One of the youngest entrants into the banking industry, Addis International Bank, registered a net profit of 112.9 million Br, an 18pc increase from the previous reporting period.

Despite the moderate increase in profit, shareholders saw their dividend returns unmoved from two years ago, at 17pc par value.

“The surge in capital and the new reporting system contributed to earnings per share being stagnant,” said Hailu Alemu, president of the bank.

Aiming to build up capital and a shareholder base, the bank sold shares in the reporting period and boosted its paid-up capital by 16.6pc to 710.45 million Br, reaching a capital adequacy ratio of 40.3pc.

The expansion in capitalization was accompanied by an increase in income from commissions and services, as well as significant earnings in interest on loans. Earned interest rose by 44.4pc, reaching 228.7 million Br and accounting for 60pc of total income.

The Bank disbursed 68.5pc of the 3.1 billion Br it mobilised. A third of that amount went to exporters, while 10pc was disbursed as loans to businesses in the manufacturing industry.

Abdulmenan Mohammed, a financial expert with over a decade and a half of experience, believes this is reasonable given manufacturers and exporters were exempt from the 16pc credit cap imposed by the central bank on lenders in the last fiscal year. The credit cap was implemented in a bid to counter inflationary pressure that may arise as a result of the devaluation of the Birr by 15pc against a basket of major currencies last year.

The cap was accompanied by a two percentage point increase on interest rate floors, bringing the rate to seven percent on deposits. This raised expenses on interest by 53pc, a 135.3 million Br increase as compared to the figures from two years ago.

The increase in expenses was not limited to deposit interest rates, however. Operational and administrative costs showed a jump of 18.6pc to 195.89 million Br.

“The increase was associated with salary adjustments and investment in new branches,” Hailu says.