Global Bank Ethiopia (GBE) has reported that interest payments to depositors accounted for 60 percent of its total operating expenses during the 2024/25 fiscal year, signaling rising competition and liquidity pressures in the country’s banking sector.
According to the bank’s newly released annual performance report, GBE’s total expenditure reached 4.39 billion birr, representing an increase of 1.21 billion birr compared to the previous year. Of this figure, interest on deposits comprised the largest share, followed by employee compensation at 24 percent and general administrative expenses at 16 percent.
Bank executives explained that the rising interest costs reflect the ongoing struggle among financial institutions to attract and retain deposits in a tightening market. Despite the higher costs, GBE’s management described the expenditure not as a setback but as part of the bank’s commitment to delivering competitive returns to its 1.78 million depositors.
“The high cost of funds demonstrates our determination to reward our customers and maintain trust at a time of strong market competition,” the report stated. Bank analysts, however, warned that the trend underscores the need for increased operational efficiency, especially as the sector adjusts to Ethiopia’s new market-based foreign exchange system introduced during the same fiscal year.
Even as expenses surged, GBE recorded notable growth in both revenue and profit. The bank’s total revenue climbed to 5.56 billion birr, up from 4.05 billion birr a year earlier. Gross profit before tax rose by 33 percent to reach 1.17 billion birr, while total assets expanded by 42 percent to 34.4 billion birr.
The expansion, according to the bank’s report, was largely driven by loan disbursements. Total loans and advances stood at 20.38 billion birr, with the foreign trade sector absorbing the largest portion (38 percent), followed by domestic trade (30 percent) and manufacturing (12 percent).
Chief Executive Officer Tesfaye Boru highlighted GBE’s ongoing digital transformation as a key strategy to reduce service costs and improve accessibility. “Digital services are not just an innovation—they are a cost-control mechanism,” he said.
The bank processed transactions worth 4.78 billion birr through its mobile, USSD, and internet banking platforms last year. It also launched its first self-help digital banking center, while cardholders climbed to nearly 75,000, reflecting GBE’s push toward a “cash-lite” financial ecosystem.
GBE also achieved a major milestone by meeting the National Bank of Ethiopia’s paid-up capital requirement of 5 billion birr—a year ahead of schedule. This was accomplished after the bank successfully raised 2.52 billion birr in fresh equity during the 2024/25 fiscal year.
Board Chairman Yosef Getachew described the achievement as “a statement of determination and resilience” within a highly competitive industry. He added that the capital buildup has placed the bank in a strong position to pursue its next five-year strategic plan, covering 2025–2030, which focuses on sustainable value creation for shareholders and the wider economy.
With its previously authorized share volume now fully sold, GBE plans to seek shareholder approval for additional capital issuance to further strengthen its balance sheet.
Having fulfilled the minimum capital requirement, Global Bank Ethiopia is now shifting its focus toward the country’s emerging capital market, a field that is expected to redefine financial intermediation once operational. The bank has announced its intention to become a “major player” in this new financial space, aiming to diversify revenue sources and introduce new investment products.
The 2024/25 fiscal year was described by the bank as one of the most challenging yet transformative periods in its history. It coincided with major macroeconomic shifts, including currency reforms and tighter monetary conditions. Despite these headwinds, GBE said it has laid a solid foundation for long-term stability through capital reinforcement and digital innovation.
As Ethiopia prepares to open its financial sector to global competition, GBE’s strategic focus on efficiency, technology, and market expansion is expected to play a defining role in shaping its next growth chapter.
