COLLEGE OF BUSINESS AND ECONOMICS

DEPARTEMENT OF MANAGEMENT

GROUP ASSESSMENT OF STRATEGY MANAGENT

COURSE TITLE; MGMT 42O1

GROUP 1

NUMBERS NAMES ID. NUMBER

1. BONA BAAK 2965

2. CHALLA DEJENE 1574

3. WAKJIRA LEGASA 1572

4 TARIKUA TESFAY 0016

5. TOLLERA YOSSEF 1788

6. HIKMA SEFFA 0007

7. DABSH YILMA 1212

SUBMISSION DATE 1\08\2016

SUBMITTED TO: INST. MENGISTU A (MBA)

BONGA, ETHIOPIA
 1. Background of the Commercial Bank of Ethiopia

The historical background of Commercial Bank Ethiopia

 The history of the Commercial Bank of Ethiopia (CBE) dates back to

the establishment of the state Bank of Ethiopia in 1942. CBE was
legally established as a share company in 1963. In 1974, CBE merged
with the privately owned Addis Ababa Bank.

 The bank has around more than 35,000 employees as of June 2022,
who staffs its headquarters and its over 1000+ branches positioned in
the main cities and regional towns. The latter include 120 Branches in
the national capital Addis Ababa.
Currently CBE has more than 37.9 million account holders in its more
than 1900 branches and the number of Mobile and Internet Banking
users also reached more than 6.6 million and 37k. Active ATM card
holders reached more than 8.3 million and 17 million CBE Birr users

What Is a Commercial Bank?

 The term “commercial bank” refers to financial institution that

accepts deposits, offers checking accounts services, makes various loans,
and offers basic financial products like certificates of deposit (CDs)and
savings accounts to individuals and small businesses. A commercial bank is
where most people do their banking.

 CBE has 2 operating branch in South Sudan and contemplating are

opining in Djibouti and opening banks in Dubai and Washington Dc all to
serve the Ethiopian.

Objectives

Banks face a significant conflict between the desire to earn profits for
shareholders and to enable the bank to expand, and the need for liquidity to
enable the bank to meet its obligations to its customers. It is a fine balancing
act which banks have not always done successfully.

Values of Commercial Bank (CBE)

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 The followings are the values of Commercial Bank of Ethiopia;

 Commercial banks make money by providing and earning interest from

loans such as mortgages, auto loans, business loans, and personal loans.
Customer Loans and other credit products
 Treasury and cash management services
 Equipment lending
 Commercial real estate
 Trade finance
 Employer service

2. Current situation of Commercial Bank of Ethiopia

What is the problem of Commercial Bank of Ethiopia?

 The main challenges facing Ethiopian commercial banks today include the
development of core banking system, financial performance, adoption of e-
banking, risk assessment and management , and the impact of the global
financial crisis.

 The funds received from the commercial banks are of short duration and the
procedure of obtaining funds is a time taking affair as there is a lot of
verification that needs to be done from the bank end. The bank can set
difficult conditions for granting of loans.
What are the current challenges faced by banking sector in Ethiopia?

 The prevalence of conflicts in various regions poses security challenges for

banks attempting to expand their operations. This instability not only
jeopardizes the safety of banking infrastructure but also discourages
potential customers from engaging in financial activities.

 The adoption of electronic banking which is hindered by security risks, lack

of trust, and absence of a legal and regulatory framework. Another biggest
challenges facing the banking industry is regulatory changes. Banks must
comply with various regulations, from anti-money laundering (AML) to data
protection laws. Keeping up with these changes can be a time-consuming
and costly process, which can impact the profitability of banks.

2. Evaluate the mission statement of the Commercial Bank of Ethiopia.

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 The missions are as follows:

 Permanent focus on Customer Satisfaction;

 Efficiency in management;
 Permanent technological update;
 Communication, respect, trust and high sense of mission of
all CBE employees;
 Provide each project with the technical, human and financial resources that
allow to obtain or exceed the results expected by our Client
 Strict compliance with technical requirements and obligations;
 Culture Development to the excellence throughout the organization, based
on the principles of quality management;
 Activity based on standards ethical and compliance with applicable laws;
 Commitment to continuous improvement of safety, hygiene and health
conditions at work;
 Active participation in improving environmental performance and the
circular economy
4. Evaluate vision statement of the commercial bank of Ethiopia
What Is a Vision Statement?
A vision statement is a business document that states the current and future
objectives of an organization. A company’s vision must align with its
mission, business plan, strategic plan, and organizational culture. A vision
statement isn’t only used in business; nonprofits and government offices also
use them to set strategic goals.
Vision statements aren’t necessarily set in stone. They can be returned to,
reviewed and revised as necessary. Any changes should be minimal
 A vision statement is a written declaration clarifying the business’s meaning
and purpose for stakeholders, especially employees. It describes the desired
long-term results of the company’s efforts.

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For example,

 An early Microsoft vision statement was “a computer on every desk and in

every home.”
 A vision statement can increase employee’s engagement while making it
easier to hire new employees for a cultural fit.
 There are some steps in evaluating vision statement, these steps are:
 The first step in writing a vision statement is determining who will craft it.
In a small business, you may be able to ask everyone for their insight. In a
larger operation, you may need to be more selective while still capturing a
range of employee voices.
 The second step is an effective vision statement should be Concise,
unambiguous, futuristic, realistic, aspirational, and inspirational. It shouldn't
be generic but rather focus on outcomes specific to the organization.
 The third step is the company likely already has published goals and
established values in it employee handbook, marketing materials and other
publications. Use this information to guide your work, suggested Alison
Brehme, an author and content, marketing and media strategist.
 “A company’s mission, purpose, goals and values are all involved in the
creation of a company vision,” Brehme said. “Weave these concepts and
beliefs into your vision statement.

Mission statement based on content

What is the content of Commercial Bank?

A commercial bank is a financial institution that provides services like loans,

certificates of deposits, saving bank accounts bank overdrafts, etc., to its
customers. These institutions make money by lending loans to individuals and
earning interest on loans.

How commercial bank of Ethiopia works?

Commercial banks offer basic services of banking to the public including

individual customers as well as small and medium-sized businesses. Money is
made by banks by charging for services and fees. The fees depend on the products
given such as overdraft fees, fees for safe deposit boxes, late fees, etc. Various
loans also consist of fees other than interest on loans.

Banks earn money by giving out loans and for that purpose they use funds from
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customer deposits. They charge higher interest rates on loans they give out and
comparatively less rate of interest on the amount they get as deposits from their
customers. For e.g., a bank may provide a 0.30 per cent rate of interest on savings
account to its customers but charges a 4.8 per cent rate of interest annually for
home loans.

Generally, commercial banks are situated in buildings where their customers come
for using ATM machines and other banker window facilities. As internet
technology has risen in recent years, most banks allow customers to do most
services online. People can now make money transfers, deposits or make payments
for bills online.

Importance of commercial banks of Ethiopia

Commercial banks are essential for the economy because they create liquidity in
the market and create capital besides providing their customers with essential
services. Banks make sure liquidity in the market by lending out loans from the
deposits of their customers.

What is commercial bank of Ethiopia?

According to the commercial bank definition, it is a financial institution whose

purpose is to accept deposits from customers and lend out loans.

What are commercial banks of Ethiopia types?

Public sector banks, private sector banks, and regional rural banks are the types of
commercial banks.

What are commercial bank functions?

The basic functions are accepting deposits, lending out loans, transfer of money,
and discounting bills of exchange.

Why are commercial bank of Ethiopia important?

Commercial banks are important because they help in creating liquidity in the
market.

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Vision Statement based on clear vision
What is a clear vision statement?

A clear vision statement defines the direction the organization is going, sets the
stage for strategic plans, and illustrates exactly what an organization “stands for”.
It can also provide other significant benefits for the people in your organization.

A good vision and mission statement should be clear, concise, and compelling. It
should capture the essence of your organization, and reflect your core values and
principles. It should also be realistic, achievable, and measurable. It should not be
vague, generic, or unrealistic.
Vision statement based relevance
What is the relevance of the vision and mission statements as part of the strategy
development process?
Statements of vision and mission are important so that everyone involved in the
organization, including outside stakeholders, understand what the organization will
accomplished In essence this means "keeping everyone on the same page" so they
are all "pulling in the same direction".

What is the relevance of mission?

Having a clear mission or purpose is essential for any organization. It helps to
prioritize tasks, focus energy, and maximize impact on target customers. This is
especially critical for nonprofit or mission-based organizations where the mission
defines the organization's values and objectives.

Vision statement based on precise

What is a precise mission statement?

Definition; A mission statement is a precise definition of what an organization
does on a daily basis and what it intends to accomplish in the future, through the
collective efforts of members of organization.
Mission statement is a precise definition of what an organization does on a daily
basis and what it intends to accomplish in the future, through the collective efforts
of members of the organization. It clearly states the organization’s long-run vision
of what it is trying to become, why the organization exists, and the unique aim
which distinguishes it from other similar organizations. The mission statement
signifies initial clarity of goals and objectives and gives a sense of purpose and

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direction in the organization. It serves as an umbilical cord, linking what the
organization does in the market place with what it does internally. A mission
statement is therefore a brief description of a company’s fundamental purpose of
existence.

5. SWOT Analysis of commercial Bank of Ethiopia

 "With the help of this Banks SWOT Analysis Template, you can efficiently
manage your tasks and improved productivity."
 In the fast-paced and ever-evolving world of finance, banks need to stay one
step ahead of the competition. That's where Click Up’s Banks SWOT
Analysis Template comes in handy.
 With this template, banks can:
 Analyze their strengths and weaknesses to capitalize on their unique
advantages and address areas for improvement.
 Identify opportunities in the market to expand their services, attract new
customers, and drive growth.
 Mitigate potential threats by staying on top of industry trends, regulatory
changes, and emerging competition.

Benefits of Banks SWOT Analysis

 A SWOT analysis is a powerful tool for banks to assess their current

position and plan for the future. With the Banks SWOT Analysis Template,
you can:
 Identify and leverage your strengths to gain a competitive edge in the market
 Address weaknesses and implement strategies to improve efficiency and
customer satisfaction
 Capitalize on opportunities in the market to expand your services and reach
new customers
 Mitigate potential threats by developing contingency plans and risk
management strategies
 Make informed strategic decisions based on a comprehensive analysis of
your bank's internal and external factors.

Main Elements of Banks SWOT Analysis

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 Click Up’s Banks SWOT Analysis template is designed to help banks conduct a
thorough analysis of their strengths, weaknesses, opportunities, and threats.
Here are the main elements of this template:

Custom Statuses: Track the progress of each task with customized statuses
such as Not Started, In Progress, Completed, and On Hold.

Custom Fields: Utilize 4 custom fields including Worksheet Link to provide

a direct link to the analysis worksheet, Completion Rate to measure the
progress of each task, Objective to define the purpose of the analysis, and
Timeline to set specific deadlines for completion.

Different Views: Access different views such as List view for a

comprehensive overview, Board view for visualizing tasks in a Kanban-style
board, and Calendar view for scheduling and managing deadlines.

Collaboration and Communication: Use click Up’s collaborative features

such as task comments, notifications, and file attachments to facilitate
communication and teamwork among team members.

How to Use SWOT Analysis for Banks

Conducting a SWOT analysis for your bank can provide valuable insights
into your strengths, weaknesses, opportunities, and threats. Follow these
steps to effectively use the Banks SWOT Analysis in Click Up:

o Gather relevant information

Start by collecting all the necessary data and information about your bank. This
includes financial reports, customer feedback, employee feedback, market
research, and any other relevant data that can help you assess your bank's
current position.
Use the Table view in click up to organize and analyze the data you've
gathered.

o Identify strengths

Analyze your bank's internal factors and identify its strengths. These could
include factors like a strong capital base, a large customer base, advanced

9
 technology infrastructure, experienced staff, or a wide range of financial
products and services.
Create custom fields in click Up to list and categorize your bank's strengths.

o Identify weaknesses

Next, assess your bank's internal factors and identify its weaknesses. These
could include factors like a lack of diversification, outdated technology, high
employee turnover, limited branch network, or poor customer service.
Create custom fields in click Up to list and categorize your bank's weaknesses.

o Identify opportunities

Analyze external factors such as market trends, regulatory changes, and

customer needs to identify potential opportunities for your bank. These
could include factors like expanding into new markets, introducing
innovative products or services, leveraging technology to enhance customer
experience, or partnering with fintech companies.
Use the Gantt chart in click up to visually map out the timeline and
implementation plan for each identified opportunity.

o Identify threats

Finally, assess the external factors that pose threats to your bank. These
could include factors like increased competition, economic downturns,
changing customer preferences, cyber security risks, or regulatory
challenges.
Create custom fields in click Up to list and categorize your bank's threats.
By following these steps and using the Banks SWOT Analysis Template in
click up, you can gain a comprehensive understanding of your bank's internal
and external factors, allowing you to make informed decisions and develop
strategies to stay competitive in the ever-evolving banking industry.
o Objectives and values of commercial bank of Ethiopia

Banks face a significant conflict between the desire to earn profits for shareholders
and to enable the bank to expand, and the need for liquidity to enable the bank to
meet its obligations to its customers. It is a fine balancing act which banks have not
always done successfully.

10
  Commercial banks make money by providing and earning interest from
loans such as mortgages, auto loans, business loans, and personal loans.
Customer Loans and other credit products
 Treasury and cash management services
 Equipment lending
 Commercial real estate
 Trade finance
 Employer services

 Communication, respect, trust and high sense of mission of all CBE

employees; provide each project with the technical, human and financial
resources that allow obtaining or exceeding the results expected by our
Client.

6. Objectives of and values of commercial bank of Ethiopia

Objectives and Values

What is the objective of commercial bank?

The main purpose of commercial banks is to provide financial services to the
general public and also provide loan facilitates to the business which helps in
ensuring economic stability and growth of economy. Therefore, we can say that
credit creation is the most important purpose of commercial banks.

Objectives of Commercial Banks

Commercial banks are authorized to provide a variety of financial services which
includes loans, savings accounts, etc..

Broadly speaking, the objectives are of two categories – primary and secondary.

Primary objectives of Commercial Banks

The primary objectives of a commercial bank are accepting deposits and also lending
funds. Deposits are savings, current, or time deposits. Also, a commercial bank lends

11
funds to its customers in the form of loans and advances, cash credit, overdraft and
discounting of bills, etc.

The primary objectives of a commercial bank are as follows:

Accepting Deposits;

Commercial banks accept deposits from people, businesses, and other entities in the
form of:

 Savings deposits – The commercial bank accepts small deposits, from

households or persons, in order to encourage savings in the economy.
 Time deposits – The bank accept deposits for a fixed time and carries a
higher rate of interest as compared to savings deposits.
 Current deposits – These accounts do not offer any interest. Further, most
current accounts offer overdrafts up to a pre-specified limit. The bank,
therefore, undertakes the obligation of paying all cheques against deposits
subject to the availability of sufficient funds in the account.

Lending of Funds

 Another important activity is lending funds to customers in the form of loans

and advances, cash credit, overdraft and discounting of bills, etc.
 Loans are advances that a bank extends to his customers with or without
security for a specified time and at an agreed rate of interest. Further, the bank
credits the loan amount in the customers’ account which he withdraws as per
his needs.

Secondary objectives of Commercial Banks;

The secondary objectives of a commercial bank are acting as an agent to its

customers and also providing general utility services.

The secondary objectives of a commercial bank are as follows:

Bank as an Agent
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A bank acts as an agent to its customers for various services like:

 Collecting bills, draft, cheques, etc.

 Paying the insurance premium, rent, loan installments, etc.
 Working as a representative of a customer for purchasing or redeeming
securities, etc. in the stock exchange.
 Acting as an executor, administrator, or trustee of the estate of a customer.
 Also, preparing income tax returns, claiming tax refunds, etc.

General Utility Services

There are several general utility services that commercial banks offer like:

 Issuing traveler cheques

 Offering locker facilities for keeping valuables in safe custody
 Also, issuing debit cards and credit cards, etc.

Values of commercial bank of Ethiopia

What are the values of commercial bank of Ethiopia?

Communication, respect, trust and high sense of mission of all CBE employees;
provide each project with the technical, human and financial resources that allow
obtaining or exceeding the results expected by our Client.

Values are;
 Permanent focus on Customer Satisfaction;
 Efficiency in management;

 Permanent technological update;

 Communication, respect, trust and high sense of mission of
all CBE employees;
 Provide each project with the technical, human and financial resources that
allow to obtain or exceed the results expected by our Client

13
 Strict compliance with technical requirements and obligations;
 Culture Development to the excellence throughout the organization, based
on the principles of quality management;
 Activity based on standards ethical and compliance with applicable laws;
 Commitment to continuous improvement of safety, hygiene and health
conditions at work;
 Active participation in improving environmental performance and the
circular economy

14