IMF Recommends CBE’s Asset Quality Review

Feb 1 , 2020


[ssba-buttons]

The latest staff report of the International Monetary Fund (IMF) recommends the asset quality review of the Commercial Bank of Ethiopia (CBE) due to tight liquidity. CBE’s liquidity ratio dropped last year due to a persistent asset-liability mismatch, according to the report. It also stated that the Bank has been prioritising the financing of long-term projects undertaken by state-owned enterprises by investing in bonds and extending loans, drawing on its deposit base. Credit to the state-owned enterprises has expanded in line with significant growth in state investment in recent years, which tightened liquidity conditions of the Bank and exacerbated the maturity mismatch, according to the IMF. Out of the total credit portfolio of the Bank, the energy sector has the highest exposure, accounting for about 40pc of the Bank's total asset portfolio. The report also indicated that sluggish repayment of state-owned enterprise's loans exacerbated the CBE’s liquidity position. "CBE has a large exposure to foreign exchange risk, as the Bank plays a central role in foreign exchange transactions,'' reads the report. The report has also downgraded Ethiopia's prospect for economic growth in the current year by one percentage point, from the 7.2pc it had projected earlier, attributing the possible growth decline to macroeconomic policy launched to address the structural imbalance in the economy.


Radar

Bank of Abyssinia Signs Partnership with Droga Cooperative

Bank of Abyssinia has entered into a partnership agreement with Droga Health & Financial Savings and Credit Cooperative to provide financial support and services for its members. The agreement was signed yesterday at the Bank's headquarters. The deal aims to strengthen collaboration between the two institutions, enabling cooperative members to access tailored banking services. It was signed by Wosenyeleh Abera, Deputy CEO for Customer Relations and Marketing at the bank, and Zelalem Yilma...


Radar

Wegagen Introduces Real Time SWIFT Tracking

Wegagen Bank has launched a new mobile app feature enabling customers to track international SWIFT payments in real time. The bank is the first in Ethiopia to introduce an online SWIFT payment tracking system. By integrating SWIFT Global Payment Innovation, customers, particularly those involved in import-export trade, can monitor cross-border transactions using a Unique End-to-End Transaction Reference (UETR) directly from their smartphones. To use the service, customers select the SWIFT...


Radar

National ID, Zambia Partners to Expands Program Reach

The National ID Program has signed an agreement with Zambia's counterpart to provide consulting services for the development of software that will issue digital IDs. It is the first time the institution has extended its expertise beyond national borders, a sign of growing recognition for its rapid progress. Program officials described the partnership as a milestone in their effort to position themselves as a regional player in digital transformation. The collaboration is expected to center...