Capital Ethiopia Newspaper

BIB sees profit surge

Buna International Bank (BIB) has registered a gross profit of 26.8 million birr in 2010/11 up by 558.3 percent from the previous financial year performance of 48,000 birr.
The bank has netted 19.4 million birr during the reported 2010/11 period.  In 2009/10 fiscal year when the bank entered the industry it pocketed 36,000 birr after tax.
As at the end of June 2011, the total assets of the bank reached 781.4 million birr, increasing by 301.2 million birr or 62.8% from the previous year. Loans and advances and deposits with the National Bank were a major reason for the huge increase.
Over the past fiscal year the total liabilities of the bank rose to 548.9 million birr from 311 million.
BIB’s current paid-up capital increased by over 44 million and has reached 213 million birr. Total capital and reserve of the bank is 232.4 million Birr at the end of the reported period, increasing by 63.3 million birr (37.5%).
Paid up capital of the bank increased by 44.3 million birr or 26.2 % during the year and stood at 213.4 million birr at the end of June 2011. Consequently, it accounted for 91.8% of the total capital and reserve of the Bank.

During the reported period BIB managed to mobilize 252.1 million birr in deposits and it reached 491.3 million birr at the end of June 2011. Out of the deposits mobilized during the fiscal year, savings deposits constituted more than 57 percent.
The size of deposit customers of the bank has increased by more than 178 percent over the June 2010 figure and reached over 12,600 at the end of June 2011.
At the end of June 2011, outstanding loans and advances of the Bank reached 366.3 million birr-increasing by 90.5 percent year-on-year. Domestic trade and service took the major share (31 percent) of the portfolio, followed by import (19.3%), transport (15.2%), and building and construction (10.1 percent) sectors.
During the 2010/11fiscal year, the Bank mobilized 419.9 million birr worth of foreign currency resources. As compared with 316.2 million birr in the 2009/10 budget year, it increased by 103.7 million birr or 32.8%. In effect, income from international banking operations reached 37.5 million birr at the end of the budget year, indicating a rise of 26.5 million birr (241%) over the previous year.
The Bank has established correspondent banking and business relationship with 51 banks in the international banking arena.
BIB received approval from the National Bank of Ethiopia on foreign exchange base and customer services, international money transfer services agreement with Western Union and FloCash money transfer companies. Two other similar relationships are being processed with other two mobile service companies, working out of Europe and the Middle East, BIB’s annual report indicates.
Total revenue generated during the fiscal year 2010/11 stood at 73.5 million birr Compared with the previous year’s nine month performance, it grew by 53.6 million birr (268.8 % rise).
The aggregate operating expense of the Bank during the reported period ascended to 46.7 million birr, increasing by 26.8 million birr (134.8%) over the previous year’s amount. According to the management of BIB it is due to high cost of branches. BIB has opened seven additional branches in the reported period reaching 208 permanent employees.
As at the end of June 2011, the total asset of the Bank reached 781.4 million birr, increasing by 301.2 million birr or 62.8% year-on-year. Loans and advance and deposits with NBE contributed for the major increment during the reporting period.
The bank has established an independent project office for the application of information and communication technology to banking services and currently it is undertaking a project to acquire a robust core banking system. Deployment of the Core Banking System is planned conclude during the coming fiscal year.