Zemen Bank has announced that it has reached the minimum paid-up capital requirement set by the central bank three years ahead of the deadline.
The bank's paid-up capital now stands at Birr 5 billion, reflecting a significant increase of Birr 1.36 billion or 37.2 percent compared to the previous year.
Zemen Bank's capital adequacy ratio currently stands at 27.8 percent, well above the minimum regulatory requirement of 8 percent. Â This capital position is a testament to the bank's financial strength and its ability to withstand external shocks, according to the Board of Directors.
During the current year, Zemen Bank's paid-up capital increased by Birr 1.3 billion, allowing the bank to surpass the minimum capital requirement of Birr 5 billion well in advance of the central bank's deadline.
"The confidence of our shareholders to further raise this capital to Birr 15 billion was demonstrated strongly by subscribing additional capital of Birr 9 billion to make the total subscribed capital Birr 14.17 billion by October 31, 2023," said Dereje Zebene, President of Zemen Bank. This substantial capital injection positions Zemen Bank to further strengthen its financial position and support its growth plans.
The huge expansion of capital, though feared to have an impact on shareholders' return, has no impact, reassured Ermias Eshetu, board chairperson of Zemen Bank.
"The Bank’s Earning per Share (EPS) stood at 43 percent, representing a sizeable return to our shareholders despite capital growth of Birr 1.3 billion during the fiscal year," Ermias said.
In addition to achieving the minimum capital threshold ahead of schedule, Zemen Bank has also experienced noteworthy growth in its overall deposit and loan disbursement.
By the end of June 2023, the bank's overall deposit reached Birr 37.08 billion, showing a substantial increase of Birr 10.21 billion or 38 percent compared to the same period last year.
During the reviewed period, Zemen Bank disbursed additional loans amounting to Birr 10.27 billion, meeting the growing demand for credit across various sectors of the economy, representing a remarkable increase of 48.6 percent.
Moreover, Zemen Bank's total income reached Birr 5.74 billion at the end of June 2023, marking an impressive growth rate of 39.7 percent.
While the bank's aggregate expenses for the fiscal year amounted to Birr 3.24 billion, higher by Birr 1.15 billion or 55 percent from the same period last year, it remained 4 percent lower than the planned figures for the period.
The bank's strong financial performance is further evidenced by its net profit of Birr 1.81 billion, surpassing that of the previous year by 23 percent.
- As part of its expansion strategy, Zemen Bank has opened 23 new branches across the country, bringing the total number of branches to 102.
