Siinqee Bank Makes Foray into Investment Banking

Aug 17 , 2025. By NAHOM AYELE ( FORTUNE STAFF WRITER )

Siinqee Bank is set launch an investment banking subsidiary with a registered capital of 497 million Br. The new company, which finalized application for registration with the Ethiopian Capital Market Authority (ECMA) on August 15, 2025, marks a milestone for Siinqee, representing a major expansion from its roots as a microfinance institution.

The Bank had already received commercial registration from the Ministry of Trade & Regional Integration a week earlier. With only final ECMA approval pending, operations are expected to commence soon.

The new subsidiary will become the third officially registered investment banking firm in the emerging securities market if approved by ECMA.

Ownership of the subsidiary is dominated by Siinqee Bank, which holds a 90pc stake, with the remaining shares distributed among several institutional investors, including the Oromia Sovereign Fund, Oromia Capital Goods Finance S.C., Shaggar Investment Group, Oromia Industrial Parks Development Corporation, and Oro-Construction Group.

Siinqee Bank formed a seven-member board chaired by its president, Neway Megersa, who previously oversaw the Bank’s transformation from a microfinance institution into a full commercial bank. The Bank has tapped Girma Muleta, 41, as both Chief Executive Officer of the subsidiary.

Girma, born in Lega Robi, West Shewa Zone, Oromia Regional State, brings over eight years of experience in banking, including more than five years with the Commercial Bank of Ethiopia (CBE) in various roles, ranging from marketing to credit monitoring. He joined Siinqee in 2022 as a strategic change management manager and was later promoted to director.

Alongside his banking career, Girma has spent more than a decade teaching at St. Mary’s University and local high schools. He holds an undergraduate degree in applied mathematics from Addis Abeba University and a postgraduate degree in development economics from St. Mary’s.

“The objective in setting up this subsidiary is to strengthen our position in the capital market and explore new types of investment,” Girma told Fortune.

He disclosed that the initial offerings will focus on advisory and brokerage services, laying the groundwork for Siinqee’s expansion into investment banking.

“We’ve finalised what is expected from us,” he said.

Siinqee Bank has moved quickly since it was granted a full commercial banking license in April 2022, following its transformation from Oromia Microfinance Institution, which was initially founded in 1996. Headquartered in Addis Abeba, the Bank operates primarily in the Oromia Regional State.

As of the end of the last financial year, Siinqee reported a paid-up capital of eight billion Birr, well above the five billion Birr minimum set by the National Bank of Ethiopia (NBE) for 2026. The Bank’s deposits exceed 105 billion Br, with loans outstanding of more than 58 billion Br and total assets reaching 121 billion Br.

The ECMA has acknowledged receipt of Siinqee’s application, confirming that the required documents are under review.

For market newcomers, ECMA’s rules require strict compliance. Applying firms should meet capital and governance standards, submit audited accounts, and secure approval from the NBE. Additional requirements include inspections to verify risk management, governance, and operational capacity, along with fidelity guarantees equivalent to 20pc of shareholder equity.

Wegagen Capital Investment Bank was the first licensed under this regime, starting with a capital of 358 million Br. It was followed by CBE Capital Investment Bank, a joint venture between the CBE and Dalol Capital, managed by Zemedeneh Negatu. More recently, Awash Bank announced plans for an investment banking subsidiary capitalised at 200 million Br, though this process is still ongoing.

Experts view Siinqee Bank’s latest move as broadening the financial sector, signalling growing confidence among domestic banks in the capital market’s prospects. However, industry analysts warn that the opportunities also come with substantial risks.

“Launching investment banks in an environment where the secondary market is still in its infancy, with limited trading activity, is risky,” said Tilahun Girma, a financial policy analyst who manages the Ethiopian subsidiary of PKF Global.

According to Tilahun, Ethiopia’s weak shareholder trading culture and underdeveloped market infrastructure are key challenges facing new investment banks.

Tilahun urged newer commercial banks such as Siinqee to closely observe the performance of existing players before entering the market.

“Profitability trends should inform whether a bank proceeds alone or collaborates with peers,” he said. “Otherwise, banks may end up investing millions, only to operate at a loss.”

Tilahun warned that competition with larger and more established banks could strain smaller entrants in a market that is still maturing. He contrasted banks with non-bank institutions that provide advisory services and operate at lower costs with fewer risks.

While Tilahun does not expect bankruptcies in the short term, he stated that broader structural problems, such as a lack of skilled professionals, weak capital market infrastructure, and the absence of a strong stock-selling culture, persist.

“It’s difficult to succeed in investment banking without addressing these foundational issues,” he said.

Tilahun also echoed broader industry concerns that the investment banking market could end up replicating the overcrowded model seen in the commercial banking industry, which has produced a proliferation of fragmented institutions and the risk of eventual consolidation. He advocated for a collaborative approach.

“It would be more sustainable if four or five banks jointly established a single investment bank, rather than each setting up one independently,” he said.

Tilahun urged the NBE to prohibit banks with insufficient paid-up capital from entering the sector, and that ECMA should raise entry thresholds to ensure that only financially robust institutions are allowed to participate.

“These measures,” he said, “would protect the market from early failures and reduce the risk of public fund losses, and create a healthier foundation for the investment banking industry.”

PUBLISHED ON Aug 17,2025 [ VOL 26 , NO 1320]