Wednesday, January 25, 2023
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BusinessMarginal rise in bank profits as EPS decline

Marginal rise in bank profits as EPS decline

Addis International Bank SC reported last week a marginal rise of seven million birr in its after-tax profits while its earnings per share fell.

The 92 million birr profit registered last fiscal year is much less than that of the preceding year. During fiscal year 2016, the bank reported a 46 increase in its net profit after tax. At the same time, earning per share (EPS) also showed a three percent rise.

However, as of June 30, 2017, EPS of Addis of 1,000 birr par value declined from 193 birr to 27.17 birr. The bank has gone through a similar pattern of EPS decline since 2011.

In its annual report, the bank attributed the decline in EPS to substantial increase in paid-up capital and slow growth in after-tax profit.

The bank has managed to increase its paid-up capital from 516.3 million to 609 million birr.

In addition, looking at its balance sheet, Addis has managed to expand its total assets by 38.6 percent to 3.41 billion birr whereas as for deposit generation, it mobilized a total deposit of 2.4 billion birr, a 46 percent increase from the preceding year.

In terms of loan and advance, the bank disbursed a loan and advance of 1.6 billion birr, reflecting a 45.7 percent rise from the previous reporting year.

As far as widening its customer base is concerned, this has reached 9,171 as of June 30, 2017 up from 8,370 the previous year.

Its major shareholders include institutions such as Yirgachefe Coffee Farmers’ Cooperative Union, Ethiopian Roads Authority as well as Ethiopian Airlines Employees’ Savings and Credit Cooperative.

As for incomes, Addis generated 199.7 million birr of interest income from loan disbursed out of a total income of 377.3 million birr.  This year’s increment by 28 percent is also lower than its previous year, which was 42 percent.

Looking at the total income of the bank, the net gain from foreign exchange dealings showed a decrease from 118 million birr to 104 million birr.

The bank’s gain from foreign exchange, unlike the general declining trend across the industry, showed a slight improvement by 24.2 percent to 30.6 million birr. As far as the industry is concerned, the decline is basically associated with a nation-wide shortage of forex.

Private banks such as Lion have also reported a declining trend while Bunna Bank was the exception with a very slight increase.

Contrary to income, total expense of Addis reached 259.2 million birr, a 42 percent rise from the previous year.

From the total expense, interest expense stood at 88.2 million birr while the rest came from things like operating expenses.

As far as its spread across the country, the bank opened 12 new branches, raising the total number of branches to 52 as of June 30, 2017. It also deployed 22 ATMs across the country.

In addition, card and mobile banking users reached 11,843 and 6,602, respectively.

Established six years ago, the bank is a latecomer in the banking business. Its total capital has now reached 757.6 million birr.


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