Fortune News | Feb 05,2022
Apr 3 , 2021
By KIDUS DAWIT ( FORTUNE STAFF WRITER )
It was a good operating year for Addis International Bank (AIB), despite the public health crisis, economic slowdown and political uncertainties.
In a statement for the annual report, Hailu Alemu, the Bank's president, acknowledged this as "a year full of unprecedented challenges." Severe liquidity crunches besieged the Bank in the first half of the fiscal year, where inflation and a foreign currency shortage defined the economic landscape.
"Despite all the challenges, the overall performance of the Bank has been encouraging," reads Hailu's statement.
Addis International Bank has seen jumps both in net profit (213.1 million Br) and earnings per share (225.1 Br) for the fiscal year ended June 30, 2020. This represents an impressive increase of 34pc in profit, part of an outcome that should delight shareholders of the Bank, according to Abdulmenan Mohammed, a financial statement analyst.
The Bank has invested a little over half a billion Birr in buying bonds from the central bank, recording an increase of 27pc. However, the largest income growth, 43pc, came from foreign exchange dealings at 43.7 million Br, while service charges and commissions went up by 20pc to 258.3 million Br.
This is a performance Abdulmenan described as "remarkable."
The Bank's total capital swelled to 1.4 billion Br over the reporting period, registering a 22pc growth during the ninth year of operation for Addis International Bank.
The expansion of business at Addis was followed by an increase in expenses. The largest jump, at 23pc, was recorded in interest paid on deposits of 256.5 million Br. However, the provision for impairment of loans and other assets plummeted by 91pc to 1.1 million Br, a reduction Abdulmenan finds "impressive."
"Addis International should keep up its strong credit management system," said Abdulmenan.
Addis's loan-to-deposit ratio increased to 74pc from 67pc, a trend Abdulmenan said requires caution against further increases as this may undermine the liquidity level.
It is advice the Bank should pay close attention to as its liquidity level declined in relative terms although increasing in value. Its cash and bank balances increased by 12pc to 1.5 billion Br, while the ratio for liquid to total assets dropped to 23pc from 24pc. Similarly, the liquid-assets-to-deposits ratio went down by four percentage points to 32pc.
Despite the reduction in the level of liquidity, Addis was still a liquid bank at the end of the fiscal year, enabling it to disburse loans and advances of nearly 3.5 billion Br, an increase of 30.2pc from the preceding year.
The modest expansion of branches seen last year could have been of some help. The Bank opened seven new branches over the reporting period, bringing its total branch network to 75, with well over half of its branches located in the capital. It boosted the deposits Addis International mobilised by 17pc to 4.6 billion Br, representing half that of the preceding year.
The Bank's total assets have also increased, registering a growth of 18pc to 6.5 billion Br, much lower than the preceding year’s growth rate of 31pc. Its paid-up capital inching close to a billion Birr, a far cry from many of its peers in the industry, gives it a capital adequacy ratio (CAR) of 35pc. It shows Addis International is a sufficiently capitalised bank for its size compared to the over 90pc ratio seen in the industry. Abdulmenan sees room for efficient use of its capital to increase shareholder returns.
Despite the "remarkable" performance, the bank's branch network, capitalisation and share in the market make Addis International a fairly small bank in the league of Debub Global and Enat banks.
However, shareholders are happy. Yilma Belay is one of these shareholders who is satisfied with the Bank's performance.
"I can't say that it was a bad year," he told Fortune. "The Bank is still growing."
PUBLISHED ON Apr 03,2021 [ VOL 22 , NO 1092]
Fortune News | Feb 05,2022
Fortune News | Jul 25,2020
Fortune News | Oct 19,2019
Commentaries | Mar 07,2020
Fortune News | Jan 02,2021
Fortune News | Dec 12,2020
Sponsored Contents | Jul 24,2022
Fortune News | Jan 23,2021
Fortune News | Jun 15,2019
Fortune News | Apr 12,2020
Dec 24 , 2022
Biniam Mikru heads the department of cabinet affairs under Mayor Adanech Abiebie. But...
Jul 2 , 2022 . By RUTH TAYE
On a rainy afternoon last week, a coffee processing facility in the capital's Akaki-Qality District was abuzz with activ...
Nov 27 , 2021
Against my will, I have witnessed the most terrible defeat of reason and the most sa...
Nov 13 , 2021
Plans and reality do not always gel. They rarely do in a fast-moving world. Every act...
Leaders of the National Election Board are in a charm offensive mood, of a sort. Last week, they organised a rare tour for members of the me...
When the country's most senior diplomats and envoys return back to their posts after two-week debriefings, they leave behind a point or two...
Feb 4 , 2023
Rene Lefort is a French journalist with a keen interest in Ethiopia, spanning over ha...
Jan 28 , 2023
It is not common to see an appointment for a senior federal government office stir de...
Jan 21 , 2023
Eyob Tekalign, state minister for Finance, took to social media platforms last week t...
Jan 14 , 2023
The longing for normalcy and a semblance of individual and collective security in Eth...
Folks awed by the devastating national exam results have ignored the massive crisis that engulf the academic sector for nearly half a centur...
Inspired by the stories of business people who started small, I have been on the quest to decode the custom-made recipe of wealth for th...
Or see contact page