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BusinessCBE faces USD half a billion slump in Forex earnings

CBE faces USD half a billion slump in Forex earnings

Commercial Bank of Ethiopia (CBE) faces almost half a billion dollar drop in foreign currencies secured from remittance and export, a new report revealed.

The Bank, which released its half year report this week, announced it has collected USD 1.4 billion from remittance and exports during the first half of the existing fiscal year, a decline from USD 1.85 billion in 2019/20.

Remittance accounts for over 90 percent of the amount of forex mobilized by the Bank, whereas the remaining was secured from exporters.

By the end of last month, the Ethiopian Diaspora Agency announced the country had secured USD 1.4 billion from remittance, half of which came through CBE, while private banks collected the rest.

“While there are efforts by stakeholders to increase flow of remittance coming through official channels, we expect the Diaspora to understand the adverse impacts of sending money informally on the country,” said Head of the Agency, Selmawit Dawit in a meeting held to promote foreign currency account, Diaspora mortgage and repayment of bond.  

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CBE witnessed a fall in forex earnings despite the slight increase in export earnings. In the first half of the existing fiscal year, Ethiopia was able to get USD 1.7 billion from the exports of goods, showing an increase of almost a quarter of a million compared to the same period last year.

Despite facing a drop in earnings, however, CBE managed to avail USD 2.5 billion to state-owned enterprises and private companies, as well as importers.

“The forex is availed to implement development projects that are being carried out by private and public companies, and part of which was also allocated to import items,” said the Bank in its statement released earlier this week.

The Bank also reported a gross profit of 7.4 billion Birr during the first half of 2021, while its total assets is nearing one billion Birr, reaching 903.6 million Birr.

According to the statement, in the same period, it also disbursed a fresh loan of 47.2 billion Birr and collected 83.2 billion Birr in deposit, achieving 221 percent of its target. Its outstanding customers’ deposits have reached 678 billion Birr.

Aiming to increase its outreach, CBE has opened 42 new branches during the report period, bringing the total to 1,646 and it now has 1.4 million ATM card and 1.8 million mobile banking users.

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