catid=98:news&Itemid=511

abesha

September 25th, 2010, 11:19 PM

Yes, Yonii, I thought maybe Yosef can change this into a thread on the Banking and Financial Services sector.

e-Equb: Indigenous Ethiopian savings scheme starts online

BY BIRUK GEBREMEDHIN

Twelve young professionals have launched an online-based money saving mechanism through the equb, a traditional Ethiopian rotating system of savings. It was organized by Meheret and her friends through the depositing of 3,000 birr per week.

According to Worku Nida, a social anthropologist in the University of Los Angeles, equb is a socio-economic association that was established by the Gurage people in the late 19th century. He added that the Gurages are the most industrious people in Ethiopia, transforming entrepreneurship through constant saving.

The development and significance of equb in the Ethiopian context helps the development of people's way of life in accordance with changing times.

“The recession during the past three years was the outcome of mistakes of expertise of the respected fields of banking and has caused us to reconsider, review and re-evaluate our social and economic development plan. We discovered that we had pursued our own indigenous ways of development through the equb,” Meheret Tefera said.

Meheret moved here from Sweden, where she had studied engineering with her fiancé, to start her own business.

Meheret, who is an equb dagna (organizer), benefited from being paid the first etta (share) deposited by members of the equbetegna (members). The first etta (share) is not something that can be put off again. “If I have worked more and more years, I would have been able to reach greater stature,” said Meheret.

Zekarias Alemu, 27, an accountant, is also another member of the e-equb. He opened his own stationery shop around Megenagna by means of money collected from the e-equb and now he has bought a used car within a year. Here in Addis Ababa, a used car in a very good condition can be bought for 45,000 birr. For the New Year, Zekarias aspires to set up his own new business.

According to the Center for International Earth Science Information Network, indigenous knowledge is local knowledge unique to a given culture or society acquired by local people through the accumulation of experiences, informal experiments, and intimate understanding of the environment in a given culture learned through family members.

Equb strengthens the economic situation on the basis of self-sufficiency and self-reliance. Members are directly involved in making decisions on significant issues such as the rate of savings, size of members, picking edelegna (the lucky one), refund interlude, repayment etc.

ICT in the globalization age should therefore be the unprejudiced assimilation between global knowledge and indigenous knowledge. Members of the equb are meeting online once a week. “Technology helps to go hand in hand with us for interpersonal understanding and harmonious communication,” Meheret concluded.http://www.ethiopianreporter.com/english/index.php?option=com_content&view=article&id=1160:e-equb-&catid=116:society&Itemid=536

Look what people are doing even with the worst telecommunications infrastructure in the world. Imagine what can happen if we actually had a proper telecoms operator :bash:

Simfan34

September 26th, 2010, 04:59 AM

Yes, Yonii, I thought maybe Yosef can change this into a thread on the Banking and Financial Services sector.

e-Equb: Indigenous Ethiopian savings scheme starts onlinehttp://www.ethiopianreporter.com/english/index.php?option=com_content&view=article&id=1160:e-equb-&catid=116:society&Itemid=536

Look what people are doing even with the worst telecommunications infrastructure in the world. Imagine what can happen if we actually had a proper telecoms operator :bash:

I'm just blown away. We could several times more done if we were to liberalize land, telcom, and the media.

Ras Siyan

September 27th, 2010, 09:29 PM

By MUSHTAK PARKER | ARAB NEWS
Published: Sep 26, 2010 22:55 Updated: Sep 26, 2010 22:55

The perceived sustainability and attractiveness of Islamic finance as an alternative financial management model in a post global financial crisis continues to flourish in new regions and countries trying to change banking regulations and laws to facilitate the introduction of such institutions and products in their respective jurisdictions.

The latest region which is trying to open up to Islamic finance is East Africa, including Ethiopia, where local reports suggest that the National Bank of Ethiopia (NBE), the central bank, is in the process of finalizing a banking regulation and business directive that would allow the authorization of a bank operating under interest-free (Islamic finance) principles.

At the same time the government of Kenya is studying the possibility of issuing the country's debut sovereign sukuk issuance, while the First Community Bank (FCB), Kenya's second Islamic bank, has launched FCB Capital, which plans to issue a series of local currency sukuk plus other Islamic capital market products for a growing market segment.

In neighboring Tanzania, private sector investors have applied to the Bank of Tanzania, the central bank, to establish their own Islamic bank to be called Al-Barakah Bank.

Perhaps more importantly, the Jeddah-based Islamic Corporation for the Development of the Private Sector (ICD), the private sector funding arm of the Islamic Development Bank (IDB) Group, is in the process of applying for an Islamic banking license in Uganda, a member country of the IDB.

The rationale, according to general manager and CEO Khaled Al-Aboodi, is to establish the bank in a member country, a pre-condition under the ICD articles of memorandum, which could then enter other countries in the region, and to finance or do business in these countries, whether they are member countries. "For example, in East Africa we only have Uganda as a member country. We are thinking of setting up a bank in Uganda which will serve the entire East African region including Tanzania and Kenya, which are not member countries. The headquarters has to be in a member country but it can do business anywhere."

East Africa, including Ethiopia, has a sizeable Muslim population of between 25 million to 45 million. In Kenya, despite the fact that the country has a Muslim population of 4 million, Islamic banking is growing at a steady rate, not only servicing the needs of Muslims but also anyone of any institution interested in ethical and socially-responsible financing. In addition, some parts of Kenya have a large expatriate Somali community as a result of the civil war in neighboring Somalia, which, in some branches, constitute 60 percent of the clientele of FCB in Kenya.

The business case for Islamic finance in Kenya and East Africa, says FCB chairman and prominent Kenyan businessman, Hasan Varvani, is proven. "The best case scenario that we had in our feasibility study and compared with what we have achieved to date is more than proof that Islamic finance is here to stay in Kenya. We have out-achieved our initial targets and objectives by far," he explained.

Kenya has ambitions of becoming the Islamic finance hub of East Africa and has the first mover advantage. The Central Bank of Kenya (CBK) has already licensed two Islamic banks - Gulf African Bank (GAB) and FCB - under CAP 488 of the Banking Act of Kenya. In terms of capital and deposits, FCB, whose CEO is the experienced Islamic banker, Nathif Adam, formerly with Qatar Islamic Bank and Sharjah Islamic Bank, is the largest Islamic bank in Kenya with a capital of 1bn Kenya Shillings (KSh).

Since starting operations in June 2008, FCB has also recently been authorized by the CBK to launch FCB Capital, which will offer Islamic asset management business and capital markets products especially sukuk. Similarly, FCB has been authorized to act as an Islamic insurance (Takaful) broker for general Takaful products the bank is structuring in conjunction with the local Cannon Insurance Company.

Religion, especially Christian-Muslim relations, in East Africa can be a sensitive issue. Despite the fact that Muslims form a largish minority in many of the East African countries, some non-Muslim groups perceive the entry of Islamic finance in religious terms and available for Muslims only, as opposed to an alternative financial system open to anybody irrespective of religion.

This is particularly so in Ethiopia, which is home to one of the oldest Christian churches and also to an ancient Islamic heritage. Not surprisingly, the government of Ethiopian Prime Minister Meles Zernawi, is treading cautiously by promoting the establishment of a so-called home-grown nascent Islamic banking industry.

The idea is to authorize the first local Islamic bank on the basis of only Ethiopian shareholders. As such, no foreign investors or Islamic banks would be allowed to have shares in any proposed bank.

The Bank of Ethiopia did publish the 2008 banking business proclamation — effectively a draft consultation document outlining the introduction of interest-free banks in Ethiopia. After the consultation period the Bank of Ethiopia in June 2010 published the directives for conducting interest-free banking, which once adopted would pave the way for the launching of the country's first Islamic bank.

In 2008, local Ethiopian Muslim investors set up the ZamZam Bank Share Company, and according to the local Capital website, this company is set to become the first Islamic bank in Ethiopia

Interesting article, as usual "tiny" Djibouti is ignored even though we have the highest islamic bank/capita in the region...Anyway, nice to see such developments., Islamic Banks are today a proven alternative to conventional ones.

abesha

September 30th, 2010, 03:00 PM

Debube Global Bank enters the market

By Muluken Yewondwossen

The first general assembly of Debube Global Bank, a commercial bank under formation, nominated thirty representatives for the eleven seats on the board of members. The Disaster Prevention and Preparedness Commission (DPPC) ex-commissioner is one of the nominees.

The assembly that was held at Millennium Hall on September 19 and has nominated thirty candidates to serve on the first board of the bank, which will have eleven members.

However, Dejene Ermeno, public relation head and member of founding committee of Debube Global Bank, did not identify the thirty board nominees’ name.

According to the public relation head of the bank under formation the elected board members will be announced after the official approval has been given by the National Bank of Ethiopia (NBE), which is the central entity that controls all financial institutions’ activity.

According to the NBE directive, any board member, board chair and the CEO (who is appointed by the bank as an employee) should get a green light from NBE to be part of the management and to enter into the financial market. The directive has several distinctive conditions for the stated positions.

The public relation head however told Capital that Simon Mechale, former Commissioner of DPPC is included on the nominees list.

Simon has led the Commission for over a decade and a half. The Commission became part of the Ministry of Agriculture and Rural Development in 2008 under the new structure.

The ex-Commissioner has been elected for the Addis Ababa City Council on behalf of his party, Southern Ethiopian People Democratic Movement, one of the four member parties of Ethiopian People’s Revolutionary Democratic Front (EPRDF), in 2008 election.

Dejene added that some of the founding committee members of the bank have been nominated for the board. During its first year Debube Global’s share sales amounts to about 100 million birr capital.

From the total 4,000 shareholders of the bank about 3,000 have attended the past week’s general assembly.

Tilahun Abay, former CEO of the state owned Commercial Bank of Ethiopia and Abate Kisho, former chairman of Southern Ethiopian People Democratic Movement, one of the four member parties of EPRDF, and president of Southern Nations and Nationalities and People region, who have a share are advising the bank. Haile Gebre Selasse, popular athlete, is also member and one of the main promoters and founders of the bank. http://capitalethiopia.com/index.php?option=com_content&view=article&id=13451:-debube-global-bank-enters-the-market&catid=12:local-news&Itemid=4

abesha

September 30th, 2010, 03:22 PM

Banks to set up central switch

Ethiopia’s fifteen commercial banks are to form an independent share company that intends to manage a Central Switch set to modernize the country’s payment system.

For the clearing and settlement of card payments, experts say it is necessary to put in place a central switch to organize the inter operability of the different networks of ATM’s and POS terminals. They say inter operability ensures that customers of one bank can use the ATMs and POS terminals of another bank.

Coordinated by the Bankers’ Association, sources told Capital that the central switch will be managed through the forthcoming company to process the card-based inter-bank operations.

The central switch will connect all ATM’s and POS-terminals of the different commercial banks and the system switch requests for authorization will automatically connect to the core banking system of the cardholder’s bank.

The switch will also calculate the commission banks owe each other for the use of the facilities of other banks and calculates the net balances resulting from these operations and sends this to the Real Time Gross Settlement (RTGS) of NBE for settlement.

The banks were studying on how to form alliance and sources told Capital that this study has now been finalized waiting for the banks to sign a memorandum of understanding (MoU) and Article of Association (AA) at the end of September.

President of Nib Bank Amerga Kassa said “the company will come” but did not mention when. “The banks will have equal share in the forthcoming company,” he added.

Sources told Capital that the National Bank of Ethiopia (NBE), with the support of the World Bank Fund, is expected to finish the national switch that complements the central switch this year, with companies, Montra and Earnest Young, doing the entire infrastructure.

Last year, NBE ordered all commercial banks to form a central switch that goes with its current endeavors to modernize national payment system and automate the current traditional ways of exchange.

On its way to a cashless society in the Ethiopian year 2010, NBE envisions to have in place a modern payment infrastructure that not only effectively supports the emerging financial markets and monetary policy but also forms the heart of a developed market for retail payments.http://capitalethiopia.com/index.php?option=com_content&view=article&id=13442:banks-to-set-up-central-switch-&catid=12:local-news&Itemid=4

I can't believe that the NBE had to order them to do this. :ohno:
Why no initiative?

Yoniii

September 30th, 2010, 03:42 PM

I would expect the CEO of Zemen Bank (forgot his name) to initiate something like this, but at least it's taken care of now.

The lack of ATM's is another problem that I'm glad the banks are tackling now, specially tourists have been complaining about it.

abesha

September 30th, 2010, 03:48 PM

^^ You mean Ermyas Amelga, the Chairman? The CEO is actually a woman, Brutawit Dawit Abdi.

You are right, but I think that the order from the NBE came right after Zemen Bank was established so they didn't have time.

Yoniii

September 30th, 2010, 03:52 PM

Simfan34

September 30th, 2010, 05:44 PM

ammasmith

October 1st, 2010, 12:43 PM

The sustainability and appeal of Islamic finance seen as a management alternative financial model to a position in the global financial crisis continues to expand into new regions and countries trying to change banking regulations and laws to facilitate the introduction of these institutions and products in their respective jurisdictions.

abesha

October 2nd, 2010, 02:00 PM

Ethiopia a step closer to credit rating

NBE tests an IT solution for real-time credit exchange system

By Asrat Seyoum

A South African IT solution with the capacity to host a national credit rating system developed by a company called CompuScan, which is the first for the country, was demonstrated by the National bank of Ethiopia (NBE) for commercial Banks on Thursday, it was learnt. According to sources, as part of NBE’s World Bank-supported capacity building program that includes the National Payment system, a project expected to be launched in April, an independent institution that would compile the credit information of borrowers and perform credit scoring has been under inception for quite some time now.

Credit scoring is an integral component to the financial sector in other countries in storing the vital and costly credit history of borrowers and assigning scores showing their credit worthiness, a task that exclusively belonged to commercial banks themselves thus far. The credit scoring envisaged by NBE will mostly be handled by an independent agency which would provide up-to-date and real-time credit information to creditors.

The system would work by assigning individual credit identification numbers (PINs) for each borrower so that up on application for loan in any of the banks in the industry the PIN would reveal the entire credit history of the borrower in the system. Currently, the credit information center at NBE is the only source that the banks use to analyze their customers' credit worthiness. This center provides a month-late credit information since the commercial banks send their credit information in the form of monthly aggregates.

Meanwhile, until the independent credit rating agency is set up the IT solution would also help the current credit information exchange system in the industry by enabling a real-time bank-to-bank information exchange about their customers (borrowers). Shortly, credit information from the credit information center would go live and up-to-date, making it accessible to the banks at any time required.

The credit information of the borrowers would also be integrated with the data bases of other relevant institutions like the revenue authority in the long term to help paint a conclusive credit picture of the borrower, according to the same source.

A professional in the banking sector that The Reporter talked to said that the credit rating system is one of the basic requirements for transforming into a plastic money society like those in the developed would which extensively use credit card facilities. Furthermore, he said that the lucking consumer loan in the banking sector in Ethiopia would be improved by credit scoring since the easily available credit history would help reduce the risks banks face.

This was the second test of the solution, which has a good track record both in South Africa and Kenya, will début in the banking sector of Ethiopia with the aim of improving the credit information center’s activities while the long term plan is to achieve the credit scoring system and the credit rating agency.http://ethiopianreporter.com/english/index.php?option=com_content&view=article&id=1166:ethiopia-a-step-closer-to-credit-rating&catid=98:news&Itemid=511

abesha

October 3rd, 2010, 12:38 AM

Zemen Breaks Second Year Profit Record in Ethiopia

Zemen Bank, the only single branch finance institution in Ethiopia, announces this week that it earned a gross profit of nearly 70 million Birr (close to 4.2 million US dollars at current exchange rate) in the 2009/10 fiscal year based on audited financial results.

Banking sector data of the country shows that there is no private bank in Ethiopia, which has registered such huge amount of profit during its second year performance.

Revenues were up more than five-fold compared to the previous year and reached a level of Birr 103 million. Net profits (after taxes) were Birr 42 million, equivalent to a return on equity of close to 40 percent.

“We have delivered first and foremost to our shareholders by earning a second-year profit that is the best-ever registered by any private bank in Ethiopia,” said Ermyas Amelga, Chairman of the Board of Zemen Bank

“We have also delivered to our esteemed customers by offering modern financial services, innovative banking products, and superior customer service,” the introducer of the one branch banking system to the country noted.

Two years ago many people were suspicious about the profitability of his single branch banking idea. Now, the idea of the enterpreneur seems likely to be replicated by many people in the future like his drinking water selling business, which led to the foundation of a dozen water selling companies in the country.

Supporting the Bank’s financial results was the strong growth in all aspects of its banking operations. Both deposits and loans more than doubled compared to the previous year, and reached a level of 688 million birr and 378 million birr respectively at end-June 2010.

Foreign exchange inflows collected by the bank showed a four-fold increase from the previous year, allowing the Bank to earn a high share of its income from international banking services rather than lending activities (which were capped last year due to tight monetary policies).

Zemen Bank also proudly announces that it has received a risk-rating of “1” or “strong” from the National Bank of Ethiopia during the fiscal year. This is the best possible rating a bank can earn and reflects a comprehensive regulatory assessment of the Bank’s capital adequacy, asset quality, management, earnings and liquidity.

Zemen Bank entered the banking sector based on a distinctive model of offering technologically-driven banking services that are based mainly on a single branch but supplemented by multiple service points such as ATMs, POS terminals, Foreign Exchange Bureaus, and Banking Kiosks.

The promoters of single branch banking told the shareholders this morning at the Hilton Adds that the model is workable within an Ethiopian setting and is actually one that promises to deliver superior results and profitability relative to traditional approaches. The bank has around 2,800 shareholders and 4,500 clients.http://www.newbusinessethiopia.com/index.php?option=com_content&view=article&id=278:single-brach-bank-breaks-second-year-profit-record-in-ethiopia&catid=31:investement&Itemid=7

Ahadu

October 3rd, 2010, 01:29 AM

Oh my bad! Yeah, I meant Ermyas, he seem like a visionary man.

Watch him here for his presentation. He constructs & de-constructs the business landscape of Ethiopia. The guy is really amazing. Ethiopia needs more like him.

This is part 1 & 9 of 9 - title "Access Capital S.C Pt. 9 "- check the rest on youtube!

November - 2009
fiiqeiVvLmg&feature=related

This part is great
wUPQ-U61T-E&feature=related

WKnq0ii77yc

abesha

October 11th, 2010, 05:11 PM

Abyssinia Beats Previous Profits by 40Pc

Bank announces that the dividends to be paid to shareholders come to 32.68pc per share

Bank of Abyssinia (BoA) announced that it had registered a record profit of 140.6 million Br after taxes during the 2009/10 fiscal year, a 40.1pc increase from the previous year’s profit, during its 14th annual shareholders’ and 8th extraordinary meeting on Tuesday, October 5, 2010, at Hilton Addis.

The bank’s total assets, capital, and deposits reached 6.28 million Br, 585.5 million Br, and 5.14 billion Br, respectively, BoA, which is the second bank after Zemen to publicise its performance this month, announced to shareholders.

The report shows that the capital and income of the bank are steadily growing, indicating confidence of the shareholders and potential for more income, an expert close to the banking industry, who requested anonymity, told Fortune. An increase in deposit mobilisation also indicated customer confidence and allows the bank to accrue interest.

The bank had to operate in an economy where there was an acute shortage of foreign exchange that decreased its interest earnings in foreign banks, Dagnachew Mehari, board chairman of the BoA, told shareholders during his address. However, the gradual recovery of the world economy had spurred the export sector of the country which was favourable to the bank.

BoA collected 469 million Br in revenues, exceeding that of the previous year by 15.8pc. Out of this income, 56pc came from interests accrued and 23pc from the fluctuation of exchange rates. Although the bank’s loans increased by 443.3 million Br during the year, its total nonperforming loans (NPLs) came down to 6.98pc, decreasing by 220 million Br.

Shareholders’ dividends per share came to 32.68pc this year, Dagnachew said in his address. This makes the bank one of the top dividend payers in the industry, according to the report. However, at the beginning of the month Zemen Bank had given its shareholders 37.84pc dividend per share in just the second year since its establishment.

Temenos AG, a Swiss Information Technology (IT) company, was recently selected to install BoA’s centralised, online, real-time, electronic (CORE) banking solutions which it expects to deploy in six months.

Once installed, all 48 branches of the bank will be electronically linked to allow customers to use withdrawal and deposit facilities at any branch. The bank opened only two branches during the previous fiscal year and three in the one before that.

Given the size of the country and relative underdevelopment of the banking industry, there is huge potential for expansion but BoA seems not to have an expansion strategy, according to the expert.

“Instead, the bank seems to want to consolidate its existing market by improving service quality,” he said.

On the same day as its presentation of its annual report, the bank also held an extraordinary meeting to amend some articles of its directive based on the Fit and Proper Proclamation which was issued by the National Bank of Ethiopia (NBE). The maximum shares that can be owned in the bank were decreased from 20pc to five per cent, including shares owned by spouses and children, by the proclamation.http://addisfortune.com/Abyssinia%20Beats%20Previous%20Profits%20by%2040Pc.htm

abesha

October 11th, 2010, 05:17 PM

Vendor Signs to Install CORE Solutions for CBO

Cooperative Bank of Oromia selects Infrasoft Tech which installed the systems for
three financial institutions

One of the few remaining banks not to have chosen a vendor to implement its centralised, online, real-time, electronic (CORE) banking solutions, Cooperative Bank of Oromia (CBO), finally selected Infrasoft Tech Ltd and signed an agreement with the company on Wednesday, October 6, 2010.

Six months ago, 12 vendors were invited to submit their technical and financial proposals to CBO. After evaluating the proposals, Temenos AG, which was selected to install the CORE banking solutions for Commercial Bank of Ethiopia (CBE) and Bank of Abyssinia (BoA), and Infrasoft were selected for the final evaluation, according to sources close to the selection process.

After a three-member steering committee, led by Alemu Reba, vice president of the bank, visited banks for which the vendor had installed the same solutions in Kenya and India, it settled on Infrasoft. The committee also visited its headquarters in India.

Following the installation of the CORE banking solutions, which both sides expect to deploy within six months, Fairfax Technologies, the local partner of Infrasoft, will be responsible for providing support, according to the agreement.

Fairfax, which was established by Ethiopians in the Diaspora in 2007, has worked with Infrasoft on the installation of three CORE banking solutions in Ethiopia.

Infrasoft was established by four Indians in 1995 and has been working in the country since its first deal with Wisdom Micro Finance Institute in 2007. It installed CORE banking solutions for Wegagen and Oromia International banks (OIB) in 2009 and 2010, respectively.

Subsequent to the National Bank of Ethiopia’s (NBE) mandate to all commercial banks to install CORE banking solution systems by June 2011, many have announced their selection of vendors over the past months.

The central bank is in the process of installing a national payment system (NPS) which will enable all banks to clear and settle payments electronically.

Out of the 15 commercial banks in the country, 13 banks have already installed, or are in the process of installing, the systems. CBO’s deal with Infrasoft makes it the 14th bank to have selected a vendor for the installation.

“The installation of the CORE banking solutions will start in a month and is expected to take six months,” Yared Demissie, managing director of Fairfax Technologies, told Fortune.

CBO was established in March 2008, with an authorised capital of 300 million Br and a paid-up capital of 122 million Br which has since increased to 150 million Br. The bank, which registered a profit of 33.1 million Br (unaudited) in the 2009/10 fiscal year, has 42 branches across the country.

“We are preparing to open the 43rd branch in Gelan Town, south of the capital in Oromia Regional State, soon,” Assefa Dibaba, president of CBO, told Fortune. http://addisfortune.com/Vendor%20Signs%20to%20Install%20CORE%20Solutions%20for%20CBO.htm

abesha

October 19th, 2010, 03:44 AM

Dev’t Bank Discloses Five-Year Strategic Plan
Private sector accounts for most of the 37.9b loans to be approved for manufacturing,
agricultural sectors

The main source of projected income, which constitutes 67pc of the total cash inflow for the next five years, is expected to come from the sale of savings bonds and soft loans

Development Bank of Ethiopia (DBE) revealed its five-year strategic plan in which it will give out an unprecedented amount of loans to the manufacturing and agricultural sectors, reaching 21.9 billion Br and 16 billion Br, respectively, by the end of the five years.

Meant to implement the government’s five-year draft Growth and Transformation Plan (GTP), DBE’s management board approved the strategic plan sometime in August.

The draft GTP, which is expected to be tabled to Parliament for approval in November 2010, aims to double agricultural production and increase the share of the industrial sector in the gross domestic product (GDP) to 17pc from its current 13pc. The sector is expected to take the leading role in the economy after 15 years.

While manufacturing and agriculture will enjoy the largest portion of the loan approval and disbursement planned for the next five years, the service sector is hardly mentioned in DBE’s strategic plan.

“The service sector is not included in the planned allocation of loans just like in the GTP,” Genene Ruga, vice president of DBE, told Fortune. “The bank plans to play its role in reaching the goals set in the GTP.”

DBE, which was established in 1909 and has 32 branches, is the biggest loan provider for developmental projects in the country.

The private sector accounts for most of the loans that are planned to be approved and disbursed in the next five years. Of the 16 billion Br planned to be approved for agriculture projects, the private sector takes 15.5 billion Br while the rest goes to cooperatives. Out of the money planned to be approved for manufacturing, the total sum of 21.9 billion Br has been earmarked for the private sector.

The private sector will receive 10.5 billion Br to be disbursed for agricultural projects and 16.77 billion Br for manufacturing projects, according to DBE’s strategic plan.

The previously cash strapped bank projects a healthy stream of income in the next five years to finance the loans it plans to approve and disburse. In previous years, the bank had to borrow money from Commercial Bank of Ethiopia (CBE) and foreign sources in addition to its loan collection to finance the loans it gave out.

In a turn of events, DBE expects to collect income from the sale of government bonds and from long-term soft loans to the amount of 11 billion Br and 10.1 billion Br, respectively.

The government bonds, to be issued by Ministry of Finance and Development (MoFED), have a six per cent interest rate on those with a maturity date of one to five years and seven per cent on those with a maturity date of more than five years. In a bid to target farmers, for whom this saving mechanism is meant to be introduced, the bank will also sell the bonds through CBE’s 294 branches nationwide.

By the end of this fiscal year, DBE plans to have sold 200 million Br worth of government savings bonds and expects it to increase to 4.1 billion Br during the last year of the strategic plan.

DBE also plans to perform better in collection of interest on loans and paybacks in the next five years during which it plans to collect a total of 9.4 billion Br. It has projected collecting 4.76 billion Br and 3.79 billion Br from loans given to the manufacturing and agricultural sectors, respectively.

The rest is expected from micro finance projects which are funded under the Rural Financial Intermediation Programme (RUFIP) of the International Fund for Agricultural Development (IFAD).

These collections are expected to improve the bank’s nonperforming loans (NPLs) which stood at 2.1 billion Br in the 2009/10 fiscal year, 22.8pc of its total loan portfolio. By the end of this fiscal year, it aims to have decreased its NPLs to 9.8pc. Should it succeed in doing so, it will meet the minimum quota set by the African Development Bank (AfDB) for all development banks on the continent, which is less than 15pc.

“Even though the National Bank of Ethiopia (NBE) sets the limit at five per cent, this does not apply to DBE as it is engaged in providing loans of a high-risk nature,” Birhanu Taye, manager of the bank’s Business Promotion and Communications Process, told Fortune. “Unlike CBE and other private banks, DBE provides medium and long-term loans that range from five to 10 years and 10 to 25 years, respectively.”http://addisfortune.com/Devt%20Bank%20Discloses%20Five-Year%20Strategic%20Plan.htm

abesha

October 30th, 2010, 06:00 PM

Enat Bank collects 80 percent of paid up capital

Enat Bank Share Company has announced that it has sold some 60 million birr worth of shares in six months, since April.

While announcing that the bank is winding up its sale of the share, the chairwomen of the bank’s organizing committee, Meaza Ashenafi, disclosed out of the 75 million birr the bank needs in paid up capital to start operation about 80 percent has been collected to date.

She said that the bank is aiming to benefit the women and the youth who are not being reached through the modern bank system operating in Ethiopia. She added the bank also seeks to encourage families and small scale businesses through its policy.

She indicated that the bank will have two branches upon commencing operation and has a long term plan to open branches mainly in the countryside.

Meaza further said that the bank would officially stop floating shares after December 9 and proceed with the registration process and obtaining an operation license from the National Bank of Ethiopia (NBE).

The bank offered a minimum of 4 shares with a par value of 1000 birr each for subscription. So far some 3,000 persons have bought acquired shares in the bank, according to information obtained from the organizing committee.http://www.ethiopianreporter.com/english/index.php?option=com_content&view=article&id=1300:enat-bank-collects-80-percent-of-paid-up-capital&catid=98:news&Itemid=511

abesha

October 30th, 2010, 06:03 PM

Fourteen companies bidding to supply ATMs for three banks

Fourteen companies are bidding to supply ATMs and POS to three private banks: United, Nib and Awash. The project includes the supply of a turnkey solution for a shared card-based payment system and electronic fund transfer solution which consists of switch, 60 ATMs, 300 POS, personalization system, data center and disaster recovery site and network infrastructure. In addition to the supply and installation of the ATMs and POSs, the winning company would be responsible for the supervision of the whole system for two years.

Awash International Bank S.C., Nib International Bank S.C., and United Bank S.C. signed an agreement on February 19, 2009 to launch Fettan ATM Network. Originally, it was planned that Fettan ATM™ will install over 140 ATMs and over 340 POSs across Ethiopia with one ATM at every branch of the consortium banks.

The three banks signed an agreement to work together to launch a wide-reaching Automated Teller Machine (ATM) and Point of Sale terminal (POS) network through which customers can withdraw cash and make payments for purchases. The agreement was the first significant cooperation between competing banks in Ethiopia’s fast-growing banking sector and promises significant gains both in quality banking technology and in cost-effective operations.

The bid was first announced on August 8. The closing date, which was on September 30, was postponed to October 26. By the closing date 14 companies submitted their bids, which were opened on the following date. One of the participating companies, Egogo, Chinese firm was disqualified due to problems related to bid bonds. The bid evaluation committee is evaluating the prequalification proposal. The second phase will be technical and the last one will be financial.

M2M Group, a Moroccan company which is represented in Ethiopia by MOTI Engineering PLC, is participating in the bid. Currently, M2M and MOTI are working on the Commercial Bank of Ethiopia’s network card banking project. Technology Associate, a Kenyan company working on a network project at Wegagen Bank. GCF, FF Communications, I Concept and Fintech, another Kenyan company, are among the companies that are participating in the bid.

IT professionals estimate that the total cost of the project is more than 200 million birr, double what the three banks allocated for the project.

Berhanu Getaneh, president of United Bank, told The Reporter that the bid committee will evaluate the proposals and will present it to the board of directors of the banks. He declined to comment on the details saying it was confidentialhttp://www.ethiopianreporter.com/english/index.php?option=com_content&view=article&id=1307:fourteen-companies-bidding-to-supply-atms-for-three-banks&catid=98:news&Itemid=511

Ras Siyan

November 5th, 2010, 07:16 PM

(Horntrade) – The banking center of Djibouti would like to contribute more substantially to the international trade of Ethiopia. But unlike the Djibouti franc, fully convertible and pegged to the dollar, the Ethiopian birr is highly regulated. Djibouti has a solution.

At the initiative of BICMR (Bank of Industry and Commerce Red Sea), a discussion was opened up recently between the Bank of Djibouti and the Central Bank of Ethiopia in order to remove the obstacles faced by traders in the transfer of cons-dollar values of their holdings in Birr. These barriers are a major hindrance to the development of regional trade.

The idea advanced by BICMR is simple: the banks open accounts in Djibouti birr for their clients and that the Central Bank of Ethiopia opened an account back in Birr to the banking Djibouti. A stabilizing device, via a fund dollars which international institutions could participate as to ensure a daily call auction mechanism for trading in the currency of Ethiopia in Djibouti. “If the proposed scheme goes ahead, the trade will be facilitated in Birr and less expensive,” argues Ould Amar Yahya, CEO of the leading bank in Djibouti.

Naturally, the main obstacle is likely to be political. It will not be easy to convince the Ethiopian authorities to delegate such management of their money. Mr. Yahya is optimistic: “The effects of this accord on the Birr are small. There will be no loss of sovereignty of Ethiopia. “However, this solution would be to him a tremendous stimulus for regional economic cycles in global markets.

Prime Minister Dileita Mohamed Dileita, supports this proposal as it considers register entirely in the interest of the Ethiopian economy as to Djibouti. At the Central Bank of Djibouti, “we know this project, but to date we have not received positive feedback from our Ethiopian counterparts,” said Ahmed Osman, somewhat dubiously.

[Translate]

Seems like a nice initiative to me, what are your thoughts on this?

abesha

November 6th, 2010, 01:52 PM

CBE installs 50 ATMs The Commercial Bank of Ethiopia (CBE) is installing 50 ATMs and 250 POS in its branch offices and business centers in Addis Ababa.

CBE awarded the card based payment system turnkey solutions (CBPS) project to a Moroccan company, M2M, in March 2009. The project includes the supply, implementation and support of 50 ATMs and 250 POS, personalization system, switch and electronic fund transfer solutions, server platform and data base. According to the contractual document, the project includes a three-year technical support. M2M, through its local representative and subcontractor, MOTI Engineering PLC, commenced work on the project in April 2009. The companies conducted adequacy study and started delivering the ATMs last June.

“Ninety five percent of the delivery is finalized,” an official at CBE told The Reporter. The companies have installed 40 of the 50 ATMs. The official said the remaining 10 are being installed and will be completed by December. Currently, the 40 ATMs can be operated using cards issued by CBE itself. However, efforts are under way to certify them by VISA Card. “The VISA Card certification process will be finalized within three weeks,” sources at the bank said.

The ATMs have been installed at the bank’s branch offices in Addis Ababa, various business centers as well as at the Addis Ababa Hilton, Ghion and Ethiopia hotels. CBE has recuirited merchants that will run the POS. The POS are expected to be operational by December. CBE was the first bank to introduce ATMs in 2003. The bank launched the service with eight ATMs which were not compliant with VISA card. Dashen Bank introduced VISA card-compliant ATMS in 2006.

The project is expected to cost about USD 77 million.http://www.ethiopianreporter.com/english/index.php?option=com_content&view=article&id=1347:cbe-installs-50-atms&catid=98:news&Itemid=511

Yoniii

November 6th, 2010, 02:53 PM

^^ Nice that it went to an Moroccan (African) contractor!

abesha

November 16th, 2010, 04:26 PM

Hewan Bank offers public share sales
By Muluken Yewondwossen

The private Hewan Bank, which is under formation, has officially launched its public share sales to collect the requested initial capital to enter the financial sector.
Last Thursday the founders and main promoters of the bank organized an event to brief potential share buyers about the bank. The main promoters explained that the bank, which is founded and led by female entrepreneurs, has offered about 400,000 registered shares to interested buyers.
According to the promoters, a single share costs 1,000 birr and share buyers have to purchase a minimum of five shares worth 5,000 birr. The maximum amount is 20 million birr or 20,000 shares.
Getachew Ayenew, former president of the Ethiopian Chamber of Commerce and Sectoral Association and Deputy Chair of the Founders Committee of Hewan Bank, said that buyers will pay 50 percent of their total shares, and the balance installment will be concluded within the next three years.

Recently, two other commercial banks have also offered share sales and three other new banks are in the final process to start their services. The Abay Bank, a newly established commercial bank, opened its doors last week. The number of banks in the country counts almost twenty now, the number includes three state-owned banks.
According to National Bank of Ethiopia’s regulations, a bank that wants to enter the financial market should register 75 million birr of paid-up capital. The banking industry has shown a strong development in the last two decades after the fall of the military Derg regime. Ten years ago only three state-owned were active in limited branches.
Although the sector is registering a growth, it is still far from satisfying the demand. Different studies implicate that a single bank branch reaches 120,755 people, which means twelve branches serve a million people.http://capitalethiopia.com/index.php?view=article&id=13676%3Ahewan-bank-offers-public-share-sales&option=com_content&Itemid=4

zzffirst

November 19th, 2010, 03:55 AM

really?

lt me see

http://pic.yupoo.com/rooibos/ABgdFDC1/PyoJU.jpg

Yoniii

November 19th, 2010, 12:11 PM

Wegagen Bank Share Company, which recently launched ‘Agar Visa Card’ in Ethiopia, announced 23.6 percent profit growth for the fiscal year 2009/10 (July 8, 2009- July 7, 2010) as compared to the previous year.

The bank made 317.3 million birr (around 19 million US dollars at the current exchange rate) gross profit out of which the government earned profit tax worth 94 million birr. This is indicated yesterday (November 18, 2010) during the annual shareholders’ meeting held at the Hilton Hotel in Addis Ababa.

President of the bank, Araya Gebre Egizhaber, also noted that Wegagen Bank is prepared to construct 22-story headquarter building complex around Stadium area.

The bank, which was established in 1997 with a paid-up capital of 30 million birr, the highest initial capital at the time, has now reached 633.2 million birr.

The press statement of the bank also indicated that during the budget year Wegagen has mobilized 3.9 billion birr deposits through its 51 braches and lend 2.5 billion birr to its customers.

Its total asset has also increased to 5.7 billion birr (around 346 million US dollars at the current exchange rate) with 1,859 employees. Wegagen Bank has now 2,140 shareholders - Source (http://www.newbusinessethiopia.com/index.php?option=com_content&view=article&id=322:wegagen-bank-profit-increases-24-percent-&catid=37:finance&Itemid=37)

abesha

November 19th, 2010, 03:24 PM

:banana: Weren't they the ones with the 12-story building? I'm glad they reconsidered.

Eta: here's what they were planning to build

http://img389.imageshack.us/img389/2161/bankgifwb0.jpg

dorzew

November 19th, 2010, 06:57 PM

^^ They better reconsider it!!! Most rendered projects have serious problems at the ground floor. Take a look at this render, how bad the ground floor can get. you see no creativity at all. I hope they will come up with the better one for the new design.

Yoniii

November 20th, 2010, 02:14 PM

^^ I agree. What's with the hundred stairs, outside as well. :ohno:

Yoniii

November 20th, 2010, 02:17 PM

http://www.newbusinessethiopia.com/plugins/content/fboxbot/thumbs/awashand-nib-banks_288x153_cc251ede79d6c0857bb442eb9d73861d.jpg
Two private banks in Ethiopia, Awash and NIB International Bank announced this morning (November 20, 2010) 350.8 million birr (21.3 million US dollars at the prevailing exchange rate) and 285.2 million birr net profit before tax, respectively for the fiscal year ended June 2010.

The annual after tax profit of Awash has increased by 61 percent from the previous fiscal year, while NIB has also increased the profit by 30 percent.

The government has earned 187.5 million birr out of total gross profit of the two banks (636 million birr).

Audit reports of both banks show that earning per share (which has 1,000 birr par value) of Awash International Bank(AIB) has reached 493 birr, while the figure for NIB International Bank (NIB) has also mounted from 170 birr to 188 birr per share (which has 500 birr par value).

AIB’s total asset has also grown 27 percent reaching 9 billion birr (546.7 million US dollars), while total asset of NIB has also increased by 24 percent from the previous fiscal year and reached 5.97 billion birr at the end of June 2010.

AIB, which began operation in 1994 as the first private bank in Ethiopia, has now 64 branches in allover the country with 2,484 total number of employees. NIB, which plans to start the construction of its own headquarter in Addis Ababa this year, has a total of 1,606 employees working within its 45 branches.

AIB has now a total of 2,834 shareholders while NIB, which is established five years after AIB, has 3,287 shareholders at the moment.- NewBusinessEthiopia.com (http://www.newbusinessethiopia.com/index.php?option=com_content&view=article&id=323:awash-nib-make-636-million-birr-profit&catid=37:finance&Itemid=37)
The banks are going strong.

abesha

December 18th, 2010, 12:57 PM

VISA certifies CBE
- Bank to launch mobile top-up services

By Kaleyesus Bekele

The Commercial Bank of Ethiopia (CBE) two weeks ago linked its core banking system to the VISA Card system. Now international VISA card holders can go to the Automated Teller Machines (ATMs) of CBE and withdraw cash in birr. A senior official at CBE told The Reporter that the banks planned to also link its system with Master Card. CBE has installed 46 ATMs at different branches of the bank and business centers in Addis Ababa.

CBE awarded the card-based payment system turnkey solutions (CBPS) project to a Moroccan company, M2M, in March 2009. The project includes the supply, implementation and support of 50 ATMs and 250 Point of Sales (PoS), personalization system, switch and electronic fund transfer solutions, server platform and data base. According to the contractual document the project includes a three-year technical support. M2M, with its local representative and subcontractor, MOTI Engineering Plc, commenced work on the project in April 2009. The companies conducted adequacy study and started delivering the ATMs last June. The total cost of the project is about 77 million birr.

A senior official of CBE told The Reporter that the companies have installed 46 of the 50 ATMs. The official said the remaining 4 are being installed. The 46 ATMs are operational with domestic card as well as VISA Card. The bank official said the VISA Card certification process was finalized two weeks ago, adding that the testing was successful.

The ATMs are installed at the bank’s branch offices in Addis Ababa, business centers, at the Hilton Hotel, the Ghion and Ethiopia hotels. CBE has recruited merchants who will run the POS. The POS were expected to be operational by December. CBE was the first bank to introduce ATMs in 2003. The bank launched the service with eight ATMs which were not compliant with VISA card. Dashen Bank introduced VISA card compliance ATMS in 2006.

Visa is a global payments technology company that connects consumers, businesses, banks and governments in more than 200 countries and territories, enabling them to use digital currency instead of cash and checks.

In related news, CBE is to launch mobile top-up services-recharging prepaid mobile accounts by deducting money from customer’s account at CBE and paying to the newly restructured Ethio Telecom and settling utility bills through mobile phones or ATMs. CBE is already testing the mobile top-up services. Employees of the bank are recharging their mobile accounts without buying scratch cards. The system enables customers to pay electric and water bills. However, the bank needs to make agreements with the Ethiopian Electric Power Corporation and Water and Sanitation Services Authority and interface the systems.http://www.ethiopianreporter.com/english/index.php?option=com_content&view=article&id=1535:visa-certifies-cbe&catid=98:news&Itemid=511

abesha

January 17th, 2011, 06:02 PM

Bunna First Newcomer Bank to Show Profit in Years

The bank earns 43pc of its 11.5 million Br noninterest income from forex in it’s first year of operation

http://addisfortune.com/Vol_10_No_559_Images/buna_int_bank.jpg

Bunna International Bank (BIB) earned a 48, 000 Br profit during its first year of operations, making it the first bank among those established over the past few years not to operate at a loss in its opening year.

BIB’s performance largely resulted from the 11.5 million Br it earned in noninterest income. A total of 4.9 million Br, close to 43pc of this amount, came from gains made on foreign currency exchanges.

Over the past few years, gains from foreign exchange dealings have become a major source of income for banks.

“This trend may not continue once the Birr stabilises and banks, including BIB, should avoid becoming too dependant on it for income,” Abdulmena Mohammed, accounts manager for Portobello Group Ltd, a London based holding company with subsidiaries in property investments and developments, told Fortune.

Yet, the bank’s good performance was not only due to gains made from these dealings, according to Negede Abebe, president of BIB.

“Although the central bank devalued the Birr twice during our first year of operations, the changes were minimal and not the major reason for the good performance of the bank,” he told Fortune.

It was hard to win the confidence of customers with foreign exchange oriented business and it was difficult business for a newcomer to the industry to secure, he told shareholders at their first annual shareholders’ meeting, held at Sheraton Addis, on December 5, 2010.

Given that it started operating in October 2009, when both the international and local economies were recovering from the global economic crisis, the bank recorded a notably good performance, Marshal Fikermarkos, chairman of the board of directors of BIB, told shareholders while presenting its annual performance report during the meeting.

http://addisfortune.com/Vol_10_No_559_Images/buna_fin_rep_gra.jpg

The bank mobilised 239.3 million Br in deposits through its eight branches, six of which are located in Addis Abeba. It made 8.4 million Br from interest related income and disbursed 190.3 million Br in loans and advances.

Although other recent newcomers to the industry were operating under different circumstances during their first year of operations, the figures of BIB in its first fiscal year are the highest, according to Abdulmena.

This is because the bank carefully scrutinised the loans and advances it made, according to Negede.

“Since the amount we could give out in loans was limited by the credit cap set by the central bank, we chose customers with good track records in paying back loans,” he told Fortune.

Using liquidity measures such as loans to deposit, liquid assets to net deposit, capital adequacy, and capital to total asset ratios contributed to making BIB the highest liquid private bank with a strong capital base.

Such a high liquidity position will help the bank to disburse more loans and earn more interest over the coming years, according to Abdulmena, who has also worked as an external auditor in Ethiopia for eight years.

However, this might not be possible as the bank has already reached the credit cap set by National Bank of Ethiopia (NBE) at the end of last year.

“Unless the cap is relaxed, we will not be able to make interest related income on additional loans,” Negede told Fortune.

The bank’s total capital reached 169.1 million Br in the fiscal year that ended on June 30, 2010; a huge amount that may diminish the bank’s performance in relative measures such as earning per share (EPS) and return on capital (RoC), according to Abdulmena.

This view is shared by Negede.

“It is obvious that a big capital base might reduce the bank’s EPS and RoC, but the remedy is to increase the bank’s profit,” Negede told Fortune. “We are ready to achieve high profits this fiscal year, and to increase our capital that would also increase our credit cap.”http://addisfortune.com/Bunna%20First%20Newcomer%20Bank%20to%20Show%20Profit%20in%20Years.htm

abesha

January 17th, 2011, 06:03 PM

Central Bank Limits Board Directors’ Compensation

Directors’ bans bank employees from serving on the board to avoid conflict of interest

The central bank has limited the annual compensation of members of the boards of directors of all banks to 50,000 Br, and banned any employee of a bank from sitting on the board, as of Friday, January 15, 2011.

The monthly allowance of a board director is further limited to 2,000 Br by the directive, which was signed by Teklewold Atenafu, governor of National Bank of Ethiopia (NBE), and distributed to commercial banks on January 6, 2011. Banks are also prohibited from paying the directors any benefits, in cash or in kind, additional to the set annual amount.

Disputes over the nomination and election of board directors of private commercial banks have caused the central bank, the regulatory body, to occasionally intervene in the past.

This is why the directive was issued, according to Solomon Desta, director of Bank Supervision for NBE.

“NBE found the amount paid to board directors to be exaggerated on many occasions, creating a corporate governance crisis and conflicts among bankers to obtain seats on the boards,” he told Fortune.

The average annual payment that board directors received was close to half a million Birr, according to a survey done by the central bank before issuing the directive.

The highest amount paid to a board director was one million Birr and the least was 102,000 Br per annum, the survey revealed.

Limiting the payment of directors would attract only those interested in the work, and not those seeking a position for the benefits, according to Solomon.

“It would solve the problem from the source and create peace in the industry,” he told Fortune. “We receive many requests from shareholders and those who did not get seats on a bank’s board to intervene.”

Although the central bank usually lets banks solve their own disputes over the directors’ selection, it occasionally intervenes. Last year, it mediated the selection of the board of directors of Lion International Bank (LIB) after its own two attempts failed.

The directive is also aimed at ensuring the proper functioning of banks without conflicts of interests. The presidents of many banks used to sit on their boards of directors.

“The presence of the president on the board affects the proper checks and balances required from him and the board,” Solomon told Fortune of the directive that has been received with mixed reaction.

It is late in being issued, but will create industry peace and good corporate governance among financial institutions, according to Worku Lemma, vice president of Oromia International Bank (OIB).

“It will also stop the unnecessary fighting to get onto the board,” he told Fortune.

However, while the directive is a move in the right direction, the new compensation scheme, set at a maximum of 50,000 Br, for the board of directors has been set too low, argued a banker in the top management of a private bank who requested anonymity as it is a sensitive case.

This was also shared by a director of the board of a private bank who wished his name to be withheld to protect his bank. The compensation does not take into consideration the workload, which involves meetings and committee work, as well as the risk involved in being a director, according to him.

“This would discourage many people as it is mainly those with many years of experience in the banking sector who are sought after,” the director told Fortune. “I personally would not want to take the workload and risk of a 15-year penalty if things go wrong. The low compensation might also open the door for corruption on the industry.”

He believed that a compensation scheme of around 400,000 Br was a fair price which is very far from what the NBE had set.

The set payment is not permanent as the central bank would revise it after another survey, according to Solomon.

The failure to implement the directive could earn a non-complying bank a penalty of 10,000 Br and make it liable for criminal and civil suits.

“We received the NBE directive on January 6, but we have not yet had a board meeting to discuss the matter,” Addisu Habba, president of Bank of Abyssinia (BoA), told Fortune.

http://addisfortune.com/Central%20Bank%20Limits%20Board%20Directors%E2%80%99%20Compensation.htm

abesha

January 22nd, 2011, 04:47 PM

Automated payment scheduled to launch in May

The National Bank of Ethiopia has finally set the date for the official commencement of the automated payment systems, which encompass the Automatic Clearing House (ACH) and Real Time Gross Settlement (RTGS), to be the beginning of May.

The New York-based software company, Montran Corporation, which specializes in providing payment system solutions, summoned bank professionals yesterday to inform them that the systems are ready to be used. According to the scheduled communicated to the banks, starting from Monday a four-week long training on both hardware and software part of the new systems will be given to the banks to enable them to better interface with the national systems.

According to Alemayehu Kebede, changes management and communications directorate director at NBE, the banks were given an overview of the whole payment systems, which are going to go live after four months, at a half-day workshop.

Under the financial sector capacity building project that is funded by the World Bank, ACH and RTGS systems, schemes hoped to transform the national payment systems in Ethiopia, were conceived in 2009.

The RTGS is a mechanism that is used to settle payments of large-value transactions conducted among the financial institutions, based on accounts held at the central bank. According to Alemayehu, this kind of system is used to settle payments on a transaction-by-transaction basis without any time lag.

On the other hand, ACH is better suited to clear low-value and more of retail natured transactions at a central data processing center. According to the director, this sort of system is an electronic payment network which nets and clears small- value and high-velocity transactions without having to use physical payment instruments like cheques.

For the banks to interface with the ACH it is absolutely important to complete the core banking projects, while for RTGS one might not need the core banking application necessarily, according to the professionals familiar with the payment systems.

“The two systems would be useful in avoiding time lag and ensure security of transactions in the sector,” said Alemayehu.http://www.ethiopianreporter.com/english/index.php?option=com_content&view=article&id=1699:automated-payment-scheduled-to-launch-in-may&catid=98:news&Itemid=511

Ahadu

January 22nd, 2011, 09:57 PM

^^
Clients of Montran Corporation:

http://img545.imageshack.us/img545/9343/17631325.jpg

lamrof

January 23rd, 2011, 07:08 AM

Does this mean Credit and ATM card usage can be popularized?

abesha

January 23rd, 2011, 05:22 PM

I'm pretty sure that's the whole idea behind it. Right now the system doesn't seem capable of handling high volume transactions (such as retail shopping, etc), so I think that's the point of this system.
Finally!

abesha

January 28th, 2011, 02:43 AM

Comprehensive review of the Banking Sector in 2010 -

http://www.accesscapitalsc.com/downloads/Banking-Sector-Review-2010.pdf

abesha

February 7th, 2011, 07:08 PM

New Entrant to BankingTsehay International Bank SC (TIB) is under formation and getting ready to join the banking industry with an authorised capital of 400 million Br from the National Bank of Ethiopia (NBE), in December 2011.

The bank has 10 founders. Addisu Anteneh is one of the promoters with two other consultants, including one executive officer who is a retired commercial banker, according to sources.

The bank is planning to adopt a product based branch system, e-banking system and is planning on providing services to rural areas, these sources said.

“The bank was told by NBE to revise its proposals as some of them are very expensive for a new bank joining the business,” sources told Fortune.

The bank was given a closed bank account from NBE in early February 2011. They are yet to acquire subscribed and paid-up capital, sources close to the bank disclosed to Fortune.

However, the bank has been floating shares to individuals and will begin to float shares to the public soon, sources confirmed.http://addisfortune.com/news_radar.htm

abesha

February 7th, 2011, 07:47 PM

Banks Establish EthSwitch for Interbank Transactions

EthSwitch was established on Thursday, February 3, 2011, with a capital of 80.5 million Br, by all local banks to handle interbank transactions and centralise the card payment system.

The technology, which will be connected to the national payment system (NPS) that National Bank of Ethiopia (NBE) is installing, will enable the clearing cheques of and using the automated teller machines (ATMs) of any bank.

EthSwitch is to issue various tenders over the coming months for the acquisition of technology required for its services.

“Bank of Abyssinia (BoA) may receive cheques from Dashen Bank and vice versa,” said Getahun Nana, vice governor of Financial Institutions Supervision at NBE.

Bank representatives must physically go to NBE’s office to clear each other’s accounts, according to the current practice that has been in place for over 50 years.

“This is a shame for us,” Getahun said, speaking at the launching ceremony at the Hilton Addis.

With EthSwitch, banks will no longer have to do that.

“The establishment of EthSwitch will bring this routine to an end,” Getahun said.

Upon EthSwitch becoming operational, clients who have payment cards of any bank will be able to transact money from their nearest ATM.

“The ATMs in each bank are properties of the public and they should be as accessible as possible,” said Haileyesus Mezgebu, head of Information Technology Department at Commercial Bank of Ethiopia (CBE).

Haileyesus was one of four people from different banks who went to South Africa in January 2010, to study the situation there. Accordingly, banks will be charged commission for the use of ATMs owned by other banks.

Each bank has 5,030 shares, while each bank president owns one share. Any new bank that wants to join the company can buy a share at 1,000 Br.

At the Hilton event, 12 members were elected to the board of directors, comprising eight banks and four individuals. The banks are BoA, CBE, Dashen, Wegagen, Nib International (NiB), Oromia Cooperative (OCB), and Construction and Business banks (CBB), as well as Development Bank of Ethiopia (DBE).

The individuals are Brehanu Getaneh, president of United Bank (UB); Abie Sano, president of Oromia International Bank (OIB); Brutawit Dawit Abdi, president of Zemen Bank; and Tsehay Shiferaw, acting president of Awash International Bank (AIB).

To date, only Dashen, Zemen, Wegagen, and CBE have ATMs. UB, NIB, and AIB have formed a consortium that has been at work for over a year to introduce this technology.http://addisfortune.com/Banks%20Establish%20EthSwitch%20for%20Interbank%20Transactions.htm

About time! It's interesting that within just the last couple of years, there's been tremendous change in the banking industry. We're finally starting to catch up to the rest of the world.

Simfan34

February 7th, 2011, 09:24 PM

^^Exactly what I was going to say.

abesha

February 10th, 2011, 05:53 PM

Ethiopia’s national bank deposit reaches US$ 4billion

APA-Addis Ababa (Ethiopia) The Commercial Bank of Ethiopia (CBE) announced on Thursday in Addis Ababa that its deposit has reached around US$4 billion, which shows over US$ 70 million rise in the past six years.

“CBE continues to pay cardinal attention to supporting national development strategies by availing the funding needed to finance development priorities.

To this end, deposit mobilization, foreign currency earnings and collections are at the heart of its operations,” said the bank.

CBE is the major financial body of the government.

While reporting its six month report, the bank said that its deposit has shown an increase since the past few years, which is contributing to the country’s economic growth.

“During the period, the Bank collected US$ 225.7 million, showing 14.8% increment over the plan and 45% increment over previous year same period performance,” said CBE in its half year report.

The foreign currency earned from exports reached 99.0% of target accomplishment, said the bank.

“Total collections from term loans and bonds stood around US$ 400 million up 8.4% from plan.

Total capital and reserve of the Bank reached over US$ 350 million reflecting 0.1% and 4.7% growth from the plan and June 2010 positions,” said CBE.

It also indicated that profit before tax reached around US$ 90 million, with a marginal increase of 0.3% and 4.5% over plan and previous year same period results respectively.

On the other hand, the Bank reported the opening of 111 branches, surpassing the annual target of 100 branches.

CBE has a branch is Southern Sudan, Juba, which was opened a couple of years back.http://www.apanews.net/apa.php?page=show_article_eng&id_article=140387

abesha

February 12th, 2011, 07:23 PM

CBE’s share of export financing shoots up to 65 percent

The export market share of the Commercial Bank of Ethiopia (CBE) has shot up to 65 percent from 33 percent over a period of six years during the first half of the current Ethiopia fiscal year, bank president Bekalu Zeleke told The Reporter. The bank secured USD 1.8 billion from its international banking operations including mainly the export sector during the reported period, the amount being close to 15 percent above target and higher than that of the same period of the previous year by USD 549 million.

During the reported period, the bank was able to attract more exporters in addition to those who have long been customers of the bank, according to Bekalu.

“After the National Bank of Ethiopia (NBE) raised the ceiling for deposit interest rate to five percent some time last year, most private banks have increased loan interest rate to 9.5 percent,” Bekalu said. “We instead reduced it to 7.5 percent, which attracted a lot more exporters to come to us. And this has actually helped our export market share to shoot up to some 65 percent from 33 percent, only in a matter of six months.”

The fact that the export sector was a priority area the bank provides credit lines for has also helped CBE to secure a record high foreign currency for the six month period, according to the president.

CBE’s deposit has reached a staggering 67.3 billion birr at the end of the current fiscal year, the amount exceeding the target, according to the bank’s six-month performance report.

During the reported period the bank has collected 5.7 billion birr loans where as its paid up capital and reserve reached 5.8 billion birr. According to the report, the bank has made gross profit of 1.5 billion birr during the reported period while its Non Performing Loans (NPL) dropped to 1.3 percent.

CBE has opened 111 branches during the reported period that make its share of banking branches in the country to 41.2 percent. The bank has mobilized 689.8 million birr deposit via the newly opened branches, according to the report.

The bank is scheduled to finalize automating all its branches that currently reach 311 at the end of the current Ethiopian fiscal year ending June 6.http://www.ethiopianreporter.com/english/index.php?option=com_content&view=article&id=1806:cbes-share-of-export-financing-shoots-up-to-65-percent&catid=98:news&Itemid=511

abesha

February 12th, 2011, 07:25 PM

First Islamic bank fulfills threshold capital

Zemzem Bank, a private bank under formation which is planning to be the first bank to give services guided by Islamic banking principles, has sold shares worth 100 million birr as of the beginning of the week, surpassing the 75 million birr threshold capital that the National Bank of Ethiopia (NBE) has set for newly established banks. Zemzem had refrained from floating shares until the end of 2010 as the directive governing Islamic banking had not been completed. However, following the go-ahead from NBE the bank offered 250,000 shares with a par value of 1000 birr each. According to sources close to the bank, the bank has sold 40 percent of the shares offered, worth some 250 million, by February 7.

The directive that governs the formation and operation of an Islamic bank and windows at mainstream commercial banks is also awaiting the signature of NBE’s governor.

Starting from 2008 Zemzem received pledges from potential shareholders before receiving the green light from the NBE to start sales. Accordingly, some 1300 shareholders who have signed the pledge form the bank has issued have become founding members. However, currently the number of people who bought shares is more than the pledges made, said sources.

The bank’s organizing committee has been involved with the development of Islamic or non-interest bearing banking directive for two years.

The minimum of shares that Zemzem had offered for subscription is 20. However, it has not yet decided whether to stop or continue selling additional shares, sources said.

According to sources, Zemzem bank is finalizing preparations to conduct its first general assembly.http://www.ethiopianreporter.com/english/index.php?option=com_content&view=article&id=1832:first-islamic-bank-fulfills-threshold-capital&catid=98:news&Itemid=511

AM2

February 12th, 2011, 10:46 PM

^^ How does this Islamic banking thing work? If they're not paying out interest on deposits, but charging interests on loans, then the bankers are making a killer profit! Maybe the bank gives the interest money to charity or something? Maybe I should start an Islamic bank ...:)

abesha

February 21st, 2011, 03:49 PM

Three hundred million birr for new bank

At its first official share sales event, held Satruday February 19, 2010 a new bank, Mercato City Bank (MCB), pledged 300 million birr in subscribed capital.
The new bank, formed by forty businesspeople and bank professionals, plans to start services this September.

The founders and main promoters of Mercato City Bank told Capital that they are fully confident they will collect what they are expecting from the 700 potential share buyers at the official share sales lunching program held at Metro Hotel yesterday.

The under formation bank received its license from the National Bank of Ethiopia (NBE) in December, 2010. It includes prominent business people who are influential at Merkato, the largest market center of the country.

“Before this event we had pledges from potential share buyers who were interested in being part of the new bank and to succeed in our target we were working different preconditions before the official share sales instigation day,” Sisay Asmare, who is head of market assessment of the bank’s founding committee, said. Yosef Tesfaye, owner of Josambine Trading Plc and promotion head of Mercato City, confidently told Capital that from the total 300 million subscribed capitals the paid up will conclude on the same day. Seventy five million birr is the minimum paid up capital necessary for banks to get a permit from NBE to be involved in commercial banking service.

The under formation bank is offering 10,000 birr for a minimum of ten shares and ten million birr for maximum buyers. Maximum share sales are limited to five percent by NBE, but the new bank is limiting the maximum share ownership below four percent.

According to the promoters, before yesterday’s event, potential buyers including from the bank promoting committee, have pledged to buy from one million to the maximum share amount.

Mercato City Bank founding committee includes Zenebe Ferew, a businessman involved in different sectors, Bahru Abraha, owner of Natran Plc, Hana Seyum, owner of Aqua Ceramic Plc, Yemane Zemenfes Kidus, entertainment professional and chair of founding committee, Bruk Haile owner Band C Aluminum and Bruk Tesfaye, lecturer at Addis Ababa University and professional in the banking sector.

Currently, about six banks are under formation in the country, while 16 commercial banks including the recently formed Abay Bank are operating in the market.http://capitalethiopia.com/index.php?option=com_content&view=article&id=14181:three-hundred-million-birr-for-new-bank&catid=12:local-news&Itemid=4

The banking is really growing very fast right now.
By 2015 I wouldn't be surprised if we have 30 private banks.

abesha

February 21st, 2011, 04:35 PM

Here's a list of all the private banks, both currently operating and those under formation. Check the initial post of this thread for updates.

http://www.skyscrapercity.com/showpost.php?p=50710611&postcount=1

yosef

March 24th, 2011, 12:39 AM

New Bank - Kokeb Bank

Bank involves Workers

A new bank called Kokeb Bank is selling shares exclusively to unionised workers, and employees of trade unions and trade federations, as of last week.

After getting a licence to float shares in December 2010, the founders of the bank have approached the Ethiopian Revenue and Customs Authority credit and savings association, the Ministry of Finance and Economic Development credit and savings association, Ethiopian Airlines labour union, and the beverage and food industries, according to Frehiwot Worku, deputy chairperson of the bank, and a former executive vice president of Ethiopian Airlines.

The bank will allow its workers to buy shares so as to make them feel a sense of ownership and create responsible banking practices, Frehiwot told Fortune.

The bank has put a ceiling of five million Birr, 1.6pc of the authorised capital of 300 million Br, per shareholder in order to avoid undue influence, Frehiwot claims..

Addis Fortune (http://www.addisfortune.com/news_radar.htm)

Kokeb bank begins share sales

By Pawlos Belete

Kokeb Bank Share Company, under formation, floated 300,000 shares of 1,000 birr par value to the public. It is the latest bank biding to enter the Ethiopian financial sector next to Merkato City Bank, which is also under formation. Merkato City Bank offered shares to the public last month.
Unlike the promoters of former private banks who are dominated by a few wealthy business people, the 28 founding members of Kokeb are professionals from 18 different institutions across the nation.

The promoters of the bank agreed to sell a minimum of five shares and a maximum of 5,000 shares. They also agreed on a full payment schedule for every share an individual aspires to own with a service charge of five percent per share.

Capital (http://www.capitalethiopia.com/index.php?option=com_content&view=article&id=14356:kokeb-bank-begins-share-sales&catid=12:local-news&Itemid=4)

yosef

March 24th, 2011, 12:42 AM

Random Banking News

Gov. Bonds sold by the Development Bank of Ethiopia

http://www.addisfortune.com/Vol_10_No_568_Images/radar_bond_sale_mel_sof.jpg

Sufian Ahmed, minister of Finance and Economic Development (MoFED), gives 500 Br to Melaku Fenta, director general of the Ethiopian Revenues and Customs Authority (ERCA) and Board Chirman of DBE, to buy a 500 Br government savings bond issued by the Development Bank of Ethiopia (DBE) at the launching ceremony for the bonds on Saturday, March 12, 2011 at Sheraton Addis.

The sale of the bonds started with Melaku inviting Sufian and Sinkinesh Ejigu, Minister of Mines (MoM), to buy 500 Br and 3,000 Br savings bonds respectively, while he bought a 1,000 Br bond while invited by Esayas Bahire, president of DBE.

The Commercial Bank of Ethiopia (CBE) bought 10 million Br worth of savings bonds, while United Bank bought one million Br worth.

A total of 21 exporters, who brought in an increase of 800,000 dollars to four million dollars in foreign currency during the last six months, were also rewarded at the end of the ceremony.

Addis Fortune (http://www.addisfortune.com/news_radar.htm)

United Bank Looks to Heights Unseen

United Bank SC, which raised 13.3 million Br from the sale of 133,477 shares to 135 bidders before its public auction was closed on November 5, 2010, sold 70 million Br worth of remaining shares in three hours on March 2, 2011.

The sale of shares comes after the seventh extraordinary general meeting of the bank to raise its authorised capital to half a billion Birr, and its subscribed capital to 400 million Br.

The general assembly, held in 2007, decided to offer the public the newly subscribed shares over a five-year period, after having offered them to their shareholders, now numbering 2,500. Within two months, 25pc of the bank’s floated shares had been paid up.

The bank, which had 70 million Br worth of shares left, offered these to the public and sold all the shares within two hours, beating the deadline, Brehanu Getahun, president of the bank, told Fortune.

Having declared a gross profit of 283.5 million Br in the 2009/10 fiscal year, the bank’s board of directors asked shareholders during the general assembly to endorse their plan to increase the authorised capital of the bank to one billion Birr, which will propel the bank to the level of the largest of the private commercial banks.

Fortune (http://www.addisfortune.com/news_radar.htm)

Dev’t Bank Invites HQ Renovation Tenders

Development Bank of Ethiopia (DBE) floated a tender on Tuesday, March 29, 2011, for the renovation of its headquarters’ complex, located behind the Hilton Addis, on Tito Street. The contract is open to local bidders.

The building has never been renovated since its construction in 1972, but was repainted eight years ago, according to Brehanu Taye, head of communications and public relations for DBE, one of the oldest banks in Ethiopia.

The quick pace of the city’s development has seen the construction of big, modern buildings being erected around the headquarters of DBE, which made a net profit of 54.4 million Br in 2009/10, an 80pc increase from that of the previous fiscal year.

This as well as security considerations caused the board of directors of the bank to decide on renovating the headquarters, Brehanu told Fortune.

Fortune (http://www.addisfortune.com/news_radar.htm)

yosef

March 24th, 2011, 12:44 AM

I thought we could post news and other info about the boom in private banks.

List of private banks (both established and in the process)

1. Awash International Bank (1994)
2. Dashen Bank (1995)
3. Bank of Abyssinia (1996)
4. Wegagen Bank (1997)
5. United Bank (1998)
6. NIB Bank (1999)
7. Lion International Bank (2006)
8. Oromia International Bank (2007-2008)
9. Zemen Bank (2008)
10. Birhan International Bank (2009)
11. Bunna International Bank (2009)
12. Abay Bank (2010)
13. Debub Global Bank (under formation - 2010-2011)
14. Enat Bank (under formation - 2010-2011)
15. Hawassa Bank (under formation - 2010-2011)
16. Zam Zam Bank (under formation - 2010-2011)
17. Hewan Bank (under formation - 2010-2011)
18. Tsehay International Bank (under formation - 2010-2011)
19. Mercato City Bank (under formation -2011)

^^just add Kokeb to Abesha's list here and that makes 20 banks so far not counting Gov. banks like DBE, CBE, or CBB etc.

yosef

June 22nd, 2011, 06:29 PM

Two more new banks entering the market (makes it 22 private banks now)

AdIB joins the banking sector

Addis International Bank (AdIB), a new bank for the commercial banking industry, officially began serving customers yesterday. Addis International established by 5318 share holders has opened its head quarters and main branch at Jomo Kenyatta Street at Zekuala Building. The bank official said that another four branches at Merkato, Mexico, Senga Tera and Megenagna area will be opened in the near future.

Dagne Gessess, business development manager of AdIB, told Capital that additional branches will be opened in major business towns of the country. AdIB established with 155.8 million birr subscribed capital has a paid up capital of 108.4 million birr. A majority of the bank is made up of cooperative unions and idirs and its goal is to provide inclusive banking service to people with middle and low incomes.

“We will provide a financial facility for these members of society through cooperatives and microfinance institutions,” Dagne said. 480 cooperative unions, including employees and farmers unions are shareholders of the new bank. In addition 158 idirs, 15 private companies and 4665 private shareholders are members of the bank.

Capital (http://capitalethiopia.com/index.php?option=com_content&view=article&id=14880:adib-joins-the-banking-sector-&catid=12:local-news&Itemid=4)

Afri Agro-Industrial Bank - Agricultural bank hopes to raise one billion birr

Afri Agro-Industrial Bank, a new entrant to the flourishing banking industry in the country hopes to raise one billion birr through sales of shares aiming to officially enter into business in six weeks. As its name suggests, farming will be the focus of Afri Agro. Prominent personalities, former government officials and known businesspeople who formed it believe this niche will make it a success.

Constantinios Berhe (PhD), economist and board chair of the bank told Capital that agriculture is the backbone for transforming industry and added “we have approached external financial sources like the World Bank and Africa Development Bank to get additional finances,” Constantinios said. The bank founders said that they have talked with officials including President Girma Wolde Giorgis, about their plan. “We have gotten a positive response from the government,” one board member said adding “we believe the government will support us and guarantee the financial sources,” the board member added.

A government guarantee is necessary for the private sector to get financial support from external sources.“The government should support our aim because this is what the Growth and Transformation Plan is all about,” Abera Deressa (PhD), former state minister of Agriculture and board member of Afri Agro told Capital.

According to the founders, the formation process took them only two months and they already have secured the 75 million birr paid up capital needed by the National Bank of Ethiopia (NBE) to form a bank. NBE, the regulator of financial institutions in the country, requires a minimum of 75 million birr paid up capital to start a bank. According to the board chairman, they plan to finalize the formation process in the next forty five days.

Capital (http://capitalethiopia.com/index.php?option=com_content&view=article&id=14870:agricultural-bank-hopes-to-raise-one-billion-birr&catid=12:local-news&Itemid=4)

Yoniii

June 29th, 2011, 08:45 PM

ADDIS ABABA (Reuters) - The Commercial Bank of Ethiopia, the Horn of Africa nation's largest, signed a $3 million deal with IBM to modernise its IT services, which will help it cut costs and enable countrywide expansion.

The bank's IT performance will improve by 50 percent, while costs will fall by 40 percent and power consumption by 50 percent, the US-based company said in a statement on Tuesday.

IBM said it would enable the state-owned bank to shift to real-time financial services, launch 100 Automatic Teller Machines and increase its accounts by 25 percent a year while opening 500 new branches under a five year plan expansion plan.
http://af.reuters.com/article/investingNews/idAFJOE75R0IS20110628

abesha

July 25th, 2011, 04:02 PM

NBE to set up online credit history

The financial sector regulating arm of the Ethiopian government, National Bank of Ethiopia (NBE), is set to commence an online client credit history at a cost of four million dollars in one month. The real time approach of sharing information with the central data system is expected to significantly reduce the information gap between lender and borrower. It also enables the regulator to assess and prevent systemic risks in the financial sector.

“The system provides information about a borrower’s behavior. Does the borrower have a positive credit history or a negative one? Such information helps one to make a decision of whether or not to lend much more easier,” explained Uli Zeisluft, Principal Financial Specialist at International Financial Corporation Advisory Services.

The system includes in its database borrower’s addresses, the partner’s information, previous credit performance, current levels of indebtedness, the amount of time credit has been in use, collateral information and court related issues.

“Since there are no unique identifiers such as an address on a national level, the regulator is forced to make use of the Tax Payers Identification Number (TIN) provided by the Ethiopian Revenue and Custom Authority,” said Mathiwos Shamo, Financial Sector Capacity Building Project Coordinator at NBE.

The technology upgrading project will totally transform and expand the capacity of the former Credit Center under the Bank Supervision Department of NBE. It will replace manual correspondence between banks and NBE about both commercial and consumer loans borrowed once a month enabling a real time information exchange.

“At present the database is set to link borrower’s information from banks and microfinance institutions. In the near future it will also include insurance,” added Mathiwos.

Experts in the financial sector argue that the creation of such an information mechanism will broaden and ensure fair access to credit by reducing the level of asymmetrical information on the part of tender about the borrower. This in itself facilitates access to credit and lowers credit costs thereby enhancing profitability for all parties involved in the lending and borrowing process. Above all, it ensures better financial resource allocation.

“Non performing loans (NPL) will significantly fall following the implementation of the project because every lender will have full information about their clients’ credit history. This reduces risks of default. If the rate of default goes down, profitability will subsequently increase, contributing not only to the reduction of NPL but also to the stabilization of the financial sector in general,” the project coordinator explained.

The program was financed by the World Bank and technically consulted by the International Financial Corporation (IFC); a World Bank Group financial advisory entity.
“As we did yesterday and as we are today. IFC would be pleased tomorrow to provide its technical support to NBE with the overall objective of developing the private sector,” said Adamou Labara, Country Director of IFC at Ethiopia.

http://capitalethiopia.com/index.php?option=com_content&view=article&id=15051:nbe-to-set-up-online-credit-history&catid=12:local-news&Itemid=4

Very good and overdue.

abesha

July 25th, 2011, 04:04 PM

Two more new banks entering the market (makes it 22 private banks now)

AdIB joins the banking sector

Afri Agro-Industrial Bank - Agricultural bank hopes to raise one billion birr

Both are great initiatives.

I've updated the first post with the new entrants. Look at the dates of formation on the list; the industry just took off the last 2-3 years!

Yoniii

November 8th, 2011, 09:54 PM

Moroccan Company Wins Ethiopian ATM Project

A Moroccan Company S2M has won the bid to form a joint electronic payment system for three Ethiopian banks. Awash International Bank, NIB International Bank and United Bank formed Premier Switch Solutions SC which will use S2M to integrate their ATM services.

Fourteen international firms took part in the bid according to Berhanu Getaneh President if United Bank.

S2M is expected to form a system that will enable ATM holders at the three banks to withdraw money at all ATM machines operated by members of the Premier Switch. The banks hope to begin joint ATM services to their customers within the next months, while debit card services will be operational in six months.

Joint services are expected to include POS, e-commerce, call centre services as well as credit card and debit card services. The structure of the new system will allow other banks to join in the future.

The new system is part of the integrated banking system that the three banks agreed to create when they formed Premier Switch Solutions in 2009.

Premier Switch Solutions will be based at the Awash Bank and Insurance headquarters. It was established with a capital of 30 million birr and has a current capital of 165 million birr.

The costs of the new project have not been disclosed due to confidentiality elements in the deal.

S2M is a pioneer in credit card applications in Morocco and has international operations in over 40 countries. An estimated 120 public and private banks depend on S2M solutions.

Source: Capital
I'd like to see more of this, deals between African companys. :cheers:

abesha

January 16th, 2012, 06:15 PM

OCB nets 47.3 mln birr

Oromia Cooperative bank (OCB) made a record net profit of 47.3 million birr during the Ethiopian fiscal year 2010/11, an increase of more than 88 percent from the previous year. In 2009/10 OCB earned about 25.1 million birr. The bank had made a gross profit of 68.25 million birr.

In the 2010/11 fiscal year, OCB’s revenue was 192 million birr, while its expenses were about 124 million birr.

According to OCB president Wondimagegn Negera, the bank also increased its total assets to 2.5 billion birr, an increase of 47 percent from the previous fiscal year, and the total deposits also reached nearly two billion birr, an increase of almost 45 percent from the previous fiscal year.

He also said that the six month performance report shows that the bank earned more than 60 million birr gross profit, already meeting by more than half OCB’s yearly target of 110 million birr pre-tax profit. OCB has about 135,000 customers currently, up from about 75,000 customers it served the same time last year.

OCB meanwhile, in the first six months of the 2011/12 Ethiopian fiscal year, has signed contracts with five money transfer agent companies including Express, Moneyexpress, and Khaa.

Wondimagegn also said the bank, which had 45 branches at the end of the last fiscal year, it now has increased its branches to 51, opening branches in Dilla, Southern Nations and Nationalities People’s Regional State (SNNPRS), in Jijiga, Somali regional state, as well as new branches in the gold mining town of Adola, Oromia regional state, and in Kolfe area of Addis Ababa which was opened just last week.

Other two branches were opened in Guliso area of western Oromia regional state and a second branch in Shashemene.

OCB has plans to open additional 15 branches this fiscal year, giving them 60 branches in total. In the next few weeks, it is scheduled to open a branch in Holeta near Addis Ababa.

Wondimagegn further said the bank is in the pilot project stage of integrating all of its branches with the core banking solution currently being installed by an Indian firm named Infrasoft. The latter had previously conducted work for Wegagen Bank. It is also reengineering all of its branches in order to provide a one window service at the bank.

Oromia Cooperative bank was formed in March 2005 and currently has about seven thousand shareholders consisting of individuals from the private sector and 1400 primary cooperatives and unions. It also has about 271 million birr paid up capital.http://capitalethiopia.com/index.php?option=com_content&view=article&id=330:ocb-nets-473-mln-birr-&catid=54:news&Itemid=27