Lion International Bank invested close to half a billion Birr in acquiring an eight-storey building in Bole District as its first property.
Located between Berhane Adere and Mafi City malls on Cameroon Street, Blue Moon was owned by Beyene Bizuayneh (MD), an individual who initially borrowed 40 million Br from Oromia International Bank (OIB) but failed to service his loan. Beyene is an ophthalmologist and runs eyeglass stores.
OIB auctioned off the building with a floor price of 99 million Br on July 3, 2019, to recover the loan it gave to Beyene. Five companies, including Lion, vied during the auction process. Along with Lion, Awash International Bank and three individuals offered bids to acquire the building.
Lion won the bid with the highest value of 470 million Br. Awash was the second-highest bidder with 450 million Br, while one of the three individuals made the third-highest offer of 260 million Br.
Resting on 1,352Sqm of land, the construction of the building has not been finished. Up to the fourth floor, the building is already being rented out to offices, while the rest of the floors are currently undergoing finishing work and were intended to be used as guesthouses.
It is a strategic move as an investment at one of the prime locations of the capital, according to Wondwossen Gashaw, director of procurement and facility management of Lion, which was founded in 2006 with 3,739 shareholders and an initial paid-up capital of 108.2 million Br.
Currently, the Bank is conducting a feasibility study to decide how to monetise the property, according to Wondwossen.
“We’re weighing our options on whether or not to use the building for a headquarters,” he toldFortune.
Lion’s current head office is located in rented space at Lex Plaza in the Haya Hulet area. The Bank spends 900,000 Br a month to rent its HQs.
The Bank has also received land from the City Administration in the blossoming financial district near Mexico, where other banks, such as Awash, Dashen and Wegagen, have already inaugurated headquarters. Nonetheless, construction has not started on the plot of land, and the bank is currently weighing options between the two places.
“The building is a strong contender, because of its attractive location,” said Wondwossen.
As of June 2019, Lion has over 229 branches operating all over the country with a paid-up capital of 1.6 billion Br. The bank also grossed 695.5 million Br in profit. The total assets of the Bank have also reached 20.4 billion Br.
Aside from the plots of land designated as a financial district in the Stadium and Mexico areas, the City Administration has begun allotting land to all banks without a bidding process, and Lion is one of them.
Awash Bank is already in the process of receiving 8,700Sqm of land it leased for 173 million Br from the city on which it plans to build its second headquarters for a cost of 12 billion Br.
“This is a positive move from Lion, as it will help them alleviate rental costs and increase their asset accumulation,” said Alemsaged Assefa, former vice governor of the National Bank of Ethiopia (NBE). “But compared to other banks, they are very late and thus should try to catch up in this regard.”