Lion Bank has emerged from a period of turbulence with a performance that commands attention in an industry where giants loom large. With an 82pc surge in net profit to 489.52 million Br, it defied the odds despite economic uncertainties and the aftermath of a devastating war in the north. The impressive rebound, while contrasted against its larger peers, tells a story of resurgence and operational grit.

However, a closer analysis reveals a picture of recovery that, while significant, suggests Lion Bank is passing through trying times. The recovery is particularly impressive considering that its net profit had plummeted to 334.5 million Br the year before from a high of 643.1 million Br two years ago. Despite these gains, Lion Bank's performance, when viewed against the backdrop of its peers — such as Abay (1.55 billion Br), Buna (949 million Br), and Berhan (508 billion Br) banks net profits — paints a picture of an institution that is still finding its footing in a competitive industry.

Following the increase of its par value of the shares to 1,000 Br this year, the earnings per share (EPS) Lion Bank posted soared from 10.6pc to 18.73pc. Although it is significantly lower than Abay's 36pc and Buna's 23.6pc, it is higher than Berhan Bank's 15.6pc.

Abdulmenan Mohammed (PhD), a financial analyst based in London, pointed to the growth in financial and non-financial intermediation income and a significant reduction in provision for loan impairment as crucial to the Lion Bank's promising results. Interest income saw a 10pc growth to 4.17 billion Br, while fees and commissions jumped by 143.9pc to 179.44 million Br. Other operating income also experienced a substantial rise of 134.1pc to 298.23 million Br.

According to analysts, these figures indicate the Bank's ability to leverage its core operations for growth, even in a challenging economic environment.

The Bank's interest expense modestly increased by 11.9pc to 1.97 billion Br while it significantly recovered from the losses arising from a substantial provision of losses for loan impairment. Expenses surged after the stagnation of the preceding year. The total staff expenses rose by 21pc to 953.16 million Br, lower than Abay (1.91 billion Br), Berhan (1.62 billion Br) and Buna (2.08 billion Br). Other operating expenses soared by 46.6pc to 551 million Br.

However, Lion Bank's foreign exchange operations have been a cause for concern, with losses amounting to 197.57 million Br in the 2022/23 operation year, following losses of 176.73 million Br and 174.08 million Br in the preceding two years. This trend has raised alarms about the Bank's forex risk management strategies and their adequacy in averting such losses.

"This is very shocking," said Abdulmenan, "Executives should explain."

The Bank's President or Board Chairman were not available for comment despite repeated attempts by Fortune.

However, the Bank's strategic focus on improving loan performance appears to be paying off, with a reversal from a loss of 518.89 million Br in 2021/22 and 689.75 million Br in the previous year to a rebound gain of 38.77 million Br. Nonetheless, the provision for impairment of other assets has surged to 265.43 million Br, indicating potential vulnerabilities in asset quality that could pose risks to the Bank's financial health.

Lion Bank's asset base grew by 7.9pc to 35.58 billion Br, with loans and advances increasing by 12.13pc to 26.69 billion Br. The growth in assets and loans underpins the Bank's recovery efforts and commitment to expanding its lending operations. However, its deposit mobilisation, which saw a 5.2pc increase to 27.31 billion Br, suggested a cautious approach by depositors, possibly influenced by the Bank's recent adversities.

During the annual meeting at the Hilton Hotel in December, Lion Bank's President Daniel told shareholders the performance lagged behind some of its peers, attributing it to the belated recovery from the turmoil of conflict.