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The Commercial Bank of Ethiopia (CBE) has achieved a significant milestone in the 2015 Ethiopian fiscal year, with its deposits surpassing an impressive 1.1 trillion birr. This remarkable accomplishment accounted for half of all deposits mobilized within the banking industry during that period. CBE’s resource base received an outstanding 18.3% boost, raising a staggering 163.2 billion birr over the fiscal year.
The announcement of this achievement was made during a performance evaluation meeting held at CBE’s new headquarters, attended by the board of directors and bank management. While expressing some dissatisfaction with the deposit mobilization compared to the set target, Abe Sano, the president of CBE, acknowledged the intense competition within the banking industry and considered the performance relatively better.
During the fiscal year, CBE aimed to mobilize approximately 205 billion birr but fell short by 41.8 billion birr. Despite this, the bank has ambitious plans to mobilize a deposit of 214 billion birr during the 2016 Ethiopian fiscal year, aiming to reach a total deposit base of 1.3 trillion birr.
On the credit disbursement front, CBE successfully disbursed 89% of the planned 169 billion birr. The bank’s capital witnessed remarkable growth, reaching 63.1 billion birr, representing 27.7% of the total capital registered by the banking industry. Additionally, CBE’s total assets expanded to 1.3 trillion birr.
The growth of private banks and the entry of new players in the industry have posed challenges to deposit mobilization in recent years. With the number of banks operating in the country nearly doubling in the past two years and new financial firms emerging, competition has intensified, compelling institutions to attract customers with attractive savings rates and product packages.
In recognition of the need for global competitiveness, the Ethiopian government has taken steps to open up the country’s financial sector. The National Bank of Ethiopia (NBE) plans to issue banking licenses to foreign investors, aiming to grant up to five licenses within the next five years. However, at present, the state-owned CBE maintains the largest market share in the industry.
CBE also excelled in foreign currency earnings, generating $3.5 billion throughout the fiscal year. This achievement surpassed the set target by 107% and represented a 32.1% increase from the previous year. CBE’s foreign currency allocation mainly went to fuel and fertilizer imports, highlighting its role in generating hard currency for the country.
Amid the foreign exchange shortages faced by Ethiopia, CBE’s efforts in expanding digital financial services have been notable. The introduction of the EthioDirect money transfer service in January 2023 aimed at serving the Ethiopian diaspora in seven countries, enabling convenient money transfers to Ethiopia. Additionally, the “Fuel Up” digital application, introduced in collaboration with the Ministry of Transport and Logistics and National Oil Ethiopia in April 2023, streamlined fuel payment transactions for customers.
CBE’s dedication to growth and innovation signifies its commitment to contributing to Ethiopia’s economic development and financial stability.
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