Awash Bank continued to lead the private commercial banking industry with its most recent earnings results, amassing a huge net profit and the highest earnings per share (EPS) among competitors.

In the last fiscal year, the Bank was able to net 2.5 billion Br in profit, registering a 65pc increase from the preceding year. Its EPS also spiked by 89 Br to 632 Br. The EPS of the Bank is the highest recorded in the industry over the past five years.

The EPS rose despite the 49pc capital injection that pushed paid-up capital to 4.4 billion Br, making Awash the highest capitalised bank in the country. The Bank plans to increase its paid-up capital to six billion Birr by next June and 12 billion Br in three years.

The management of AIB should be applauded for such impressive performance, according to Abdulmenan Mohammed, a financial statement analyst who closely follows the financial reports of banks.

Last financial year was a mix of challenges and opportunities to the banking industry, according to Tabor Wami, board chairperson of Awash.

"Political reform was the opportunity," said Tabor, " while relatively elevated inflation, a recently relaxed regulatory framework, political instability and stiffer competition in the industry were among the challenges."

CEO Tsehay Shifraw attributes the strategic plan the Bank adopted recently for the positive performance. Dubbed "Vision 2025," the strategy incorporates a ten-year road map, a five-year plan and a yearly activity plan. It covers the Bank’s target plan in human resources, service provision and organisational structure.

A massive increase in interest income, fees and commissions, gains on foreign exchange dealings and other income positively contributed to the rise in profit of Awash.

AIB’s interest on loans, advances, NBE bonds and other deposits surged by 42pc to six billion Birr.

This must have been mainly due to a massive increase in loans and advances, according to the expert.

The revenues from non-financial intermediation businesses also showed considerable increases. Fees and commissions soared by 65pc to 1.4 billion Br, gains on foreign exchange dealings increased by 89pc to 446.7 million Br, and other income increased by a staggering 89pc to 285.9 million Br.

Tsehay says that the Bank was able to increase forex dealing despite the forex crunch in the country and expansion of the parallel market.

The increase in income resulted in a surge in expenses. Awash had total expenses of 4.7 billion Br, an increase of 37pc.

Interest on deposits increased by 42pc to 2.1 billion Br; personnel expenses went up by 32pc to 1.6 billion Br; and other operating expenses increased by 22pc to 878.1 million Br.

Provision for impairment of loans and other assets soared by more than eight fold to 93.3 million Br.

“Despite the surge in the provision for impairment of loans and other assets," said Abdulmenan, "the amount is still reasonable for a bank as big as Awash."