Cooperative Bank of Oromia Share Company (CBO) is set to construct its new Headquarters near the National Theatre at an initial cost of 700 million birr.
Wondimagegnehu Negera, President of CBO told Capital that the total construction area represents 5,040 square meters, and the planned building is to be not less than 25 storeys.
CBO is currently clearing the land and making compensation payments to the existing tenants on the plot and plans to start building by the end of 2013.
In related news the bank also revealed that it is currently installing a core banking solution in all its branches at a cost of some 50 million birr, to be finished by March.
The technology has currently started in a few of its branches.
Gross Profit target exceeds by 18pc
Meanwhile, CBO announced that it recorded 100.08 million birr gross profit in the past six months of the current Ethiopian Fiscal year 2012/13, which is 18 percent above its target. The gross profit also represents an increase of 38 million birr from last year’s midterm earnings.
The bank’s branches portfolio also showed strong growth, with 16 new branches opened in the six month period. CBO now counts 72 branches, including bureaus in towns such as Legetafo, 19 kms north of Addis Ababa, and Kemise, 376 kms north of Addis Ababa, where previously there were no bank branches.
However, CBO disclosed that the success did not come without difficulties. It faced numerous challenges including high market competition, economic challenges and inability to meet customers’ demand in satisfying huge loan appetite, and foreign currency demand.
Wondimagegnehu further said the country’s export structures have to be diversified with emphasis on heavy industries rather than relying on agricultural products.
He also said that he noticed weaknesses in attracting remittances through the bank’s various branches, scarcity of foreign exchange, weak coffee and sesame export figures, and underutilization of some bank branches potential.
NPLs well below threshold level
Regarding Non Performing Loans (NPLs) CBO said it’s well below the National Bank of Ethiopia’s threshold of five percent of all loans given out, reaching about one percent.
The ratio of NPLs decreased by 96 percent an impressive achievement for CBO.
In the near future, the bank plans to focus on great market potential areas such as Humera and Dedessa that are centres for sesame exports.
CBO was registered commercially on October 29, 2004 with an authorized capital of 300 million birr. It started operation on March 8th, 2005 with paid up share capital of 112 million birr.
CBO’s paid up capital today is 361.72 million birr, with total deposits of 2.95 billion birr, total assets of 4.25 billion birr and 184,446 account holders.