Eight months after its shareholders elected a new board of directors, Anbesa Bank has been ordered to do it again.

The National Bank of Ethiopia (NBE) has rejected the election and called a fresh one. This unusually forceful intervention has laid bare a bitter struggle among members of the Board of directors, management and influential shareholders over who controls the lender and where it is headed.

The measure is a rare display of regulators’ muscle inside a private lender, and it follows months of open dispute over shareholders’ influence and feud, board authority, credit decisions and the running of the institution.

A boardroom feud has spilled into public view and drawn in the NBE. The verdict now hanging over Anbesa Bank is not about profit but whether it can govern itself.

Anbesa Bank posted its strongest year in 2024/25 despite an economy under pressure from inflation, foreign-currency shortages and the northern conflict. Gross profit nearly doubled to 1.8 billion Br, assets grew by 25pc to 54 billion Br, deposits by 23pc to 44 billion Br, and loans increased by 18pc to 36.2 billion Br.

Its management, under Daniel Tekeste, who has been in charge since 2022, credited a wider retail customer base, expanded digital banking and more disciplined lending.

Analysts, though, cautioned that the Bank still faces rising operating costs, foreign-exchange constraints, asset-quality risk and the very governance weakness now on public display. After nearly 19 years, the Bank had shed the Lion name, unveiled a new corporate identity, and launched a digital platform, all of which were meant to accelerate its digital transformation and broaden its customer base in an increasingly crowded market.

The boardroom war has instead put that story on hold. Anbesa Bank instead finds itself in a conflict that has escaped the boardroom and landed on the regulator's desk, with the NBE concluding, after an investigation, that the rift had reached a point that endangered the lender and its depositors.

At the centre of the fight are competing accounts of how the Bank raised its capital, how new shareholders acquired large stakes, and whether the Board and Management acted in the financial institution's interest.

Two camps have formed. One, led by Aklilu Gebreselassie (PhD) with Assefach Haileselassie and Andinet Haregewoin, argued that governance was compromised when a group of new shareholders bought substantial stakes under questionable circumstances. This is a group backed by influential shareholders such as Kibrom Gebregiorgis of Tamrin Trading Plc and Azezom Ayele, major shareholder of AZ Plc and United Steel & Metal Industry Plc.

The other, led by the Board Chairperson, Alem Asfaw, and senior executives, including the President, Daniel, maintains that the process was lawful and necessary to meet the regulator’s capital rules and a five billion Birr capital threshold deadline this month.

Between the two lie the questions the regulators now want answered, over shareholder influence, board authority, credit decisions and the direction of the Bank.

Before the close of the 2024/25 year, Anbesa Bank's paid-up capital was 3.69 billion Br; by year-end, it had grown by 21pc, lifting the Bank above the regulatory minimum. Much of the increase came from buying more than 600 million Br of shares from Ge'ez Bank, an equity mobilisation effort that never opened for business after trying to enter the industry, a deal that turned Ge'ez Bank's shareholders into Anbesa's.

The transaction was lawful on its face, Alem's camp insisted, and without the fresh capital, the Bank would have fallen short of the regulator's threshold. To Aklilu's Group, the manner of it mattered more than the math. What was meant to shore up capital became the main source of the feud.

For Aklilu's Group, the new entrants were more than a capital exercise. They allege that several shareholders “bought their shares with loans from Anbesa Bank itself,” which they argue violated NBE’s directives and diluted the shareholdings of traditional influential shareholders.

If substantiated, this will be viewed by regulators as a major breach of the banking business law enacted last year. The law explicitly prohibits individuals and entities from buying shares using loans the same bank advances them.

Says Article 25 (2): “No bank shall grant loans against the security of its own shares.”

Violation of this rule results not only in the loss of shares and money but also in years of imprisonment for financial fraud and violations of banking laws.

Aklilu’s Group also questioned the transparency of a 10-million-dollar foreign-currency transaction made by Safaricom Ethiopia, alleging that the “accounts did not fully disclose foreign-currency obligations tied to the conflict in northern Ethiopia.”

The mix of allegations yet to be proven and pointed questions was, in their view, enough to warrant regulatory investigations. They pointed, too, to “unexplained overseas trips by directors, alleged bias in decisions, and the sidelining of employees who tried to report problems.”

The Group allege that the issues expose “broader weaknesses in corporate governance, risk management, internal controls and transparency.” Its leaders took their allegations to the NBE, the Federal Ethics & Anti-Corruption Commission and the National Intelligence & Security Service (NISS), seeking outside investigations.

The dispute was never only about money. It was also a contest for the Board itself.

Aklilu, once vice chairperson and head of the Risk & Compliance Committee, was stripped of those roles and left as an ordinary director. Now working for the Ministry of Finance (MoF) and having once worked at the state-owned Commercial Bank of Ethiopia (CBE), he was left with a single seat.

Alem's camp alleged that Aklilu was “removed for meddling in Management's affairs, intimidating staff and ignoring governance procedure,” a step taken, in their account, to protect the Bank's governance integrity and keep a clear line between Board and Management. Aklilu claimed he was pushed out for demanding transparency and stronger oversight, raising legitimate concerns to protect the Bank from “possible failure,” and that colleagues who saw his questions as a threat to their authority sought to silence him.

Matters came to a head at Anbesa's 21st annual general meeting, held at the Sheraton Addis on November 1, 2025, when shareholders elected a Board as the previous term expired. The vote preserved the incumbents including Alem Asfaw, Almaz Hagos, who had replaced Aklilu as vice chairperson, stayed on; and five other directors, among them Teklehaimanot Abera, Berhanu Kebede and Fassil Tadese, kept their seats.

Aklilu, Assefach and Andinet failed to win re-election, the latter having resigned beforehand.

The outcome appeared to cement the incumbents' dominance. Tesfamariam Hailu, NBE’s deputy director for regulation, licensing and approval, advised the federal public notary office to register the decisions of Anbesa Bank’s general assembly, which was held seven months later in November.

However, the feud had run for months by then, through rival accounts and cross-complaints, without either side dislodging the other. That dominance, though, proved short-lived, and what had been an internal quarrel would soon become a governance crisis that placed Anbesa Bank under heightened scrutiny from shareholders, regulators and industry observers alike.