Debub Global Bank experienced a mixed performance from its operations last year, struggling to match the profitability levels observed in the industry or its records from just a few years ago.

This development underscores the financial sector's challenges in an ever-changing market where the Bank's capacity to adapt and improve will determine its long-term success. The banking industry has seen significant expansion in recent years. Private banks, such as Awash, Abyssinia, and Dashen, have led the way in assets, loans and advances, deposits, and profitability. Meanwhile, relatively younger banks, including Abay, Addis, Enat, and Debub Global, have demonstrated more modest financial performance.

Debub Global's assets, loans, and deposits have experienced moderate growth compared to the industry average. However, its total capital and capital adequacy ratios outpace it, indicating a strong capital base. Despite this, the Bank's return on assets, equity, and earnings per share (EPS) growth remains below the industry average, suggesting potential profitability issues.

In the 2021/22 fiscal year, Debub Global netted a profit of 277.16 million Br from its operations, growing by 42.2pc. Nevertheless, its profit ranked the lowest among its peers, such as Enat Bank (314.18 million Br), Abay Bank (933.3 million Br), and Addis International Bank (344.9 million Br).

This performance resulted in an EPS of 182 Br, up from the previous year's 166 Br but significantly lower than the 323 Br it posted in 2019. With a profit margin of 18pc, Debub Global Bank trails industry leaders, suggesting that the Bank may need to focus on cost management strategies to enhance profitability. While not the lowest, the Bank's asset turnover of 0.08 indicates room for improvement in deploying assets to generate revenue. Debub Global exhibited a moderate level of financial leverage compared to its peers, with an equity multiplier of 7.0.

The Bank's return on equity (ROE) of 10.08pc placed it in the middle range compared to its competitors. Enat Bank, boasting the highest ROE of 15.18pc, has set a benchmark with a high-profit margin, better asset utilization, and moderate financial leverage. With the highest asset turnover, Oromia International Bank generates more revenue from its assets.

To enhance its profitability and ROE, Debub Global can concentrate on improving cost management and better utilization of assets, according to experts. The Bank's total assets increased by 21.2pc to 14.09 billion Br, exceeding Addis Bank's 10.8 billion Br, but three times lower than Abay Bank and three billion Birr short of Enat Bank's 17.21 billion Br.

Debub Global's growth in profit was driven by a surge in interest income and a drop in general administrative expenses. Its cost-to-income ratio and net interest margin are marginally higher than the industry average, highlighting areas where cost and interest rate risk management could be improved.

Interest on loans, advances, and central bank bills soared by 56pc to 1.72 billion Br, hailed by experts as an "impressive growth". The Bank disbursed loans and advances of 9.35 billion Br, an increase of 14pc. This performance has improved from the previous year, earning third place, trailing Enat Bank (11.21 billion Br) and Abay Bank (26.9 billion Br). The loan-to-deposit ratio decreased to 85pc from 95.3pc. Loans and advances account for 66pc of its total assets, two percentage points lower than the industry's average.

However, income from service charges and commissions plummeted by 41.4pc to 198.94 million Br, while the figure for foreign exchange dealings shows a decline of 36.3pc to 139.3 million Br. Foreign assets constitute a mere 0.9pc of total assets, significantly lower than the industry's average of 1.8pc.

A Branch Manager who requested anonymity noted that reaching deposit mobilization and client acquisition goals was challenging last year. He observed a severe forex shortage in recent years.

"The management should look closely into this," said Abdulmenan Mohammed, a financial statement analyst based in London.