Wednesday, June 12, 2024

Oromia Bank sees boom in IFB services


Deposit mobilization hits 34 billion birr

Oromia Bank registers a growth in deposit mobilization and interest free banking (IFB) activities in the past financial year.
The annual report of the bank indicated that in the year the deposit mobilization expanded by almost a quarter compared with the performance attained a year earlier.
The deposit mobilization of the bank surged to 34 billion birr a climb of 24 percent from the preceding year.
According to the annual report of the bank, the saving deposit has taken 62 percent of the total collection and it grew by almost 28 percent to stand at 21.3 billion birr. It was followed by demand deposit which expanded by 30 percent.
The total outstanding loan and advances that includes the interest free banking financing at the end of June 2021 was 25.8 billion birr, “exhibited a growth of 27 percent over the position attained at the end of the preceding year,” the report read.
On his message, Teferi Mekonnen, President of Oromia Bank, stated that in the 12 years of operational history, the bank concluded the year with the lowest ever non performing loan (NPL) ratio that stood at 2.43 percent.
In the reporting year, the total asset of the bank has spiked by 23 percent and reached almost 42 billion birr. In the 2019/20 financial year Oromia Bank’s total was 33.8 billion birr.
At the end of the year the bank has secured 4.5 billion birr income that increased by 18 percent from the revenue earned a year ago.
The bank profit before tax has increased by six percent to reach 1.13 billion birr that was 1.07 billion birr on June 30, 2020.
The profit after tax has stood at 872 million birr that was 860.8 million birr a year ago.
The paid up capital of the bank has reached 3.47 billion birr as of June 30 last year from the preceding year of three billion birr.
The IFB business, which Oromia Bank introduced as pioneer, is continuing on its promising growth in terms of financing and saving. The profit from IFB is stated as huge success even when compared with some other conventional financial firms’ profit.
The report indicated that in the year the IFB contributed a profit of 301 million birr which is a spike of 33.4 percent.
“IFB customers has significantly increased year on year reaching 611 thousand showing an increment of 62 percent from its last year customer base of 376 thousand,” the report mentioned the successes registered in IFB, an infant financial business for the country.
It added that the number of IFB borrowers also reached 810 at the end of the reporting year. “This indicates that the customers have developed big trust in our services as we are dedicated in offering the products and services,” the report opined.
For the year, the IFB deposit mobilization has stood almost at 4.9 billion birr with the growth of 23.6 percent compared with 3.9 billion birr of a year ago.
In the year, the total amount of financing the bank provided through IFB instruments has reached 3.5 billion birr that rose by 22 percent.
“As a result, the IFB financing to deposit ratio of the bank stood at 73 percent in the reported period,” the annual report said.
In terms of income, the IFB has expanded by 72 percent from 242 million birr in June 2020 to 416 million in June 2021. The income share from the total revenue of the bank constituted six percent.

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