AB 28th Annual Report 2022 23 Compressed
AB 28th Annual Report 2022 23 Compressed
AB 28th Annual Report 2022 23 Compressed
2022/23
ANNUAL REPORT // 2022/23
2
Annual Report
For Financial Year
Ended 30 June 2023
S- Socially Responsible
H- Honesty
In Millions of Birr
160,000 152,007 120,000
140,000 100,000
87,539
120,000 80,000
108,074
100,000 60,000 57,274
47,262
80,000 74,266 40,000
62,464
60,000 20,000
0 0
2018/19 2019/20 2020/21 2021/22 2022/23 2018/19 2019/20 2020/21 2021/22 2022/23
Financial Year Financial Year
In Millions of Birr
21,000 20,951
140,000 128,695
18,000
120,000
15,852
100,000 15,000
89,280
80,000 74,635 12,000 11,968
60,000 9,640
9,000
40,000
6,000
20,000
0 0
2018/19 2019/20 2020/21 2021/22 2022/23 2018/19 2019/20 2020/21 2021/22 2022/23
Financial Year Financial Year
600 566
6,000
500 466
5,000 4,823
410
400
4,000 3,600
3,344
3,000 300
2,000 200
0 0
2018/19 2019/20 2020/21 2021/22 2022/23 2018/19 2019/20 2020/21 2021/22 2022/23
Financial Year Financial Year
Responding to Changing Life
Valid
Thru
PREPAID CARD
PREPAID CARD
Valid
Thru
VALID
THRU
783 ATMs
Banking
For Your Needs
2,472
875 Branches POS Machines
20,055
Employees
5,500
Agents
BOARD OF DIRECTORS
GURE KUMSSA
Board Chairman
• Total income of the Bank escalated by The overall success of the Bank, however,
39 percent from last year same period is coiled on the wise guidance of the
and arrived at Birr 28.79 billion, Board of Directors, the prudent and
coordinated quality leadership of the
• The total expense of the Bank stood at CEO, the dedication and the hardworking
Birr 19.05 billion as at June 30, 2023, commitment of the Management
up by 44 percent from previous year Members, the immense and unreserved
similar period, contribution of the entire employees and
• The gross profit grew by 30.8 percent the overall strong endeavors made by the
over previous year and reached Birr Bank-wide community to maximize the
9.75 billion, as at end of June 2023, wallet share of the Bank that deserves a
an honorary recognition.
• Total foreign currency generated
during the year stood at USD 1.46 In another phenomenon, although, the
billion, surpassing the amount year was full of challenges, it is worth
generated last year same period by mentioning to raise one miraculous
USD 248.2 million or 17 percent, victory which the Bank enjoyed during
the year under review. This surprising
• The aggregate deposit customer base
triumph was that a well-known world-
rose to 10.4 million up by 34 percent
wide Financial Magazine known by the
from last year similar period,
name ‘’Global Finance Magazine’’ has
• The branch network as at June 30, chosen Awash Bank, for the second time,
2023 reached 875 showing a growth by as the Best Bank of Ethiopia in the fiscal
21 percent, year 2022/23. In recognition of this
• Agents, POSs, ATMs and Merchants/ particular selection, an award was given
Billers have shown a growth of 198%, to the Bank during the IMF/World Bank
5%, 77% and 152%, respectively, as Group Annual Meeting of the FY 2022/23,
Tsehay Shiferaw
Chief Executive Officer
Zelalem Bekele
Director, Wolaita Sodo
Region
Tsehay Shiferaw
Chief Executive Officer
I feel proud and pleased to congratulate was USD 5.21 Billion, which is less by USD
all respected Shareholders, Board of 1.5 Billion (31.8%). The drop in the value
Directors, all Management and the entire of global commodity prices, illegal trade,
hard-working staff members and above security issues, suspension from African
all, most respected and valued customers Growth and Opportunity Act (AGOA),
of the Bank on the magnificent and etc… were some of the factors that have
unparalleled financial and non-financial contributed to slow-down of export
performance registered by our Bank for earnings nation-wide.
the financial year ended June 30, 2023.
Domestically, the security issue, especially
All other stakeholders of the Bank also
in the northern and western part of the
deserve due recognition and appreciation
country, has been seriously affecting
for the performance registered during the
the national economy in general and the
financial year.
banking business in particular. Nation-
The financial year 2022/23 was challenging. wide, the inflation rate for food and non-
As per the Federal Government’s official food items has been above 30% over the
report, in the budget year just ended, the past one year and this also escalated our
nation-wide total revenue generated from day-to-day operational expenses.
export was USD 3.64 Billion while the plan
banks as well as from non-bank players such L/C Margin 3,978 4,896 918 23 3 3
Total 152,006 187,367 35,361 23 100 100
as Fintech companies and Telecom operators.
It is worth mentioning that the number of Interest Free Banking line of business has
Figure 1: Deposit Structure as at June 30, 2023
[CATEGORY
commercial banks operating in Ethiopia has continued NAME]
59%
to play a significant role in the
reached over 30 by the end of June 2023, half overall deposit mobilization performance of
[CATEGORY
of which were the newly entrant ones during the Bank. Accordingly, the IFB deposits
NAME]
[PERCENTAG
grew by
2
the last two years. Similarly, Ethio-Telecom and Birr 4.2 billion (37 percent) during the financial
a number of Fintech companies have started year 2022/23 and reached Birr 15.7 billion as at
engaging in payment services, which was June 30, 2023.
previously allowed only for banks.
Figure 1: Deposit Structure as at
Despite these headwinds impacting the overall June 30, 2023
performances and profitability of banks, Awash
Bank has once again registered an outstanding
operational and financial results during
the financial year 2022/23. Indeed, Awash
Bank maintained its leading position in key
3%
6% e
Tim
59%
an
%
m
32
De
(2
The percent) and
sectoral distribution other
of loans sectors
and advances (0.3
reveals that percent).
domestic trade and services took the
lion’s share (24 percent), followed by export (19 percent), building and construction (17 percent),
import (13 percent), manufacturing (11 percent), personal loans (9 percent), staff loans and
Table 2: Loans and Advances by Economic
advances (4 percent), transportation (2 percent) and other sectors (0.3 percent).
Lottery Award
129
Birr 1.3 billionInterest
during the
income financial
accounted for theyear
largestunder review.
portion of This
the overall registered
income (76 percent), decline
followed byin operating
Table
decline3:inComponents of Income
fees and commissions (19 percent) and other operational income (4 percent).
income is mainly due to the gain on foreign currency transactions and translations.
(In Millions of Birr)
Table 3 Components of Income (In Millions of Birr)
Interest income accounted for the largest portion of the overall income (76 percent), followed by
Financial Year Growth Share
2020/21 2021/22 2022/23 fees and commissions (19 percent) and other operational income (4 percent).
Description
2021/22 2022/23 Absolute % 2021/22 2022/23
Table 3 Components
Interestof Income (In Millions
Income 14,160 of Birr)
21,934 7,775 55 69 76
1.5 Capital Fees & Commission
4,961 5,605 644 13 24 19
Income
Following the Shareholders’ decision at the Other Operating Financial
Year Growth Share
1,5221,261 (261) (17) 7 4
Description Income
17 Extraordinary Meeting held in November
th
Total Income 2021/22 20,643 2022/23 28,788 Absolute
8,154 40% 1002021/22
100 2022/23
2022 to raise the paid-up capital of the Bank Interest Income 14,160as at June
Figure 4: Income Composition 21,934
30,2023 7,775 55 69 76
to Birr 55 billion within four years, the paid- Interest income accounted for the largest
Fees & Commission
up capital of the Bank has increased by Birr Income portion of the 4,961 overall 5,605income
Interest 644 (76 percent),
Income, 76%
13 24 19
80.0%
4.4 billion (42 percent) during the reporting Other followed by fees
Operating
1,522
and1,261 commissions
70.0%
(261)
(19(17)
percent) 7 4
Income
and other operational income (4 percent).
60.0%
period and reached Birr 14.6 billion at the end 50.0% Commission
Total Income 20,643 28,788 Income, 8,15419% 40 100 100
of June, 2023. This strategic decision will allow
40.0%
30.0%
staffBirr 9.1
and reached forbillion
the aggressive
as at June branch
30,2023. The rise in personnelexpansion
expense was driven by the is registered despite the significant capital
endeavor
recruitment ofstaff
of additional theforBank and fulfillment
the aggressive branch expansion of vacant
endeavor of the Bank and
growth of the Bank during the reviewed period.
fulfillment of vacant posts at Regional and Head Offices. Similarly, interest expense stood at
posts at Regional and Head Offices. Similarly,
Birr 6.1 billion, up by Birr 1.7 billion (38.5 percent) as compared with last year, mainly due to the
interest expense stood at Birr 6.1 billion, up Table 5: Trends in Profit (In
increase in the interest-bearing deposits.
by Birr 1.7 billion (38.5 percent) as compared Millions of Birr)
with last year, mainly due to the increase in
Personnel expenses accounted for the lion’s share of the Bank’s overall expense (48 percent),
Financial Year Growth
followed by interest expenses (32 percent), and other operating expenses (13 percent). During
the interest-bearing deposits. Description
2021/22 2022/23
Percentage
the review period, loss allowances on financial assets has significantly declined mainly because
Table 4 Composition of Expense
of the notable improvement in asset quality and increase in average recovery rate of the Bank. Profit Before Tax 7,453 9,751 30.8
(In Millions of Birr)
Table 4 Composition of Expense (In Millions of Birr) 5,341 6,991 30.9
Other Operationg Expense 1,469 2,545 1,077 73 Ninthy-Three Million Five Hundered Sixty
Depreciation and Amortization 807 1,107 300 37 Thusand Nine Hundred Fourty-Two) after
3! STRATEGY AND BUSINESS-RELATED DEVELOPMENTS
Loss Allowances on considering deductions in legal reserve and
860 243 (618) (72)
Financial Assets other allowances,
3.1! Crafting of New Corporate theStrategy
Board of Directors of
Total Expense 13,190 19,050 5,860 44
Awash Bank
In response to the recommended
dynamic changes in global, thatdomestic a anddivided of in
regulatory landscape
share of the Bank’s overall expense (48 Sixty-Eight Million Eight Hundred Twenty
companies and the ongoing establishment of capital market, Awash Bank has crafted a new
five-year corporate strategy to be implemented starting from FY 2023/24. According to the
(13 percent). During the review period, loss Bank’s shares, depending upon the choice of
top ten African banks by 2030.
declined mainly because of the notable In view of enhancing employee productivity, drive high performance culture and excellent
improvement in asset quality and increase in customer services, the Bank has continued to provide targeted, role-based, specific as well as
general trainings to its staff. During the review period, the Bank provided close to 287 different
average recovery rate of the Bank.
Figure 5: Components of Expense as at June 10
30, 2023 (Percentage)
Interest Expense
Personnel
W
Expense
32%
Other Operating
Expense
48% A
A
13%
Depreciation &
S
Amortization
6% Loss Allowance
H
on Financial
Asset
SHARIAH
Ustaz Sultan Aman ADVISORY
Eba COMMITTEE'SAhmed
Mohammedhakim REPORT Ustaz
(Dr.) FOR Hassen Abdulnasir
FINANCIAL YEARAli2022/23
Chairman D/Chairman Member
“In the name of Allah, the most Compassionate, the most Merciful”
AUDITORS’
REPORT
This management report discloses summary of the financial performance and state of affairs of the Bank.
Awash Bank Share Company was incorporated in Ethiopia in 1994 as the first privately owned commercial Bank and is
domiciled in Ethiopia.
Awash Bank was established by 486 founding shareholders with a paid-up capital of ETB 24.2 million and started
banking operations on February 13, 1995. As of 30 June 2023, the number of shareholders and its paid-up capital
increased to over 6,430 and ETB 14.650 billion respectively.
Principal activities
The Bank provides diverse range of financial products and services to a Wholesale, Retail and Small and Medium
Enterprises (SME) clients base in Ethiopian Market; both for conventional and interest free banking(IFB) customers.
Awash Bank focuses on delivering distinctive profitable solutions for its clients in all core areas of commercial
banking in the arena of conventional and Interest free Banking.
The Bank's results for the period ended 30 June 2023 are set out on the Statement of profit or loss and other
comprehensive income. The profit for the year has been transferred to retained earnings. The summarised results
are presented below.
In accordance with the Banking Business Proclamation No. 592/2008, the National Bank of Ethiopia (NBE) may direct
the Bank to prepare financial statements, whether their designation changes or they are replaced, from time to
time. Also, the Financial Reporting Proclamation No. 847/2014 requires the Bank to prepare its financial statements
in accordance with the International Financial Reporting Standards (IFRS).
The Board of Directors are responsible for the preparation and fair presentation of these financial statements in
accordance with International Financial Reporting Standards, and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error. The Bank is required to keep such records as are necessary to:
c) Enable the National Bank to determine whether the Bank had complied with the provisions of the Banking
Business Proclamation and regulations and directives issued for the implementation of the aforementioned
Proclamation.
The financial statements are prepared in accordance with International Financial Reporting Standards and are
based upon appropriate accounting policies and supported by reasonable and prudent judgements and estimates.
The Bank's Board of Directors accept responsibility for the annual financial statements, which have been prepared
using appropriate accounting policies supported by reasonable and prudent judgements and estimates, in
accordance with International Financial Reporting Standards.
The Bank's Board of Directors are of the opinion that the financial statements present fairly, in all material
respects, the financial position of the Bank and its financial performance.
The Board of Directors further accept responsibility for the maintenance of accounting records that may be relied
upon in the preparation of financial statements, as well as adequate systems of internal financial control.
Nothing has come to the attention of the Board of Directors to indicate that the Bank will not remain as a going
concern for at least twelve months from the date of this statement.
10
LIABILITIES
LIABILITIES
Deposits from customers 23 182,470,510 148,028,613
Deposits from Borrowings
customers 23 24 182,470,510 148,028,613
- 107,580
Borrowings Other liabilities 24 25 - 107,580 11,257,683
9,596,580
Other liabilities
Current tax liabilities 25 14 9,596,580 11,257,683
2,444,698 2,268,417
Current tax liabilities
Lease liabilities 14 20 2,444,698 2,268,417
751,453 450,945
Lease liabilities
Severance and Retirement benefit obligations 20 26 751,453 450,945
532,304 326,674
Severance andDeferred
Retirement
tax benefit
liabilityobligations 26 14 532,304 326,674
260,241 -
Deferred tax liability 14 260,241 -
11
11
Balance as at 1 July 2021 8,188,948 1,389 3,547,493 3,742,975 258,709 97,794 (7,908) 18,432,692
Profit for the period - - 5,341,231 - - - - 6,705,658
Other comprehensive income:
Change in fair value of Fair value
through other comprehensive income - - - - - 65,987 - 79,313
investments (net of tax)
Re-measurement gains on defined
benefit plans (net of tax) - - - - - - (5,356) (5,356)
Total comprehensive income for the period - - 8,888,724 3,742,975 258,709 163,781 (13,264) 25,212,308
As at 30 June 2022 10,291,407 1,389 5,066,846 5,078,283 362,703 163,781 (13,264) 20,951,145
As at 1 July 2022 10,291,407 1,389 5,066,846 5,078,283 362,703 163,781 (13,264) 20,951,145
Profit for the period 30 - - 6,993,561 - - - - 6,993,561
Other comprehensive income:
Change in fair value of Fair value - - - - - 126,250 - 126,250
through other comprehensive income
investments (net of tax)
Re-measurement gains on defined 26 - - - - - - (63,597) (63,597)
benefit plans (net of tax)
Total comprehensive income for the period - - 12,060,407 5,078,283 362,703 290,031 (76,863) 28,007,359
As at 30 June 2023 14,649,656 1,389 5,852,088 6,826,673 425,353 290,031 (76,863) 27,968,329
12
Cash and cash equivalents at the beginning of the year 15 20,150,786 12,698,221
Foreign exchange (losses)/ gains on cash and cash equivalents 8 672,938 1,007,557
Cash and cash equivalents at the end of the year 15 21,278,071 20,150,786
13
1 General information
Awash Bank S.C. ("Awash Bank or the Bank") is a private commercial bank domiciled in Ethiopia. The Bank was
established in November 1994, in accordance with the provisions of the Commercial Code of Ethiopia of 1960
and the Licensing and Supervision of Banking Business Proclamation No. 592/2008. The Bank's registered office
is at:
Awash Tower
Ras Abebe Aregay Street
Addis Ababa,
Ethiopia
The Bank is principally engaged in the provision of diverse range of financial products and services to
corporate, retail and SME clients base in Ethiopian market.
The principal accounting policies applied in the preparation of these financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
The financial statements for the year ended 30 June 2023 have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board
("IASB"). Additional information required by National regulations is included where appropriate.
The financial statements comprise the statement of profit or loss and other comprehensive income, the
statement of financial position, the statement of changes in equity, the statement of cash flows and the notes
to the financial statements.
The financial statements have been prepared in accordance with the going concern principle under the
historical cost concept, except for the following;
All values are rounded to the nearest thousand, except when otherwise indicated. The financial statements
are presented in thousands of Ethiopian Birr (ETB' 000).
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgment in the process of applying the Bank’s
accounting policies. Changes in assumptions may have a significant impact on the financial statements in the
period the assumptions changed. Management believes that the underlying assumptions are appropriate and
that the Bank's financial statements, therefore, present the financial position and results fairly. The areas
involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant
to the financial statements, are disclosed in Note 3.
14
New Standards, amendments, interpretations effective and adopted during the year.
Amendments to IAS 16 ‘Property, Plant and Equipment’: Proceeds before Intended Use
The amendment to IAS 16 prohibits an entity from deducting from the cost of an item of PPE any proceeds
received from selling items produced while the entity is preparing the asset for its intended use (for example,
the proceeds from selling samples produced when testing a machine to see if it is functioning properly). The
proceeds from selling such items, together with the costs of producing them, are recognised in profit or loss.
IFRS 9 Financial Instruments – clarifies which fees should be included in the 10% test for derecognition of
financial liabilities. This change did not have an impact on the Bank’s financial statements.
IFRS 16 Leases – amendment to remove the illustration of payments from the lessor relating to leasehold
improvements, to remove any confusion about the treatment of lease incentives. This change did not have an
impact on the Bank’s financial statements.
IFRS 17 requires a current measurement model where estimates are remeasured in each reporting period.
Contracts are measured using the building blocks of:
• discounted probability-weighted cash flows
• an explicit risk adjustment, and
• a contractual service margin (CSM) representing the unearned profit of the contract
15
The narrow-scope amendments to IAS 1 Presentation of Financial Statements clarify that liabilities are
classified as either current or non- current, depending on the rights that exist at the end of the reporting
period. Classification is unaffected by the expectations of the entity or events after the reporting date (e.g.,
the receipt of a waver or a breach of covenant). The amendments also clarify what IAS 1 means when it refers
to the ‘settlement’ of a liability. The amendments could affect the classification of liabilities, particularly for
entities that previously considered management’s intentions to determine classification and for some
liabilities that can be converted into equity. The standard effective on or after 1 January 2023.
The IASB amended IAS 1 to require entities to disclose their material rather than their significant accounting
policies. The amendments define what is ‘material accounting policy information’ and explain how to identify
when accounting policy information is material. They further clarify that immaterial accounting policy
information does not need to be disclosed. If it is disclosed, it should not obscure material accounting
information. The standard effective on or after 1 January 2023.
The amendment to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors clarifies how
companies should distinguish changes in accounting policies from changes in accounting estimates. The
distinction is important, because changes in accounting estimates are applied prospectively to future
transactions and future events, whereas changes in accounting policies are generally applied retrospectively
to past transactions and other past events as well as the current period. The standard effective on or after 1
January 2023.
Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12
The amendments to IAS 12 Income Taxes require companies to recognise deferred tax on transactions that, on
initial recognition, give rise to equal amounts of taxable and deductible temporary differences. They will
typically apply to transactions such as leases of lessees and decommissioning obligations and will require the
recognition of additional deferred tax assets and liabilities.
16
IAS 12 did not previously address how to account for the tax effects of on-balance sheet leases and similar
transactions and various approaches were considered acceptable. Some entities may have already accounted
for such transactions consistent with the new requirements. These entities will not be affected by the
amendments. The standard effective on or after 1 January 2023.
Other Standards
The financial statements of the Bank are not anticipated to be materially affected by the modified standard
to IFRS 10 and IAS 28 on sale or contribution of assets between an investor and its associate or joint venture.
2.3 Investment in associates
An associate is an entity over which the Bank has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee, but is not control or joint control
over those policies. The Bank’s investments in its associates are accounted for using the equity method. Under
the equity method, the investment in an associate is initially recognised at cost. The carrying amount of the
investment is adjusted to recognise changes in the Bank’s share of net assets of the associate since the
acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is
neither amortised nor individually tested for impairment.
The statement of profit or loss reflects the Bank’s share of the results of operations of the associate. Any
change in OCI of those investees is presented as part of the Bank’s OCI. In addition, when there has been a
change recognised directly in the equity of the associate, the Bank recognises its share of any changes, when
applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions
between the Bank and the associate are eliminated to the extent of the interest in the associate.
After application of the equity method, the Bank determines whether it is necessary to recognise an
impairment loss on its investment in its associate. At each reporting date, the Bank determines whether there
is objective evidence that the investment in the associate is impaired. If there is such evidence, the Bank
calculates the amount of impairment as the difference between the recoverable amount of the associate and
its carrying value, then recognises the loss as ‘Share of profit of an associate and a joint venture’ in the
statement of profit or loss. Upon loss of significant influence over the associate, the Bank measures and
recognises any retained investment at its fair value. Any difference between the carrying amount of the
associate upon loss of significant influence and the fair value of the retained investment and proceeds from
disposal is recognised in statement of profit or loss.
17
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign
currency transactions and from the translation at exchange rates of monetary assets and liabilities
denominated in currencies other than the Bank's functional currency are recognised in profit or loss within
other (loss)/income. Monetary items denominated in foreign currency are translated using the closing rate as
at the reporting date.
Changes in the fair value of monetary securities denominated in foreign currency classified as available for
sale are analysed between translation differences resulting from changes in the amortised cost of the security
and other changes in the carrying amount of the security. Translation differences related to changes in
amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in other
comprehensive income.
Translation differences on non-monetary financial assets and liabilities such as equities held at fair value
through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation
differences on non-monetary financial assets measured at fair value, such as equities classified as FVOCI, are
included in other comprehensive income.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Bank and
the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at
the fair value of the consideration received or receivable, taking into account contractually defined terms of
payment and excluding taxes or duty.
The Bank earns income from interest on loans and advances given to customers, service charges and
commissions from customers, interest income from Deposits with local and correspondent banks, investment
in NBE (National Bank of Ethiopia) bills. Other income includes incomes like foreign currency transactions,
dividend, rental, and other miscellaneous incomes.
18
When calculating the effective interest rate for financial instruments other than credit-impaired assets, the
Bank estimates future cash flows considering all contractual terms of the financial instrument, but not
expected credit losses. For credit-impaired financial assets, a credit-adjusted effective interest rate is
calculated using estimated future cash flows including expected credit losses.
The calculation of the effective interest rate includes transaction costs and fees and points paid or received
that are an integral part of the effective interest rate, if the amount is material. Transaction costs include
incremental costs that are directly attributable to the acquisition or issue of a financial asset or financial
liability.
However, for financial assets that have become credit-impaired subsequent to initial recognition, interest
income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the
asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.
For financial assets that were credit-impaired on initial recognition, interest income is calculated by applying
the credit-adjusted effective interest rate to the amortised cost of the asset. The calculation of interest
income does not revert to a gross basis, even if the credit risk of the asset improves.
19
Interest income and expense on other financial assets and financial liabilities at FVTPL are presented in net
income from other financial instruments at FVTPL.
Fees and commission income and expenses that are integral to the effective interest rate on a financial asset
or liability are included in the measurement of the effective interest rate. Other fees and commission income
such as rental income, telephone and SWIFT are recognised as the related services are performed.
When a loan commitment is not expected to result in the draw-down of a loan, loan commitment fees are
recognised on a straight-line basis over the commitment period.
Other fees and commission expenses relate mainly to transaction and service fees and are expensed as the
services are received.
This is recognised when the Bank’s right to receive the payment is established, which is generally when the
shareholders approve and declare the dividend.
These are gains and losses arising on settlement and translation of monetary assets and liabilities
denominated in foreign currencies at the functional currency’s mid rate of exchange at the reporting date.
This amount is recognised in the statement of profit or loss and it is further broken down into realised and
unrealised portion.
The monetary assets and liabilities include financial assets within the foreign currencies deposits received and
held on behalf of third parties etc. 20
The Bank shall initially recognise loans and advances, deposits, debt securities issued and subordinated
liabilities on the date on which they are originated. All other financial instruments (including regular-way
purchases and sales of financial assets) shall be recognised on the trade date, which is the date on which the
Bank becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability shall be measured initially at fair value plus, for an item not at fair value
through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.
The Bank shall measure a financial asset at amortised cost if it meets both of the following conditions and is
not designated at FVTPL:
— the asset is held within a business model whose objective is to hold assets to collect contractual cash flows;
and
— the contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest (SPPI). `
A debt instrument shall be measured at FVOCI only if it meets both of the following conditions and is not
designated at FVTPL:
— the asset is held within a business model whose objective is achieved by both collecting contractual cash
flows and selling financial assets; and
— the contractual terms of the financial asset give rise on specified dates to cash flows that are SPPI.
On initial recognition, an equity investment that is held for trading shall be classified at FVTPL. However, for
equity investment that is not held for trading, the Bank may irrevocably elect to present subsequent changes
in fair value in other comprehensive income (OCI). This election is made on an investment-by-investment
basis.
All other financial assets that do not meet the classification criteria at amortised cost or FVOCI, above, shall
be classified as measured at FVTPL.
In addition, on initial recognition, the Bank may irrevocably designate a financial asset that otherwise meets
the requirements to be measured at amortised cost or at FVOCI or at FVTPL if doing so eliminates or
significantly reduces an accounting mismatch that would otherwise arise .
21
The Bank shall make an assessment of the objective of a business model in which an asset is held at a
portfolio level because this best reflects the way the business is managed and information is provided to
management. The information considered includes:
— the stated policies and objectives for the portfolio and the operation of those policies in practice. In
particular, whether management’s strategy focuses on earning contractual interest revenue, maintaining a
particular interest rate profile, matching the duration of the financial assets to the duration of the liabilities
that are funding those assets or realising cash flows through the sale of the assets;
— how the performance of the portfolio is evaluated and reported to the Bank’s management;
— the risks that affect the performance of the business model (and the financial assets held within that
business model) and its strategy for how those risks are managed;
— how managers of the business are compensated (e.g. whether compensation is based on the fair value of
the assets managed or the contractual cash flows collected); and
— the frequency, volume and timing of sales in prior periods, the reasons for such sales and its expectations
about future sales activity. However, information about sales activity is not considered in isolation, but as
part of an overall assessment of how the Bank’s stated objective for managing the financial assets is achieved
and how cash flows are realised.
Financial assets that are held for trading or managed and whose performance is evaluated on a fair value basis
shall be measured at FVTPL because they are neither held to collect contractual cash flows nor held both to
collect contractual cash flows and to sell financial assets.
Financial assets shall not be reclassified subsequent to their initial recognition, except in the period after the
Bank changes its business model for managing financial assets.
- Assessment of whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, ‘principal’ shall be defined as the fair value of the financial asset on
initial recognition. ‘Interest’ shall be defined as the consideration for the time value of money and for the
credit risk associated with the principal amount outstanding during a particular period of time and for other
basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as profit margin.
In assessing whether the contractual cash flows are SPPI, the Bank considers the contractual terms of the
instrument. This includes assessing whether the financial asset contains a contractual term that could change
the timing or amount of contractual cash flows such that it would not meet this condition. In making the
assessment, the Bank considers:
22
— contingent events that would change the amount and timing of cash flows;
— leverage features;
— prepayment and extension terms;
— terms that limit the Bank’s claim to cash flows from specified assets (e.g. non-recourse loans); and
— features that modify consideration of the time value of money (e.g. periodical reset of interest rates).
The Bank shall classify its financial liabilities, other than financial guarantees and loan commitments, as
measured at amortised cost or FVTPL.
A financial guarantee is an undertaking/commitment that requires the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified party fails to meet its obligation when due in
accordance with the contractual terms.
Financial guarantees issued by the Bank are initially measured at their fair values and, if not designated as at
FVTPL, are subsequently measured at the higher of: the amount of the obligation under the guarantee, as
determined in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets; and the amount
initially recognised less, where appropriate, cumulative amortisation recognised in accordance with the
revenue recognition policies.
c. Impairment
At each reporting date, the Bank shall assess whether there is objective evidence that financial assets (except
equity investments), other than those carried at FVTPL, are impaired.
The Bank shall recognise loss allowances for expected credit losses (ECL) on the following financial
instruments that are not measured at FVTPL:
The Bank shall measure loss allowances at an amount equal to lifetime ECL, except for the following, which
are measured as 12-month ECL:
— debt investment securities that are determined to have low credit risk at the reporting date; and
— other financial instruments (other than lease receivables) on which credit risk has not increased
significantly since their initial recognition.
23
12-month ECL is the portion of ECL that result from default events on a financial instrument that are possible
within the 12 months after the reporting date. Financial instruments for which a 12-month ECL is recognised
are referred to as ‘Stage 1 financial instruments’.
Life-time ECL is the ECL that result from all possible default events over the expected life of the financial
instrument. Financial instruments for which a lifetime ECL is recognised but which are not credit-impaired are
referred to as ‘Stage 2 financial instruments’. Other wise, the financial instruments classified as ‘Stage 3
financial instruments’.
i) Measurement of ECL
— for financial assets that are not credit-impaired at the reporting date (stage 1 and 2): as the present value
of all cash shortfalls (i.e. the difference between the cash flows due to the Bank in accordance with the
contract and the cash flows that the Bank expects to receive);
— for financial assets that are credit-impaired at the reporting date (stage 3): as the difference between the
gross carrying amount and the present value of estimated future cash flows;
— for undrawn loan commitments: as the present value of the difference between the contractual cash flows
that are due to the Bank if the commitment is drawn down and the cash flows that the Bank expects to
receive; and
— for financial guarantee contracts: as the expected payments to reimburse the holder less any amounts that
the Bank expects to recover.
Where the terms of a financial asset are renegotiated or modified or an existing financial asset is replaced
with a new one due to financial difficulties of the borrower, then the Bank shall assess whether the financial
asset should be derecognised and ECL are measured as follows:
— If the expected restructuring will not result in derecognition of the existing asset, then the expected cash
flows arising from the modified financial asset are included in calculating the cash shortfalls from the existing
asset.
— If the expected restructuring will result in derecognition of the existing asset, then the expected fair value
of the new asset is treated as the final cash flow from the existing financial asset at the time of its
derecognition. This amount is included in calculating the cash shortfalls from the existing financial asset that
are discounted from the expected date of derecognition to the reporting date using the original effective
interest rate of the existing financial asset.
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At each reporting date, the Bank shall assess whether financial assets carried at amortised cost, debt financial
assets carried at FVOCI, and finance lease receivables are credit impaired (referred to as ‘Stage 3 financial
assets’).
A financial asset shall be considered ‘credit impaired’ when one or more events that have a detrimental
impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
A loan that has been renegotiated due to a deterioration in the borrower’s condition shall be considered to be
credit-impair unless there is evidence that the risk of not receiving contractual cash flows has reduced
significantly and there are no other indicators of impairment. In addition, a retail loan that is overdue for 90
days or more shall be considered credit-impaired even when the regulatory definition of default is different.
Loss allowances for ECL shall be presented in the statement of financial position as follows:
— for financial assets measured at amortised cost: as a deduction from the gross carrying amount of the
assets;
— for loan commitments and financial guarantee contracts: generally, as a provision;
— where a financial instrument includes both a drawn and an undrawn component, and the Bank cannot
identify the ECL on the loan commitment component separately from those on the drawn component: the
Bank presents a combined loss allowance for both components. The combined amount is presented as a
deduction from the gross carrying amount of the drawn component. Any excess of the loss allowance over the
gross amount of the drawn component is presented as a provision; and
— for debt instruments measured at FVOCI: no loss allowance is recognised in the statement of financial
position because the carrying amount of these assets is their fair value. However, the loss allowance shall be
disclosed and is recognised in the fair value reserve.
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Loans and debt securities shall be written off (either partially or in full) when there is no reasonable
expectation of recovering the amount in its entirety or a portion thereof. This is generally the case when the
Bank determines that the borrower does not have assets or sources of income that could generate sufficient
cash flows to repay the amounts subject to the write-off. This assessment shall be carried out at the
individual asset level.
Recoveries of amounts previously written off shall be included in ‘impairment losses on financial instruments’
in the statement of profit or loss and OCI.
Financial assets that are written off could still be subject to enforcement activities in order to comply with
the Bank’s procedures for recovery of amounts due.
Where the Bank determines that the guarantee is an integral element of the financial asset, then any premium
payable in connection with the initial recognition of the financial asset shall be treated as a transaction cost
of acquiring it. The Bank shall consider the effect of the protection when measuring the fair value of the debt
instrument and when measuring ECL.
Where the Bank determines that the guarantee is not an integral element of the debt instrument, then it shall
recognise an asset representing any prepayment of guarantee premium and a right to compensation for credit
losses.
d. Derecognition
i) Financial assets
26
Any cumulative gain/loss recognised in OCI in respect of equity investment securities designated as at FVOCI
shall not be recognised in profit or loss on derecognition of such securities.
Any interest in transferred financial assets that qualify for derecognition that is created or retained by the
Bank shall be recognised as a separate asset or liability.
The Bank shall derecognise a financial liability when its contractual obligations are discharged or cancelled, or
expire.
e. Modifications of financial assets and financial liabilities
i) Financial assets
If the terms of a financial asset are modified, then the Bank shall evaluate whether the cash flows of the
modified asset are substantially different.
If the cash flows are substantially different, then the contractual rights to cash flows from the original
financial asset shall be deemed to have expired. In this case, the original financial asset shall be derecognised
(see (1.3)) and a new financial asset shall be recognised at fair value plus any eligible transaction costs. Any
fees received as part of the modification shall be accounted for as follows:
— fees that are considered in determining the fair value of the new asset and fees that represent
reimbursement of eligible transaction costs shall be included in the initial measurement of the asset; and
— other fees are included in profit or loss as part of the gain or loss on derecognition.
If cash flows are modified when the borrower is in financial difficulties, then the objective of the modification
is usually to maximise recovery of the original contractual terms rather than to originate a new asset with
substantially different terms.
If the Bank plans to modify a financial asset in a way that would result in forgiveness of cash flows, then it
shall first consider whether a portion of the asset should be written off before the modification takes place.
Where the modification of a financial asset measured at amortised cost or FVOCI does not result in
derecognition of the financial asset, then the Bank shall first recalculate the gross carrying amount of the
financial asset using the original effective interest rate of the asset and recognises the resulting adjustment as
a modification gain or loss in profit or loss. Any costs or fees incurred and fees received as part of the
modification adjust the gross carrying amount of the modified financial asset and shall be amortised over the
remaining term of the modified financial asset.
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Where the modification of a financial liability is not accounted for as derecognition, then the amortised cost
of the liability shall be recalculated by discounting the modified cash flows at the original effective interest
rate and the resulting gain or loss is recognised in profit or loss. Any costs and fees incurred are recognised as
an adjustment to the carrying amount of the liability and amortised over the remaining term of the modified
financial liability by re-computing the effective interest rate on the instrument.
f. Offsetting
Financial assets and financial liabilities shall be offset and the net amount presented in the statement of
financial position when, and only when, the Bank currently has a legally enforceable right to set off the
amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability
simultaneously.
Income and expenses shall be presented on a net basis only when permitted under IFRS, or for gains and losses
arising from a group of similar transactions such as in the Bank’s trading activity.
i) Financial assets
At initial recognition, the Bank may designate certain financial assets as at FVTPL because this designation
eliminates or significantly reduces an accounting mismatch, which would otherwise arise.
The Bank shall designate certain financial liabilities as at FVTPL in either of the following circumstances:
— the liabilities are managed, evaluated and reported internally on a fair value basis; or
— the designation eliminates or significantly reduces an accounting mismatch that would otherwise arise.
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2.7.1 Murabaha
Murabaha is an interest free financing transaction which represents an agreement whereby the Bank buys a
commodity/good and sells it to a counterparty (customer) based on a promise received from that counterparty
to buy the commodity according to specific terms and conditions. The selling price comprises of the cost of
the commodity/goods and a pre-agreed profit margin.
It is treated as financing receivables. Financing receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market.
The profit is quantifiable and contractually determined at the commencement of the contract. Murabaha
Income (profit) is recognised as it accrues over the life of the contract using the effective profit method
(EPRM) on the principal balance outstanding.
Interest Free export financing facility is a short term financing given to the borrower for three months free of
any charge or profit and not subject to discounting being a short term facility. Interest free export facility
financing is stated in the statement of financial position of the bank at fair value of the consideration given
(amount of disbursement) and subsequently, they shall be stated at disbursement amount less loss allowances
(if any).
Cash comprises cash on hand, deposits held on call with other banks, and other short term highly liquid
investments. Cash equivalents are deemed of immediate realization since they are easily convertible into cash
within three months following the date of the financial statements.
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Property and equipment is stated at cost, net of accumulated depreciation and accumulated impairment
losses, if any. Such cost includes the cost of replacing part of the property, plant and equipment if the
recognition criteria are met. When significant parts of property, plant and equipment are required to be
replaced at intervals, the Bank recognises such parts as individual assets with specific useful lives and
depreciates them accordingly. All other repair and maintenance costs are recognised in statement of profit or
loss as incurred.
Subsequent costs are included in the asset’s carrying value or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the bank and the
cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised.
Depreciation is calculated using the straight-line method to allocate their cost to their residual values over
their estimated useful lives, as follows:
Capital work-in-progress is not depreciated as these assets are not yet available for use. They are disclosed
when reclassified during the year.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon
disposal or when no future economic benefits are expected from its use. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
value of the asset) is included in statement of profit or loss.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed
at each financial year end and adjusted prospectively, if appropriate.
30
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite
lives are amortised over the useful economic life. The amortisation period and the amortisation method for an
intangible asset with a finite useful life are reviewed at least at each financial year-end. Changes in the
expected useful life, or the expected pattern of consumption of future economic benefits embodied in the
asset, are accounted for by changing the amortisation period or methodology, as appropriate, which are then
treated as changes in accounting estimates. The amortisation expenses on intangible assets with finite lives
are presented as a separate line item in the statement of profit or loss, if significant.
Amortisation is calculated using the straight–line method to write down the cost of intangible assets to their
residual values over the lower of their estimated useful lives of six years or by the license duration for
purchased computer software.
The Bank assesses, at each reporting date, whether there is an indication that an asset may be impaired. If
any indication exists, or when annual impairment testing for an asset is required, the Bank estimates the
asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating
unit’s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those from
other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model is used. These calculations are
corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair
value indicators.
The Bank bases its impairment calculation on detailed budgets and forecast calculations, which are prepared
separately for each of the Bank’s CGUs to which the individual assets are allocated. These budgets and
forecast calculations generally cover a period of five years. For longer periods, a long-term growth rate is
calculated and applied to project future cash flows after the fifth year.
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For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an
indication that previously recognised impairment losses no longer exist or have decreased. If such indication
exists, the Bank estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss
is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of
the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such
reversal is recognised in the statement of profit or loss.
2.12 Other assets
Other assets are generally defined as claims held against other entities for the future receipt of money. The
other assets in the Bank's financial statements include the following:
(a) Prepayments
Prepayments are payments made in advance for services to be enjoyed in future. The amount is initially
capitalized in the reporting period in which the payment is made and subsequently amortised over the period
in which the service is to be enjoyed.
• Disclosures for valuation methods, significant estimates and assumptions Notes 3 and Note 4.7.1
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on
the presumption that the transaction to sell the asset or transfer the liability takes place either:
32
The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.
The Bank uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use
of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable.
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Bank
determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of
each reporting period.
The Bank’s management determines the policies and procedures for both recurring fair value measurement,
such as available-for-sale financial assets.
Wages, salaries, other allowances, paid annual leave and sick leave are accrued in the period in which the
associated services are rendered by employees of the Bank. The Bank operates an accumulating leave policy;
this can be encashed when the employee is leaving employment or paid in cash if the bank rarely decides to
pay in cash. The Bank measures the expected cost of accumulating compensated absences as the additional
amount that the entity expects to pay as a result of the unused entitlement that has accumulated at the end
of each reporting period.
33
The Bank operates a defined contribution plans of pension scheme in line with the provisions of Ethiopian
Pension of Private Organisation Employees Proclamation No. 715/2011. Funding under the scheme is 7% and
11% by employees and the Bank respectively; 2% provident fund contribution is made by the bank for
employees covered under pension scheme.
(c) Defined benefit plan
The liability or asset recognised in the balance sheet in respect of defined benefit pension plans is the present
value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.
The liability recognised in the statement of financial position in respect of defined benefit pension plans is the
present value of the defined benefit obligation at the end of the reporting period less the fair value of plan
assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit
credit method. The present value of the defined benefit obligation is determined by discounting the estimated
future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency
in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related
pension obligation.
The current service cost of the defined benefit plan, recognised in the statement of profit or loss in employee
benefit expense, except where included in the cost of an asset, reflects the increase in the defined benefit
obligation resulting from employee service in the current year, benefit changes curtailments and settlements.
Past-service costs are recognised immediately in profit or loss and other comprehensive income.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are
charged or credited to equity in other comprehensive income in the period in which they arise.
(d ) Termination benefits
Termination benefits are payable to executive directors when employment is terminated by the Bank before
the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these
benefits. The Bank recognises termination benefits when it is demonstrably committed to either: terminating
the employment of current employees according to a detailed formal plan without possibility of withdrawal;
or providing termination benefits as a result of an offer made to encourage voluntary redundancy.
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2.15 Provisions
A provision is recognised when the Bank has a present obligation (legal or constructive) as a result of a past
event and it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation. When the Bank expects
some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is
recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to
a provision is presented in statement of profit or loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in
the provision due to the passage of time is recognised as other operating expenses.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
The legal reserve which is a statutory reserve to which no less than 25% of the net profits after taxation shall
be transferred each year until such fund is equal to the capital. When the legal reserve equals the capital of
the Bank, the amount to be transferred to the legal reserve account shall be 10% of the annual net profit.
The Bank presents basic earnings per share for its ordinary shares. Basic earnings per share are calculated by
dividing the profit or loss attributable to ordinary shareholders of the Bank by the weighted average number
of shares outstanding during the period.
2.19 Leases
At commencement or on modification of a contract that contains a lease component, the Bank allocates
consideration in the contract to each lease component on the basis of its relative stand-alone price. However,
for leases of branches and office premises the Bank has elected not to separate non-lease components and
accounts for the lease and non-lease components as a single lease component.
35
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement
date to the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Bank’s incremental borrowing rate. Generally, the Bank uses its incremental borrowing rate
as the discount rate.
The Bank determines its incremental borrowing rate by analysing its borrowings from various external sources
and makes certain adjustments to reflect the terms of the lease and type of asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
—the exercise price under a purchase option that the Bank is reasonably certain to exercise, lease payments
in an optional renewal period if the Bank is reasonably certain to exercise an extension option, and penalties
for early termination of a lease unless the Bank is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when
there is a change in future lease payments arising from a change in an index or rate, if there is a change in the
Bank’s estimate of the amount expected to be payable under a residual value guarantee, if the Bank changes
its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised
in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount
of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has
been reduced to zero.
The Bank presents right-of-use assets in ‘property and equipment’ and lease liabilities in ‘other liabilities’ in
the statement of financial position.
36
At inception or on modification of a contract that contains a lease component, the Bank allocates the
consideration in the contract to each lease component on the basis of their relative stand-alone selling prices.
When the Bank acts as a lessor, it determines at lease inception whether the lease is a finance lease or an
operating lease.
To classify each lease, the Bank makes an overall assessment of whether the lease transfers substantially all
of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a
finance lease; if not, then it is an operating lease. As part of this assessment, the Bank considers certain
indicators such as whether the lease is for the major part of the economic life of the asset.
The Bank applies the derecognition and impairment requirements in IFRS 16 to the net investment in the
lease. The Bank further regularly reviews estimated unguaranteed residual values used in calculating the gross
investment in the lease.
2.20 Income tax
(a) Current income tax
The income tax expense or credit for the year is the tax payable on the current year’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the end of the reporting period in Ethiopia. Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
(b) Deferred tax
Deferred tax is recognised as temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they
arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss.
Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the
balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred
tax liability is settled.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets against current tax liabilities and when the deferred taxes assets and liabilities relate to income taxes
levied by the same taxation authority on either the same taxable entity or different taxable entities where
there is an intention to settle the balances on a net basis.
37
The preparation of the Bank’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the
accompanying disclosures, as well as the disclosure of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustment to the carrying value
of assets or liabilities affected in future periods.
Other disclosures relating to the Bank’s exposure to risks and uncertainties include:
• Capital management Note 4.6
• Financial risk management and policies Note 4
3.1 Judgments
In the process of applying the Bank’s accounting policies, management has made the following judgments,
which have the most significant effect on the amounts recognised in the financial statements:
The Bank has entered into commercial property leases. The Bank has determined, based on an evaluation of
the terms and conditions of the arrangements, such as the lease term not constituting a substantial portion of
the economic life of the commercial property, that it does not retain all the significant risks and rewards of
ownership of these properties and accounts for the contracts as leases.
The Bank’s management has made an assessment of its ability to continue as a going concern and is satisfied
that it has the resources to continue in business for the foreseeable future. Furthermore, management is not
aware of any material uncertainties that may cast significant doubt upon the Bank’s ability to continue as a
going concern, except that it has to make significant effort to reach the minimum capital requirement.
However, the financial statements continue to be prepared on going concern basis.
The key assumptions concerning the future and other key sources of estimation at the reporting date, that
have a significant risk of causing a material adjustment to the carrying values of assets and liabilities within
the next financial year, are described below. The Bank based its assumptions and estimates on parameters
available when the financial statements were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances beyond the control of the Bank.
Such changes are reflected in the assumptions when they occur.
38
The Bank reviews its loan portfolios for impairment on an on-going basis. The Bank first assesses whether
objective evidence of impairment exists individually for loans and receivables that are individually significant,
and individually or collectively for loans and receivables that are not individually significant. Impairment
provisions are also recognised for losses not specifically identified but which, experience and observable data
indicate are present in the portfolio at the date of assessment. For individually significant loans and
receivables that have been deemed to be impaired, management deems that the cash flow from collateral
would arise within one year where the loans and receivables is back by collateral.
The use of historical loss experience is supplemented with significant management judgment to assess
whether current economic and credit conditions are such that the actual level of inherent losses is likely to
differ from that suggested by historical experience. In normal circumstances, historical experience provides
objective and relevant information from which to assess inherent loss within each portfolio. In other
circumstances, historical loss experience provides less relevant information about the inherent loss in a given
portfolio at the balance sheet date, for example, where there have been changes in economic conditions such
that the most recent trends in risk factors are not fully reflected in the historical information. In these
circumstances, such risk factors are taken into account when calculating the appropriate levels of impairment
allowances, by adjusting the impairment loss derived solely from historical loss experience.
The detailed methodologies, areas of estimation and judgment applied in the calculation of the Bank's
impairment charge on financial assets are set out in the financial risk management section.
The estimation of impairment losses is subject to uncertainty, which has increased in the current economic
environment and is highly sensitive to factors such as the level of economic activity, unemployment rates,
property price trends and interest rates. The assumptions underlying this judgement are highly subjective. The
methodology and the assumptions used in calculating impairment losses are reviewed regularly in the light of
differences between loss estimates and actual loss experience.
39
The cost of the defined benefit pension plan, long service awards and gratuity scheme and the present value
of these defined benefit obligations are determined using actuarial valuations. An actuarial valuation involves
making various assumptions that may differ from actual developments in the future. These include the
determination of the discount rate, future salary increases, mortality rates and future pension increases. Due
to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The estimation of the useful lives and residual values of assets is based on management’s judgement. Any
material adjustment to the estimated useful lives of items of property and equipment will have an impact on
the carrying value of these items.
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit
will be available against which the losses can be utilised. Significant management judgement is required to
determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the
level of future taxable profits together with future tax planning strategies.
40
4.1 Introduction
Risk is inherent in the Bank’s activities, but is managed through a process of ongoing identification, measurement
and monitoring, subject to risk limits and other controls. This process of risk management is critical to the Bank’s
continuing profitability and each individual within the Bank is accountable for the risk exposures relating to his or
her responsibilities. The Bank is exposed to credit risk, liquidity risk, market risk and different operational risks. It is
also subject to various risks that affect the financial sector of the country.
The independent risk control process does not include business risks such as changes in the environment, technology
and industry. The Bank's policy is to monitor those business risks through the Bank’s strategic planning process.
The Senior Management chaired by the chief Executive Officer (CEO) has the overall responsibility for the
development of the risk strategy and implementing principles, frameworks, policies and limits. It is also responsible
for managing risk decisions and monitoring risk levels and reports on a monthly basis to the Board Risk Sub-
Committee.
The Risk Management Unit is responsible for implementing and maintaining risk related procedures to ensure an
independent control process is maintained. The unit works closely with the Senior Management to ensure that
procedures are compliant with the overall framework.
The Risk Management Unit is responsible for monitoring compliance with risk principles, policies and limits across the
Bank. It carries out an assessment of risk on an ad hoc basis to monitor the Bank's independent control of risks,
including monitoring the risk of exposures against limits and the assessment of risks of new products and structured
transactions. This unit also ensures the complete capture of the risks in risk measurement and reporting systems.
Exceptions are reported, where necessary, to the Senior Management, and further to the Board Risk Sub-Committee
and the relevant actions are taken to address exceptions and any areas of weakness.
The Bank Finance and Treasury function is responsible for managing the Bank’s financial assets, financial liabilities
and the overall financial structure. It is also primarily responsible for the funding and liquidity risks of the Bank.
The Bank’s policy is that risk management processes throughout the Bank are audited annually by the Internal Audit
Function, which examines both the adequacy of the procedures and the Bank’s compliance with the procedures. The
Internal Audit Function discusses the results of all assessments with management, and reports its findings and
recommendations to the Board Audit Sub-Committee.
41
The Bank’s risks are measured using a method that reflects both the expected loss likely to arise in normal
circumstances and unexpected losses, which are an estimate of the ultimate actual loss based on statistical models.
The models make use of probabilities derived from historical experience, adjusted to reflect the economic
environment. The Bank also runs worst-case scenarios that would arise in the event that extreme events, which are
unlikely to occur, do in fact, occur.
Monitoring and controlling risks is primarily performed based on limits established by the Bank. These limits reflect
the business strategy and market environment of the Bank as well as the level of risk that the Bank is willing to
accept, with additional emphasis on selected regions. In addition, the Bank’s policy is to measure and monitor the
overall risk bearing capacity in relation to the aggregate risk exposure across all risk types and activities.
Risk controls and mitigates, identified and approved for the Bank, are documented for existing and new processes
and systems.
The adequacy of these mitigates is tested on a periodic basis through administration of control self-assessment
questionnaires, using an operational risk management tool which requires risk owners to confirm the effectiveness of
established controls. These are subsequently audited as part of the review process.
The Bank's financial assets are classified into the following measurement categories: Financial assets at fair value
through OCI and Financial assets at amortized cost and the financial liabilities are classified into other liabilities at
amortised cost.
Financial instruments are classified in the statement of financial position in accordance with their legal form and
substance.
The Bank's classification of its financial assets is summarised in the table below:
Financial
assets at fair Financial
value through assets at
Notes OCI amortized cost Total
30 June 2023 ETB'000 ETB'000 ETB'000
42
Credit risk is the risk of financial loss to the Bank if a customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from the Bank’s loans and advances to customers and other
banks and other financial assets.
Exposure to credit risk is managed through periodic analysis of the ability of borrowers and potential borrowers to
determine their capacity to meet principal and interest thereon, and restructuring such limits as appropriate.
Exposure to credit risk is also mitigated, in part, by obtaining collateral, commercial and personal guarantees .
The Bank structures the levels of credit risk it undertakes by placing limits on the amount of risk accepted in relation
to one borrower, or groups of borrowers, and to term of the financial instrument and economic sectors.
The National Bank of Ethiopia (NBE) sets credit risk limit for a single borrower, one related party and all related
parties to not exceed 25%, 5% and 35% of Bank’s total capital amount as of the reporting quarterly period
respectively.
Credit management is conducted as per the risk management policy and guideline approved by the board of directors
and the Risk Management Committees. Such policies are reviewed and modified periodically based on changes and
expectations of the markets where the Bank operates, regulations, and other factors.
In measuring credit risk of Financial assets at amortized cost to various counterparties, the Bank considers the
character and capacity of the obligor to pay or meet contractual obligations, current exposures to the
counterparty/obligor and its likely future developments, credit history of the counterparty/obligor; and the likely
recovery ratio in case of default obligations-value of collateral and other solutions. Our credit exposure comprises
wholesale and retail Financial assets at amortized cost which are developed to reflect the needs of our customers.
The Bank’s policy is to lend principally on the basis of our customer’s repayment capacity through quantitative and
qualitative evaluation. However we ensure that our loans are backed by collateral to reflect the risk of the obligors
and the nature of the facility.
43
The Bank holds collateral against loans and advances to customers in the form of bank guarantees and property.
Estimates of fair value are based on the value of collateral assessed at the time of lending.
(a) Maximum exposure to credit risk before collateral held or other credit enhancement
The Bank's maximum exposure to credit risk at 30 June 2023 and 30 June 2022 is represented by the net carrying
amounts in the statement of financial position.
Credit risk exposures relating to off balance sheet items are as follows:
Loan commitments 13,827,041 10,355,972
Guarantees 5,553,635 7,945,838
Letters of credit 3,347,407 3,843,965
22,728,083 22,145,775
44
45
The credit quality of Cash and bank balances and short-term investments that were neither past due nor impaired at
as 30 June 2023 and 30 June 2022 and are held in Ethiopian banks have been classified as non-rated as there are no
credit rating agencies in Ethiopia. However, Cash and bank balances that is held in foreign banks can be assessed by
reference to credit rating agency designation as shown in the table below;
30 June 2023 30 June 2022
ETB'000 ETB'000
A 27,292 15,436
A+ 6,350,288 4,777,894
AA- 55,323 260,185
AAA 54,953 -
BB 56,999 -
BBB+ 1,182,551 1,217,362
Not rated 27,150,665 25,779,909
34,878,071 32,050,786
Definitions of ratings
AA: Very high This denotes expectations of a very low default risk. It indicates a very strong capacity for
credit quality payment of financial commitments. This capacity is not significantly vulnerable to foreseeable
events.
A: High credit This denotes expectations of low default risk. The capacity for payment of financial
quality commitments is considered strong. This capacity may, nevertheless, be more vulnerable to
adverse business or economic conditions than is the case for higher ratings.
BBB: Good credit This indicates that expectations of default risk are currently low. The capacity for payment of
quality financial commitments is considered adequate, but adverse business or economic conditions are
more likely to impair this capacity.
Not rated This indicates financial institutions or other counterparties with no available ratings and cash in
hand.
A "+ "(plus) or "-" (minus) may be appended to a rating to indicate the relative position of a credit within the rating
category. This is based on Fitch national long-term issuer default ratings.
46
Explanation of the terms ‘Stage 1’, ‘Stage 2’ and ‘Stage 3’ is included in Note 2.6.
2023
12 month ECL Lifetime ECL Lifetime ECL
(Stage 1) not credit credit
In ETB'000 impaired impaired Total
(Stage 2) (Stage 3)
2022
12 month ECL Lifetime ECL Lifetime ECL
(Stage 1) not credit credit
In ETB'000 impaired impaired Total
(Stage 2) (Stage 3)
47
2023
12 month ECL Lifetime ECL Lifetime ECL
(Stage 1) not credit credit
In ETB'000 impaired impaired Total
(Stage 2) (Stage 3)
2022
12 month ECL Lifetime ECL Lifetime ECL
(Stage 1) not credit credit
In ETB'000 impaired impaired Total
(Stage 2) (Stage 3)
48
In ETB'000 2023
Other financial assets (debt Gross Loss Net carrying
instruments) exposure allowance amount
Cash and balances with banks 12 Month ECL 34,878,071 (1,756) 34,876,315
Investment securities
12 Month ECL 12,194,395 (631) 12,193,764
(debt instruments)
Other receivables and financial Lifetime ECL 3,641,305 (24,081) 3,617,225
assets
Total 50,713,771 (26,468) 50,687,304
In ETB'000 2022
Other financial assets (debt Gross Loss Net carrying
instruments) exposure allowance amount
Cash and balances with banks 12 Month ECL 33,234,203 (1,662) 33,232,541
Investment securities 12 Month ECL
12,037,358 (602) 12,036,756
(debt instruments)
Other receivables and financial Lifetime ECL 3,558,066 (18,844) 3,539,223
assets
Total 48,829,627 (21,107) 48,808,519
The bank holds collateral or other credit enhancements to mitigate credit risk associated with financial assets. The
main types of collateral and the types of assets these are associated with are listed below. The Bank does not sell or
repledge the collateral in the absence of default by the borrower. In addition to the Bank's focus on
creditworthiness, the Bank aligns with its credit policy guide to periodically update the validation of collaterals held
against all loans to customers.
The estimated value real estate collaterals are based on the last revaluations carried out by the Bank's in-house
engineers. The valuation technique adopted for properties is in line with the Bank's valuation manual.
49
The Bank holds collateral against most of its credit exposures. The following table sets out the principal types of
collateral held against different types of financial assets.
Machinery and
Real estate equipment Motor vehicles Shares Others Total
Machinery and
Real estate equipment Motor vehicles Shares Others Total
30 June 2022 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000
50
The general creditworthiness of a customer tends to be the most relevant indicator of credit quality of a loan
extended to it. However, collateral provides additional security and the Bank generally requests that corporate
borrowers provide it. The Bank may take collateral in the form of a first charge over real estate, floating charges
over all corporate assets and other liens and guarantees.
Because of the Bank’s focus on customers’ creditworthiness, the Bank does not routinely update the valuation of
collateral held against all loans to customers. Valuation of collateral of real estates (buildings) is updated and
reviewed every three year and at the same time whenever the loan foreclosure measure is opted. For credit-
impaired loans, the Bank obtains appraisals of collateral because it provides input into determining the management
credit risk actions.
As at 30 June 2023, the net carrying amount of credit impaired loans and advances to customers amounted to ETB
1.807 billion (2022: ETB 2.440 billion) and the value of identifiable collateral held against those loans and advances
amounted to ETB 1.903 billion (2022: ETB 4.779 billion). For each loan, the value of disclosed collateral is capped at
the nominal amount of the loan that it is held against.
As at 30 June 2023, the Bank had no exposure to credit risk of the investment securities designated as at FVTPL.
4.3.6 Amounts arising from ECL
i) Inputs, assumptions and techniques used for estimating impairment
See accounting policy in Note 2.6
ii) Significant increase in credit risk
When determining whether the risk of default on a financial instrument has increased significantly since initial
recognition, the Bank considers reasonable and supportable information that is relevant and available without undue
cost or effort. This includes both quantitative and qualitative information and analysis, based on the Bank’s
historical experience and expert credit assessment and including forward-looking information.
The objective of the assessment is to identify whether a significant increase in credit risk has occurred for an
exposure by comparing:
— the remaining lifetime probability of default (PD) as at the reporting date; with
— the remaining lifetime PD for this point in time that was estimated at the time of initial recognition of the
exposure (adjusted where relevant for changes in prepayment expectations).
— the Bank uses three criteria for determining whether there has been a significant increase in credit risk:
— quantitative test based on movement in PD;
— qualitative indicators; and
— a backstop of 30 days past due,
51
Credit risk grades are defined and calibrated such that the risk of default occurring increases exponentially as the
credit risk deteriorates so, for example, the difference in risk of default between credit risk grades 1 and 2 is smaller
than the difference between credit risk grades 2 and 3. Each exposure is allocated to a credit risk grade on initial
recognition based on available information about the borrower. Exposures are subject to ongoing monitoring, which
may result in an exposure being moved to a different credit risk grade. The monitoring typically involves use of the
following data;
b. Overdraft exposures
— Payment record – this includes overdue status as well as a range of variables about payment ratios
— Utilisation of the granted limit
— Requests for and granting of forbearance
— Existing and forecast changes in business, financial and economic conditions
52
The credit risk may also be deemed to have increased significantly since initial recognition based on qualitative
factors linked to the Bank’s credit risk management processes that may not otherwise be fully reflected in its
quantitative analysis on a timely basis. This will be the case for exposures that meet certain heightened risk criteria,
such as placement on a watch list. Such qualitative factors are based on its expert judgment and relevant historical
experiences.
As a backstop, the Bank considers that a significant increase in credit risk occurs no later than when an asset is more
than 30 days past due. Days past due are determined by counting the number of days since the earliest elapsed due
date in respect of which full payment has not been received. Due dates are determined without considering any
grace period that might be available to the borrower.
If there is evidence that there is no longer a significant increase in credit risk relative to initial recognition, then the
loss allowance on an instrument returns to being measured as 12-month ECL. Some qualitative indicators of an
increase in credit risk, such as delinquency or forbearance, may be indicative of an increased risk of default that
persists after the indicator itself has ceased to exist. In these cases, the Bank determines a probation period during
which the financial asset is required to demonstrate good behaviour to provide evidence that its credit risk has
declined sufficiently. When contractual terms of a loan have been modified, evidence that the criteria for
recognising lifetime ECL are no longer met includes a history of up-to-date payment performance against the
modified contractual terms.
The Bank monitors the effectiveness of the criteria used to identify significant increases in credit risk by regular
reviews to confirm that:
there is no unwarranted volatility in loss allowance from transfers between 12-month PD (Stage 1) and lifetime PD
(Stage 2).
vi) Definition of default
The Bank considers a financial asset to be in default when:
the borrower is unlikely to pay its credit obligations to the Bank in full, without recourse by the Bank to actions
such as realising security (if any is held);
Overdrafts are considered as being past due once the customer has breached an advised limit or been advised of a
limit smaller than the current amount outstanding; or
it is becoming probable that the borrower will restructure the asset as a result of bankruptcy due to the borrower’s
inability to pay its credit obligations.
53
In assessing whether a borrower is in default, the Bank considers indicators that are:
Inputs into the assessment of whether a financial instrument is in default and their significance may vary over time
to reflect changes in circumstances.
The definition of default largely aligns with that applied by the Bank for regulatory capital purposes .
The Bank incorporates forward-looking information into both the assessment of whether the credit risk of an
instrument has increased significantly since its initial recognition and the measurement of ECL.
For each segment, the Bank formulates three economic scenarios: a base case, which is the median scenario, and
two less likely scenarios, one upside and one downside. For each sector, the base case is aligned with the
macroeconomic model’s information value output, a measure of the predictive power of the model, as well as base
macroeconomic projections for identified macroeconomic variables for each sector. The upside and downside
scenarios are based on a combination of a percentage error factor of each sector model as well as simulated
optimistic and pessimistic macroeconomic projections based on a measure of historical macroeconomic volatilities.
External information considered includes economic data and forecasts published by Business Monitor International,
an external and independent macroeconomic data body. This is in addition to industry – level, semi – annual NPL
trends across statistically comparable sectors.
The Bank has identified and documented key drivers of credit risk and credit losses for each portfolio of financial
instruments and, using an analysis of historical data, has estimated relationships between macro-economic variables
and credit risk and credit losses.
54
The economic scenarios used as at 30 June 2023 included the following key indicators for Ethiopia for the years 2022
to 2024
Macro-economic factor 2022 2023 2024
Goods exports, USDbn 4,022 4,137 4,393
Real GDP per capita, USD (2010 prices) 549 567 589
Predicted relationships between the key indicators and default rates on various portfolios of financial assets have
been developed based on analysing semi – annual historical data over the past 5 years.
55
4 Financial risk
4.3 Credit risk (Continued)
4.3.6 Amounts arising from ECL (Continued)
Scenario probability weightings
As at June 2023
Optimistic Base Downturn
Cluster 1 9% 91% -
Cluster 2 - 100% -
Cluster 3 48% 52% -
Cluster 4 9% 91% -
As at June 2022
Optimistic Base Downturn
Cluster 1 - 97% 3%
Cluster 2 3% 94% 3%
Cluster 3 4% 91% 4%
Cluster 4 2% 94% 3%
56
ECL for exposures in Stage 1 is calculated by multiplying the 12-month PD by LGD and EAD. Lifetime ECL is calculated
by multiplying the lifetime PD by LGD and EAD.
The methodology of estimating PDs is discussed above under the heading ‘Generating the term structure of PD’.
LGD is the magnitude of the likely loss if there is a default. The Bank estimates LGD parameters based on the history
of recovery rates of claims against defaulted counterparties. The LGD models consider the structure, collateral,
seniority of the claim, counterparty industry and recovery costs of any collateral that is integral to the financial
asset.
EAD represents the expected exposure in the event of a default. The Bank derives the EAD from the current exposure
to the counterparty and potential changes to the current amount allowed under the contract and arising from
amortisation. The EAD of a financial asset is its gross carrying amount at the time of default. For lending
commitments, the EADs are potential future amounts that may be drawn under the contract, which are estimated
based on historical observations and forward-looking forecasts. For financial guarantees, the EAD represents the
amount of the guaranteed exposure when the financial guarantee becomes payable. For some financial assets, EAD is
determined by modelling the range of possible exposure outcomes at various points in time using scenario and
statistical techniques.
As described above, and subject to using a maximum of a 12-month PD for Stage 1 financial assets, the Bank
measures ECL considering the risk of default over the maximum contractual period (including any borrower’s
extension options) over which it is exposed to credit risk, even if, for credit risk management purposes, the Bank
considers a longer period.
The maximum contractual period extends to the date at which the Bank has the right to require repayment of an
advance or terminate a loan commitment or guarantee.
However, for overdrafts that include both a loan and an undrawn commitment component, the Bank measures ECL
over a period longer than the maximum contractual period if the Bank’s contractual ability to demand repayment
and cancel the undrawn commitment does not limit the Bank’s exposure to credit losses to the contractual notice
period. These facilities do not have a fixed term or repayment structure and are managed on a collective basis. The
Bank can cancel them with immediate effect but this contractual right is not enforced in the normal day-to-day
management, but only when the Bank becomes aware of an increase in credit risk at the facility level. This longer
period is estimated taking into account the credit risk management actions that the Bank expects to take, and that
serve to mitigate ECL. These include a reduction in limits, cancellation of the facility and/or turning the outstanding
balance into a loan with fixed repayment terms.
57
The groupings are subject to regular review to ensure that exposures within a particular group remain appropriately
homogeneous.
x) Loss allowance
The following tables show reconciliations from the opening to the closing balance of the loss allowance by class of
financial instrument.
30-Jun-23
12 month ECL Lifetime ECL Lifetime ECL
(Stage 1) not credit credit
In ETB'000 impaired impaired Total
(Stage 2) (Stage 3)
58
59
30-Jun-22
2 month ECL Lifetime ECL Lifetime ECL
(Stage 1) not credit credit
In ETB'000 impaired impaired Total
(Stage 2) (Stage 3)
30-Jun-23
Cash and Investment Other
In ETB'000 balances with securities receivables Total
banks (debt and financial
Other financial assets (debt instruments) assets
instruments)
Balance as at 01 July 2022 1,662 602 18,844 21,108
Net remeasurement of loss 94 29 5,237 5,360
allowance
Balance as at 30 June 2023 1,756 631 24,081 26,468
60
Loans with renegotiated terms are defined as loans that have been restructured due to a deterioration in the
borrower’s financial position, for which the Bank has made concessions by agreeing to terms and conditions that are
more favourable for the borrower than the Bank had provided initially and that it would not otherwise consider. A
loan continues to be presented as part of loans with renegotiated terms until maturity, early repayment or write-off.
The maximum exposure to credit risk relating to a financial guarantee is the maximum amount the Bank could have
to pay if the guarantee is called upon. The maximum exposure to credit risk relating to a loan commitment is the full
amount of the commitment. The table below shows the Bank’s maximum credit risk exposure for commitments and
guarantees.
61
Liquidity risk is the risk that the Bank cannot meet its maturing obligations when they become due, at reasonable
cost and in a timely manner. Liquidity risk arises because of the possibility that the Bank might be unable to meet its
payment obligations when they fall due as a result of mismatches in the timing of the cash flows under both normal
and stress circumstances. Such scenarios could occur when funding needed for illiquid asset positions is not available
to the Bank on acceptable terms.
Liquidity risk management in the Bank is solely determined by the Asset and Liability Committee (ALCO), which bears
the overall responsibility for liquidity risk. The main objective of the Bank's liquidity risk framework is to maintain
sufficient liquidity in order to ensure that we meet our maturing obligations.
Cash flow forecasting is performed by the Finance and Treasury function. The Finance and Treasury function
monitors rolling forecasts of liquidity requirements to ensure it has sufficient cash to meet operational needs.
The Bank has incurred indebtedness in the form of borrowings. The Bank evaluates its ability to meet its obligations
on an ongoing basis. Based on these evaluations, the Bank devises strategies to manage its liquidity risk.
Prudent liquidity risk management implies that sufficient cash is maintained and that sufficient funding is available
to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or
risk of damage to the Bank’s reputation.
The table below analyses the Bank’s financial liabilities into relevant maturity groupings based on the remaining
period at the statement of financial position date to the contractual maturity date. The cash flows presented are the
undiscounted amounts to be settled in future.
181 - 365
0 - 30 days 31 - 90�days 91 - 180�days days Over �
1 year
ETB'000 ETB'000 ETB'000 ETB'000 ETB'000
30 June 2023
Deposits from customers 6,631,510 14,125,000 17,655,000 34,205,000 109,854,000
Other liabilities 2,219,769 4,896,197 - - -
Total financial liabilities 8,851,279 19,021,197 17,655,000 34,205,000 109,854,000
62
181 - 365
30 June 2022 0 - 30 days 31 - 90�days 91 - 180�days days Over �
1 year
ETB'000 ETB'000 ETB'000 ETB'000 ETB'000
Deposits from customers 5,537,613 10,213,000 14,090,000 27,913,000 90,275,000
Other liabilities 5,455,842 3,978,189 - - -
Total financial liabilities 10,993,455 14,191,189 14,090,000 27,913,000 90,275,000
Market risk is defined as the risk of loss that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market risk factors such as interest rates, foreign exchange rates, equity prices,
credit spreads and their volatilities. Market risk can arise in conjunction with trading and non-trading activities of a
financial institutions.
The Bank does not ordinarily engage in trading activities as there are no active markets in Ethiopia.
4.5.1 Management of market risk
The main objective of Market Risk Management is to manage and control market risk exposures within acceptable
parameters, while optimising the return on risk.
Market risk is monitored by the risk and compliance management function regularly, to identify any adverse
movement in the underlying variables.
The Bank’s exposure to the risk of changes in market interest rates relates primarily to the Bank’s obligations and
financial assets with floating interest rates. The Bank is also exposed on fixed rate financial assets and financial
liabilities. The Bank’s investment portfolio is comprised of treasury bills, Ethiopian government bonds and cash
deposits.
63
Liabilities
Deposits from customers 109,851,492 72,619,018 182,470,510
Other liabilities - 7,115,966 7,115,966
Total 109,851,492 79,734,984 189,586,476
Liabilities
Deposits from customers 89,166,801 58,861,812 148,028,613
Other liabilities - 9,434,031 9,434,031
Total 89,166,801 68,295,843 157,462,644
64
Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due
to the changes in foreign exchange rates.
The Bank is exposed to exchange rate risks to the extent of balances and transactions denominated in a currency
other than the Ethiopian Birr (ETB). The Bank’s foreign currency bank accounts act as a natural hedge for these
transactions. Management has set up a policy to manage the Bank's foreign exchange risk against its functional
currency.
The table below summarises the impact of increases/decreases of 10% on equity and profit or loss arising from the
Bank's foreign denominated borrowings and cash and bank balances.
The total foreign currency denominated assets exposed to risk as at year end 30 June 2023 was ETB 7.909billion (30
June 2022: ETB 8.383billion).
7,909,262 6,467,378
65
The sensitivity analysis for currency rate risk shows how changes in the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market rates at the reporting date.
30 June 2023 30 June 2022
ETB'000 ETB'000
Effect of a 10% Increase of the ETB against USD 723,224 600,452
Effect of a 10% Decrease of the ETB against USD (723,224) (600,452)
The Bank’s objectives when managing capital are to comply with the capital requirements set by the National Bank
of Ethiopia, safeguard its ability to continue as a going concern, and to maintain a strong capital base so as to
maintain investor, creditor and market confidence and to sustain future development of the business.
66
According to the Licensing & Supervision of Banking Business Directive No SBB/50/2011 of the National Bank of
Ethiopia, the Bank has to maintain a capital to risk weighted assets ratio of 8% at all times, the risk weighted assets
being calculated as per the provisions of Directive No SBB/9/95 issued on 18 August 1995. Capital includes capital
contributions, retained earnings, legal reserve and other reserves to be approved by the National Bank of Ethiopia.
The capital adequacy ratio is the quotient of the capital base of the Bank and the Bank’s risk weighted asset base.
21,477,718 15,371,079
IFRS 13 requires an entity to classify measured or disclosed fair values according to a hierarchy that reflects the
significance of observable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, which comprises three levels as described below, based on the lowest level input
that is significant to the fair value measurement as a whole.
67
IFRS 13 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are
observable or unobservable. Observable inputs reflect market data obtained from independent sources; unobservable
inputs reflect the Bank's market assumptions.
● Level 1: Inputs that are quoted market prices (unadjusted) in active markets for identical assets or liabilities.
●Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices) .This category includes instruments valued using:
quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in
markets that are considered less than active, another valuation technique in which all significant inputs are directly
or indirectly observable from market data.
In conclusion, this category is for valuation techniques for which the lowest level input that is significant to the fair
value measurement is directly or indirectly observable.
● Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs). This
category includes all assets and liabilities for which the valuation technique includes inputs not based on observable
data and the unobservable inputs have a significant effect on the asset's or liability's valuation. This category
includes instruments that are valued based on quoted prices for similar instruments for which significant
unobservable adjustments or assumptions are required to reflect differences between the instruments.
68
30-Jun-23 30-Jun-22
Carrying Amortized Carrying
amount Cost amount Amortized Cost
ETB'000 ETB'000 ETB'000 ETB'000
Financial liabilities
Deposits from customers 182,470,510 182,470,510 148,028,613 148,028,613
Other liabilities 7,115,966 7,115,966 9,434,031 9,434,031
During the two reporting periods covered by these annual financial statements, there were no movements between
levels as a result of significant inputs to the fair valuation process becoming observable or unobservable.
69
5 Interest income
21,934,382 14,159,649
Included within various line items under interest income for the year ended 30 June 2023 is a total of ETB
255.146 million (30 June 2022: ETB 250.817 million ) relating to impaired loans and advances.
6,061,492 4,376,829
ETB'000 ETB'000
7 Fees and commission income
Cash payment orders and cheques 3,750 2,050
Foreign currency transactions 2,892,649 2,428,476
Letters of credit 1,172,083 1,093,006
Letters of guarantee 278,406 264,944
Telegraphic transfers 2 7
Money transfers 39,492 19,223
Other commission 567,512 943,254
Murabaha Income 651,119 210,499
5,605,013 4,961,459
70
ETB'000 ETB'000
8 Other operating income
1,249,048 1,513,673
Loans and advances - charge for the year (note 16) 232,534 855,392
Loans and advances - reversal of provision (note 16) - -
Loans and advances - Bad Debts Write Off - (12,054)
232,534 843,338
71
9,093,592 5,677,133
30 June 2023 30 June 2022
ETB'000 ETB'000
13 Other operating expenses
Rent 7,272 5,226
Stationery 297,747 203,347
Transportation 158,521 103,544
Telephone and related charges 102,166 71,164
Professional and legal fees 348,709 282,034
Audit fee 2,390 2,168
Insurance 28,241 24,428
Taxes 31,774 17,096
Fuel 29,111 11,712
Repair and maintenance 174,253 95,245
Other expenses 236,643 202,134
Card charges 69,043 39,138
Cleaning 13,806 7,770
Entertainment 78,067 36,488
Utility 45,348 22,274
Bank charges 13,964 9,131
Penalities 460 1,264
Loss on Disposal of old assets 3,298 14,358
Membership fees 1,687 1,496
Board Members fees 2,926 1,560
Loss provision for assets damage_West Region 23,669 -
Provision on legal claims - 2,445
Impairment (Reversal) on Off Balance sheet items 32 (649)
Shariah Advisory committee fees 800 1,010
Advertising and publicity 357,525 190,455
Donation 511,046 118,406
Bad Debt expense 5,021 3,519
Land and Building taxes 4,839 992
Postage 2,549 -
POS Charges 1,737 -
Wadi'ah Deposits 73 123
Mudarabah Investment - 950
2,552,717 1,468,828
72
The tax on the Bank’s profit before income tax differs from the theoretical amount that would arise using the
statutory income tax rate as follows:
Profit before tax 9,750,514 7,453,151
Add : Disallowed expenses and reversals
Entertainment 78,067 36,488
Donation 69,002 5,098
Penalty 460 1,264
Taxes Paid on Tax audit - 1,877
Accrued Leave 96,664 236,587
Amortisation of Right of Use Asset 545,814 400,961
Interest expense on lease liability 60,332 36,613
Long service Award (Severance and Gratuity pay) 123,429 203,429
Amortization of employee prepaid expense 40,634 5,432
Bad debt written off 19,009 1,046
Provision for loans and advances as per IFRS 232,534 855,392
Impairment Losses Reversal on Other Assets (includes Local and
Foreign Deposits, NBE Bills and Bonds and Receivables) 10,382 5,042
Impairment Losses (Reversal) on off Balance
Sheets (LC and Guarantees) 32 (649)
Bonus Provisional expenses 711,000 974,735
Provision for doubtful debt- litigation Cases - 2,445
Loss provision for assets damage_West Region 23,669 -
Depreciation for accounting purpose_PPE 447,959 334,501
Amortization for accounting purpose_Intangible Assets 45,247 34,944
Net rental loss from rental operations 16,113 5,056
73
74
The analysis of deferred tax assets/(liabilities) is as follows: 30 June 2023 30 June 2022
ETB'000 ETB'000
To be recovered after more than 12 months (260,241) 44,480
Deferred income tax assets and liabilities, deferred income tax charge/(credit) in profit or loss ("P/L"), in
equity and other comprehensive income are attributable to the following items:
Credit/ Credit/
At 1 July (charge) to (charge) to
2022 P/L equity 30 June 2023
ETB'000 ETB'000 ETB'000 ETB'000
Credit/ Credit/
At 1 July (charge) to (charge) to
2021 P/L equity 30 June 2022
ETB'000 ETB'000 ETB'000 ETB'000
Deferred income tax assets/(liabilities):
75
2022
Oromia Oromia Sidama Harari
South
Addis Ababa Regional Regional Regional Regional Total
Regional Gov't
Gov't Gov't (PMB) Gov't Gov't
Income: ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000
Rental Income 14,284 2,085 24,526 7,430 786 208 49,319
Expenses: -
Salaries and wages 1,838 958 2,472 1,778 496 - 7,542
Insurance 52 14 64 74 3 3 210
Depreciation 5,305 1,917 7,430 4,582 341 - 19,575
Repair and
4 4 15 6 - - 29
maintenance
Building Taxes 12 74 319 198 2 1 606
Utilities 409 - 183 463 - - 1,055
Total Rental
Expenses 7,620 2,968 10,484 7,101 842 4 29,019
Net Profit (Loss) 6,664 (883) 14,042 329 (56) 204 20,300
Loss BF - - (4,422) (24) - (4,446)
Rental Income
6,664 (883) 14,042 (4,093) (80) 204 15,854
(Loss)
Rental income
tax (30%) 1,999 (265) 4,213 (1,228) (24) 61 4,756
76
Maturity analysis
Current 21,278,071 20,150,786
Non-Current 13,600,000 11,900,000
34,878,071 32,050,786
Cash and bank balances in the statement of cash flows are the same as on the statement of financial position
as the Bank had no bank overdrafts at the end of each reporting period.
We have reclassified local deposits and treasury bills maturing in three months as cash and bank balances and
the remaining as investment securities.
77
161,952,420 129,244,185
159,370,386 126,894,685
78
A reconciliation of the allowance for impairment losses for loans and advances to customers by class, is as
follows:
Remeasureme
Charge for nt and
As at 1 the year As at 30 Charge for the As at 30 June
July 2021 2022 June 2022 year 2023 2023
ETB'000 ETB'000 ETB'000 ETB'000 ETB'000
523,078 340,030
Financial assets at amortized cost :
Ethiopian Government Treasury Bills 9,172,767 10,125,133
DBE Bill 2,269,516 889,186
Deposits with Local Banks 620,205 2,177,651
Ethiopian Government bonds 131,907 28,806
12,194,395 13,220,776
Less: Loss allowances (631) (602)
12,193,764 13,220,174
The Bank has pledged NBE Bills with a face value of ETB 2.822 Billion to secure currencies that the Bank carries
in its vault on behalf of the NBE.
79
Entities
As draft financial statement of both Negat Mechanical Engineering Share Co. and Ethiopian Reinsurance Share
company were not ready for valuation, the last valuation date for our investments was on June 30, 2022.
Premier Switch Solutions Share Co. is a consortium owned by six private banks; Awash Bank, Nib International
Bank, United Bank, Berhan International Bank, Addis International Bank and Cooperative Bank of Oromia. It
was established in 2009 by the visionary banks to save the high investment cost of the modern payment
platform and deliver electronic payment services to financial institutions with a shared system. It commenced
operation officially on 5 July 2012 with 165 million ETB. Awash Bank holds 44,996 shares which is 30.12% of the
total shareholding of the entity.
In accordance with the shareholders' agreement, Awash Bank has the right to cast 30.12% of the votes at
shareholders' meetings.
The financial year end date of Premier Switch Solutions Share Co. is 30 June. This was the reporting date
established when that company was incorporated. For the purposes of applying the equity method of
accounting, the provisional financial statements of Premier Switch Solutions Share co. for the year ended 30
June 2023 have been used.
The financial information in respect of the associate is set out below. The summarised financial information
below represents amounts shown in the associate's financial statements.
80
The amount recognised in the income statement as share of profit/(loss) from investment in associate during
the year is as follows:
81
Financial assets
3,871,379 2,241,976
Non-financial assets
6,646,145 4,294,481
Maturity analysis
6,646,145 4,294,481
A reconciliation of the allowance for impairment losses for other assets is as follows:
30 June 2023 30 June 2022
ETB'000 ETB'000
82
The Bank leases a number of assets including land and buildings. Information about leases for which the Bank is
a lessee is presented below:
i. Right-of-Use assets:
Land Building Total
Cost: ETB'000 ETB'000 ETB'000
Balance at 01 July 2022 35,759 2,648,633 2,684,391
Additions 116 1,291,476 1,291,592
Balance at 30 June 2023 35,875 3,940,109 3,975,984
Amortisation
Balance at 01 July 2022 (1,906) (911,670) (913,576)
Charge for the year (761) (545,053) (545,814)
Balance at 30 June 2023 (2,667) (1,456,722) (1,459,389)
Net Carrying Value at 30 June 2023 33,208 2,483,387 2,516,594
The Bank recognises a lease liability at the present value of the lease payments that are not paid at that date.
The Bank uses an incremental borrowing rate that is based on the weighted average cost of deposits across the
years. The rates used to compute the present values of buildings lease liabilities as at 30 June 2023 was
10.81%. The adjustments were occurred due to changes in Incremental borrowing rate (IBR).
The Bank leases buildings for its office space and branches. The building leases typically run for a period
between 2 and 15 years with the majority of the contracts running for a period of 5 and 7 years. Some leases
include an option to renew the lease for an additional period at the end of the contract term. The renewal
term and lease rental cannot be reliably estimated before the end of a contract.
The Bank leases land for construction of its own office buildings. The land leases typically run for a period of
between 40 years and 70 years with majority of the contracts running for a period of 40 and 60 years. These
leases include an option to renew the lease.
83
Purchased
software
ETB'000
Cost:
As at 1 July 2021 242,760
Acquisitions 151,068
As at 30 June 2022 393,828
84
Cost:
As at 1 July 2021 4,391 1,784,301 554,621 1,152,855 582,304 441,522 4,519,994
Adjustments - - - 35 - - 35
Additions - 95,802 266,910 486,528 247,878 59,263 1,156,381
Disposals - - - (34,006) (10,636) - (44,642)
Awash Bank S.C.
122
85
Awash
AwashBank
BankS.C.
S.C.
Financial Statements
Financial Statements
For the year ended 30 June 2023
For the year ended 30 June 2023
Notes to the Financial Statements
Notes to the Financial Statements (Continued)
22.1.Construction in progress represents directly attributable costs related to IT projects and construction of
buildings at Head Office Cafteria, Bulbula, Bale Robe and Ashewa Meda.
22.2.Upon impairment review, the net book values of property and equipment do not exceed their recoverable
amounts. Furthermore, the bank disposed majority of impaired property and equipment during the period.
22.3.Property and equipment include ETB 4.391 freehold land with indefinite economic life that is not depreciated.
182,470,510 148,028,613
Maturity analysis
182,470,510 148,028,613
24 Borrowings
30 June 2023 30 June 2022
ETB'000 ETB'000
The Bank entered a one year Master Loan Agreement with NBE at an annual interest rate of 5% as a
reimbursement to the credit extended to Hotel and Tourism Sectors to cope with the COVID-19 pandemic. This
short-term borrowing was entirely repaid this fiscal year.
86
9,596,580 11,257,683
Maturity analysis
9,596,580 11,257,683
Provision for doubtful debt and assets damage- North Ethiopia conflict - As a result of conflict in the Northern
Part of Ethiopia in Tigray Region, the management of the Bank has made prudential judgements and estimates
on the loss occurrance on the assets of the Bank. Thus, the Bank has made a total provision of ETB 191.058
million (2022: 201.758 million). Hence, the management belived that the Bank provided sufficient amount of
provision. Beside, the Bank provided ETB 23.669 million for assets damanged in the West Region of the Bank
due to internal conflict.
Tax payable includes tax on capital gain, value added taxes (VAT), income tax, tax on saving deposits interest
paid and withholding taxes.
87
Remeasurements for:
` 63,597 5,356
The income statement charge included within personnel expenses includes current service cost, interest cost
and past service costs on the defined benefit schemes and legal requirement.
532,304 326,674
The employee benefit plan is made up of two (2) unfunded schemes which are severance benefits that are
paid on voluntary withdrawal and retirement gratuity paid on retirement. These plans have been aggregated
in determining the retirement benefit obligation as the inherent risks applicable to these plans have been
assessed not to be materially different.
The key financial assumptions are the discount rate and the rate of salary increases. The provision for gratuity
was based on an independent actuarial valuation performed by QED Actuaries & Consultants (Pty) Ltd using
the projected unit credit method.
The Bank does not maintain any assets for the schemes but ensures that it has sufficient funds for the
obligations as they crystallise.
88
Clause 39 (1) (h) of the Labour Proclamation sets out that any worker who has completed their probation and
who is not eligible for pension is entitled to a severance benefit:
h) Where he has given service to the employer for a minimum of five years’ service and his contract of
employment is terminated because of sickness or death or his contract of employment is terminated on his
own initiative provided that he has no contractual obligation relating to training to render service to the
employer
Clause 40 of the Labour Proclamation sets out the amount of the benefit, as follows:
The benefit applicable would be:
• thirty times the average daily wages of their last week of service for the first year of service, with part-
years pro-rata, plus
• ten times the average daily wages of their last week of service for each completed year of service after the
first.
To a maximum of one years’ wages payable to the member.Where the Company closes or reduces its work
force, an additional multiple of sixty times the average daily wages of their last week of service is payable.
Below are the details of movements and amounts recognised in the financial statements:
89
123,429 203,429
D Changes in the present value of the defined benefit obligation 30 June 2023 30 June 2022
ETB'000 ETB'000
The movement in the defined benefit obligation over the years is as follows:
90
The rate of mortality assumed for employees are those published in the Demographic and Health Survey
(“DHS”) 2016 report compiled by the CSA. The DHS report provides male and female mortality rates for 5 year
age bands from age 15 to age 49. For ages over 47 we have assumed that mortality will be in line with the
SA85/90 ultimate standard South African mortality tables published by the Actuarial Society of South Africa
(“ASSA”), since the rates in these tables are similar to the DHS female mortality rate at age 47. These rates
combined are approximately summarized as follows:
20 0.00306 0.00223
25 0.00303 0.00228
30 0.00355 0.00314
35 0.00405 0.00279
40 0.00515 0.00319
45 0.00450 0.00428
50 0.00628 0.00628
55 0.00979 0.00979
60 0.01536 0.01536
The withdrawal rates are believed to be reasonably representative of the Ethiopian experience. The valuation
assumed a rate of withdrawal of 15% at the youngest ages falling with increasing age to 2.5% at age 45.
The sensitivity of the overall defined benefit liability to changes in the weighted principal assumption is:
91
The above sensitivity analysis is based on a change in an assumption while holding all other assumptions
constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated.
When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same
method (present value of the defined benefit obligation calculated with the projected unit credit method at
the end of the reporting period) has been applied as when calculating the pension liability recognised within
the statement of financial position.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior
years. The average duration of the gratuity scheme at the end of the reporting period is five years (30 June
2022: five years).
27 Share capital
30 June 2023 30 June 2022
Authorised:
Ordinary shares of ETB 1,000 each 55,000,000 12,000,000
Issued and fully paid:
Ordinary shares of ETB 1000 each 14,649,656 10,291,407
Issued but not fully paid:
Ordinary shares of ETB 1000 each 23,405,785 1,698,320
Share Reconcilation
Number of shares outstanding at the beginning of the period 10,291,407 8,188,948
Number of shares Purchased by Cash 599,085 262,300
Number of shares Purchased by Dividend 3,759,164 1,840,159
Number of shares outstanding as at the end of the period 14,649,656 10,291,407
1,389 1,389
92
Basic earnings per share (EPS) is calculated by dividing the profit after taxation by the weighted average
number of ordinary shares in issue during the year.
30 June 2023 30 June 2022
ETB'000 ETB'000
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares. There were no potentially dilutive
shares at the reporting date (30 June 2021:nil), hence the basic and diluted earnings per share have the same
value.
The NBE Directive No. SBB/4/95 requires the Bank to transfer annually 25% of its annual net profit to its legal
reserve account until such account equals its capital. When the legal reserve account equals the capital of the
Bank, the amount to be transferred to the legal reserve account will be 10% (ten percent) of the annual net
profit.
93
Provisions under prudential guidelines are determined using the time based provisioning prescribed by the
National Bank of Ethiopia (NBE) Directives. This is at variance with the expected credit loss model required by
IFRS under IFRS 9. As a result of the differences in the provision, there will be variances in the impairments
allowances required under the two methodologies. Similarly, interest on non-performing loans are suspended
as per NBE directive, while IFRS 9 prescribes to recognize stage 3 loans interest income net of impairement
losses.
The proclamation ‘Financial Reporting Proclamation No.847/2014 stipulates that Banks would be required to
make provisions for financial assets as prescribed in the relevant IFRS Standards when IFRS is adopted.
(a) Provisions for loans & advances and other assets are recognised in the income statement based on the
requirements of IFRS. However, the IFRS provision should be compared with provisions determined under the
NBE Directives and the expected impact/changes in other reserves are treated as follows:
• Prudential provisions is greater than IFRS provisions; the excess resulting should be transferred from the
general reserve (retained earnings) account to a “regulatory risk reserve”.
• Prudential provisions is less than IFRS provisions; IFRS determined provision is charged to the statement of
comprehensive income. The cumulative balance in the regulatory risk reserve is thereafter reversed to the
general reserve account.
• Interest suspended in the previous years and regularized in the current year is compared with current year
stage 3 loans interest income recognized net of impairment losses. The difference between the two is
transferred to “regulatory risk reserve”.
(b) The non-distributable reserve should be classified under Tier 1 as part of the core capital.
94
6,914,903 6,459,533
95
Awash Bank Share Company is owned by over 6,430 shareholders without an ultimate parent company.
Premier Switch share company (PSS) is the only associate of the Bank. See note 18 for the details of the Bank's
relationship with PSS.
A number of transactions were entered with related party in the normal course of business. These are
disclosed below:
35a Transactions with related parties Relationship 30 June 2023 30 June 2022
ETB'000 ETB'000
Key
management
personnel
Board of Directors 7,569 1,649,510
Loans and advances
Executive Management 80,785 18,390
88,354 1,667,900
It has been determined that key management is the members of the Board of Directors and the Executive
Management of the Bank. The compensation paid or payable to key management is shown. There were no
sales or purchase of goods and services between the Bank and key management personnel as at 30 June 2023.
Compensation of the Bank's key management personnel includes salaries, non-cash benefits and contributions
to the post-employment defined benefits plans. During the year, the Board of Directors approves shares and
other benefit in kind to the lower, middle and top managements of the Bank.
96
The Bank conducts business involving bonds and guarantees. These instruments are given as a security to
support the performance of a customer to third parties. As the Bank will only be required to meet these
obligations in the event of the customer's default, the cash requirements of these instruments are expected to
be considerably below their nominal amounts.
The table below summarises the fair value amount of contingent liabilities for the account of customers:
8,901,042 11,789,803
37 Commitments
The Bank has commitments, not provided for in these financial statements for the year 30 June 2023 is ETB
24.095 billion (30 June 2022: ETB 22.698 billion), being exposure of the Bank from commercial letters of
credit, guarantees to customers, loan commitments and other commitments. Other commitments represent
commitments made in respect of the estimated cost to complete the Bank's construction work in progress.
97
The Bank leases various properties under non-cancellable operating lease agreements. The lease terms are
between two and fifteen years, and the majority of these lease agreements are renewable before the end of
each lease period at market rate.
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
The Bank acts as lessor of office spaces. These leases have an average life of between three and five years
with no renewal option included in the contracts. There are no restrictions placed upon the lessee by entering
into these leases (such as those concerning dividends, additional debt and further leasing).
Future minimum lease payments under non–cancellable operating leases as at 30 June are, as follows:
There were no significant post balance sheet events which could have a material effect on the state of affairs
of the Bank as at 30 June 2023 and on the profit for the period ended on that date, which have not been
adequately provided for or disclosed.
98
Particular 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23
Deposit* 16,118 19,506 24,236 32,893 45,906 62,464 70,578 108,074 152,007 187,367
Loans & 9,176 12,482 15,451 22,646 31,304 47,262 57,274 87,539 129,244 161,952
Advance**
NBE Bills*** 4,067 5,365 5,306 8,355 6,993 11,221 9,915 9,916 889 2,270
Total Asset 22,106 25,140 31,148 40,027 55,268 74,635 89,288 128,695 183,391 224,024
Capital &
Reserves
(Total Equity) 2,597 3,185 3,934 5,424 6,496 9,640 11,968 15,852 20,951 28,173
Profit Before 829 861 986 1,350 1,946 3,344 3,600 4,823 7,453 9,796
Tax
Profit After 619 669 744 1,003 1,492 2,432 2,591 3,396 5,341 7,046
Tax
Earnings Per 475 445 371 390 543 632 510 470 570 577
Share (Birr)
No of 150 202 240 316 366 410 466 566 725 875
Branches
(in no.)
No. of 4,011 5,847 6,003 6,772 7,872 9,046 10,130 12,188 17,393 20,055
Employees
( in no.)
136
ATMs and their Locations as at June 30,2023
79 Mesalemiya atm 2 TTW 15 Arsi sire ATM 01 TTW 53 Diksis ATM 01 TTW
8. Head Office
011-557-69-01/557-68-36/08/
1 Abwuare 011-557-69-10
68-83
2 5 kilo 0 111541458
3 Ababil br. 0111264766 / 0111264763
4 Abado Meskelegna 011-869-40-44
5 Abwuare Gebeya 011-6-68-03-51
6 Addisu Gebeya 011-126-81-00/126-80-72 011-126-80-99
7 Aleltu 011-631-07-10/05-78 011-631-06-32
8 Alem Ketema 0111321058/0111321146
9 Arada Giorgis 0111-55-61-66/59-38/62-08 0111-55-58-00
10 Arat Killo 0111-57-03-32/31/57-17-14/16 0111-57-03-35
11 Balderas 011-636-81-41 011-636-81-42
12 Bilo 011-1-61-71-29
13 Burka Koricha
14 Chancho 011-188-09-05/06 011-188-09-23
15 Chirchil Road 0111-26-20-25/26-20-00/26-20-17 0111-26-20-18
16 Dalle Dembel 011-667-95-39/91-94 011-665-92-78
17 Debre sina 0 333116992
0116-37-50-61/94/71/51-01/
18 Debreberhan 0116-37-50-88
011-890-90-57
19 Degem br. 111360544/0111360545
20 Dejach Wube 0111702115/0111702979
21 Dera Gundo Meskel 011-115-07-07/08-32 011-115-06-74
22 Dessie Ber 0116-67-80-22/44/56 011667-80-48
23 Eyesus 41 116687179
24 Ferensay Legasion 011-154-80-82/84/90 011-154-80-81
25 Fiche 011-135-20-22/77/69 011-135-21-87
26 Gara Kilo 011-6-68-00-65
General Tadese
27 0 111609818
Biru
011-131-07-22/33/011-131-06-
28 Gerbaguracha 011-131-07-95
89/29
29 Gojam Ber 011-126-83-45/55/ 011-126-83-53
30 Gulele-Fiinance 011-273-24-32/27/21 011-273-23-51
31 Gurd Sholla 0116-46-76-99/16-47/16-79 0116-46-12-31
0111-57-88-91/95-93/91/
32 Habtegiorgis 0111-57-45-46
155-51-20
33 Hayat Tafo 0116391502/18/73
46 Jemmo 2 0118-83-80-70
47 Jemo Micheal 011-369-96-02/ 011-369-99-57 011-369-84-07
48 Karl Adebabay 011-384-81-54/011-384-80-04
011-557-07-56/ 011-557-07-57
49 Kazanchis 011-557-06-83
011-557-07-22/ 011-557-07-28
50 Kela 046-322-99-55/ 046-322-86-36
51 Kera 011-471-25-19/ 011-471-23-34
011-554-75-83/ 011-554-75-81
52 Kirkos Akababi 011-554-75-82
011-554-75-85/ 0118-59-22-49
53 Kirkos Riche 011-470-06-45/ 011-470-21-33
54 Kirkos 45 011-470-5606/ 011-470-40-36 011-470-58-39
55 Kute 011-369-37-69/ 011-369-35-41
011-419-07-63/ 011-419-10-86
56 Lafto 011-419-64-88
011-419-64-89/ 011-419-05-79
011-471-19-84/ 011-471-15-07
57 Lafto Gebya
011-471-15-05
58 Lebu 011-471-25-04/ 011-471-24-95 011-471-25-44
59 Lebu Musika Sefer 011-471-11-56/ 011-437-53-79
011-532-00-01/ 011-553-19-48
60 Legehar 011-551-08-67
011-5-54-77-65
61 Legehar Gumeruk 011-558-15-45/ 011-558-34-87
62 Lemen 011-363-03-59/ 011-363-03-60
63 Liben 011-366-45-71/ 011-366-49-81
Mebrate
64 011-470-58-68/ 011-470-56-74
Condominium
65 Mehal Amba 011-336-05-06/ 011-336-04-02
66 Mehal Gofa 011-467-12-39/ 011-467-12-97 011-467-12-81
67 Mehal Kazanchis 011-562-11-92/ 011-562-14-44
68 Mekanisa Abo 011-369-03-26/ 011-369-03-27 011-369-03-29
69 Mekenisa 011-369-83-48/ 011-369-86-03 011-369-83-25
70 Mekanisa Seminary 011-385-41-28/ 011-385-42-04
71 Melka Erecha 011-367-96-94/ 011-367-97-40
72 Meskel Flower 011-466-93-930/ 011-467-15-27 011-466-95-01
011-557-21-79/ 011-557-22-61
73 Mexico 011-557-22-59
011-557-22-08
74 Mogole 011-366-21-74/ 011-366-22-78
011-442-03-09/ 011-442-03-08
75 Nifas Silk 011-442-46-79/ 0114-70-75-63 011-442-09-58
011-4404385
76 Olompia 011-557-11-90/ 011-557-12-40 011-557-11-88
77 Sadeka 011-471-10-53/ 011-471-11-97
011-372-73-91/ 011-372-78-06
78 Sarbet 011-372-78-72
011-372-77-95
011-662-46-68/67/ 18-99-38/
1 22 Mazzoria 0116-62-65-87
63-50-31 CSM..Megrssa
011-660-84-43/86-73
2 22 Wuhalimat 0911643365 Muluken Tekele 011-660-09-31
/913051412
011-470-77-35/ 08/42/30/
3 Adey Ababa 011-470-77-43
Gobena 0912607740
4 Airport 0116-18-06-11/75/ 091164-33-65 0116-18-01-71
011-639-54-93/648-92-44/
40 Gurd Sholla Jakros 665-87-75/659-01-41/ 011-661-74-00
0911584767
41 Harbu Guddo 0116683168 / 0116683225
42 Hayat 49 0116-67-05-15
43 Hayat Adebabay 011-639-03-05/03 - 23/36 011-639-03-14
44 Hayat Arabsa 0118 16 01 10/ 0935008622
45 Head Office 116620303/ 01166118/24/35/70 11-618-9522
46 ICT Industry 116461231 fax
47 Imperial Akababi 011-667-46-73/49-24 011-667-48-38
48 Jackros 011-667-70-69 011-667-66-18
49 Jackros Adebabay 0116-73-43-22/21
50 Jackros Figa 0118-13-23-40/ 0118-132341/
51 Kality Gebriel 011-471-72-62/15/65/28 0114 71 72 63
0114-70 72 79/55/63/54 /
52 Kality Gumruk 011-470 72 86
011-869-49-83
53 Kilinto 0114512014/15
54 Kilinto Indu. Zone 1-11-618-9524
55 Kokeb 011-667-44-63/28 0116-67-38-02
56 Kore Guye 251-11-872-2897
57 Korea Hospital 0116-29-38-36/35-43 0116-29-31-50
58 Koyefeche 251-222-250-317/ 0115553649
59 Lemelem Meda 0116-73-25-64
60 Megenagna 22 011-667-33-82/31-56 011-667-33-63
61 Mehale Gerji 116395838
62 Mehale Summit 116688040
63 Melka Sheno 0114715646/68-90
64 Meri Summit 116682736/97-57
Asnake
011-661-00-87/68-38/56-95 Aman
65 Milinium Akababi 011-661-55-50
( Sahile 0913117539) 0913
400242
66 Moenco 0116 67 44 48/20 0116-67-44-69
67 OdaNebe 0114-71-82-93
68 Rwanda Embassy 0116146758/ 0116146640
011-471-62-23/ 011-471-61-87
69 Salogora 011-471-61-97
011-869-64-64
0116-67-38-20/21/22 Fasica
70 Shalla Akababi 0913475533 Mesi 0913469381 0116-67-37-18
/0924741452/
71 Sumit Safari 114702412
0116680148/ 0116-68-09-71
72 Summit
0116-68-01-04
73 Summit 72 011639-11-51/52
74 Summit -Goro
75 Tulu dimtu 0114627011/12
76 Weji 011-8-13-39-81
77 Wollo Sefer 011-557-58-55/40-20 011-557-43-24
Wollo Sefer Adeba-
78 011-557-8373
bay
0114-71-74-98/ 0114-71-79-49
79 Worku Sefer
0965-52-80-81
80 world Bank 0116662192/ 0116662192
81 Wuha Limat 0116-18-12-00/18-90-21 011-618-78-29
82 Yerer 011-667-72-04/56
83 Yerer Leka 0116-73-38-24
84 Yerer Sefer 251-11-668-3428/ 0116-66-16-98/
85 Goro Adebabay 464430935
86 Summit geriogres 577760906
87 Andode 11-440-0153
88 Meri Loke
89 Akaki 08 0114-62-98-27/ 0114-62-96-17
90 Meri Meskelega
91 Gara Duba
92 Figa
93 Bole Bras
94 Habebe Tufa
95 Bole Atlas 1-11-689-6992
96 Megenagna Deledy
0112-79-14-44/011-273-89-60/56/
1 18 Mazoria 0913 29 28 85
0118-69-79-74
2 Abdi Nono 0921 18 48 55 011260154013/30
"0112-75-83-58/57/77-24-81/82
3 Addis Ketema 0911-42-51-53
011-894-95-40”
4 Ada Berga 911-41-80-25 112860563
5 Afdal(IFB) 913490331 011-273-31-02
6 Ajamba 910831066 118552621
7 Alem Bank Akababi 0941-39-91-90 011-369-45-59/65/63
"011-273-60-09/46/39/73
8 Amanuel Total 913078604
011-833-40-50”
9 Amanuel Ajib 924251811 /251-11-275-2907
"0112-78-41-18/94-53/
84 Sidamo Tera 911694005
78-94-55/41-18”
85 Sost Kutir Mazoria 922183487 113692629
86 Oddo Liben 0913-29-72-49 011-2-60-99-25
87 Olankumi 0945-96-55-76 112850700
88 Tegbared 913475102 0116-18-26-69
"0112-78-93-76/77-27-30/31/
89 Teklehaimanot 0911-74-66-91
276-01-09”
90 Torhayloch 0911-76-65-24 011-369-13-11/369-12-93/13-18
Torhayloch Adeba-
91 91-24-76-267 113842605
bay
92 Tulu Boke 913634122 0112-73-24-21
93 Yeshi Debele Sefer 0922 47 9729 0113-69-23-92/24-50/07-21
94 Yusra(IFB) 911607141
95 Zenebe Work 0913-58-58-84 011-369-71-77
5.Adama Region
1 Abomsa 0224-41-13-40/41
0114-30-30-36
2 ADA'A 0114-33-85-47
0114-33-89-00/8626
3 Adama Bole 0222-11-52-46/47
4 Adama Branch 0221-11-85-84/85/86 0221-11-53-75
5 ADAMA GORO 022-212-2882
Adama Industry
6 0222-12-59-87/6391
park
7 ADAMA RAS 0222-11-63-93/94/95 022-211-63-93
8 Adulala
9 Arboye 0224-70-07-44/0412
10 ARERTI 0222-23-06-64/2561
11 ARSI ROBE 0222-42-17-65/1406/0042 022-242-00-42
12 Arsi Sire 0223-30-07-39/57
13 Assella Branch 0223-31-63-56/2875/2770 0223-31-56-22
14 Awash 40 0342407921/0342407914
15 Awash Melkasa 0222-25-03-08/17
16 AWASH SEBAT KILO 0222-24-02-74/79 0222-24-02-51
17 Balchi 0116-73-00-92/0406
18 BATU BRANCH 0464-41-22-10/52 0464-41-22-11
19 BEKOJI BRANCH 0223-32-06-55/0549/0439 0223-32-00-80
20 Bele Gesgar 0225-13-76-56/7723
62 Kurkura 0118-48-08-65/80-30/70-07
63 LEMA GUYA 0114304430/4530
64 LUGO 0222-11-80-12
65 Lume 0222-36-34-12
66 Mararo 022-467-03-31
67 MEKI BRANCH 0221-18-07-44/41 022-118-07-40
68 MELKA LAMI 022-236-5826
69 METEHARA BRANCH 0222-26-12-13/13-11 022-226-13-17
70 Migra 0222-12-52-30/59-38
71 Mojo 0221-16-03-55/02-86 022-116-04-73
72 Negele Arbagugu
73 ODA BOQOTA 0221182267
74 OLENCHITI BRANCH 0221-13-11-11/71/10-33 0221 13 11 71
75 Sagure 0223-38-05-33
76 SAR TERA BRANCH 0222-12-04-14/03-90 022-212-04-08
77 Sekakalo 0222-11-59-94/87-96
78 SILTANA 0225-13-03-36/37
79 Sole 0222-11-64-48/96-61
80 Uta Wayu 0224-79-05-78/04-97
81 Walkessa 022-238-51-00/52-22
82 WENJI 022-220-21-74
83 Haro Adi 0222261675
6.Dessie Region
1 Adago 0334314991/4992
2 Afdera 0342464396/91
3 Aflaha 0333518156/7905/6527
4 Akesta 033114 0704/0749
5 Akrma 0335520496/0515
6 Asayita 0332408910/8693
7 Ataye 0336611059/0730
8 Ayteyef 0333127518/9024
9 Bati 0335532272/1808
10 Buanbuawuha 0331119898/6992
11 Dawudo 0333122127/4704
12 Degollo 0332260577
13 Dessie 0331112829/2834
14 Fathi 0333127981/8593
15 Haik 0332221280/0765
ANNUAL REPORT // 2022/23
158
Awash Bank Branch Address by Regional Office
16 Hara 0334520559/0544
17 Kalu 0333510991/7822
18 Kebir 0334490975/79
19 Kelala 0334510557/0742
20 Kemisse 0335541450/1443/3034 0335541447
21 Kobo 033341312/033341336
22 Kombolcha 0335510877/0839/0883/0792
kombolcha Industry
23 0333516170/9122
Park
24 Kone 0334430754/0566
25 Lalibela 0333361410/1335 0333361286
26 Logia 0335500060/65
27 Mabrook 0331180608/0627
28 Mekanselam 0332201126/1106
29 Meket 0332111288 /1274
30 Mekoy 0334440288/0557
31 Mersa 0333331036/1042
32 Mugad 033 312 6579/6358
33 Robit 0331130430/0230/0302
34 Sekota 0335405419/20
35 Semera 0333662813
36 Shewarobit 0336642189/1986
37 Tossa 0333127994/5612
38 Tuluawelia 0332405591/5617
39 Wegeltena 0333350002/0484
40 Werebabo 0332210413/0416
41 Wereiulu 0331160517/0669
42 Wogdi 0334456423/1209
43 Woldia 0333312579/1693 0333312619
44 Zeweld 0333341359/1902
7.East Region
8.North Region
38 jiga 058-779 06 39
39 Debrework 058- 663 00 00
40 Addiskidam 058-450 07 12
41 Dejen 058- 776 24 74
42 Yejube 058-246 04 39
43 Shebelberenta 058-247 04 94
44 Shimbt 058-320 42 90
45 Humera 034 448 14 72
46 Zigem 058-555 90 31
47 Deber Eliyas 058 -250 06 35
48 Dembecha 058-773 08 53
49 Belay Zelek 058-320 84 39
50 Kosober 058 227 70 60
51 Dengele 058 320 71 61
52 Amanuel 058 777 03 98
53 Kotitina 0583209568
54 Fasilo 0582200671
55 Zoble 0585555651
56 Simada 0586670703
57 Koladeba 0583350708
58 Azena 0583278378/8690
59 Menkorer 0587717289
60 Shahura 0582700507
61 Dansha 0344481472
62 Andabet 058 554 70 07
63 Maksegnit 085 332 06 54
64 Delgi
65 Chuahit 058 334 07 25
66 Sekela 058 259 07 51
10.South Region
1 Abaro 0462113964/3965
2 Abaya 0463266162/6534
3 Abosto Branch 0462115077 0462115058
4 Adaba Branch 0226631222/1265 0226631258
5 Adola Weyu 0463350059/0607 0463350220
6 Agarfa 0222271128/0999
7 Aje 0464560268/0276
8 Alamura 0462126308/7096
9 Aleta Chuko 0462270805
10 Aleta Wendo Branch 0462240588/0630 0462240630
11 Ali 0224770025/0328
12 Angetu
13 Arsi Negele 0461160127/0946 0461160877
14 Assasa Branch 0223360845 0223360819
15 Awasho Branch 0462119840/5535 0462119840
16 Bale Robe Branch 0226651675/99 0226651975
17 Bensa Daye 0463370637/0638
18 Beriso Dukale 0464431520
19 Bore 046 667-0593
20 Bule Hora Branch 0464430927/0121 0464430935
21 Chelelektu 463360420
22 Chembelala 0462126656/6929
23 Dato 046 221-0523
24 Delo Sebro no office phone 0226680540
25 Dilla Branch 0463311062/0970 0463314107
26 Dimtu no office phone
27 Dodola Branch 0226660474/0477 0226660429
28 Dolo Oddo 0464490414/0377
29 Dolomena Branch 0226680039/21
30 Filtu Branch 0464730538/48
31 Fura 0462121854/2188
32 Garambamo no office phone
33 Gasera 0224620754/1588
34 Gedeb 0462680377/0590
35 Ginnir Branch 0226640065/1150 0226640449
36 Goba 0226612623/2929 0226614927
37 Goljota 0463287372/7209
38 Haro Welabu Branch 0461310446/0445
39 Harufa Branch 0461100335/0610 0461100543
40 Hawasa Industry Park 0462122472
41 Hawassa 0462204751/4722 0462204751
42 Hawassa Areb Sefer 0462123849/4240 0462124811
43 Hawassa Menaharia 0462124021/4162 0462123621
44 Jara 0224780713/0691
45 Kerecha Branch 0463242008 0463242004
46 Kiltu Dema 0463289691
47 Kofele Branch 0461120978/0869
48 Kokosa no office phone
49 Kore no office phone
10 Darimu 047-444-06-28/05-61
11 Didessa 047-443-05-37/39
12 Dima 047-332-07-01/07-00
13 GAMBELA BRANCH 047-551-18-14/67/68 047-551-1869
14 Gambela New Land 047-151-52-79/38-50/03-52 047-151-0352
15 Gatira 047- 655-04-40/05-39
16 Gera 047-342-06-93
17 Gesha 047-774-0340
18 Ginjo 047-111-33-69
19 Gomma 047-221-53-48/47
20 Gore 047-554-14-27
21 HIRMATA BRANCH 047-211-00-33/35/39 047-211-0044
22 Hurumu 047-446 - 05-65/06-16
047-111-21-89/59-76/12-92/46-
23 Jimma Branch 047-111-9412
10
24 Jiren Branch 047-211-37-08/31-88
25 Konta 047-227-05-93
26 Kuja 09-33-02-19-19
27 Lare 047-553-00-37/27
28 Limu Genet 047-224-07-52/20
29 Limu Shay 09-11-59-02-45
30 Masha 047-452-26-51/ 20
31 Meti 047-339-06-64/06-04
32 METU BRANCH 047-441-33-05/26-48/34/67 047-441-4165
Mizan Teferi
33 047-135-91-38/31-89 047-135-1879
Branch
34 Omo Nada 047-115-06-80/04-99
35 Pugnido 047-465-06-99
36 Reserve for Hira 047-211-19-02
37 Reserve IFB-Ashura 047- 223 - 05-19/05 - 26
38 Reserve IFB-Rayyan 047-221-26-90
39 Sadecha 047-211-30-41
40 Saglan Ilu 09-62-39-79-33
41 Saja 09-11-59-95-76
42 Seka Chekorsa 047-116-06-86
43 Shebe 047-118-07-75/89
44 Shenen Gibe 047-211-76-24/66-93
45 Shey Bench 047-777-04-46
46 Shishinda 047-668-0269
47 Sokoru 047-117-04-99
48 Tepi branch 047-556-34-89/35-66 047-556-2506
49 Toba 047-540-05-00
50 Wacha 047-338-04-75
51 Yayo 047-333-07-65/51/80
52 Yebu Branch 047-226-04-85/06-22 047-226-0560
12.West Region
60 Zumbara New
1 Afiya 046-237-0310/0390
2 Alaba kulito 046-556-0124/0224/0052 011-261-00-21
3 Amanah 046-556-1626/1625
4 Ameka 046-855-5546
5 Angecha 046-340-0666/0777
6 Arbaminch 046-881-2992/34/2376 022-242-00-42
7 Areka 046-552-1320/1321\1787 022-336-08-19
8 Birbir 046-452-0678/0466
Fax Remarks
S.N Branch Name Telephone Address
North Addis ababa Region
1 Ababil 011-126-47-63/66
South Addis Ababa Region
1 Ameen 011-380-5240 046-881-46-05
West Addis Ababa Region
1 Afdal 0112-73-31-01/02
2 Amal 011-273-55-24/23
3 Awelia 011-273-12-10/19-95
4 Khidma
5 Manal 011-369-50-84/58-12
6 Mu'amalat 011-369-78-15/16
7 Yusra 011-369-54-55/38-56
Adama
1 Kausar 022-238-31-47/50-87 New
2 Noor 022-111-27-79
3 Raji 022-212-07-92/10-86 New
Dessie Region
1 Akram 033-552-05-15/04-96 011-631-06-32
2 Afdera
3 Aflaha 0333518156/7905/6527
4 Fathi 033-312-79-81/85-93 011-260-11-33
5 Kebir
6 Mabrook 033-118-06-08/06-27 047-444-14-01
East Region
1 Barwako 025Ͳ278Ͳ53Ͳ91/92
2 Billal 025-466-41-76 New
3 Chinaksen 025-779-05-29/04-59
4 Daru Selam
5 Degehabur 025-771-06-48/49 0463-31-41-07
6 Huda 025-441-12-51/52 057-667-05-02
7 Qorahe 025-774-02-12
8 Mashraq 025-411-54-39/15-93 057-660-32-56
9 Naher
10 Taajir 025-466-80-74/09-46 New
South Region
1 Ansar
2 Bani New
3 Berekah 046Ͳ211Ͳ93Ͳ28/56Ͳ51
4 Ikram 022-336-07-95/09-84
5 Sefaw
6 Teqwa
North West Region
1 Nejashi 058-320-78-29/6312 057-666-01-52
Soth West Region
1 Ashura 047-223-05-19/26 New
2 Hira 047-211-19-02/21-64 0257-75-20-72
3 Rayyan 011-471-10-53/11-97
West Region
1 Ihsan
2 Naafii 0576609735
Wolaita Sodo Region
1 Afiya 046-237-03-10/ New
2 Amanah New
3 Imam 046-234-04-66 New
4 Mina 046Ͳ771Ͳ0875/0844