Honorable Shareholders,

On behalf of the Board of Directors, it gives me great pleasure and sense of pride to present the bank’s Annual Report for the financial year conclud­ed on June 30, 2020, while celebrating the Bank’s 10th year anniversary.

May I take this opportunity to congratulate everyone for the success we have achieved in the last ten years since this institution was established, as we look forward to many more years of astounding performance.

The year under review was marked by significant global and domestic developments which impacted our business in several ways. Despite the COVID-19 pandemic and its im­pact on business slowdown, intense and growing compe­tition in the sector, the performance of the bank remained commendable.

For the Bank, total deposits and outstanding loans grew by 39% and 52%, respectively from the last year’s record. Sim­ilarly, the paid-up capital of the bank has grown by 30% and attained its annual target of Birr 2.2 billion. Subsequently, the Bank’s total Capital soared up by 26% from last year’s position and attained a balance of Birr 3.1 billion reflecting commensurable balance sheet status. During the year, rev­enue grew by 14 % from last year and the bank has regis­tered a profit before tax of Birr 640 million.

In the non - financial spectrum, the Bank achieved substan­tial results. Thanks to the coordinated effort of all the play­ers, the Bank acquired an additional plot of land adjacent to our current landholding in Addis Ababa. The total area we own matches our ambition to build iconic Head Quarters and the review of the design work to upgrade it further by scale and quality is well under progress. The bank has also considered the option of acquiring assets through the pur­chases of buildings after conducting a thorough analysis of its feasibility. In this regard, the bank has acquired a mixed-use building, known as Quara Hotel building, in Gondar city.

The Board has taken actions to fast track fundamen­tal changes ensuring sustainable and profitable growth through excellence in operations, technology, and custom­er experience. The Board also believes that having an en­gaged and motivated workforce and a sound governance and risk management are pivotal to attaining the sustain­able profit and growth that the Bank aspires. In light of these, the Board revised the five years strategic plan of the bank based on the results of the mid-term review. A new or­ganizational structure to enable the implementation of the revised strategy is put in place. The bank has finalized the upgrading of the Core Banking System to the state-of-the-art version and subsequently made digital banking services more reliable than ever before. Besides, the bank’s risk management program and audit charter have been revised and implemented, thereby instituting a strong internal con­trol system.

As a well-diversified business underpinned by histori­cally-stable revenue generation and significant capital strength, Abay has registered a notable financial and non-financial performance. The board of directors contin­ues making its utmost effort to strike a balance between robust growth and sustainability to deliver on long-term val­ue to stakeholders. In doing so, the board is determined to follow-up on the execution of the strategic plan along with the recommendations forwarded based on the findings of the Mid-Term Review of the bank’s strategic plan,to take measures that would strengthen corporate governance and institutional capabilities, strengthen risk management frameworks and internal control systems.

With the new fiscal year, the Board of Directors, the Man­agement, and the entire staff of Abay Bank S.C. will contin­ue to accelerate its transformation and seize opportunities to capture more market shares through business innovation and increased efficiency. We will continue to embark on the construction of the bank’s headquarters and regional office buildings, conduct aggressive resource mobilization while rendering personalized financial services.

Finally, these achievements would not have been possible without the commitment of the management and the ded­ication of the Bank’s staff, the continued support and trust of our esteemed customers, and the strategic leadership and guidance of the National Bank of Ethiopia and other stakeholders. On behalf of the Board of Directors and my own behalf, I would like to express my deepest gratitude and appreciation to all of you and count on your continued support.

Thank you,

Ethiopia Tadesse

 Chairperson, Board of Directors