By Eyasu Zekarias
In the face of various challenges that have affected Ethiopia’s banking industry over the past three years, including the impact of the COVID-19 pandemic, the conflict in the north, and breaches of international security, the sector has faced negative repercussions. These issues have also had an impact on remittances from abroad.
Despite these difficulties, Bunna Bank has demonstrated growth and met its planned targets, as outlined in a recent report. The widening gap between the black market and official exchange rates has significantly affected foreign currency collection, but the bank has managed to navigate these challenges successfully.
According to Ambassador Alemayehu Sewagene, Chairman of the bank’s board of directors, Bunna Bank achieved a pre-tax profit of 1.36 billion birr in the last fiscal year. The bank’s growth in this period was driven by interest income, accounting for 84.1 percent, with the remaining 15.9 percent derived from non-interest services.
Ambassador Sewagene also noted that the bank’s total assets reached 46.4 billion birr during the last fiscal year. Additionally, the bank obtained 175.7 million US dollars in foreign currency.
Bunna Bank recently held its 14th regular general meeting of shareholders on November 30, 2023. At the meeting, it was reported that the bank achieved a pre-tax profit of 1.35 billion birr and gathered deposits exceeding 36.59 billion birr by the end of the fiscal year.
The report highlighted a significant increase in deposits compared to the previous year, with an additional 9.4 billion birr collected during the fiscal year that ended on June 30, 2023. Consequently, the bank’s total deposits grew by 34.6 percent, reaching 36.6 billion birr, with savings account deposits comprising the largest share at 73.3 percent.
During his speech at the meeting, the Chairman of the bank’s board of directors emphasized that Bunna Bank managed to withstand the economic slowdown caused by internal peace and security challenges, as well as the volatile foreign currency exchange rates in the black market. The bank’s profitability and overall performance surpassed the previous year, providing encouragement to shareholders and employees.
The report further revealed that Bunna Bank extended loans amounting to 8.92 billion birr to various sectors of the economy, representing a 34.5 percent increase compared to the previous year. The decline in remittances and a slowdown in exports due to global and national issues negatively impacted the bank’s foreign exchange earnings. Export trade accounted for 55.5 percent of these earnings.
Moreover, the report indicated that the bank has established direct relationships with foreign money transfer organizations. Additionally, the bank’s total assets grew by 12.29 billion birr, reaching 46.39 billion birr during the fiscal year.
The bank’s capital increased by 1.5 billion birr, bringing the total capital to 6.5 billion birr, as stated in the report presented by the chairman of the board of directors.
Bunna Bank successfully attracted an additional 1,089,400 deposit account customers in the current financial year, representing a growth rate of 55.6 percent. This achievement increased the bank’s total number of customers to 3,050,253 by the end of the financial year.
The report also highlighted an increase in the number of mobile and internet banking users, contributing to a total transaction volume exceeding 10.6 billion birr.
Furthermore, the report mentioned Bunna Bank’s effective implementation of interest-free banking services through a dedicated account called “KHADIM,” which has its own unique identity and business name. This initiative has resulted in deposits obtained through interest-free banking services totaling 1.63 billion birr.
