Five truck importers accuse Bunna Bank over refusal of commission reimbursement stemming from undelivered services as the complaints get forwarded in letter form to the National Bank of Ethiopia (NBE) for intervention on the matter. Bunna Bank now, in wait of NBE’s verdict which has taken up the case.
A year ago, five truck importers of the 168 companies which were authorized by the Ministry of Transport and Logistics to import trucks from the Jampur International FZE had struck deals with Bunna Bank and opened LC to facilitate the imports.
However, a couple of weeks ago the transport and logistics ministry announced the termination of 108 companies from the 168 that had been selected and given a loan guarantee to import 1,700 trucks citing they didn’t follow through with the stipulated timelines. However following the resentments of the companies, the ministry leniently gave a one month timeframe for things to be set in order which will end on January 14, 2023.
The lack of Ethiopian banks that run credit line facilities with the Africa import export bank (Afrexim Bank) was mentioned as one of the reasons since it was a requirement of the supplier to have Ethiopian banks have at least two years of credit facility with Afrexim.
As the importers highlight, “Bunna knowing that they didn’t have this credit facility line nevertheless accepted our request.”
When the five importers requested to shift to another bank and have their money refunded a whole new can of worms was unleashed following Bunna’s refusal.
“However, the bank refused to repay commission fees collected to provide the service while refunding only the down payment,” said Melaku Abebaw CEO of Melaku Abebaw Private Fuel transporter and one of the complainants processing to import eight fuel trucks with LC opened with a value of USD 751,680. Melaku further pointed out that the five businesses had paid about 19 percent of the total amount to open LC worth 3 million dollars.
According to the letter that the importers sent to the bank, the details expressed that as Afrexim bank didn’t approve LCs opened from Bunna Bank, thus a refund request of all costs the bank has charged them with including commissions paid to the bank and NBE was in order.
However, following the refusal of the bank to refund the five importers, they penned a letter to NBE and transport and logistics Ministry for intervention.
“We will sue the bank if it is necessary,” said Melaku.
As sources from the Bank disclose, since the case has reached to the governing body, NBE, Bunna will wait for the decision of NBE so as to solve the issue.
Asmamaw Melese Local Inland Freight Private Transport, Shikur Abder Local Inland Freight Private Transports, Adane Belay Fuel Transport PLC, Melaku Abebaw Private Fuel Transporter, Alamre Ayenew Import and Export are the five companies to file complaints.
Two years ago with advice of the macroeconomic committee, NBE provided the opportunity to purchase more vehicles by interested and capable companies who were selected by the transport and logistics ministry. Following the issuance of a bid, 168 companies vied to buy 3200 freight trucks with a credit facility from the local banks and the ministry thus gave loan guarantees from the Afrexim bank.
For the procurement of the trucks, a tender was then floated on January 12, 2021. The trucks were expected to be delivered to the country within 60 to 120 days, and had to meet the specifications outlined in the bid document including the payload and carrying capacity.
As it would later turn out, the trucks being expected to be imported within four months as per the agreement were not to materialize owing to companies not following through with the stipulated timelines.
The procurement was initially set to ease problems in the logistics sector brought on by a shortage of trucks. With the initiative, the private sector was geared to procure the trucks through a supply credit modality approved by the National Logistics Council. The companies were to raise a 30pc of the value, while the remaining was to be covered by a loan secured through the central bank’s guarantee.
All in all, shortage of trucks in the country is one of the logistics nightmares. As officials said the multi challenging conflict in the northern part has left or destroyed vehicles making the problem worse.
Jampur International FZE, Sino Truk international, FOTON intre. Trade co ltd china, Renault trucks SAS. Shacman heavy duty automobile import and export are some of the suppliers, in the Ethiopian truck market scene.
Truck importers collide with Bunna Bank over payment refusal
Nib Int’l bank’s financial hive buzzes in success
Nib International Bank attains outstanding performance in conventional and interest free banking (IFB) business operations in the 2021/22 financial year.
In the year under review, the bank was able to mobilize an additional 6.2 billion birr through its deposit scheme, which is 14 percent higher when compared to the previous year, cumulating to a now firm record of 49.8 billion birr.
The growth registered also rippled to the number of depositors who increased by over 25 percent to currently stand a little over 2.12 million.
Of the total 49.8 billion birr deposit mobilization, 9.3 billion birr or 18.7 percent stemmed from non-interest bearing deposits.
In the year, Nib’s total outstanding loans and advances stood at 39.4 billion birr that increased by 14.2 percent of the 34.5 billion birr as of June 30, 2021.
According to the report, the loan to deposit ratio of the bank was 79 percent at the end of the year, while the number of loan accounts have reached over 18,200.
The bank paid up capital has expanded by over 13 percent to reach 4.8 billion birr, while the total equity has increased by almost 16 percent sitting at 8.1 billion birr.
The bank’s asset now stands at 61.5 billion birr as a result of a 7.3 billion birr or 13.5 percent increase registered during the year in review.
In the financial year that closed June 30, 2022, the bank managed to generate 7 billion birr that increased by a fifth or 1.2 billion birr compared with the year that ended on June 2021.
Likewise, Nib’s profit has registered marvelous achievement and according to the annual report, in the year, 1.76 billion birr profit before tax was secured which is an 8.6 percent increase from the year prior.
On similar grounds, the bank’s IFB activity also attained promising results. For instance, in the IFB business the bank’s customer increased by over 129,000 or by 62 percent to reach over 340,000. Similarly fresh deposit mobilization in the IFB sector has increased by 768 million birr to cumulate to 3.8 billion birr at the end of the year.
The profit after tax also grew by 10 percent to reach a new milestone of 1.34 billion birr. However, the aggressive paid up capital increment influenced the earning per share (EPS) to slightly reduce compared with the preceding year. According to the bank’s audit book, the EPS now stands at 146 birr for 1,000 birr par value from 154 birr from the 2020/21 financial year.
Oromia Insurance levels up as profits hit new milestone
Oromia Insurance Company (OIC), one of the insurers that have grown to prominence since the market reopened for the private sector, attracts massive results as profits hit new ceiling.
The company which disclosed its annual performance a couple of weeks back indicated that for the year that started July 1, 2021 and closed June 30, 2022, it has managed to amass 38 percent higher gross written premium for general insurance business when compared to the year that closed in June 30, 2021.
Similarly the life insurance business premium collection has expanded by 45 percent.
The annual report indicated that in the general insurance business, OIC registered 925.3 million birr in premium from general insurance business up from 671.7 million birr a year ago.
In regards to life insurance, the gross written premium expanded to 19.4 million birr up from 13.3 million birr of the previous year.
Despite, the company registering a big success in the premium collection both the general and life insurance businesses were below the target that the company had set for the year.
In the reporting year, the net claim incurred was 312.6 million birr which is an almost quarter percent increase when compared to the 2020/21 financial year. However the claim incurred in the year was18 percent lesser than the projection that the company set for the period.
Similarly, the claims paid for the year shot up by 31 percent compared with the preceding year to sit at 251.5 million birr.
For the year, the company secured a net income of 457.3 million birr a notch higher than the previous year’s achievement of 304 million birr.
The company’s asset has also been boosted by more than a third. According to the annual report, OIC’s asset now stands at 2.55 billion birr up from 1.9 billion birr recorded a year prior.
The report indicated that the company’s total investment during the reported year had expanded to almost 1.4 billion birr with an increment of 41 percent of the preceding year.
Of the total investment, the fixed time deposit took the lion’s share. The report showed that the insurer’s fixed time deposit investment accounted for 786 million birr while the equity investment took 289 million birr.
The company that is building its headquarters aligned the 275.8 million birr of the investment for its construction project.
One of the big moves the company attained in the year was the expansion of its paid up capital. For the year, OIC’s paid up capital stood at 680 million birr with increments of 36 percent compared to the period that closed in June 2021.
In terms of profitability, the company concluded the year with extraordinary achievements.
The annual report indicated that the profit before tax for the year stood at 239.8 million birr which was a 70 percent increase from last year and 183 percent of the target set at the beginning of the year.
A year ago, the insurer had secured almost 140.9 million birr profit before tax.
In the 2021/22 financial year, the company amassed 198.5 million birr profit after tax, which is a 56 percent boost from the 127 million birr reeled in a year ago.
In the year, the earning per share stood at 35 percent.
Oromia bank, Islamic Affairs Supreme Council bank agrees for a one-window interest-free service
Oromia bank and Ethiopian Islamic Affairs Supreme Council sign a Memorandum of Understanding to work together in certain areas including on providing interest-free banking services.
The agreement was signed on Thursday December 29, 2022 at the Hyatt regency hotel by Teferi Mekonnen, CEO of Oromia Bank and Sheikh Haji Ibrahim Tufa, president of the Supreme Council of Ethiopian Islamic Affairs.
As Oromia bank’s CEO indicated during the signing ceremony, the financial firm has been providing full interest free banking services across its 32 branches.
He also mentioned that the memorandum of understanding will enable the one-window interest-free service provided by all its branches to be delivered in quality and scope.
Sheikh Haji Ibrahim Tufa on his end stated that the Supreme Council will continue to work with the bank, which has already started interest-free services for the Muslim community.It is said that the agreement will enable them to work on various issues between the institutions.
