Dashen Bank Grows Bigger, Safer, But Not as Profitable

May 17 , 2026. By BEZAWIT HULUAGER ( FORTUNE STAFF WRITER )

Dashen Bank closed the 2024/25 financial year, expanding its total assets by 38.5pc to 254.5 billion Br and deposits by 38.7pc to 202.2 billion Br. However, gross profit saw a marginal increase of 5.1pc, reaching 6.68 billion Br. The Bank added more than 70 billion Br in assets, but total expenses surged by 44pc to 24.8 billion Br, pushing the cost-to-income ratio up to 69pc, an eight percentage points deterioration from the previous year. Shareholders experienced a modest 321 million Br in additional gross profit despite the massive scaling of the Bank's balance sheet.

Dashen Bank entered the foreign-exchange reform year with a defensive proposition. It grew large enough to protect its market position, preserve liquidity, and push more customers out of costly branches and into digital channels. By June 2025, that proposition had worked in scale, but less convincingly in earnings.

Using net profit, operating income, average assets and average equity, Dashen Bank’s return on equity of about 22pc came from a 28.5pc margin, 9.46pc asset turnover and 8.32 times equity multiplier. Its reported return on assets was 2.7pc. Costs and foreign-exchange losses absorbed much of its revenue gain.

The Bank closed the 2024/25 financial year with assets of 254.5 billion Br, up 38.5pc, and deposits of 202.2 billion Br, up 38.7pc. Net loans and interest-free banking financing grew by 17.3pc to 134 billion Br. However, gross profit increased by only 5.1pc to 6.68 billion Br, while net profit grew by one billion Birr to 5.9 billion Br. Although the Bank added more than 70 billion Br in assets, its shareholders saw only about 321 million Br in additional gross profit.

It was this gap that defined the year for Dashen Bank. Revenue climbed 34pc to 31.4 billion Br, but expenses surged by 44pc to 24.8 billion Br. The cost-to-income ratio deteriorated to 69pc, eight percentage points higher than the previous year and 58pc two years earlier. According to analysts, Dashen Bank expanded faster than it earned, becoming larger and more liquid while losing operating sharpness.

Board Chairman Dulla Mekonnen called it a year of “complex operating environment,” shaped by mixed global signals, volatility, inflation and geopolitical uncertainty. At home, foreign-exchange shortages, inflation, import costs and tougher Central Bank rules narrowed room for manoeuvre.

"Dashen continued to demonstrate resilience, foresight and agility,” said Dulla.

The "resilience", however, came at a price. For Dashen Bank, the floating of the Birr resulted in a foreign-exchange loss that initially reached nearly four billion Birr in early July before recovery efforts reduced it to a little over half by year-end. A year earlier, the Bank recorded a foreign-exchange gain of 129.3 million Br, accounting for much of the profit gap.

Aminu Nuru, the Doha-based financial analyst, sees Dashen Bank as a large bank operating inside a narrow policy corridor. Its loan-to-deposit ratio fell from about 78pc. At 66.3pc, it was lower than Bank of Abyssinia’s 79.5pc and Wegagen’s 77.1pc, and higher than Awash’s 64.6pc and Zemen’s 64.4pc.

“It isn't a sign of low credit appetite,” Aminu said, pointing to the Central Bank’s 18pc credit growth ceiling to contain inflation.

Dashen Bank mobilised deposits faster than it could lend them, pushing surplus funds into lower-yielding treasury instruments and placements. The Bank's President, Asfaw Alemu, offered the same defence.

“Even though we couldn’t lend it to customers, we've invested it elsewhere,” he told Fortune.

Customer deposits made up nearly 90pc of liabilities, while borrowings were below one percent of assets. Cash and bank balances nearly tripled to 58.7 billion Br, and its reserves with the Central Bank grew by half. The position protected liquidity but reduced earnings intensity. Industry-wide, assets grew 44.5pc to 4.74 trillion Br, deposits by 40.7pc to 3.51 trillion Br, liquid assets to 1.07 trillion Br (90.9pc growth), and net income after tax reached 93.4 billion Br.

Compared with its peers, Dashen Bank's story was mixed. Awash Bank remained the largest private bank, with assets of 442.6 billion Br. Its paid-up capital of 27.9 billion Br was nearly twice Dashen’s, and its earnings per share reached 783 Br, against Dashen’s 456 Br. The Bank of Abyssinia had assets of 286.2 billion Br. However, Dashen remained larger than Zemen, with assets of 88.6 billion Br, and Wegagen, with 84.7 billion Br.

Yet Dashen’s net profit to total assets, at 2.32pc, was the weakest among these peers, ranging from Bank of Abyssinia’s 2.55pc to Zemen’s 6.62pc.

Personnel and administrative expenses consumed 56.8pc of total expenses, below Awash’s 63.3pc but above Abyssinia’s 48.6pc.

Funding costs were better controlled, with interest expense absorbed 30.9pc of total expenses, below Abyssinia, Zemen and Wegagen, though above Awash. Savings deposits made up 51.1pc of deposits, giving it funding flexibility, while net interest income reached 14 billion Br, 44.6pc of total gross income and 67.7pc of operating income.

Foreign currency remained a source of strength despite the loss. Dashen Bank generated 1.12 billion dollars, up by 15.6pc, and deployed 914.5 million dollars. The 81.9pc generation-to-deployment ratio showed measured use of scarce foreign exchange by corporate, import and export customers.

Credit quality improved but did not reassure. Stage 3 loans and interest-free banking (IFB) financing were about six billion Birr, producing a 4.42pc ratio, down from about 7.12pc a year earlier. The ratio remained above Abyssinia’s 2.6pc, Zemen’s 2.93pc and Awash’s 2.23pc; only Wegagen was weaker, at 5.98pc. Dashen’s IFRS allowance of 1.69 billion Br covered 28.1pc of Stage 3 exposure, against peer coverage ranging from 64pc at Zemen to 114.6pc at Bank of Abyssinia.

The asset-to-equity ratio was 8.86 times, below Abyssinia’s 9.92 times but above Awash’s 7.59 times. The capital-to-asset ratio (11.29pc) was stronger than Abyssinia’s 10.08pc but weaker than Awash, Wegagen and Zemen. Total capital adequacy remained at 14pc, while primary capital slipped from 12pc to 11pc.

To strengthen the buffer, shareholders approved a 14.3 billion Br capital increase. The Board recommended 796.1 million Br in cash dividends and 1.86 billion Br in share dividends, maintaining a 70pc share and 30pc cash mix. According to Asfaw, Dashen Bank has long favoured stock dividends and is selling shares to create a buffer against growth risks.

For newer shareholders, like Berhanu Arega, a supply chain manager at MIDROC Investment Group, the return still looked attractive. He took dividends in his first year, then shifted toward building holdings through share purchases. He plans to invest further now that the Bank has joined the capital market, which he believes will make share acquisition easier, though Awash Bank has delivered stronger returns.

Dashen launched what its leadership praised as Ethiopia’s first banking SuperApp with EagleLion System Technology, built locally to reduce recurring foreign-currency software costs. For Asfaw, Dashen Super App is a ‘platform’ rather than a mere mobile app, reaching about two million subscribers, 90pc of which are fully activated within six months, and processing 1.7 billion Br in daily person-to-person transactions. In the last nine months, more than 200 million transactions were conducted.

Aminu obserevd that the SuperApp gives Dashen a defence against foreign-exchange volatility, substantially reducing hard-currency maintenance costs and shifting customers from costly infrastructure. Its mobile phone subscribers jumped to 2.63 million from 1.91 million.

However, the brick-and-mortar network still grew, opening 26 branches and consolidating two, ending the year with 906 branches. Dashen Bank generated 223.2 million Br in deposits per branch, compared to Zemen Bank's (operating 132 branches) 488.2 million Br, Awash's 336.6 million Br, Abyssinia's 262.1 million Br, and Wegagen's 146.1 million Br.

Account holders reached 7.88 million, up from 6.71 million; loanees increased to 40,758 from 32,428; and staff, including outsourced employees, reached 19,102. According to analysts, Dashen Bank is pursuing physical reach and digital scale, which will work only if digital channels cut costs faster than wages, compliance, technology and administration rise.

Dashen earned 522,000 Br in net profit per employee, still below stronger peers.

At the Bole Medhaniyalem branch, the shift is visible. Zentalem Getahun has spent 25 years with Dashen Bank, after arriving from Dessie in the Amhara Regional State and joining as an intern following graduation from Addis Abeba University’s Commerce Campus. Her branch cut its workforce from 50 to 34 under resource optimisation. It still mobilised more than 600 million Br in deposits this year, including 300 million Br in three months.

Zentalem has watched banking change from when customers could not withdraw cash from branches in other regions because networks were limited. Dashen now offers e-commerce integration, instant account opening, virtual MasterCard issuance, and school-fee payments through a single application.

According to Asfaw, his management is pursuing “Branch Rationalisation” across its network, including resizing, downsizing or closing units where Central Bank rules permit. Dashen Bank is also moving toward paperless operations.

Interest-free banking offered another growth lane, with deposits jumping to 15.8 billion Br (a 42.3pc growth), mobilised from 1.31 million customers. IFB financing expanded by 74.5pc to 13.89 billion Br after the fully-fledged IFB branch network grew to 94.

Agriculture is being tested through risk sharing. Asfaw disclosed a pilot project in Arsi Zone, Oromia Regional State, for barley production, which he hopes could expand to 50,000 farmers this year with the International Finance Corporation (IFC), insurers and off-takers.

“There is a risk in agriculture," he said. "We're trying to mitigate the risk by sharing it.”

Aside from its immediate peers and against an 11-bank average, Dashen looked neither weak nor dominant. The average net profit margin on total assets was about 2.1pc, below Dashen Bank’s 2.32pc, while the average asset-to-equity was about eight times, below Dashen’s 8.86 times. The average capital-to-asset ratio was 12.5pc, above Dashen Bank’s 11.3pc, and the loan-to-deposit ratio of 73.5pc, eight percentage points higher than Dashen’s. The loan-to-asset ratio was 59.6pc, against Dashen’s 52.7pc.

Aminu argued that Dashen’s main challenge has moved from scale to optimisation.

"Costly branches, payroll pressure, weak staff productivity, rising expenses and foreign-exchange losses weigh on profit," he told Fortune.

Aminu urged the managment to tighten costs, restructure branches, deploy excess liquidity into higher-yielding instruments and strengthen credit management to keep loans within regulatory ceilings.

PUBLISHED ON May 17,2026 [ VOL 27 , NO 1359]