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The proposal made by the Board of Directors of
Dashen Bank for a cash dividend payment of 109
million Br has been approved at the 15th ordinary
and the 13th extraordinary general assembly of the
bank’s shareholders.
This was subsequent to the bank’s 352.4 million Br
profit in the 2008/09 fiscal year which has shown an
increase of six per cent over the preceding year.
The shareholders meeting, which was held on the
afternoon of Thursday, October 29, 2009, was
followed by a dinner party at Sheraton’s Lalibela
Hall to celebrate the bank’s profit.
The bank also reported a total deposit of 7.9
billion Br for the year, an increase of 1.8 billion
Br (29.5pc) over 2007/08, which a banking expert,
said was “commendable.”
The composition of the deposits of the bank showed
that demand deposits, savings deposits and time
deposits were 2.1 billion Br, five billion Birr and
500 million Br in 2008/09, respectively. These
deposits, in 2007/08, were 1.6 billion Br, 3.8
billion Br and 692 million Br, in the same order.
The expert, who insisted on anonymity because of his
involvement in the industry, said that the wide
customer base Dashen had was a strong asset. The
number of depositors reached slightly more than
582,000 by the end of the fiscal year 2008/09 from
487,000 in 2007/08.
The bank’s loans and advances grew by only one
percent to 4.45 billion Br, which, the expert says,
could be mainly due to the National Bank of
Ethiopia’s credit restrictions imposed as a measure
to control inflation.
The sectoral composition of loans which shows that
the bank has increased its loans to domestic trade
and services rather than manufacturing is a good
strategy, the expert believes. This is because of
the high risk of providing loans to the
manufacturing sector due to the acute shortage of
electric power and depletion of foreign currency
reserves.
The expert says that the bank’s mix of loans shows a
weakness on the import and export trade, where it
should have been strong. Dashen extended 349.3
million Br in loans to exporters, up from 338
million Br in 2007/08, and 359.8 million Br to
importers, which was lower by 156.6 million Br
compared to 2007/08.
The 55pc loan-to-deposit ratio showed the existence
of a huge amount of excess funds, according to the
expert, who applauded the bank’s move to invest the
excess money in the construction of its own
buildings in Addis Abeba and regional towns.
“Especially during a time of very high inflation it
is advisable to invest in real assets such as
buildings,” the expert told Fortune.
The bank’s income of 755.6 million Br was 12.8pc
higher than the previous year; 57pc of this income
was from interest on loans and advances to
customers.
Dashen’s total expenses
come to 403 million Br – an increase from 332.5
million Br in 2007/08. The bank secured 39pc of its
income from international banking activities.
Dashen Bank earned 42.3
million dollars through Visa and Master Card
services in 2008/09. It is set to bring in an
additional 16 automated teller machines, bringing
the total to 55 in 2009/10.
Return on equity decreased from about 84.6pc in
2007/08 to 55pc in the last fiscal year. The
considerable growth of paid-up capital during the
year may explain the reduction in the return, which
is still good seen against the challenges of the
business environment, the expert commented.
Teklu Haile, chairman
of the Board of Directors of Dashen Bank said the
bank succeeded in attracting close to 60,000 new
clients to the card payment system. It also has 519
point-of-sale terminals.
Teklu was quoted saying
that the bank registered the profit despite the
multifaceted challenges faced during that same
period.
Dashen opened branches
in Arbaminch; Adama; Bedele; Shire (Inda Selassie);
and Arada, Addis Abeba, in the year under report,
raising the number of branches to 52. Five foreign
exchange bureaus have also been opened including one
at the Intercontinental Addis Hotel. |
