Dashen Bank’s performance last year represented a marked rebound in its foreign exchange dealings, complemented by considerable revenue and asset growth. It has also capitalised on strategic investments and treasury adjustments to reverse previous forex losses, achieving a net gain of 129.34 million Br in foreign exchange operations, transforming a loss of 342.9 million Br registered the previous year.

“Shareholders should be delighted for such performance in the face of adverse business conditions,” said Abdulmenan Mohammed (PhD), a financial statement analyst based in London.

A keen and close observer of the financial sector for two decades, Abdulmenan echoed how banks operate in an economy experiencing inflationary pressures and foreign exchange shortages, which impact loan portfolios and operational costs. The National Bank of Ethiopia (NBE) has imposed policies to curb inflation, including a 14pc cap on credit growth and an increase in the emergency lending facility rate by two percentage points to 18pc. These policies have constrained banks' lending capacities and earnings potential, pressuring financial institutions to seek alternative revenue streams.

Despite these headwinds, Dashen Bank reported a net profit of 4.88 billion Br for the last fiscal year, marking a substantial 37pc increase over the previous year and building on a prior year's growth of 22.8pc. Its total revenue surged by year-on-year growth of 33.8pc to 23.5 billion Br. Interest income from loans, advances, and government securities rose by 30pc to 17.44 billion Br. While interest income from loans and advances grew modestly by 1.27pc to 15.39 billion Br, interest income from Treasury bills, government bonds, and deposits soared by 55.3pc to 2.05 billion Br.

Dashen Bank's ability to achieve substantial net income is believed to reflect effective risk management and operational efficiencies.

Analysts attributed this shift to a carefully recalibrated approach within its treasury, which optimised overnight foreign investments and strategically managed forex allocations.

“It was a deliberate action,” Asfaw Alemu, president of Dashen Bank, told Fortune. “The Treasury wing undertook this major assignment.”

According to the analysts, this shift reveals a strategic choice toward investing in government securities to offset limitations on credit growth.

Asfaw concurred.

"Our strategy centred on income diversification and operational efficiency has been instrumental in navigating adverse business conditions," he told Fortune, speaking from Washington DC, where he attended the IMF-World Bank summit last week. "We've focused on market enhancement, cost optimisation, and improving customer experience."

An economist by training graduating from Addis Abeba University and the University of Ghana, Asfaw has been with Dashen Bank for nearly two decades, serving as president for 10 years. Under his managment, the Bank's total assets expanded by 26.9pc to 183.72 billion Br. He serves on the boards of Nyala Insurance, EthSwitch, and Debremarkos University and is the Deputy President of the Ethiopian Bankers' Association (EBA). His extensive career began as a project officer at the Development Bank of Ethiopia (DBE), a state-owned policy bank, advancing through roles at Wegagen Bank as vice president for Credit & Risk Management, and later working in finance and business development at Unity University.

Under his watch, liquidity improved markedly, with cash, bank balances, and short-term Treasury bills (T-bills) increasing by 48.7pc to 19.79 billion Br. Investments in three-month T-bills increased by 301.9pc to 6.35 billion Br, and fixed-time deposits surged by 443.9pc, enhancing interest income from these sources.

“We worked hard to manage it properly,” said Asfaw.

The Bank's total loans and advances increased by 14pc to 114.28 billion Br, although this represented a slowdown from the prior year's 28.5pc growth due to the Central Bank's lending restrictions.

The Bank mobilised 145.86 billion Br in deposits, a 26.9pc growth, while its liability to total assets ratio rose from 8.3pc to 10.8pc. However, the loan-to-deposit ratio dropped from 87.2pc to 78.75pc due to policy caps on credit growth, signalling a more conservative lending approach under regulatory constraints. Dashen Bank's return on assets (RoA) increased to 2.7pc, and its return on equity (RoE) rose to 20.4pc, both up by two percentage points from the previous year.

Its strategy of diversifying income sources and focusing on non-interest income, such as fees and commissions, which increased by 29.8pc to 4.75 billion Br, has paid off in boosting its financial performance.

However, Dashen Bank's earnings per share (EPS) experienced a slight dip due to capital expansion efforts. The EPS dropped by one percentage point to 43.3pc, down from last year's 442 Br. Asfaw sees this as a temporary dilution, a natural outcome of raising capital, and believes that further capitalisation will be made to enhance future profitability. The Bank increased its paid-up capital by 28.4pc to 12 billion Br, not only achieving a capital adequacy ratio of 15.6pc, but also nearly double the regulatory minimum.

Abdulmenan believes Dashen Bank's strong capital position provides a cushion for absorbing potential losses and supports future growth initiatives.