Wegegan Bank is back on track as it registers a 1.4 billion birr gross profit in the just-ended fiscal year. A strong rebound in the performance of the 25-year old bank boosted the profit of the bank by a staggering 1.3 billion birr.
The profit jump is registered at a time when the banking industry is seeing an upsurge in gross profit that reached 40 billion birr in the last fiscal year.
Shareholders of Wegagen are likely to see a significant jump in dividends compared to the 4.2 percent given in 2020/21. The figure will be announced once the bank is audited by external auditors.
Wegagen’s management, under the presidency of Aklilu Wubet, devised a recovery strategy last year along with its board of directors, chaired by Abdishu Hussien.
However, the bank’s profit is way below the financial performance registered by its peers, Bank of Abyssinia and Nib Bank.
Abyssnia doubled its profit to 5.4 billion birr, the second highest in the industry, while Nib Bank grossed 2.4 billion birr in the same period. The industry leader, Awash Bank, grossed a 9.1 billion birr profit in the last fiscal year.
Wegagen managed to rebound from last year’s underperformance, despite closures to a third of its branches located in Northern Ethiopia.
“Despite last year’s challenges, we have managed to rebuild the confidence of our customers, thanks to the concerted efforts of shareholders, the board and the management,” said Afework Gebretsadik, marketing and corporate communications director at Wegagen.
The Bank underwent restructuring last year, increasing the number of its vice presidents. The accumulation of much of its portfolio in the capital helped the financial institution to quickly rebound from last year’s performance.
Sources also told The Reporter that the Bank has managed to lower its Non-Performing Loans significantly this year. Assisted by the policy measure of the central bank, which lifted the loan freeze in mid of last year, Wegagen managed to mobilize more deposits and increased its credit portfolio last year.
Up until the end of 2020/21, the outstanding deposit of Wegagen reached 29.5 billion birr. It has over 4,000 shareholders, with a 3.2 billion birr investment until the end of 2020/21.