Monday, May 20, 2024

Banks target the diaspora for share sales


Ethiopian banks are expected to begin fresh share sales in the current fiscal year in connection with the opening up of the financial sector for Ethiopian born foreign citizens.
Some of them have already started lobbying the Diaspora to be shareholders in their banks.
According to the information Capital obtained, private banks are in preparation to hunt for potential big shareholders from places such as North America, Europe, and the Middle East. On the other had some of the biggest banks like Awash Bank and United Bank are already aggressively working on it to attract potential hard currency holders to get a stake in their banks.
The parliament recently has ratified a law that would allow Ethiopian born foreign citizens to invest in the financial sector.
However experts said that the Diaspora might be attracted in the well-established financial firms to join the sector.
Capital sources confirmed that private banks are working to include non-Ethiopians into their business.
“We have toured North America to attract the Diaspora in our bank,’ Taye Dibekulu, President of United Bank, told Capital.
He said, in May they were on tour in North America, which is the major destination for the Diaspora community, and even lobbing the potential Diaspora community to work with the bank.
“During our tour we have introduced our businesses associated with the Ethiopian community,” Taye said.
“Currently the Diaspora has more interest in the country compared with the previous period and we considered that it is fertile ground,” he added.
“It is early to talk about the share sales since the proclamation should be published on Negarit Gazette even though it is ratified by the parliament and that should be also followed by issuing additional directives by the regulatory body, to implement the share sales,” Taye explained.
Experts said in the coming general assemblies of banks that mainly focus on the performance report of the past financial year might include an extraordinary meeting to expand their banks shares with the aim of including the Diaspora.
However some of the banks might not need the extra ordinary meeting since they have decided to expand their capital in the previous meetings and still open to fill the amended gaps.
Experts in the banking industry said that effort of banks to sell share to the Diaspora is the recourse mobilization strategy.
“It has three major benefits,” one of the bank experts, who preferred to be anonymous, told Capital.
“Initially it is mobilizing more hard currency, secondly the Diaspora shareholders will come directly or in another way come with inward investment, and the scheme will create contacts like the remittance and other businesses besides handling capable Diaspora,” he added.

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