While bidding farewell to its founder and chairman of the board of directors, Meaza Ashenafi, Enat Bank has garnered a net profit of 99.7 million birr, which is up from its previous year’s profit by 20 million birr.
A relatively newcomer on the bloc, Enat Bank had the only and first female board chairperson in the country’s financial sector.
“Despite the rapidly evolving customer preference and dynamism in the banking sector, our bank has managed to cope up with all the volatilities in the business and record notable growth both in size and net worth,” Meaza described the sector in her message preface to the financial performance report of the bank.
Commercial banks in Ethiopia are obliged by the National Bank of Ethiopia (NBE) to expand their branches by 25 percent annually and accordingly, Enat expanded its branch by 14 branches pushing the total number of branches operated by the bank to 34.
“To contain costs of expanding access points, we have planned to implement Mobile Financial Services (MFS) and e-banking services. As the first initiative, we have launched Enat card which is operable on ATMs of domestic commercial banks,” explained Wondwosen Teshome, president of the bank in his opening message.
Operating in an industry that is mostly characterized by high profit and much regulation, Enat bank struggles to reach the two billion birr minimum capital requirement set by the central bank. In the fiscal year ended June 30, 2017, Enat was able to push its paid up capital to 763.9 million birr from last year’s 565.1 million birr.
Its asset grew from 3.2 billion to 4.8 billion birr in the report period. The growth of its asset gives the bank the potential to control the risks that might arise in connection to loans it disburses.
In line with the increasing profits and capital, the bank’s expenses are increasing which makes it distressful. With a much competitive industry which goes to the extent of snatching employees, the bank’s salary and benefits expenses have gone up to 70.8 million birr from the previous year’s 44.8 million. The general and administrative expenses surged to 83 million birr up from 56 million birr in the preceding year.
For a bank that operates in a competitive industry, however profitable it might be, increasing expenses should be put under watchful eyes in order to survive the growing “volatility”, experts say.
In one of the major performance indicators of the industry, deposit, Enat Bank has shined in the report period being able to improve its deposit mobilization by more than a billion birr. Specifically, Enat was able to mobilize 3.7 billion birr in deposits report period. The total liabilities of the bank stand at 4.8 billion birr.
Apart from the growing deposits, the bank’s loans and advances surged to 2.4 billion birr increasing from 1.6 billion birr it disbursed last year.
Despite robust growth in different aspects of banking operations, the 13,000 shareholders of the bank received smaller earnings per share compared to last year. This year the bank was able to pay its shareholders 14.9 percent per share, down from its last year’s 16.76 percent Earnings Per Share (EPS) its shareholders pocketed.
With the majority of the shareholders of the institution being women, the bank is exploiting its competitive edge by working in empowering women by providing loans to them. It is also is one of the partner financial institutions to the Development Bank of Ethiopia in financing Small and Medium Enterprises.
With board’s chairmanship still vacant since the resignation of Meaza, the bank will have to strive hard to sustain its growth and stay afloat in the tidal sector.
“Dating back to the inception of the idea of establishing the bank over 10 year ago, I have enjoyed collaboration of fellow promoters of the bank whom I call my sisters and later the board of management for which I have developed deep respect. This has been an incredible journey and my special thank also goes to the shareholders for the trust they have afforded me and my fellow board members, the opportunity to serve,” Meaza waved goodbye in the annual report.