Bekalu Zeleke, president of the Bank of Abyssinia, and his executive team have a lot to smile about after seeing a vigorous operational year that led the Bank to consolidate its position in the industry as the second-largest, trailing Awash Bank. It was a noteworthy rebound from four years ago when the Bank lost ground as the fourth-largest private bank.

In several aspects of operations, from total revenues to net income and profit to asset position and return on equity, Abyssinia Bank had a momentous year that cheered shareholders to declare "many accomplishments despite the wide-ranging shortfalls."

"Under capitalised before, we've recuperated over the past years," Bekalu told Fortune.

But shareholders met at the Inter-Luxury Hotel on November 26 were reminded that Abyssinia Bank has more work to do to gain a foot on its equity size (lower by 164.2 million Br to Dashen's 14.38 billion Br) and earnings per share, a mismatch in its forex position.

Abyssinia Bank’s net profit growth surged by 141pc from the previous financial year to 3.24 billion Br, attributed to a substantial jump in revenues at 12.4 billion Br. The net profit growth has led to a 45pc increase in earnings per share to 14.20 Br.

Abdulmenan Mohammed, a financial statement analyst based in London, praised the result as “very impressive”, which should delight shareholders. However, the first-generation private bank posted a 3.2 billion Br net profit, short by 2.1 billion Br Awash Bank reported from the same period, and over a billion Birr larger than the average for the six largest banks.

The Bank’s interest on loans, advances and five-year central bank bills soared by 82.7pc to 14.35 billion Br from last year, driven by increased lending activities. Abyssinia Bank's loan size was the second largest at 111.1 billion Br; although its loan-to-deposit ratio (91.4pc) is the highest among its six peers and six percentage points above their average, non-performing loans ratio, at 3.3pc, remains lower than the average 4.9pc. The provision for loans and other asset impairments have declined by 5.4pc to 642.4 million Br.

The loan-to-deposit ratio should be "very concerning as it can cause serious liquidity problems, hence watched keenly", the expert told Fortune.

The non-financial intermediation income of Abyssinia shows a mixed performance in the reported year. Service charges and commissions increased by 19.5pc to 2.91 billion Br. In contrast, for the third year in a row, the performance of foreign exchange dealing declined, resulting in a loss of 774.2 million Br from 231 million Br last year.

“This should be concerning,” Abduelmenan cautioned.

He urged Bekalu and his team to devise a strategy to reverse the trend.

According to Bekalu, narrowing the mismatches between the forex position and total equity will be the focus of his management team in the current operational year. Beefing up capital, mobilizing more resources from forex and deposit, and deepening digitisation will be the other fronts of concentration, Bekalu disclosed to Fortune.

Tisonawit Getachew, business manager at Abyssinia's Global branch, attributed the growing loss in the forex front mainly to the surrender regulators at the central bank imposed last year on the industry as well as the widening gap in the parallel market. Although she was pleased with the Bank's performance during her six years of stay, she observed the number of exporters who were customers of Abyssinia discouraged by the central bank policy.

The Board Chairman, Mekonnen Manayazewal, echoed the sentiment. He conceded the operational year was marked by several policy changes, such as an amendment to deposit reserve requirements and foreign currency utilisation, which had unprecedented consequences on the Bank's performance and profitability.