The bank has spent almost half a billion birr on staff and operating costs, increasing total branches to 108 Dashen Bank , busy with a spate of expansion, has closed the 2012/13 fiscal year with less of a profit than that of the previous year. The profit after tax of 606.7 million Br is a decrease of seven percent from that of the previous year. This is for a bank that had a reported gross income of 1.817 billion Br - an increase of 5.3pc. In the previous year, the 18-year-old Bank asserted its dominant place among the dozen private banks with a profit after tax of 652 million Br - up by nearly 45pc from the year before. Its earnings per share (EpS) had also increased by 23pc to 926 Br. This year, however, its EpS has also slipped, to 823 Br, and its return on equities has plunged to 34.9pc from 49.4pc. Interest on loans, advances, deposits, treasury bills and National Bank of Ethiopia (NBE) bonds has increased by a decent figure of 16.3pc to 1.127 billion Br. However, the good performance in the area of financial intermediation (using deposits to extend loans, for example) has been undermined in other areas of business. For instance, gains on foreign exchange dealings have gone down to 258.4 million Br and service charges and commissions have decreased to 399.7 million Br. "The decrease in service charges and commissions is disappointing," says Abdulmena Mohammed Hamza, an accounts manager for the Portobello Group Ltd - a London -based holding company with subsidiaries in property investment and development. "The management of Dashen needs to address these issues by designing an appropriate strategy." The fierce competition for resources among private banks in the industry has induced Dashen to pursue an aggressive expansion. Total expenses incurred amounted to 1.004 billion Br - an increase of 20.6pc. Out of the total expenses, 489.9 million Br was interest paid to savings account holders; 496.2 million Br for staff and general administration expenses and 17.77 million Br provided for doubtful loans and advances. As of June 30, 2013 , the Bank's total number of staff reached 3,690, while it aggressively opened 31 new area banks, raising the branch network by a whopping 40pc to 108. This led to rising expenses for the Bank, according to the annual statement Officials of the Bank have not responded to Fortune's questions despite repeated attempts. The total assets of Dashen have expanded to 19.747 billion Br. Dashen disbursed loans and advances of 8.663 billion Br - an increase of 8.9pc - and mobilised deposits of 15.8 billion Br - an increase of 12.7pc. The growth in assets, loans and advances and deposits at Dashen is the lowest in the industry, however. Further reflecting the high competition facing the Bank, the loan to deposit ratio has also dropped, to 54.6pc from 56.5pc. "Dashen should set out an appropriate strategy to maintain its position," advices Abdulmena. Dashen, a pioneer in the introduction of payment card systems by private commercial banks, saw the number of ATM and Visa cardholders shoot up to 280,000. Although witnessing its capital adequacy ratio (CAR) go down by 2.3 percentage points in the previous year, the Bank's CAR increased to 18.4pc this year. Even if the current level is twice the legal requirement, the figure is lower than other banks. Banks should be cautious about their CAR position, because high adequacy ratio cushions them during times of unforeseen difficulties, while it protects their depositors when their liability exceeds their assets and liquidity, according to a veteran of the private banks Dashen's paid up capital of 737.2 million Br makes it a well capitalised bank. This amount already exceeds the National Bank of Ethiopia's (NBE) threshhold of 500 million Br, which banks must meet by 2016.
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