Premier Switch Solutions Posts Modest 4% Net Profit Growth Amid Birr Depreciation, Inflation Pressures

Premier Switch Solutions, the 16-year-old third-party banking technology and services provider owned by six private banks, has recorded a modest 4% year-on-year increase in net profits, reaching 88.8 million Birr. The company said it did not implement any fee increments despite incurring higher operating costs throughout the year due to Ethiopia’s shift to a market-based foreign exchange regime in July 2024, resulting in a 170% depreciation of the Birr. PSS’s profit before tax also took a hit, declining by 10% to reach 110 million Birr.

The company’s CEO, Amaha Tadesse, highlighted FY 2024/25 as a year of “revolutionary expansion and operational steadfastness,” amid intensifying competition in digital payments and increased demand for cash-lite services.

PSS continued to strengthen both its payment and trading business lines, the latter now operating as a subsidiary and reported separately.

Revenue climbed to 429 million Birr, a 17% rise from last year, supported by new digital services and increased transaction activity across its platform. PSS handled over 49 million successful ATM withdrawals, a 17% increase, totaling 56 billion Birr in cash, while the value of transactions rose 20%. Point-of-Sale (POS) transactions reached 142,780 purchases valued at 649 million Birr.

EthSwitch, Ethiopia’s national switch operator, processed 287.4 million interoperable transactions worth 741.1 billion Birr during the year. Person-to-person transfers, the fastest-growing category, jumped 158% to 128.3 million transactions for the national switch.

However, card issuance continued to expand across the broader payment sector. PSS personalized more than 1.29 million new cards during the reporting period, bringing its total card base to more than 8.1 million. International transactions jumped sharply, with over 55,600 operations generating 176.9 million Birr more than double both the planned volume and revenue.

The company’s asset base grew 30% to a record 565 million Birr, buoyed by heavy capital investment of over 260 million Birr in platform modernization, card personalization technology, and upgrades to legacy infrastructure. Paid-up capital increased by 50% to 362 million Birr, demonstrating what the company described as strong shareholder commitment.

Return on equity stood at 21%, a decline from last year, largely due to the exclusion of earnings from the trading subsidiary yet still signaling strong value creation over the company’s five-year growth trajectory.

PSS absorbed multiple cost pressures throughout the year, including the steep depreciation of the Birr and rising fuel and compliance-related expenses, without adjusting service fees charged to member banks. The company reported a cost-to-income ratio of 51%, indicating what executives described as a careful balance between investment and operational efficiency.

Looking ahead, PSS plans to scale new API-driven services and deepen its role in the national digital payments ecosystem, positioning itself to support the expansion of card acceptance, rural access, and secure real-time transactions.

“As Ethiopia’s digital economy evolves, we remain committed to strengthening our infrastructure and delivering sustainable value,” the company stated in its annual report.