During the recently ended fiscal year, Dashen grossed 1.05 billion Br operating profit excluding the Bank earnings from the shares at Tana Department Store in Merkato and Nyala Insurance. The other bank which acquired the same strategy, Awash Bank, grossed a provisional profit of 1.4 billion Br during the same period. BoA grossed 801 million Br profit during the past fiscal year.
As for Advisory services, Dashen Bank finally settles with KPMG Advisory Services Limited for the strategy formulation and implementation of the Bank after a 10-month long bidding process. The entire project is likely to cost the Bank 40 million Br.
The contractual agreement was signed by Asfaw Alemu, president of Dashen and Sheel Gill, head of Deal Advisory for KPMG East Africa, on October 4, 2017. The project was officially kicked-off on the same day.
Based on the agreement, KPMG will formulate a 10-year strategic roadmap; develop and see through the implementation of a one-year operational plan; develop a five-year strategic plan; design suitable organisational structure and support implementation of performance management system for Dashen.
With the aim of positioning itself for greater domestic as well as international competitiveness, Dashen announced the tender in January 2017 for a holistic management strategy overhaul. Following the announcement, five companies submitted their proposals.
Deloitte Consulting Plc, KPMG, Fairfax Africa Fund LLC in partnership with Boston Consulting Group (BCG), Palladium Group and McKinsey & Company submitted their proposals. Except for Fairfax Africa Fund LLC and Boston Consulting Group (BCG), the remaining four were able to pass the technical evaluation.
The nine-month project will make Dashen the third local bank to get its management strategy redesigned. KPMG redesigned the management strategy of Awash Bank. Bank of Abyssinia (BoA) also partnered with Deloitte for the same project and United Bank is also in the process of hiring a firm for similar changes.
Before settling for KPMG, Dashen was also dealing with Deloitte, but the latter withdrew from the process. Deloitte retreated from the process following the separation from HST Consulting Plc and Deloitte Leadership after a five-year-long partnership.
Deloitte’s withdrawal led Dashen to negotiate solely with KPMG in July 2017, until the deal concluded last week.
“Since then, we have been negotiating with them on the scope and schedule of the project,” said Mulugeta Alebachew, director for Marketing & Corporate Communications at Dashen.
For the veteran financial expert, KPMG would not bring much change from what it has already brought to Awash Bank. He believes that KPMG might repeat the same method at Dashen if it does not see the project with a different eye.
“KPMG will not fully craft our strategy. Rather, it will consult us with the best global experience, and we will develop our strategy,” said Mulugeta.
The company has to focus on App economies such as mobile and Internet banking, according to this financial expert. And work on launching new products, extension services and financial solutions, as the banking industry will ultimately be open for international banks, according to him.
“The findings of the study will show us what to do next,” said Mulugeta.
Recently, KPMG also helped the state-owned giant, Commercial Bank of Ethiopia (CBE) to adopt International Financial Reporting Standards (IFRS) contracted with close to 16 million Br. The consulting firm took about a year to complete the job.
Source : Fortune