The leading private commercial bank cemented its place in the industry with an impressive performance that saw it make strides on nearly all CAMEL fronts.

Awash International Bank (AIB), the first private bank incorporated following the domestic liberalisation of the financial sector almost three decades ago, netted 3.4 billion Br in profits, recording a 31pc jump. The figure puts Awash well ahead of its close competitors. Dashen Bank, the second-biggest name in the industry, registered half the net profits over the same period.

“Last year, Awash registered big achievements on all fronts,” said Dibaba Abdeta (PhD), board chairperson of AIB, during the annual shareholders meeting held on November 27, 2021, at the Hilton Hotel.

Awash Bank has managed impressive feats in capital adequacy, asset quality, management, earnings, and liquidity, otherwise known in the industry lingo as CAMEL. Its balance sheet has seen growth on a massive scale, recording a 40pc increase in paid-up capital and a 44pc surge in total assets. The Bank's paid-up capital shot up by 40pc to 8.2 billion Br.

In a period marked by the COVID-19 pandemic and economic slowdown due to war, Awash Bank has boosted its revenues from non-financial intermediation businesses. Gains on foreign exchange dealings surged by 76pc to 755.64 million Br while fees and commissions soared by 63pc to 2.62 billion Br. This achievement was despite the requirements by the central bank to surrender 30pc of foreign currency earnings, which has been eroding the forex reserves of Awash, reads a statement from Tsehay Shiferaw, president of Awash, in the Bank's annual report.

Expenses went up in tandem with the rise in income.

The Bank's total expenditures rose by 35pc, reaching 8.9 billion Br. Personnel expenses, which grew from 2.2 billion Br to 3.5 billion Br, were a major factor. This has made up nearly 40pc of total expenditures while interest expense, which went up by 24.5pc to 3.3 billion Br, accounts for 37.1pc.

The growth of personnel and other operating expenses needs the management's attention, says Abdulmenan Mohammed, a financial statement analyst and a keen observer of the financial sector.

The growth is attributed to the salary scale adjustment at the beginning of the financial year and significant branch expansion, according to Ebisa Deribie, director of marketing and communications at Awash Bank. Last year, the Bank opened 100 branches, bringing its branch network to 566. Awash also hired 2,058 new employees, pushing its total workforce to 12,188.

Awash Bank's earnings per share (EPS) have fallen for the second consecutive year despite the significant leaps. The value sits at 470 Br, down from 510 Br the previous year.

Taye Aseged, one of the Bank's 4,369 shareholders, says the earnings this year are not as bad as the challenges Awash Bank faced during the reporting period.

“Branches located in Tigray were not operational last year,” said Taye, who bought 20 shares in 2009, paying 27,000 Br at an auction, 35pc higher than the par value. He owns 1,400 shares with a par value of 1,000 Br.