At Nib Bank, a House Divided Over Billions Lost

Nov 2 , 2025. By BEZAWIT HULUAGER ( FORTUNE STAFF WRITER )

A fierce dispute among shareholders erupted at Nib International Bank’s general assembly after the announcement of a 4.4 billion Br foreign exchange loss and a net loss of 2.9 billion Br for the 2024/25 financial year. The meeting, held at Millennium Hall, on Africa Avenue, unearthed the scale of the crisis and brought simmering boardroom battles into the open.

Nib International Bank S.C. has found itself at the epicentre of a severe governance crisis, which exploded into public view during a contentious general assembly held at Millennium Hall on October 25, 2025.

Allegations of foreign exchange losses, governance breakdown, and deep internal divisions shocked shareholders and cast a long shadow over the Bank's future.

The 2024/25 financial year proved fateful for Nib Bank, which posted a 4.4 billion Br loss in foreign exchange transactions and a 2.9 billion Br net loss, wiping out profitability and rattling shareholders' confidence. Addressing shareholders, the new Board, under Chairman Shisema Shewakena, delivered a scathing assessment of its predecessors, accusing former directors and executives of “reckless lending,” abuse of foreign exchange mechanisms, and leaving the Bank in a 5.85 billion Br liquidity hole.

The fallout included heavy regulatory penalties, the temporary suspension of Real-Time Gross Settlement (RTGS) services, and an erosion of credibility with correspondent banks after over 80 million dollars in Letters of Credit (LCs) were allegedly opened without sufficient reserves. A 3 billion Br uncollateralised facility secured from the National Bank of Ethiopia (NBE) has staved off collapse, but the damage is extensive, with total repayments reaching 6.54 billion Br.

However, the Bank’s general assembly voted to exempt three former board directors - Melaku Woldemariam, Amare Lemma and Kifle Sebgaze - from a civil lawsuit seeking 507 million Br in damages, a case that has exposed deep fissures among the shareholders.

The lawsuit, filed by Nib Bank at the Federal High Court on May 8, 2025, charged 30 former board directors, senior executives, and external auditors. The Bank accuses these individuals of "gross mismanagement, self-dealing," and a range of violations, including flouting the Central Bank's directives, non-transparent procurement practices, and the "abuse of foreign exchange mechanisms," allegedly causing it to incur substantial losses between September 2021 and early 2024.

The list of defendants includes former Board Chairman, Woldetensay Woldegiorgis; former President Genene Ruga, and past auditor Tewodros Fikre. The Bank claims that the individuals it accused authorised loans "in violation of existing lending restrictions, acted in the face of clear conflicts of interest, disregarded risk assessments, and manipulated financial reports." These actions, the Bank contended, resulted in regulatory fines and tax penalties.

The severity of the claims, combined with the scale of the alleged loss, marks the case as one of the most serious governance crises in the private banking industry in recent years.

At the general assembly, Nib Bank’s legal service head, Assebe Tizazu, presented a motion requesting the exemption of the three former board directors from the lawsuit. The motion argued that these individuals had consistently recorded dissenting opinions in board minutes and had openly voiced their objections during meetings.

“These individuals have tried their best to restore the truth but have been overturned by the majority voice,” Assebe told the shareholders.

According to Assebe, the exemption would grant the trio freedom from the current court proceedings, although the right to pursue action against them in the future would be preserved.

In a sharply divided vote, 66.4pc of shareholders supported the motion to drop the lawsuit against the three, while 32.8pc voted against it, with the rest abstaining. Nonetheless, some of the shareholders openly questioned the wisdom of the move. One shareholder attending the meeting went so far as to suggest suing the National Bank of Ethiopia (NBE), arguing that the regulator had attended all annual meetings, reviewed audit reports, but failed to intervene despite warning signs.

“The penalties the NBE issued should be lifted for those trying despite being suppressed," he said, noting that they deserve a reward.

Others argued that accountability for the Bank’s losses should extend beyond internal actors, with another shareholder advancing the view that the NBE’s role warranted legal scrutiny. The emotion in the room was evident as shareholders spoke about the impact the crisis had had on their investments.

“How can we talk about their freedom when the Bank has been damaged for three years?” asked Kefyalew Berhanu, a shareholder. “I bought this share for my retirement.”

Kefyalew pressed the assembly to recognise the reputational damage suffered by Nib Bank, as well as the financial harm, and urged that those involved should be reported to the Anti-Corruption Commission.

Other shareholders echoed similar concerns, including Fikru Worku, who charged that the Board had effectively presented a motion “without a choice.” He called on all present to “see the bigger picture” and argued that “there should be no one exempt from the suit.”

Fikru proposed that the Board assume representation rights and make decisions on behalf of the general assembly, a position that resonated with others seeking more decisive leadership. Calls for harsher penalties were voiced by Tilahun Tsegaye, a shareholder, who insisted that criminal proceedings should supplement civil charges.

“Not only civil charges but criminal charges as well,” Tilahun argued, reflecting a mood of anger and mistrust apparent in the hall.

The Board's mandate to recommend the exemption came under scrutiny as well, with Re’eyot Zewede, a shareholder, questioning the authority the Board uses to make such a proposal. He insisted that the courts, not the general assembly, should be responsible for deciding whether to drop the case. Another shareholder, Berhanu Woldegiorgis, urged that accountability for the crisis should take into account the pressure placed on Board members at the time, stating the complexity of assigning blame in a period marked by institutional stress and factional disputes.

The roots of Nib Bank’s governance troubles stretch back several years and have been aggravated by ongoing disputes over ethical standards and boardroom decision-making. In May, two former board directors, Amare and Kifle, submitted a formal appeal to the current Board, demanding to be excluded from the lawsuit citing their previous letters for urgent action over alleged violations of the Bank’s founding value of “integrity.” Their appeal, relayed by Melaku, cited "conflicts of interest, lack of transparency, and failure to uphold professional standards" in the Board’s actions.

According to Melaku, who has been represented by Amare and Kifle in the past, his duties as a commissioner for the Ethiopian National Dialogue Commission had prevented him from signing on to the latest complaint.

“Our case is the same, though,” he told Fortune.

According to Amare, the saga began in December 2022 when he raised the alarm over “integrity failings" under Board Chairman, Woldetensay. Amare alleged an arbitrary assignment of board members to Nib Insurance, the outsourcing of bank functions without proper study, the denial of promotions based on merit, and the questionable auditing of the Bank President’s conduct. Tensions escalated in December 2022 when a study recommending full outsourcing of Nib Insurance operations was not tabled for discussion, prompting Amare to accuse the Board of “disrespecting" its collective wisdom.

The most serious confrontation reportedly took place in 22 December 2022, during a retreat at the Skylight Hotel, on Africa Avenue. There, Amare claimed that then-president Genene issued a threat. Amare called for disciplinary action under the Bank’s code of conduct. He later wrote a follow-up letter comparing the episode to a similar incident that occurred in the same week and urging the Board to protect members from alleged intimidation.

Further disputes followed. In January 2023, Kifle submitted a criticism of a Board meeting that was allegedly held in violation of NBE's directives, accusing the leadership of alienating key staff by removing heads of audit, risk, and compliance without due process. Questions about the transparency and merit of management appointments also surfaced, with allegations that senior positions were filled despite apparent competency gaps and a lack of relevant experience.

The document also challenged the Board’s approval of senior management appointments. Leulseged Nigussie was named chief corporate operations officer, while Abraham Tesfaye was appointed vice president for Strategy & Marketing.

Nib Bank’s new Board of Directors, under the chairmanship of Shisema, has publicly blamed its predecessors for "leaving a legacy of financial instability and regulatory breaches."

Addressing the annual meeting two weeks ago, Shisema delivered a biting assessment of the former board and management. He accused the previous leadership of plunging the Bank into a severe liquidity crisis through "reckless lending and poor foreign exchange management."

He reported that Nib Bank had been left with 2.85 billion Br in long-term debt, forcing the institution to borrow at high short-term interest rates and incur charges of 658.4 million Br. Shisema also cited inherited provision liabilities of over 5.2 billion Br from private banks at interest rates of up to 24pc, a figure that has since reduced by 2.1 billion Br through disciplinary action. Liquidity shortfalls were so acute that Nib Bank failed to meet the Central Bank’s 15pc liquidity ratio, temporarily blocking Real-Time Gross Settlement payments and triggering penalties totalling 348.4 million Br. This included 251 million Br for liquidity breaches and 97.4 million Br for RTGS payment delays.

Shisema also alleged that previous management had opened Letters of Credit (LCs) "without sufficient reserves, exposing the Bank to heavy risk and damaging relationships with international correspondent banks." The fallout included demands for guarantees and the halting of warranties, with one example being an LC issued to the Ethiopian Shipping & Logistics Services and HAWK International Finance & Construction Co. Ltd.

Despite the crisis, some shareholders used the meeting to praise the Bank’s commitment to transparency during the turmoil.

Samrawit Behailu, a corporate law expert with nearly a decade of experience, described the shareholders’ concerns as fair, but clarified that because the case is a civil matter, the Board is legally empowered to exclude any party it chooses from the lawsuit.

“If the Bank has sued the Board despite their appeal, and by odds if they won, the three people can ask for redemption of lawyers’ fees, reputational damage, and other costs,” Samrawit said. "The outcome would likely depend on the approach of the lawyers involved."

She also doubted the merit of the calls to sue the NBE, stating its status as an autonomous institution with supervisory powers.

“NBE can be held accountable for failing to implement its regulatory authority, but can't be liable for a financial institution’s financial standing,” she said.

PUBLISHED ON Nov 02,2025 [ VOL 26 , NO 1331]