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Commercial Bank of Ethiopia Collects 1.17 Trillion Birr Deposits

CBE,v2

Ethiopia’s biggest financial institution, the state-owned Commercial Bank of Ethiopia (CBE) has crossed a formidable financial threshold as its deposits

September 4, 2024
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Team Shega

Addis Ababa, Ethiopia

CBE,v2

Ethiopia’s biggest financial institution, the state-owned Commercial Bank of Ethiopia (CBE) has crossed a formidable financial threshold as its deposits reached 1.17 trillion birr in the calendar year. CBE’s 11% rise in deposits aligned with significant strides in its loan disbursements with 218 billion birr given out during the year. With less than 10% of the loans going to the public sector, it marked a significant turnaround for an institution historically criticized for leaving out the private sector.

The Bank’s figures were revealed during its performance dialogue session with the management of Ethiopian Investment Holding (EIH), the country’s sovereign wealth fund, mid-week. Attendees included freshly crowned CEO of the Fund Brook Taye (PhD) who has been conducting evaluations over the past two weeks, and CBE president Abie Sano.

CBE, which holds 58% of banking assets in Ethiopia, is one of the top earners among the 26 state-owned enterprises within EIH’s portfolio.  A month before Ethiopia adopted the four-year economic reform program prescribed by the International Monetary Fund (IMF), the Council of Ministers approved a capital raise for the Bank bolstered by 870 million billion birr(government securities).

The reform program includes tight limits on SOE borrowing including CBE governance reform backed by the World Bank to enhance financial discipline. WB’s Financial Sector Strengthening Project (FSSP) of US$700 million will be used for recapitalization and continued support of the reform and restructuring of the bank. This will include a focus on governance and risk management, including CBE’s ownership policy, mandate, and business plan to ensure CBE can compete as a sound, viable, and commercially oriented bank at arms-length from the government as the financial sector is opened.

CBE, which was categorized as the only large bank in the central bank’s financial stability report, has also increased its number of accounts by 4.7 million reaching a historic 45 million.

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