Lion Bank Absorbs Ge’ez Stakeholders in Rare Industry Manuvour

Shareholders of Ge’ez Bank, an initiative under formation, have been granted regulatory nod to transfer their equity to Lion International Bank (LIB).

The decision, concluded on August 25, 2025, signalled a resolution to a prolonged impasse that has immobilised Ge’ez Bank since its inception five years ago. It emerged in 2020 with ambitious plans to become a new force in the financial sector, backed by 12,200 shareholders who raised 610 million Br in paid-up capital.

However, the timing proved unfortunate. The outbreak of a civil war in the northern Ethiopia and National Bank of Ethiopia’s (NBE) subsequent capital requirement increase to five billion Birr created barriers. Internal discord compounded the challenge, where founding shareholders and promoters disputed over strategic direction, including whether to pursue a commercial banking license, transition to microfinance, or join an existing commercialbank.

Attempts at mediation collapsed, leaving investor capital effectively stranded for half a decade.

The transfer to Lion Bank offered an exit route, albeit not one initially envisioned. For Lion Bank, it offered a rare windfall, an infusion of fresh equity and a symbolic vote of confidence at a time of growing industry consolidation pressure.

Despite boasting a paid-up capital of 3.06 billion Br, Lion remains below Central Bank’s June 2026 deadline to meet the regulatory threshold.

Lion’s leadership, both at the board and executive levels, has outlined a strategy to raise capital to 10 billion Br, combining organic growth with potential mergers and acquisitions. The integration of Ge’ez Bank’s investors is an early sign that this strategy is not merely rhetorical.

Lion Bank’s rebound from wartime disruptions has been striking. The Bank was heavily exposed in Tigray Regional State, where more than half of its branches were closed during the civil war. However, for the 2023/24 financial year, it posted a 61pc surge in net profit to 788.17 million Br, with earnings per share (EPS) rising to 28.1pc.

While consolidation has been discussed widely in the domestic financial sector, actual transactions remain few. According to 8ndustry observers Lion Bank's arrangement with Ge'ez Bank shareholders could serve as a prototype for other stalled banking initiatives.

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