United Bank records over 61 mln birr profit

By Eskinder Michael

United Bank S.C, at its 8 th Annual General Meeting announced that it has registered a 61.6 million birr profit before tax, its highest ever profit margin.

This year's profit represents 18.7 million birr or 43.7% increase from last fiscal year's record of 42.9 million birr profit before tax. According to Ato Eyessuswork Zafu, Chairman of the Board of Directors, this profit comes from the huge increase in the bank's total income of the year from 90.9 million birr to 126.1 million.

Ato Eyessuswork who leaves his post as Chairman of the Board of Directors said that the new chairman would elected after the first meeting of the board of directors.

“The bank's expense for the just ended fiscal year also increased to 66.4 million birr, 18.4 million birr more compared with last year's expense. This was mainly due to the increase in volume of business transacted, increased deposits mobilized and loans extended,” Eyessuswork added.

He further explained that part of the expense incurred in the just ended fiscal year was also due to the bank's decision to automate its services. It acquired new banking software called Flex Q and several computers including the main server for networking all the branches and the head office.

The bank also boasted highest ever outstanding balance as of June 30, 2006 at 1 billion USD, showing 69.4% increase compared to that of last fiscal year's. United's non performing loans ratio stayed as low as 4%.

“I can dare say that we have hit our target this year, as we raised our deposits by 50% to a record high 1.3 billion birr, allowing us to have enough liquidity to provide ample loans to our ever increasing customers,” Ato Eyesuswork said.

International banking still remained the bank's premier source of income as the just ended fiscal year showed that 39.1% of the banks total income came from this source - 16.7% more than last year's. The banks assets also grew to 2 billion birr, about 88.1% more than last year.

The total capital of the bank stood at 193.2 million birr, recording a growth of 54.7%, including retained earnings and legal reserves. The paid up capital of the bank, which stood at 130.8 million birr, showed an increase of 43 million birr and now stands at 173.8 million birr.

With the aim of increasing the number of its shareholders and in turn increasing its paid up capital, the bank will continue selling shares at a low price of 105 birr, until the paid up capital reaches 200 million birr.

The bank also proposed to pay the board of directors a profit incentive of 5% of the profit after tax and legal reserve. United bank had last year paid 25% dividend to its shareholders and considering its excellent performance this year, the board of directors approved a dividend of 30%.