FORTUNE+ VIDEO SPONSORED CONTENTS ADVERTORIALS FORTUNE AUDIO Fortune Careers TRADE AFRICA Election 2026 New TIME REMAINING UNTIL ETHIOPIA’S NATIONAL ELECTION 0Days 0Hours 0Minutes 0Seconds

DIG ZONE

A fleet of heavy-duty excavators, bulldozers, and dump trucks lines the muddy banks of a river near the German Square area. The concentrated presence of machinery signals the scale and speed driving the city’s Corridor Development Program.

The aggressive infrastructure push is reshaping the capital’s urban form, but the intensity of earthworks at the river’s edge also exposes a fragile tension. Rapid transformation and environmental protection sit side by side, each pulling against the other as construction advances along the waterfront.

BROKEN LIN

A heavily damaged utility pole lies across a pedestrian sidewalk in the Gofa Camp neighborhood, with loose wiring exposed and a crushed metal sheet fence nearby. The scene points to a disrupted urban landscape where basic infrastructure repair has lagged behind visible damage.

The lingering wreckage underscores growing concerns over delayed responses to hazardous public property failures.

VEST WAIT

Revenues Bureau personnel, identifiable in branded vests and body cameras, stand in a dense commuter queue at the Qera taxi terminal. Their roles are rooted in field enforcement and policing the informal economy, yet their off-duty reality looks no different from the citizens they regulate.

The capital’s strained public transport system turns routine commuting into a shared struggle, where municipal employees and the wider workforce wait side by side, exposed to the same delays, congestion, and uncertainty of movement across the city.

Parliament Receives $237m Development Loan Package

The Council of Ministers forwarded two concessional loan agreements totalling 237.3 million dollars to Parliament for ratification, targeting rural infrastructure and food security. The package includes 46.3 million dollars from the African Development Bank (AfDB) for climate-resilient infrastructure in pastoralist regions. A second credit facility of 191 million dollars (146.1 million SDR) from the International Development Association (IDA) is earmarked for the sixth phase of the Productive Safety Net Programme (PSNP-VI). These programs serve as primary fiscal instruments to protect food-insecure households from inflationary shocks.

MoTRI to Overhaul Consumer Protection Rules Following Cabinet Approval of Trade Policy

The Council of Ministers, led by Prime Minister Abiy Ahmed (PhD), approved Ethiopia’s first unified trade policy last week, ending a three-year deliberation period to fill a decades-long regulatory vacuum. This institutional milestone mandates the Ministry of Trade & Regional Integration (MoTRI) to overhaul consumer protection frameworks, specifically requiring a rigorous revision of the Trade Competition and Consumer Protection Proclamation to eliminate market distortions and the proliferation of sub-standard goods.

The policy identifies “regulatory complexity” as a primary bottleneck and seeks to mitigate trade costs by digitizing registration and licensing procedures. To resolve the significant gap between producer and consumer prices, strategic interventions include the expansion of “Sunday Markets” to facilitate direct linkages and the development of modernized market infrastructure. These reforms are anchored in a macroeconomic commitment to protect purchasing power by managing high inflation and narrowing the disparities between official and parallel exchange rates.

Regional Power Exports Yield $366m as Capacity Hits 9.6GW

Ethiopian Electric Power (EEP) generated 365.99 million dollars from regional exports in the first nine months of the fiscal year as national capacity reached 9,579MW. The revenue followed the sale of 24,940GWh, representing 91pc of gross generation.

Hydropower remains dominant, providing 9,500MW. To diversify assets and mitigate climate risks, the utility integrated the 100MW Asela Wind Power Project. The transmission network has expanded to 148,600km to secure domestic industrial supply and export corridors. While generation scales up, the utility faces high capitalisation costs.

Ethiopia Calls for Scaled-Up Rural Financing at IFAD14

Ethiopia urged a significant scale-up in strategic financing for Africa’s rural transformation at the IFAD14 meeting in Brazzaville, Congo on May 27. State Minister for Finance Semereta Sewasew framed rural development as a strategic economic investment, rather than social expenditure, to mitigate climate shocks and rising borrowing costs. Ethiopia currently manages a 900-million-dollar IFAD portfolio, supporting the Lowlands Livelihood Resilience Project II and the Rural Financial Intermediation Programme III. A planned credit guarantee facility aims to leverage private capital for rural growth. These initiatives seek to anchor continental food security and macroeconomic stability through intensified agrifood systems.

Coffee Export Revenues Threatened by 30pc Price Slump

New York Arabica futures declined by nearly 30pc as analysts forecast a global coffee surplus of 10 million bags the largest in six years. This production glut follows record-shattering harvests in Brazil, expected to reach 75.9 million bags, and an export surge from Vietnam. While maritime bottlenecks in the Strait of Hormuz briefly rallied prices, the influx of physical supply has reversed these gains. For Ethiopia, Africa’s largest producer, this environment grants international buyers greater leverage in price negotiations. The price drop poses a significant risk to national foreign currency revenues and will test the fiscal resilience of local exporters. The shift highlights the volatility of commodity-dependent trade and the necessity for Ethiopian exporters to navigate a highly competitive market for premium Arabica beans.

NBE Institutionalises Franco Valuta to Formalise Informal Trade

The National Bank of Ethiopia (NBE) has authorized a comprehensive legal framework for Franco Valuta imports, effective last week, to institutionalise a trade channel previously defined by regulatory gaps.

Governor Eyob Tekalegn (PhD) sanctioned the regulation to target licensed investors, manufacturing enterprises, and strategic projects. The directive integrates the Foreign Exchange Monitoring and Orchestration Unified System (FEMoUS) to ensure transactions are digitally traceable by the Customs Commission. The NBE acknowledged that the previous lack of oversight had created risks of misreporting and illicit financial flows.

The mandate covers capital goods and raw materials while setting duty-free thresholds for the diaspora. Returning investors are permitted personal effects with an FOB value of up to 10,000 dollars; first-time residents are capped at 5,000 dollars. To ensure compliance, importers must submit proforma invoices and shipping documents via the FEMoUS platform. The central bank warned that false declarations or attempts to circumvent controls would result in penalties, including confiscation or criminal liability.

The overhaul signals a return to a policy area for Eyob, who previously oversaw several revisions to Franco Valuta directives during his tenure as State Minister for Finance.

The NBE aims to leverage external capital for industrial growth while shielding national reserves from immediate pressure. However, the framework’s success depends on the institutional capacity to prevent the circumvention of foreign exchange controls through enhanced digital oversight.

Billion-Dollar Bond Talks Hit a Wall

Negotiations between Ethiopia’s Ministry of Finance and an Ad Hoc Committee of international bondholders over restructuring the country’s one-billion-dollar Eurobond reached a deadlock on May 27, 2026, following three weeks of restricted discussions.

Bondholders rejected a revised proposal for the 6.625pc Notes due in 2024, which included a 12pc principal haircut, a 6.15pc interest rate, and a new maturity date of July 15, 2029. Although the Official Creditor Committee (OCC) validated the offer as compliant with the Comparability of Treatment (CoT) principle, the private creditors declined the terms.

A primary point of contention was the removal of a Value Recovery Instrument (VRI), which would have triggered higher payments if the economy outperformed expectations. The OCC insisted on the VRI’s removal, citing a fast-evolving macroeconomic environment unsuitable for the instrument. As a result of the stalled talks, Finance Minister Ahmed Shide informed Parliament that Eurobond payments initially planned for the current budget year will be transferred to the next during his last nine months report.

The government is now evaluating alternative options, including a potential exchange offer, to resolve the status of the 2024 Notes with an aim to transition the country to moderate-risk category, a shift critical to the country’s broader market-based reforms.

Addis Abeba Pours a New Story in Every Cup, Where Tradition Meets Global Influence

Customers settle into a carefully curated space of dark wood, black accents, muted green furnishings, and striking wall art that brightens the cafe’s earthy palette. Behind the counter, baristas move with quiet precision, transforming coffee preparation into performance.

At a table inside Yoya Coffee’s Qera branch, Yedidya Getahun watches as a barista pours hot water over freshly ground coffee in a slow, hypnotic spiral. The brewing method, known as V60, has become one of the defining symbols of a new generation of coffee culture taking shape in the capital.

Yedidya lifts his cup and takes a measured sip of his espresso, which costs 130 Br.

“Walking into these new spaces in Addis, my brain experiences a bizarre, beautiful kind of jet lag,” he says, leaning back against the wooden bench and gesturing toward the coffee counter. “If you closed your eyes to the sound of the traffic outside, you could easily convince yourself you’re sitting in a not-so-quiet cafe in Tokyo.”

For the 27-year-old, the growing popularity of V60 brewing in Addis Abeba represents a deeply personal full-circle moment.

Yedidya recently graduated with a Bachelor’s Degree in Computer Science from International Christian University in Japan. Yet his years abroad involved far more than coding and lectures. Between classes, he developed a fascination with coffee culture, studying how Tokyo baristas meticulously extracted delicate tasting notes from Ethiopian beans that had travelled thousands of kilometres to reach Japanese cafes.

For decades, urban coffee culture in Ethiopia has largely revolved around macchiato. The drink, a bold espresso softened with steamed milk, remains one of the most enduring legacies of the Italian occupation era. It is fast, familiar, and deeply woven into everyday city life.

Watching a barista pull out a ceramic V60 cone, rinse a paper filter, and carefully bloom freshly ground beans with a gooseneck kettle feels, to Yedidya, like witnessing a quiet revolution.

“In Tokyo, the V60 is almost treated like a laboratory instrument,” he says. “People use it to isolate the exotic floral notes of African coffee.”

He pauses before taking another sip.

“Seeing it used here, just miles from where those beans were harvested, feels like the bean has finally reclaimed its own narrative.”

What was once primarily a raw commodity destined for export is increasingly becoming a locally celebrated craft.

The rise of these contemporary cafes reflects a broader shift in how coffee is being consumed and appreciated within Ethiopia itself. Their minimalist interiors may draw inspiration from international design trends, but the atmosphere inside remains unmistakably Ethiopian.

“What I love is how Ethiopian culture naturally subverts that quiet, solitary Tokyo vibe,” Yedidya says with a laugh, watching a group of customers rearrange chairs to accommodate a growing conversation. “In Japan, you drink your pour-over in near silence, reading a book or staring out a window. Here, even in the most minimalist Tokyo-styled cafe, people are arguing about business, sharing laughs, and pulling chairs together.”

He smiles.

“We took the precise Japanese hardware and injected it with the loud, communal soul of my mother’s living room. It’s brilliant.”

The transformation is happening not only in the design of cafes but also in the way coffee itself is roasted and served.

By adopting roasting techniques once reserved almost exclusively for export markets, local roasters are introducing customers to a far broader spectrum of flavours. Dark, uniform coffee profiles are increasingly sharing space with carefully developed roasts that highlight the fruit, floral, citrus, and tea-like characteristics that have made Ethiopian coffee famous around the world.

“When I was a teenager visiting coffee spots like Tomoca, coffee was dark and uniform,” Yedidya recalls. “Japan blew my mind by showing me that coffee could taste like citrus tea.”

Today, he sees that same discovery unfolding at home.

“Local roasters and baristas here are mastering those exact same delicate roasting profiles,” he says. “We are finally teaching our own domestic market to appreciate the dizzying complexity of our own soil.”

A few metres away, behind the bar at Yoya Coffee, Biniyam Alemayehu moves steadily between grinders, scales, and espresso machines.

The 29-year-old barista has spent six years building his career in coffee. His introduction to the industry was modest. He began as a waiter at the coffee house where he worked, which selected him and several colleagues for formal barista training. Since then, he has sharpened his skills across four different coffee shops before eventually bringing his experience to Yoya.

“I enjoy working and being around coffee,” Biniyam says as the mechanical hum of a grinder briefly fills the room. “Being able to motivate people and help them push through their day is what I always look forward to when I stand in front of my machine.”

The enthusiasm has earned him a loyal group of regular customers who return each day for their preferred caffeine ritual.

Espresso remains the foundation of most drinks he prepares, but Biniyam’s curiosity extends well beyond traditional coffee service. He constantly experiments with alternative brewing methods such as French press, V60, and cold brew preparations, encouraging customers to explore flavour profiles they may never have considered before.

For baristas like him, coffee is no longer simply a beverage. It has become a craft built on precision, experimentation, and a deeper appreciation of the bean itself.

Every weekday morning, Selam Berihun can be found inside the Lancha branch of Tomoca Coffee, slowly stirring her daily dark macchiato.

“Ever since I moved to Addis Abeba from Assela and started working as a banker six years ago, I have been a loyal customer here,” says the 38-year-old. “I don’t think I could drink any other coffee.”

That kind of loyalty is precisely what transformed Tomoca from a coffee business into an Ethiopian institution.

That loyalty is exactly what built Tomoca Coffee into an Ethiopian institution.

The name itself, TO.MO.CA, stems from the Italian phrase Torrefazione Moderna Café, meaning modern coffee roasting. Founded in 1953 in Addis Abeba, Tomoca Coffee became the first roasting company in the country to carefully process highland-grown Arabica beans sourced from Kaffa, widely regarded as the birthplace of coffee.

From the beginning, the company positioned itself at a rare intersection: preserving Ethiopia’s raw coffee heritage while formalising it for both domestic and international markets. Over time, it expanded into a nationally recognised brand with more than 21 branches across the country. Originally established by an Italian family, the business was later acquired and transformed into its current identity under Zewdu Meshesha, evolving into one of the country’s most enduring coffee names.

Not far from the city’s newer minimalist cafes, older rituals of friendship and routine continue to define coffee life.

As the late afternoon light stretches along Cameroon Street near Bole Medhanialem Church, 66-year-old Zerihun Gedamu relaxes inside the wood-furnished interior of Dukamo Coffee. Steam rises gently from his freshly ordered latte as he waits for friends, part of a ritual that has remained unchanged for decades.

For Zerihun, coffee is not about novelty. It is about continuity.

“I have known them since our college days, for over 30 years now. This is what we do twice a week,” he says, a quiet smile surfacing as he glances back at a long archive of shared memory.

When asked about the wave of new brewing styles entering the city, he chuckles.

“We actually tried those new methods from France and Japan because the waiters recommended them. But I still prefer my usual Italian latte or macchiato. I guess I’m just too old-fashioned to appreciate all these new brewing strategies and techniques.”

If Zerihun represents familiarity, 72-year-old Masresha Abebe represents resistance.

She avoids the city’s booming cafe culture entirely, choosing instead to drink coffee only within the controlled comfort of her home.

“If I drink coffee from these cafes, it completely messes with my gastric,” she explains, using the common local term for acid reflux and stomach discomfort. “You never know how long the beans have been sitting or how they are washing the equipment. At home, I control the roast, I know the water is pure, and my stomach stays at peace.”

For Masresha, coffee is not just a preference; it is control, routine, and health.

Her ceremony at home remains slow and deliberate, grounded in tradition.

“This younger generation is completely hooked on it,” she says, shaking her head. “For them, it’s not even about the gathering anymore. They cannot open their eyes without it; they cannot think without it. I don’t see any difference between this and being addicted to khat or cigarettes.”

She pauses, firm in her conviction.

“In my day, coffee was a social blessing, something you shared with neighbours after a long morning of work. Now, these kids are running into these glass shops three times a day just to get a chemical kick. It’s an addiction, plain and simple.”

Beyond the cafes and personal rituals lies a deeply structured global industry that defines how Ethiopian coffee reaches the world.

Exports are generally divided into three broad tiers. Conventional or commercial coffee makes up the bulk of production, consisting of blended beans graded for consistency and mass-market supply. Single-origin coffee narrows the focus to specific regions, cooperatives, or washing stations, preserving traceable flavour identities tied to geography. At the highest level, micro-lot coffee represents extreme precision, beans harvested from a single plot or producer at peak ripeness, designed for rare, high-value flavour expression in speciality markets.

At the centre of this shift is Lydia Gebregziabher, general manager at Yoya Coffee, who oversees an operation that connects rural cultivation to urban consumption with unusual precision.

Yoya’s supply chain stretches from its farm in Mizan Teferi in southwestern Ethiopia to specialised processing facilities in Guji, Oromia. From these high-altitude washing stations, the company sources single-origin Guji beans that anchor its premium export catalogue, carefully positioned to demonstrate what Ethiopian soil can produce when handled with technical precision.

Yet Lydia’s focus is not limited to exports.

Inside Yoya’s cafes, coffee is treated with near-ceremonial care. Every batch is roasted and ground according to the brewing method it is destined for, whether high-pressure espresso extraction or slow-filter preparation. Precision is not optional; it is the foundation of the brand.

To maintain that standard, Yoya has built its own internal academy, training baristas, roasters, and sensory specialists. The goal is not just service but mastery, ensuring that local talent can interpret and elevate Ethiopia’s own coffee at a professional level.

Stepping into a cupping school reveals a different sensory world entirely.

It bridges two traditions: the slow, communal rhythm of Ethiopian jebena coffee ceremonies infused with incense and conversation, and the strict, analytical environment of global speciality coffee evaluation.

For students like 24-year-old Martha Bedilu at the Yoya Roastery, cupping space & academy, coffee becomes less ritual and more discipline. Long tables are lined with precisely measured cups. The air is filled with concentration rather than chatter.

Training is intense. Students learn to slurp loudly and deliberately, aerating the liquid to distribute it across the palate. They isolate flavour notes such as jasmine, citrus, and stone fruit, guided by international scoring frameworks. Acidity, body, and defects are assessed with technical accuracy, building a shared vocabulary between farmers and global buyers.

The outcome is not just certification. It is access, a bridge connecting Ethiopian producers directly to global speciality markets through a language of precision.

From her vantage point, Lydia sees the transformation clearly. Addis Abeba is no longer consuming coffee in a single form; it is absorbing it across multiple identities at once.

She attributes much of this shift to globalisation and exposure to international standards, which have reshaped both taste and expectation in the capital’s coffee culture.

Still, she resists reducing it to economics alone.

“Coffee,” Lydia says, looking across the busy cafe floor, “is more passion-driven than business.”

Tsehay Bank’s Expansion Leaves Profits in the Shade

Tsehay Bank closed its last financial year with the profile of a young lender that had learned to grow but not yet to make growth pay. Its operating income exceeded one billion Birr, up by 33.7pc.

The Bank ended the year with a wider loss, weaker equity and a cost structure that strained against its income. The gap was becoming visible, as its assets reached 8.38 billion Br by June 2025, up by 35.6pc from a year earlier. Cash and cash equivalents nearly doubled to 1.98 billion Br, while debt and equity securities were 1.53 billion Br. Net loans and interest-free banking (IFB) financing reached 3.46 billion Br (a 38pc growth).

Total deposits increased by 29.4pc to 5.63 billion Br, including customer deposits of five billion Birr. By April 2026, the loan-to-deposit ratio had reached 78.26pc, with a liquidity ratio of 24.6pc in June 2025, above the 15pc regulatory floor, while other liabilities, mainly tied to operations and taxes, had declined to 1.19 billion Br.

During the year, the banking industry expanded assets by 44.5pc to 4.74 trillion Br, deposits by 40.7pc to 3.51 trillion Br and net income by 61.3pc to 93.4 billion Br. The industry’s return on assets reached 2.5pc, return on equity (ROE) 27.4pc, capital adequacy 19.1pc and liquidity 30.4pc. Tsehay Bank outperformed the industry on asset quality and liquidity, pointing to market reach, balance-sheet formation and public acceptance.

According to Mekbib Tesfaye, a London-based financial analyst, Tsehay’s 20pc financial health score unveiled a Bank strong in growth and market expansion but weak in profitability, efficiency and internal capital generation.

“The statements show dependence on external funding, aggressive deposit mobilisation and continued shareholder capital injections,” he told Fortune.

Tsehay Bank’s loss widened to 271.4 million Br from 181.5 million Br, a 49.5pc deterioration. The Bank posted a loss of about 171,900 Br per employee, compared with peer banks, which generated an average profit of 310,655 Br an employee. Total comprehensive income swung from a positive 104.4 million Br to a negative 238.8 million Br, a reversal of 343.2 million Br.

Tsehay Bank’s President, Yared Mesfin, acknowledged that high overhead costs and capital constraints weighed on profitability, but argued that investment in branches and digital infrastructure laid the foundation for sustainable performance. His recovery path rests on higher-margin services, including interest-free banking and trade finance, as well as productivity gains.

“The bank made measurable progress and strengthened its operating foundation,” he told shareholders in a message published in the annual report the Bank released.

For Tadesse Ayenew, the Bank’s board chairman, the loss reflected a structural imbalance, with rapid expansion outpacing resources and paid-up capital. He called the year “a test of organisational resolve,” marked by strong growth and severe operational and economic pressure.

“The next phase is to strengthen the financial base by meeting the paid-up capital requirement and shifting from network building to strategic consolidation and stricter cost discipline,” he told shareholders in his statement published in the annual report for the 2024/25 financial year.

Tsehay Bank’s paid-up capital grew only 9.9pc to 1.28 billion Br, far below the National Bank of Ethiopia’s (NBE) five billion Birr threshold. Its total equity fell to 1.02 billion Br from 1.13 billion Br, leaving it below paid-up capital due to accumulated losses. However, the Bank’s Management expects the decline in total equity to be offset by profit generated in the current financial year and expects discussions on additional capital raising.

Tsehay Bank’s return on closing assets was negative 3.24pc, compared with the weighted average return on assets of about 2.1pc across 11 banks in its peer group. These banks had a weighted loan-to-deposit ratio of 73.5pc, against Tsehay’s 61.6pc, based on total deposits. The Bank’s 61.8 million Br deposit per branch paled in comparison with the average of 150 million Br for the 11 banks. Addis Bank posted deposits per branch of about 87.4 million Br, while Anbesa Bank reported around 129 million Br.

According to the Bank’s Management, deposit mobilisation at the branch level was impacted by underperforming outlets, uneven resource potential across locations and instability in northern Ethiopia. Fifteen branches recorded performance below their prior-year levels.

At the Beklo Bet branch on Debrezeit Road, near the Bank’s headquarters, this pressure could be perceptible. Hailemelekot Assefa, with 16 years of banking experience, manages a 10-person team, part of the Bank’s 1,579 workforce, serving 150 to 200 walk-in customers daily and handles the rising use of mobile and internet banking. Despite challenges from staff turnover and regional economic volatility, he exceeded seven of his performance targets last year.

The Branch reached a total deposit balance of about 1.5 billion Br, including an additional 449 million Br mobilised in the first nine months of the current fiscal year. Of this, 297 million Br came from interest-free banking services.

Tsehay’s branch network, 91 by the year’s close, reveals why scale has not translated into earnings. Although visible, it was not dense enough to carry its cost. The Bank attributed this to inflationary pressures and corporate customers’ bargaining power, which weakened net interest performance.

Expenses reached 1.3 billion Br against operating income of 1.03 billion Br, while personnel and administrative costs absorbed about two-thirds of expenses. Wages, benefits and allowances totalled 463.3 million Br, and general costs reached nearly 399.5 million Br. Interest expense surged by 162.1pc to 417.5 million Br.

Tsehay Bank’s managment disclosed plans to reduce the cost-to-income ratio below 75pc and to develop “a balanced strategy” for revenue optimisation and cost control this year. It seeks to grow interest and non-interest income through earning assets, foreign-currency operations, guarantees and equity investments.

“The framework also includes branch area downsizing initiatives and the merger of underperforming branches with nearby branches,” the Bank’s managment said, responding to Fortune’s queries, in a written statement. “Major expenditures now face tighter approval procedures.”

The Bank’s non-interest income declined in 2024/25, mainly due to lower commission income from letters of credit, the foreign-currency regime change, and intense competition in an industry in which it is a new entrant. A fourth-generation financial institution, headquartered at Meaza Desalegn Tower, Sierra Leone Avenue, Tsehay Bank was incorporated in July 2022, with a paid-up capital of 734 million Br.

With 8.38 billion Br in assets in an industry above 4.7 trillion Br, its share is below 0.2pc.

Since launching operations, its interest income has nearly doubled to 653.8 million Br, while interest expense has grown faster to 417.5 million Br. Net interest income was 236.3 million Br (22.9pc) of operating income. Non-interest income fell 14.9pc to 378.9 million Br.

Tsehay earned 38.3 million dollars in foreign currency during the year, with exports contributing 8.88 million dollars and remittances 6.72 million dollars. It also mobilised over 30 million dollars through Central Bank auctions and export activity.

Net loans accounted for 41.3pc of assets, compared with 40.6pc a year earlier. Cash and cash equivalents accounted for 23.7pc of assets, while debt and equity securities made up 18.3pc. At 3.51 billion Br, the Bank’s combined liquid assets and investment securities reached 41.9pc of total assets. Although liquid assets accounted for about 36.3pc of deposits, above the Central Bank’s minimum, analysts noted that Tsehay Bank’s challenges remained in converting liquidity into profit.

The Bank’s managment displayed a conservative lending practice, with a 61.6pc loan-to-deposit ratio, putting it closer to Ahadu and Addis banks, but without their earnings outcomes. Addis Bank, with a similar ratio of about 66pc, generated 2.2 billion Br in net profit and a return on assets above nine percent. Hibret Bank had 85.6pc, while Anbessa posted 82.3pc, and Amhara Bank 81.4pc.

However, asset quality was Tsehay Bank’s strongest defence, posting a non-performing loan (NPL) ratio of 1.78pc, below the industry’s 3.1pc and the five percent regulatory threshold. Its Stage 3 loans were about 2.1pc of gross loans, while Stage 2 and Stage 3 exposures together were 5.4pc. The expected credit loss allowance was only 0.69pc of gross loans and about one-third of Stage 3 exposure.

Yet, export and import loans accounted for about 61pc of gross loans, exposing the Bank to trade cycles, foreign-exchange shortages, import restrictions, logistics costs, and settlement delays.

Tsehay Bank’s gap with mid-sized banks, such as Sidama and Ahadu, was wider, placing it between them in asset size and resulting in a large loss. Sidama Bank had assets of 5.52 billion Br, deposits of 3.67 billion Br and loans of 2.39 billion Br, but generated 70 million Br in net profit. Ahadu had 10.05 billion Br in assets, 7.88 billion Br in deposits and 4.34 billion Br in loans, with a net profit of 400 million Br.

Tsehay’s digital and interest-free banking record shows acceptance, not decisive earnings. IFB deposits reached 304.3 million Br, while Murabaha and Mudarabah financing amounted to about 84.5 million Br, and profit from these financing was only 8.65 million Br. The Bank’s Management attributed constrained growth in IFB financing to the regulatory credit cap and plans to scale products as permitted.

The Management hopes that current-year measures are producing results, with a provisional profit of 476.1 million Br in the first 10 months, above its annual target. It credited “strategic initiatives” in mobilising stable foreign-currency sources and diversifying revenue through exports, remittances and cash purchases, resulting in non-interest income “more than doubling” by April 2026 compared with the same period a year earlier.

In its young age, Tsehay Bank’s directors and executives have built a bank with comfortable liquidity, acceptable asset quality and real customer growth. However, earnings for shareholders remain absent, capital lacking, operating productivity low, and funding costs rising fast. The next reporting year will show whether the loss was the cost of building scale, as Management argued, or an early sign that the model needs deeper repair.

Mekbib urged the Management to shift from rapid balance-sheet expansion to a focus on quality and efficiency. His prescriptions are faster capital mobilisation to close the 3.72 billion Br gap to the regulatory threshold, stronger cost discipline, better operating leverage, more low-cost current and savings deposits, higher branch productivity and greater monetisation of digital banking infrastructure.