The long awaited core banking project of the Ethiopian financial giant, Commercial Bank of Ethiopia (CBE), began operating last week, connecting 34 of its Addis Ababa branches in the first phase of its automation project. CBE was the first bank to introduce Automated Teller Machines (ATM) to Ethiopia, followed by Dashen Bank. The National Bank of Ethiopia (NBE) wants the nation’s banks to transfer to the modern electronic banking systems used by developing nations. This system, known as core banking solutions, would mean using computers and Automatic Teller Machines to replace the system of handing out large amounts of cash and paper bank books. By April 30, 2012 CBE managed to digitize one million of its 3.7 million manual accounts in the automated 34 branches.
Last fiscal year, the bank opened 160 new branches that collected 2.9 billion birr in deposits. Swiss company Temenos Group AG received nearly 70 million birr from the bank for the new technology. The new IT infrastructure should enable the bank to make credit card use easier, and increase the use of banking online and via mobile phones.
The bank currently has 525 branches.
CBE plans to raise its number of accounts by 25 percent per year, launch 100 new ATMs per year and open 400 additional branches in the five year period of Growth and Transformation Plan, using the new IT infrastructure. It already has 58 ATM machines functioning as of August 2011.
CBE has cashed in more than 4.2 billion birr in gross profits during the 2010/11 budget year. This is almost double of what it was in 2009/10.
The bank’s non-performing loans (NPL) dropped significantly from double digits three years ago to less than one percent last year. Though the industry average for NPL is five percent, its NPL is 0.9 percent of its total credit.
With a total assets of 114.2 billion birr, 6.2 billion birr capital and reserve, 10,753 staff members, CBE continues to be one of the leading banks in Ethiopia.
The vendor, Temenos, is solely engaged in providing core banking solutions. Its system is used by over 500 clients in over 100 countries. The Geneva based company has 34 offices in 29 countries. It is represented in Ethiopia by its local partner, United Systems Integrators (USI).