WARNING: This is Version 1 of my old archive, so Photos will NOT work and many links will NOT work. But you can find articles by searching on the Titles. There is a lot of information in this archive. Use the SEARCH BAR at the top right. Prior to December 2012; I was a pro-Christian type of Conservative. I was unaware of the mass of Jewish lies in history, especially the lies regarding WW2 and Hitler. So in here you will find pro-Jewish and pro-Israel material. I was definitely WRONG about the Boeremag and Janusz Walus. They were for real.
Original Post Date: 2010-11-30 Time: 15:00:03 Posted By: News Poster
By Hailu Teklehaimanot
After announcing a profit of 324 million Br after taxes in the 2009/10 fiscal year to shareholders during a meeting at the Sheraton Addis on November 7, 2010, Dashen Bank proposed that 175.5 million Br be paid as dividends, representing earnings of 60.9pc on 1,000 Br share, 23.6 percentage points more than the industry average of 37.3pc.
This was achieved under tough conditions in the banking industry despite globally improving macroeconomic conditions following the meltdown two years ago, both Lulseged Teferi, president of the bank, and Teklu Haile, chairman of the board of directors, said in the report they presented to shareholders.
Dashen, whose deposits by 693,302 depositors reached 10.1 billion Br in 2009/10, an increase of 28pc from the previous year, was particularly challenged by the credit cap placed on all private banks, Teklu claimed.
Since inflation has been contained to the single digits, National Bank of Ethiopia (NBE) has revised the bank-by-bank credit cap it had imposed.
The cap will be lifted if inflation remains in the single digits, the central bank and Ministry of Finance and Development (MoFED) indicated in their memorandum of macroeconomic and financial policies (MMFP) to the International Monetary Fund (IMF).
This is good news for Dashen which has cash to the amount of 5.3 billion Br (representing 42.5pc of its total assets) between its head office and 58 branches nationwide.
Deposits have been increasing for the past three years. Savings deposits increased by 2.9 billion Br while loans and advances increased by only 647 million Br between 2008 and 2010.
If this trend continues, the bank will incur heavy interest costs which might become unsustainable, according to Abdulmena Mohammed, accounts manager for Portbello Group Ltd, a London based holding company with subsidiaries in property investments and developments.
“Considering the long-term situation, this is a price we are willing to pay,” Lulseged told Fortune. “It took us a long time to attain this level of trust and we will continue to open more branches and mobilise deposits.”
Despite this, the bank, which has been in operation since 1996, registered 458.2 million Br in profits before tax, a 30pc increase from the previous year and a 147pc increase from 2006.
However, the bank’s earnings per share declined over the past five years. In comparison with 95.6pc in 2006, the volatility of returns is 20pc.
This might be due to the increase in share capital by 380pc since 2006, according to Abdulmena who has also worked as an external auditor for eight years in Ethiopia.
As opposed to the return on shares, the return on the bank’s capital was more stable with only four per cent standard deviation at an average of 44.2pc since 2006.
Dashen Bank, the first to have a capital of one billion Birr authorised from the central bank, raised its paid-up capital of 591.9 million Br by 63.3 million Br during the year.
With so much liquidity, the bank’s management should have designed a more appropriate strategy to invest the money in a higher yielding investment than its current investment of 1.4 billion Br in treasury bills with low yields, according to Abdulmena.
This is contested by the bank’s president.
“We pay no tax on the interest we earn from the treasury bills,” Lulseged told Fortune. “Our role as a bank is to encourage investors, not to be investors ourselves.”
Apart from its financial intermediation operations, Dashen performed well in other areas such as foreign exchange dealing, letters of credit (LCs), and local transfers last year as well as over the past five years. This is the kind of performance that has positioned the bank as the largest private commercial bank in the industry.
A total of 309.6 million Br, constituting 64.3pc of its income for 2009/10, was gained from foreign exchange dealing, the main component of noninterest income. This figure saw an increase of 569pc from the 54.4 million Br in 2006.
Dashen, a pioneer in the introduction of payment card systems by private commercial banks, also generated 66 million dollars out of its total income of 964.3 million Br through VISA, MasterCard, and Maestro card services. The number of people who hold VISA Dashen debit cards shot to 103,050 during the past year, an increase of 88.7pc.
The bank encountered various challenges in popularising and penetrating the market through electronic delivery channels to achieve these numbers, according to Lulseged.
Original date published: 29 November 2010
Source: http://allafrica.com/stories/201011300883.html?viewall=1