Hibret Bank marked its silver jubilee with an impressive financial feat, posting an outstanding 111pc surge in net profits, reaching 2.3 billion Br, traversing economic adversities such as soaring inflation, political unrest, and shifting fiscal policies. The performance positioned Hibret Bank as a noteworthy contender in the intensely competitive banking terrain despite its relatively modest ranking compared to industry behemoths like Awash, Abyssinia and Dashen banks.

The surge in profitability was announced at the annual shareholders' meeting, held at the Sheraton Addis, where attendees revelled in the doubled profit earnings from the previous year, now standing at 50.72 Br per share. The Earnings Per Share (EPS) Hibret posted at 21.8pc may be respectable but overshadowed by the 32.2pc average for 15 private banks and the leading banks such as Awash Bank (57pc), Abyssinia (56.8pc) and Dashen (53.2pc).

Samrawit Getamesay, the board chairwoman, outlined the financial success achieved in a backdrop of high inflation rates, political unrest, dwindling foreign currency reserves, and the gradual lifting of fuel subsidies.

Despite its modest footprint compared to giants in the industry, Hibret Bank remained a significant player with a paid-up capital of nearly 4.7 billion Br, positioning it as a mid-tier financial institution. Its capital base is less than half of the industry's highly capitalised private bank (Awash).

Its total equity of 7.2 billion Br is very close to the 7.7 billion Br average for these banks, while its total assets amounting to 82.5 billion Br exceeds the 64.3 billion Br average, illustrating its modest yet competitive stance in the market. However, this is in sharp contrast to the larger banks such as Awash, which boasts equity of 20.9 billion Br, and assets size of 242.9 billion Br.

Hibret Bank's income was reported at a little over 10.3 billion Br, one-fifth of Awash Bank. It recorded a return on equity (ROE) of 14.7pc, lower than the industry average of 19.8pc and significantly trailing behind leaders such as Awash (25.8pc) and Abyssinia Bank (24.7pc). ROE is a crucial measure of a company's effectiveness in using its assets to generate profits, suggesting areas for improvement for Hibret. The Bank's return on assets (ROA) stood at 1.6pc, below the industry average of 2.4pc and well under second-generation banks such as Zemen and Addis International.

Hibret Bank's notable profit increase was attributed to a significant rise in interest income, reduced provisions for loan impairments, increased commission income, and lower administrative expenses, alongside a lower profit tax bill. Particularly impressive was Hibret's performance in financial intermediation. Interest on loans, advances, and investments in securities increased by 28.7pc to 8.6 billion Br. Provisions for loans and other asset impairments plummeted by 84.3pc to 103.1 million Br, markedly less than its peers.

Melaku Kebede, the Bank's president, attributed part of this success to the resurgence of businesses in the war-stricken Tigray Regional State, which has resumed positive earnings, aiding the reduction in provisions for loan impairments. Under Melaku's watch, the bank has shown prudent management in branch expansions, which were capped at 49 for the year, with 1,139 new staff recruited. The total branches reached 473, served by a total workforce of 8,839.

An alumnus of Addis Abeba University, Melaku has nearly two decades of experience in the banking industry and has been at the helm of Hibret for three years.

London-based financial statement analyst Abdulmenan Mohammed (PhD) lauded the Bank's management for these measures, noting the 15pc rise in commissions and service charges, which surged to 1.49 billion Br.

"The reduction significantly contributed to profit growth," Abdulmenan observed.

The Bank's approach to managing expenses was also noteworthy, as it maintained a balance despite promoting wage and benefits packages.