Wegagen Bank's road to recovery has been cemented following the restoration of peace in Tigray Regional State, where the majority of its branches operate. Its executives were able to reopen the 112 branches that had closed during the two-year war in the region, which came to an end a year ago after the warring parties signed an accord in Pretoria, South Africa, in November 2022.

Peace brought back a stable yet progressive trajectory for Wegagen Bank in an increasingly competitive industry. Despite its recent turbulent past, it has maintained a solid presence, underpinned by significant assets and a strong equity base. Board Chairman Abdishu Hussien reassured some of the 11,345 shareholders recently met at the Hilton Hotel that the strategic steps taken to restore the Bank's presence, including the introduction of treasury bonds, have paid off.

However, banking experts caution areas that require strategic focus to enhance its performance, including profitability per share, equity efficiency, and asset utilisation.

Incorporated in 1997 with 60 million Br equity raised from 16 shareholders, Wegagen Bank has seen its total assets grew by 24pc to 53.49 billion Br. Its paid-up capital increased by 17.4pc to 3.98 billion Br, though it still falls short of the regulatory minimum threshold set for 2026. Despite a decline in the capital adequacy ratio, the Bank maintains a strong capital position. During the prior year general assembly, shareholders passed a resolution to increase the paid-up capital to 20 billion Br, reminiscing over the times when they received as high as 50pc in dividends.

Alazar Abebe, a shareholder for a decade, acknowledged the Bank's progress but suggested that consolidation could be beneficial to enhance capacity and rebrand the Bank, which he believes has been marred by political undercurrents.

"They should consider a merger," he told Fortune.

However, Wegagen has shown a commendable performance for the second consecutive year. Its asset and equity figures place it in a mid-to-upper tier position among its peers, a status that becomes more evident when considering the Bank's profitability. Its net profit rose by 49.4pc to 823.82 million Br, marking a significant improvement over the previous year. Nonetheless, Wegagen's earnings still trail behind peers such as Nib and Hibert banks, which reported profits of 1.5 billion Br and 2.29 billion Br, respectively.

The earnings per share (EPS) also increased to 22.7pc from 16.6pc, although it remains half the average among the 15 top private banks in the industry of 30.

Wegagen Bank's notable achievement in the past operational year was turning a loss of 279.73 million Br in foreign exchange into a gain of 106.78 million Br. Industry analysts such as Abdulmenan Mohammed (PhD) praised this turnaround as a "remarkable achievement." The credit for this turnabout goes to the Bank's executive team, led by its President, Aklilu Wubet (PhD), who assumed executive mantle in February 2022.

Under Aklilu's stewardship, Wegagen Bank has reinforced its stature in the banking industry, focusing on healthy loan disbursement and maintaining foreign currency reserves. Aklilu attributed the importance of narrowing the gap between foreign currency liability and assets and timely settlement of letters of credit to reversing the previous losses.

The Bank's total equity stands at 6.9 billion Br, a significant figure when viewed against its total liabilities and assets of 46.5 billion Br and 53.5 billion Br, respectively.

Its Return on Equity (ROE) and Return on Assets (ROA) stand at 22pc and 1.7pc, respectively. Top performers like Awash and Abyssinia banks boast ROAs of 4.3pc and above. Though moderate, these point to average performance in asset and equity management, crucial indicators of a bank's efficiency in using its resources to generate profits. The average ROE for the 15 banks was at 19.8pc.