With excitement, Berhan Bank shareholders left a meeting two weeks ago, learning their earnings per share had more than doubled from last year. However, the Bank's overall performance is not only half of the industry average but also that of two years ago.

Much of the blame for the sluggish performance lies on the rise of non-performing loans the Bank advanced to construction companies that have defaulted on the guarantee bonds. The Board Chairman described it as a "massive burden" on performance.

Banks provide unconditional advanced and performance guarantee bonds to private construction companies helping them ink deals with clients. If companies fail to deliver the contracts on time, banks would have to pay the agreed amount to the client, according to Sewale Abate (PhD), a lecturer of finance and investments at Addis Abeba University.

The dividend Berhan Bank paid shareholders declined by 65pc due to these unreturned guarantee bonds to contractors who defaulted to complete projects in the two years before 2021. Several clients, including the Ethiopians Roads Administration, have taken the Bank to court, claiming funds they paid in advance.

The Bank has set strict procedures and requirements for issuing guarantee bonds, says Netsanet Worku, Lancha branch manager. She believes the dividend performance was impressive in customer-base record with the growth it showed compared to the last 10 years.

Berhan Bank's directors tried to delight shareholders by reporting a profit of 478 million Br from its operations in 2021/22, growing by a whopping 146pc. This brought positive earnings per share (EPS) of 156 Br, recovering from a dip of 74 Br registered the year before.

Etenesh Takele, a housewife and mother of two, is among the 15,000 shareholders. She was pleased to see the Bank made the curve for the better.

"It showed a little improvement from the previous year," she told Fortune.

Berhan generated 3.2 billion Br income from interest on loans, advances and central bank bonds, showing a 24pc growth. The revenues from service charges and commissions on foreign exchanges show a rise of 22pc to one billion Birr. It is a performance hailed by experts observing the banking industry.

"Revenues growth is remarkable," said Abdulmenan Mohammed, a financial statement analyst based in London with close to two decades of experience.

However, an expansion of expenses accompanied the growth in revenues. Interest expenses increased by 24pc to 1.2 billion Br while salaries and benefits also shot up by 39pc to 1.2 billion Br.

Provision for assets declined by 11pc from the previous year to 337 million Br. Abdulmenan puts the considerable amount as one of the reasons for Berhan's lower profit from the industry average.

"Berhan needs to reduce the provision for assets impairment to an acceptable level," he said.

The Bank's President, Girum Tsegaye, echoed the expert's bid. He said that the previous years' experience in defaulted loans and advances triggered the soaring provision, pointing out the work done on non-performing loans and reducing claims on guarantees as one of the Bank's performances in the reported year.