Siket Bank, one of Ethiopia’s newest commercial banks, has announced that it possesses the financial capacity to continue operating independently without the need for a merger. This confidence is backed by its robust financial performance, with a paid-up capital exceeding 8 billion birr and a profit of over 1.6 billion birr in the 2023/24 fiscal year.
CEO Damte Alemayehu emphasized that Siket Bank has built the potential for sustained growth on its own, without relying on mergers with other banks. The bank’s success is attributed to its strategic expansion and customer acquisition efforts, which have resulted in a customer base of over 600,000 and a rapidly expanding branch network.
Siket Bank’s financial strength is notable in the context of Ethiopia’s banking sector, where 25 banks, including Siket, collectively hold a 42.8% share of the market, marking a slight increase from the previous year.
The National Bank of Ethiopia (NBE) has been promoting mergers as a strategy to strengthen the banking sector, particularly ahead of its opening to foreign competition. The Banking Act, set to come into effect, outlines detailed rules for bank integration, with the primary goal of ensuring the health of “problematic banks.”
However, Siket Bank has already met the regulatory requirement of having a paid-up capital of at least 5 billion birr, which is mandatory for all banks by June 2026. With its capital exceeding this threshold, Siket Bank is well-positioned to continue independently.
In addition to its financial strength, Siket Bank is pioneering innovative financial services. The bank recently launched a psychometric loan model in partnership with the World Bank, designed to assess loan eligibility based on borrowers’ psychological profiles and behavioral patterns. This initiative aims to support small business owners who may lack collateral but demonstrate strong financial potential.
The psychometric model aligns with the broader “Ethiopia Tamirt” movement, which seeks to transition the country from consumption to domestic production. Siket Bank’s efforts in this area have been recognized during a high-level panel discussion focused on access to finance for industrial productivity.
CEO Damte Alemayehu expressed that the potential entry of foreign banks into Ethiopia’s market does not pose a threat but rather an opportunity for Siket Bank to enhance its capabilities through increased competition. “It makes us work harder,” he noted, highlighting the bank’s readiness to adapt and grow in a more competitive environment.
