Capital Ethiopia Newspaper

CBE’s forex income down by 24%

CBE

 

Hard currency earnings for the state owned Commercial Bank of Ethiopia (CBE) declined 24 percent last fiscal year despite figures showing a 1.2 billion birr increase in profits over last year.

One of three state financial enterprises, CBE, earned 13.9 billion birr in profits before tax in the 2015/16 fiscal year, up from 12.7 billion birr a year ago.

According to experts, hard currency has historically increased at CBE even in times of financial turmoil.

For instance in the 2012/13 fiscal year hard currency earnings were USD 4.8 billion, slightly less than the USD 4.9 billion in the 2011/12 fiscal year. Three and four years ago performances were higher than the previous year’s performance.

The report released a week ago indicated that the hard currency earnings for the 2015/16 financial year stood at USD 4.7 billion. In 2014/15the financial firm secured USD 5.8 billion, In 2013/14 that figure was  USD 5.5 billion.

The 2014/15 year had currency earnings were the largest ever for CBE.

The past year’s decrease compared with the preceding year stood at USD 1.1 billion which is close to 24 percent lower compared with the 2014/15 fiscal year.

Exports make up the largest source of hard currency for CBE followed by remittances, according to information from a statement sent to Capital.

Experts claimed that the hard currency earnings from remittances continued to grow at a similar rate as previous periods.

Weak export performance is the reason being givenfor low the hard currency earnings, according to people working in the financial sector, while the hard currency earnings in other banks including private firms has registered growth.

Ethiopia has recently had periods of hard currency shortages and in the past fiscal year that shortage has increased. This has made importing items more difficult. The financial regulatory institution, National Bank of Ethiopia has been also enforced a new directive to get banks to manage their hard currency more efficiently.

CBE currently has a 70 percent share of the banking industry with has 1,136 branches, according to their report last year.

It has 28, 467 employees and its assets reached at 384.6 billion birr. Last fiscal year the bank’s total revenue was 27.2 billion birr, which is slightly lower than the state owned telecom monopoly which secured 28 billion birr in the 2015/16 fiscal year.