Board Chairperson’s Message
I would first of all like to pay tribute to our almighty God for keeping us together and guiding us forward to this date with immense hope and serenity. I am also pleased to present to you our Bank’s annual performance report for the Fiscal Year ended June 30, 2022.
Thanks to the early vaccine development and its fairly speedy distribution and to the wide ranging economic and fiscal measures taken by countries and institutions round the globe, economic recovery was finally well on course. Nevertheless, the rise of Omicron variant mid-way into the fiscal year followed by the coming into scene of the Russia-Ukraine conflict in the second half of the fiscal year had been disruptive setbacks to the toddling recovery. Yet again, the world has to grapple with renewed challenges in dealing with sharp rising prices in food and energy markets and marked shortfalls in food and commodity supply.
Food security concerns in Africa has been brewing across wider regions of the continent with severe consequences felt in certain hard-hit countries like Somalia where dependency on food imports from the Black Sea region was too high. While the situation in Ethiopia appears somewhat different with the dependency on wheat imports markedly limited and that prospects of looming production of the grain becoming a reality, our country is still experiencing extended high inflationary conditions severely impacting households.
The onset of the fiscal year for Ethiopia, thus, couldn’t still be any different not only on account of the particularly rocketing food prices but also owing to the painful repercussions coming out of the ongoing conflict in the northern region of the country.
The banking sector has seen marked expansion witnessing entry into the market of several new private commercial banks which were already under formation. The government has also shown visible moves to allow entry of foreign banks into the banking sector. The fast-increasing trend of competition in the sector was also to be amplified by non-bank entities like Ethio telecom which aggressively introduced the telebirr.
The fiscal year had been a year in which close to 25% of Abay’s branches were not functional for about half of the year due to the conflict in the north. Strong efforts were made afterwards to resume banking services as quickly as possible in those war affected areas by refurnishing the damages and replacing lost equipment.
Despite the grim situations experienced during the year, our Bank was able to record commendable results in several respects. In the resource mobilization front, the Bank has managed to mobilize value of deposits to the tune of Birr 8.5 billion witnessing a 35.5% annual growth. Instrumental in these results had also been the branch expansion efforts which saw 87 new outlets opened across the country, taking the total figure to 373 and growing by 30% year-on-year. The Bank has also successfully commenced constructing its monumental headquarters building in the heart of the capital. It has also been running two regional office building construction projects in addition to a 14-story new building design on course for commencement. Amidst business and investment in day-to-day operations, the Bank never fell short of compassionate hearts to live its corporate values through discharging various corporate social responsibility causes by granting donations where they are most needed.
Resilience and commitment to change remain choiceless options for us in our current as well as forthcoming efforts to transform into a much more sustainable business. With our up and running strategy formulation project, we are committed to build a business model that would navigate the Bank amid current and upcoming challenges toward desired heights.
Colleagues deserve praise for their fruitful efforts in maintaining growth and profitability. Our Bank had to sustain significant financial damage due to the loss of fixed assets and stall business in substantial areas of the country before bouncing back to functioning ways. We are always grateful for the support and cooperation we witness every year from all our stakeholders. We are so proud of our customers who keep us going and remain the real reason for our relentless improvement efforts. I would also like to underscore the praiseworthy moves of the government and the regulatory organs for their efforts in maintaining the sector safe and sound.
Chairperson, Board of Directors
Abay Bank S.C.