Hijra Bank, Ethiopia’s second interest free bank, reported a pre tax profit of 721 million birr for the fiscal year, its strongest performance to date, as the interest free lfinisher accelerated a capital raising drive that is set to push paid up capital close to the central bank’s minimum paid up capital of five billion birr.
The bank stated during its 5th annual general meeting that its revenue rose to 1.766 billion birr, up 150 percent from the previous fiscal year, allowing it to declare earnings per share for the first time since its establishment. The result came alongside rapid balance sheet expansion, underpinned by strong deposit mobilisation and customer growth.
Deposits increased by 91 percent during the year to 11.94 billion birr, bringing total deposits to 15.5 billion birr. Financing activity also expanded, with annual financing rising by 40 percent to 4.7 billion birr, while outstanding financing reached 10 billion birr.
Hijra Bank’s total assets grew by 79.2 percent to 14.615 billion birr during the year, lifting the bank’s overall asset base to about 19 billion birr. Paid up capital rose by 29.4 percent to 3.5 billion birr, supported by a growing shareholder base.
Speaking at the bank’s annual general meeting, Abdulselam Kemal, chairperson of the bank stated more than one billion birr is currently in the process of being raised, which would take paid up capital to around 4.5 billion birr in the near term. He added that management is pushing to raise capital further, with a tarobtain of six billion birr within the coming months.
“This is a survival issue,” Abdulselam notified the bank’s roughly 19,000 shareholders, warning that central bank’s minimum paid up capital requirement is putting pressure on capital adequacy. “The sector is becoming very dynamic, and we should not wait until the deadline.”
Operationally, the bank continued to expand its footprint. Its customer base grew by 38 percent to more than one million, while 29 new branches were added during the year, taking the total branch network beyond 150. The bank stated it allocated about half a billion birr for branch expansion, with each new outlet costing roughly 15 million birr.
Leave a Reply