The total capital of the Ethiopian banking industry has surged by 19.0 percent in the 2014/15 budget year noted the National Bank of Ethiopia in its flagship publication; Annual Report on Ethiopian Economy.
According to the Report, the total capital of the Ethiopian banking industry has reached 31.5 billion Birr by the end of June 2015. That is a 19.0 percent surge as compared to the industry’s capital in 2013/14 budget year. The reason behind such a rise in capital is explained by an injection of more capital by a number of banks, the report said.
As a result, the share of private banks in total capital marginally increased to 56.5 percent from 55.4 percent last year while that of Commercial Bank of Ethiopia (CBE) remained at 34.0 percent. Meanwhile the banks opened 485 new branches in the budget year, raising the total branch network in the country to 2693 from 2208 last year. As a result, bank branch to population ratio declined from close 1:39,834 people to 1:33,448 in the period under consideration.
The significant branch expansion was undertaken by CBE with 127 branches, followed by Awash International Bank with 55 branches. The remaining banks opened less than 50 branches each.
Despite more branch expansion by public banks, their share in total branches slightly went down to 41.9 percent from 45.4 percent last year. About 35.5 percent of bank branches were in Addis Ababa, during the review period. Banks, insurance companies and microfinance institutions are the major financial institutions operating in Ethiopia.
The number of private banks in the country has started to mushroom following the downfall of the socialist regime 25 years ago. Now, the country is home to 18 banks, of which 16 are private while the remaining two are state-owned.
[waltainfo.com/]