Ethiopia’s State-Owned Bank Mops Up 58% of Deposits in Banking Industry

The Commercial Bank of Ethiopia’s (CBE) total deposits have surged to 1.4 trillion birr as it managed to mobilize close to 245.9 billion birr in the past six months. CBE’s performance was 146.7% of the Bank’s half-year target while it accounted for 58.3% of the 423.1 billion birr collected by the banking sector.

CBE is the only bank that qualified as a large bank in the latest financial stability report by the National Bank of Ethiopia. At the end of June 2024, its total assets and deposits constituted just under half (47.9% and 47.1%, respectively) of the whole banking sector. Ethiopia’s parliament ratified a bill back in November that greenlit the issuance of 845-billion-birr bonds to settle government-guaranteed but nonperforming loans predominantly owed by other state-owned enterprises (SOE).

CBE, which is currently conducting its half-year performance review, is among the 40 SOEs managed by Ethiopian Investment Holdings (EIH), the country’s sovereign wealth fund. The Bank is also a major player in Ethiopia’s emerging digital financial ecosystem with digital transactions outnumbering traditional channels over the past year.

Re-capitalization of CBE and cleaning of its balance sheet is one of the main undertakings implemented under the International Monetary Fund prescribed four-year economic program for Ethiopia. In December, the World Bank approved a $700 million credit line for Ethiopia under the Financial Sector Strengthening Project with most of the funds directed to the state-owned behemoth.