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BusinessDBE profit plummets drastically

DBE profit plummets drastically

Repeating a grim pattern, the Development Bank of Ethiopia (DBE) reported last week a 323.85 million birr profit, a 13.3 percent decline on last year’s. Reports show that the bank’s profit has been plummeting for the past two years.

According to its income statement, it was in 2015 that, during the tenure of former president Esayas Bahre, the bank managed to bag a net profit of 681.4 million birr. However, the following year profits dropped to 373.5 million birr.

This was in contrast to its performance from 2011 to 2015, when it saw surging profits for five consecutive years. In this regard, the bank reported 204 million birr profits in 2011, which continued to increase until 2015.

The past two years have particularly been turbulent with its senior staff removed following the appointment of Getahun Nana as the new president. He replaced Esayas Bahre as president in November 2016.

The departure of Esayas comes on the heels of a controversial report by the Prime Minister’s Office,which revealed irregularities in the granting of loans to large-scale commercial farms across the country, eventually bringing an end to his eight years at the helm.

Following that, the bank has been undergoing restructuring, which also saw the removal of four vice presidents who had been serving the bank during Esayas’ tenure.

In addition, the bank has made a major reshuffle in its more than 26 director-level positions.

At a staff meeting held last week, the bank’s annual performance report was presented. In his opening speech, Getahun said that the bank has still a lot to do considering its mandate as a policy bank.

Established in 1909, DBE is mostly known for project-financing. 

Over the just-ended budget year, the bank has disbursed a total loan of 5.38 billion birr out of the approved 12.08 billion birr. The amount of disbursed loan in 2017 has shown a 15 percent decline from the previous year’s 6.33 billion birr.

The bank has also managed to collect 4.56 billion birr as of June 2017, which it disbursed as loan.

DBE in its scheme of providing lease-financing to small and medium enterprises, it approved 3.99 billion birr. Out ofthis, the bank has paid 510 million birr for machinery purchases through lease-financing. 

For the followingbudget year, the bank has planned to approve 14 billion in loans and to disburse some 10 billion birr. At the same time, it plans to collect 6.09 billion birr.

 

 

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