The 4 financial institutions earned 5.6 bln br profit
Public financial institutions collected 22 percent less hard currency in the first half of the current fiscal year compared with the similar period last year.
The three public banks; Commercial Bank of Ethiopia (CBE), Development Bank of Ethiopia (DBE) and Construction and Business Bank (CBB), that planned to earn USD 3.15 billion in the first half of the 2013/14 fiscal year have met 77.1 percent of the target.The hard currency generation was also significantly lower than the first half year of 2012/13, which was USD 3.1 billion. The six month performance has met 78 percent of the past year's achievement.Lower remittance and export performance are blamed as major reasons, according to the report by Public Financial Enterprises Agency (PFEA), a regulatory body of four public financial institutions that include Ethiopian Insurance Corporation (EIC) besides CBE, DBE, and CBB.The Ministry of Trade's recent report indicated that the country's exports during the past six months have declined compared with the target and the achievement registered in the similar period of last fiscal year.CBE has earned more than the other two public banks. According to the report it has earned USD 2.33 billion in the first six months, while DBE and CBB have earned USD 40 and 60 million respectively.Despite the fact that the public enterprises registered lower performances in hard currency generation, the six month profits are very encouraging.According to the half year report presented by Sentayehu Woldemichael (PhD), Director General of PFEA, the four financial institutions; have amassed a 5.6 billion birr gross profit in the past six months, which is over 98 percent of the 5.7 billion birr target.The profit earned in the past six months has about a 1.3 billion birr difference compared with the first half of the 2012/13 fiscal year.In the first half of the past year the public financial institutions, which are major financial sources in the country, have made a profit of 4.3 billion birr or 29.4 percent lower than the current year's achievement.According to Dr Sentayehu, the financial institutions have dispersed 26.2 billion birr in the economy in the past six months. The amount is 95 percent of the target and the sick loan percentage has successfully declined from the projection 2.1 percent to 1.9 percent.As of December 31, 2013 the deposit mobilization of the banks met 98 percent of the target, which has reached 172.4 billion birr.The four financial institution's assets reached 255.6 billion birr which is almost equal with the targeted 256.5 billion birr. The total assets were 204.3 billion birr in the first half of 2012/13, which was 25 percent lower than this year's achievement. According to the report, out of the total assets, 36.5 billion birr is in cash. From the total assets, loans and investments took 103 and 107.3 billion birr respectively.Including the reserve, their capital has reached 16.1 billion birr, which is a growth by 1.33 billion birr compared with the target, and it has a 21 percent growth compared with similar period of last year. CBECBE has taken the lions share in terms of hard currency generation and profit earnings.In the stated period CBE, a bank with 780 branches throughout the country, has generated over 4.6 billion birr profit, which is 93 percent of the target, and its profit share stands at 83 percent of the total profit generated from all institutions. According to the director general, increased earnings from interest and commissions are major reasons for the profit growth.The bank's total asset is 210.3 billion birr, which is 99.6 percent of the target. The bank's asset has taken 82.3 percent of the total share of the institutions. Its capital including the reserve is 10 billion birr. DBEThe other state bank, DBE registered a tremendous achievement in the stated period. The report indicated that the bank has registered almost double compared with the target, even though they earned less than CBE. DBE, the major development project partner in the country, has amassed 757.3 million birr in the stated period. The profit is 94.3 percent higher than the 390 million birr target. The normalization of big non-performing (sick) loans is the major reason for the increase.CBBEven though CBE collected a large amount of money in the first half of the year, DBE and CBB have also been able to achieve over their targets. The other mortgage bank, CBB, has also achieved almost 102 percent of its target in the stated period. The agency report indicated that CBB has earned about 62 million birr in the first six months, which is a good indication for the bank that targeted to expand its business during the previous period. Its earnings amounted to 110 million birr in net profits for the past fiscal year.EICThe state insurance firm that is responsible for insuring big projects controlled by the government is the only public financial institution that registered a lower performance compared with the three banks.The insurance firm had a goal of earning 271.6 million birr in profits during the stated period, while the actual performance was about 111 million birr or 40 percent lower than the target. The agency report indicated that EIC has earned 160.8 million birr in the first six months of the budget year.EIC was established in 1976 after the nationalisation of 13 private insurance firms by the Derg. It has also registered lower performance in terms of premium collection. The insurance firm had targeted to collect a premium of 1.434 billion birr, while the exact achievement did not increase from 63 percent of the target. The insurance firm has collected 900 million birr in premiums and also paid 263 million birr compensation and commission in the stated period. Despite the growth of compensation and commission payment by 4.2 percent when compared with the past year's similar period, the cost has declined significantly in contrast with the target.EIC planned to pay 485 million birr compensation and commission in the first half of the fiscal year. This is a 222 million birr difference compared with the actual payment.The insurance firm earned 343.4 million birr in profits before tax in the past fiscal year.