In a remarkable achievement, Goh Betoch Bank, Ethiopia's first private mortgage bank, has announced that its loan book has exceeded the billion birr mark, underscoring its rapid growth within a short span of time. However, an unexpected trend has emerged as commercial loans dominate the bank's portfolio, deviating from its original mission.
According to the audit report presented at the bank's second general annual assembly, Goh Bank disbursed an impressive 1.3 billion birr in loans during the last fiscal year. This achievement is all the more significant considering that the bank was established just two years ago with a paid-up capital of 850 million birr. Goh Bank has become the sole private mortgage bank in Ethiopia, filling the void left by the closure of the state-owned mortgage bank in 2016.
While Goh Bank's loan disbursements have soared, it is worth noting that commercial loans have emerged as the dominant component of its loan portfolio, accounting for 50.8 percent of the total loans. This deviation from its original focus on mortgage financing raises questions about the bank's adherence to its core mission.
On the deposit side, Goh Bank has witnessed substantial growth, with outstanding deposits rising from a quarter of a billion birr to an impressive 912 million birr during the last fiscal year. Notably, approximately 70 percent of the depositors are individuals seeking mortgage finance, indicating a strong demand for such services in the market.
Financially, Goh Bank has demonstrated impressive progress. Total income has surged to 212.6 million birr, representing a remarkable 74.7 percent increase compared to its first year of operation. However, expenses have also grown substantially, rising by 81 percent to 206.2 million birr. This surge in expenses can be attributed to factors such as increased overhead costs, including rent for new branches, furniture purchases, and an expanded workforce.
Addressing the shareholders at the assembly, Getahun Nana, the Board Chairman of Goh Bank, acknowledged the challenging environment in which the bank operated during the previous fiscal year. Getahun pointed to the impact of civil unrest, foreign exchange shortages, double-digit inflation, and the global economic slowdown as significant hurdles that affected the bank's operations.
Despite these challenges, Getahun said “it remains committed to its mission of providing financial services to a wide range of customers.”
Currently operating nine branches with a workforce of 150 employees, the bank aims to continue serving its expanding customer base with new mortgage offers.
With its paid-up capital now approaching the two billion birr mark, Goh Betoch Bank is poised to strengthen its position as a major lender in Ethiopia's banking sector.