For the second fiscal year in a row, Lion Bank has registered a remarkable performance, increasing its profit by 41pc.

In the reporting period that covers mid-2018 through mid-2019, the Bank netted 527.2 million Br in profit, pushing its earnings per share (EPS) up by two Birr to 9.5 Br.

Its positive performance in financial intermediation and non-financial intermediation activities helped the Bank boost both profit and EPS.

Lion’s income from interest on loans, advances and NBE bonds soared by 43pc to 1.7 billion Br, while fees and commissions went up by 41pc to 221.7 million Br. Gains on foreign exchange dealing soared by 63pc to 86.6 million Br, while other income also soared by 92pc to 237.3 million Br.

This performance is laudable, said Abdulmenan Mohammed, a financial analyst based in London.

“The management should be credited with such good results,” he said.

Commissioning a new strategic plan, rearrangement of the organisational structure and focusing action plans enabled the Bank to retain the momentum of growth registered in previous years, said Getachew Solomon, president of the Bank.

The Bank was able to generate a large amount of foreign currency by maintaining the existing exporters and attracting new ones by offering attractive lending rates, as well as establishing good relationships with NGOs and tour agencies, said Getachew.

The Bank has achieved a strong performance despite the challenges in the local and global economy, according to Tassew Woldehana (PhD), board chairperson of the Bank and president of Addis Abeba University.

"Despite the global and domestic economic challenges that directly and indirectly impact the banking sector," said Tassew Woldehana, "the fiscal year in point was a year of steady and meaningful progress for Lion."

The increase in income was followed by a massive increase in expenses. Interest on deposits spiked by 44pc to 610 million Br. Employees’ salaries and benefits went up by 40pc to 485.6 million Br, and other operating expenses increased by 39pc to 284.6 million Br.

The revised organisational structure and salary scale increased alongside the opening of 39 new branches, all of which forced the Bank to increase its workforce by 941.

This together with the increase in office rent, office equipment, salary and benefits of employees and other administrative costs and operating expenses have forced the Bank to increase expenses, according to the president.

Lion’s provision for loans and other asset impairment soared by 183pc to 142.4 million Br.

“This is a huge increase, and the management of the Bank should closely watch the quality of credit,” said Abdulmenan.

However, the president disputes the need for worry, since the increasing volume of loans and assets forces the Bank to hold provisions commensurate to the assets required in accordance with the International Financial Reporting Standards (IFRS) and NBE’s requirements.