Gadaa Bank Debuts on Securities Exchange

Jun 29 , 2025. By NAHOM AYELE ( FORTUNE STAFF WRITER )

Gadaa Bank has listed 1.2 million shares on the Ethiopian Securities Exchange (ESX), becoming the second financial institution to go public after Wegagen Bank.

The listing, done through an “introduction” method that places existing shares on the secondary market without raising new capital, marks a major turning point for the two-year-old bank and the evolving financial sector.

Each share is valued at 1,000 Br, providing over 30,000 shareholders with newfound liquidity and market access, an advantage the Bank’s executives say is a strategic move to enhance shareholder value, financial transparency, and long-term capital mobilisation.

“Our listing on ESX will help us raise capital and ensure greater transparency,” said Eshetu Dheresa, chief customer experience officer at Gadaa Bank. “We see this as a way to build investor trust through mandated financial disclosures.”

Founded in December 2022 with 1.3 billion Br paid-up capital raised from an initial pool of 28,000 shareholders, Gadaa Bank has since expanded its investor base while demonstrating rapid growth. Its total assets have reached around nine billion Birr, backed by a deposit base of seven billion Birr and a loan portfolio exceeding three billion Birr.

The Bank has a rapid financial turnaround after posting a net loss of 84.3 million Br during its first year ending June 2023. It swung into profitability with a 90.2 million Br net gain by June last year, registering a net profit of 247.2 million Br by the end of December 2024.

Gadaa Bank’s President, Wolde Bulto, views the listing not only as a liquidity boost for shareholders but as a channel to extend financial services into underserved markets.

“It broadens our reach and supports our drive to innovate,” Wolde said.

Market observers characterised the listing as a test case for investor appetite in an untested but promising public equities market.

The ESX, officially launched in January 2025, is regulated by the Ethiopian Capital Market Authority (ECMA), which mandates rigorous compliance and disclosure protocols from participants. Gadaa Bank reportedly underwent a five-month approval process to meet the ESX and ECMA’s listing standards.

“Gadaa Bank completed all documentation and passed the regulatory scrutiny,” said Solomon Kitata, senior advisor at ESX.

He acknowledged early-stage challenges, including misinterpretation of listing requirements and a dearth of qualified investment advisors in the country. In response, the ECMA allowed both Gadaa and Wegagen banks to self-prepare their prospectuses, a temporary deviation from international norms where licensed advisors typically handle such tasks.

Despite the celebratory tone, some experts caution against complacency.

Dakito Alemu (PhD), a finance professor at Addis Abeba University, warned that the shift to public ownership may invite governance complications, particularly over majority control.

“There is a serious risk of majority shareholding undermining minority rights,” he said. “The Bank should ensure governance mechanisms are in place to protect all shareholders.”

He also pointed to the financial and legal weight of compliance.

“Transparency isn’t optional, and non-compliance is costly,” said Dakito, echoing concerns about the sustainability of such regulatory burdens for younger institutions.

Nonetheless, the listing is expected to stimulate market participation and provide a benchmark for other financial institutions considering similar steps. According to Eshetu, Gadaa Bank plans to eventually issue new shares to raise capital, though its current focus remains on secondary market activity.

The Bank’s Chairperson, Hassan Hussen (PhD), described the move as a statement of institutional credibility.

“This listing demonstrates our commitment to trust and transparency,” he said. “It enhances our financial profile and positions us for strategic growth.”

PUBLISHED ON Jun 29,2025 [ VOL 26 , NO 1313]