By our staff reporter
Ethiopia’s mortgage pioneering bank, Goh Betoch, signals that it’s searching for provisions in government policies to realize its goal.
The bank, which is steered by well-known banker, Mulugeta Asmare, President of Goh, and Getahun Nana, a former vice governor of the central bank, in his capacity as Chairperson of the Board of Directors, announced that the financial firm has been asking the government to establish the necessary regulatory framework which is currently lacking, for mortgage banking.
According to the bank’s officials, in the annual report on the second general assembly that took place a week ago, the government needs to give a directive to help the housing industry, which is a major concern for the nation’s residents.
Mulugeta, who is the founding President of Goh which began operations in late 2021, stated in the financial report that, “However, it is worth noting that our operations have been severely affected by insufficient laws and by the absence of a conducive environment for mortgage banking.”
In an effort to create an atmosphere that would enable the bank to process mortgages efficiently, the bank has submitted many comprehensive suggestions to the appropriate government authorities.
Nonetheless, the bank stated in its annual report, which was closed on June 30, that the majority of its operations are focused on housing schemes. For example, during the time under review, about half of the loans and advances were used to fund housing initiatives.
According to the report, the bank had 1.32 billion birr in total outstanding loans and advances at the end of the 2022/23 financial year, up 1 billion birr, or 342 percent, from the year before.
Of the total, 49.2 percent of the loan portfolio was allocated to mortgages, with foreign trade accounting for the remaining 35.5 percent.
Although the recently formed bank’s earnings for the year is lower than it was the year before, it has achieved amazing feats in other key areas of performance.
The bank raised around 912 million birr for the year, which is a 255.3 percent increase over the 256 million deposit mobilization in the 2021/22 fiscal year.
To reach 21,932, the number of deposit accounts has grown by 16,908 or 336.6 percent as the report indicated.
According to the annual report, “regular deposit accounts for 17.5 percent of the total deposit, while commitment savings for mortgage loans account for 70.2 percent.” In terms of earnings, the bank had an almost 75 percent increase to 212.6 million birr.
The bank’s assets have increased by more than a double this year, totaling 2.63 billion birr. This new bank asset has increased by 117.4 percent, or 1.39 billion birr, in a single year, according to the annual report.
Total assets consist of investment securities, loans and advances, and cash and bank balances, making up 77 percent of the assets; the remaining 23 percent are all other assets.
Profit before tax for the reviewed financial year was 6.4 million birr, a 19 percent decrease from the previous year.
The report stated, “Investments made on branch expansion, technology, increases in depreciation and amortization expenses and deployment of other relevant resources are mainly attributed due to the decline in profit from the previous same period.” There are now nine branches after five of them became active during the given period.
Throughout the year, the bank has engaged in a variety of operations, such as acquiring a parcel of property and creating a subsidiary that would work in the mortgage industry, a crucial area of business for the financial institution.
The President stated, “In addition to establishing a company, a real-estate developer, in which the bank is a significant shareholder, a strategic partnership has been formed with various stakeholders to secure loanable funds.”
