Sunday, October 1, 2023
BusinessWegagen expects profit to reach pre-war level in 2022

Wegagen expects profit to reach pre-war level in 2022

Wegagen Bank said its profit would reach pre-war level once the security situation improves in Northern Ethiopia, a development that forced it to experience a sharp fall in earnings.

Established almost 25 years ago, Wegagen recently reported a decline in gross profit from over one billion birr to less than 193.1 million birr in the last fiscal year, the lowest in the industry.

The management of the Bank has already designed a recovery plan and is undergoing restructuring to rebound from the sharp decline in profits and shareholders’ return.

The move comes as the Non-Performing Loans of the Bank increased from 1.2 billion birr to almost three billion birr.

Acting president of Wegagen Bank, Aklilu Wubet, in an interview with The Reporter, disclosed that Wegagen is financially sound and is in a position to recover this year.

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His prediction is based on an assumption that peace would prevail in the northern part of the country, particularly Tigray, where a third of Wegagen’s branches are located.

“If peace is going to prevail, the government would put all of its efforts on the economy, while it would enable us to reopen our branches, collect unpaid loans and increase our deposit,” said Aklilu.

But if the tense security situation continues, Wegagen plans to use its active branches. The Bank has over 143 branches in Addis Ababa alone.

“We should not forget that new banks are joining the sector, let alone us with huge resources on our hands. We have already started designing strategies and communicating with the Board to boost our pool of resources,” Aklilusaid.

With over 4,957 human resources, Wegagen is one of the most capitalized financial institutions in Ethiopia. Its paid-up capital reached 3.2 billion birr by the end of the last fiscal year.

Wegagen was one of the top five profitable financial institutions in Ethiopia for over two decades before facing a profit decline last fiscal year

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