Berhan Bank Profits 260.2 million Br after tax on 2016

Berhan International Bank Logo EthiopiaBerhan Bank scored a profit of 260.2 million Br after tax in 2016. For the seven-year-old bank, this is an increase of 146pc from last years performance and is the largest rate of increment compared to all banks who have declared their profits this year.

This has helped increase earnings per share (EPS) from 207 Br to 399 Br.

Considering the fact that the bank is still new to the banking industry and the industrys average EPS, the banks performance is a big improvement from previous years, more specifically in the last two-years.

This is good news to shareholders who now number more than 9,000. The growth in profit is attributed to a combination of an increase in all income streams. Basic loans, advances and national bank loans have expanded by more than two folds to 460.4 million Br and service charges generated an income of 242.3 million Br, an increase by 109pc from last year.

While the banking industry has noted a sharp decrease in forex and more competition for the ever-shrinking arena, Berhan has seen its foreign currency exchanges increase. It reported an income of 74.4 million Br.

This increment is attributed to the banks strategic focus towards satisfying credit needs for exporters and expansion of remittance services, according to the banks financial report. In addition, the bank has taken on express money transfer agents.

The management of Berhan should be congratulated for the best performance in the most competitive and volatile business market, Abdulmenan Mohammed Hamza, an analyst with Portobello Ltd., a London-based assets management firm told Fortune.

However, the bank saw its expenses go up to 436 million Br, almost a two-fold increment from last year. Salaries and benefits and interest expenses contributed to the increase. For instance, salaries increased 113pc to 158.9 million Br while interest expenses by 84pc to 134.5 million Br.

Most of the salary and benefits increased is as a result of an aggressive strategy to open more branches around the country. As of June 30, the bank had opened 33 branches and added 748 new employees.

Other expense included provision for doubtful loans. Advances skyrocketed by 320pc to 29.3 million Br. Unlike the previous reporting as of June 30, 2016, the bank paid three million Br for claimed guarantees.

The management should install a system to avoid such loses from being repeated, Abdulmenan observed.

The bank has seen an upward up tick in its balance sheet statements as total asset expanded to 7.19 billion Br, an increase by 72pc. It has disbursed loans and advances of 3.7 billion Br, almost a one hundred percent improvement from last year.

From total loans and advance disbursed, the amount injected to domestic trade and services was 40pc, followed by 13pc for the transport sector. In addition, the bank has a noted relationship working with the hospitality and manufacturing industry.

This year, the Bank made a deal with Addis Abeba meter taxi associations to help facilitate the new meter taxis access loans.

From an approximate customer base of over 40,000, the bank mobilised a deposit of 5.2 billion Br. Its liquid assets have increased in absolute terms but dropped in relative terms. Its cash and bank balances have gone up by 25pc to 1.5 billion Br.

The bank has also increased its paid up capital by 27pc to 730.6 million Br and achieved a capital adequacy ratio (CAR) of 24pc. This reveals that the bank is a successful capitalized bank.

For the current fiscal year, it has planned to expand its IT infrastructures, raising paid-up capital and acquiring a new headquarter.


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