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Annual Report 2021
Annual Report 2021
The global macroeconomic envi- There have been scores of impactful initiatives undertaken by the Bank
ronment we passed through all last during the year which meaningfully supported its continuous strive
year had been punctuated with the to offer improved services to its esteemed customers. Revision and
three-wave impacts of the corona implementation of a new organizational structure, upgrading of the
virus which has not only inflicted Core-Banking system, design and implementation of a competitive pay
wide ranging damages across the scheme, finalization of the contract agreement for construction of the
globe but also forced us into adopt- Bank’s Headquarters building can be mentioned among them. These
ing a new way of life. Enduring its wide-ranging endeavors of the Bank had also been reinforced with a
sever impacts as it robbed us of our strong risk management and compliance practices which were under-
loved ones, damped business and taken all year through. The Bank has also been an active participant in
sent families into solitude, it now ap- several CSR activities lending a hand to various nationwide initiatives.
pears that, with invention of and more Looking ahead, as we conclude the just ended fiscal year with all of us
access to the vaccine, the world is gradually coming out of the dark as a nation still to work toward creating a peaceful and stable Ethiopia,
casted by the horrible pandemic albeit in a divergent mode of recovery. and fight against the rise of the ‘third wave’ of COVID-19 which togeth-
IMF’s report labeling part of the year (well into November 2020) as “a er are poised to impact our national growth trajectory, we shall remain
year like no other” says it all about the massive consequences it has resilient and hopeful to come out at the top of our challenges and stay
witnessed. on course to yet again register commendable achievements. Despite
facing headwinds of various forms, our Bank is determined to perform
Almost in a largely similar fashion, the situation in our country had not even better by working to reinforce its growth strategy through enhanc-
been any different. Our country got into an unavoidable war in a mis- ing its organizational capability and level of execution with the help and
sion to inforce law and order in the northern parts of the country and support of all its stakeholders as well as entire Bank’s community.
this, coupled with the repressive impacts of COVID-19, has contributed
toward a stalled economy and a general slowdown in business. The I would like to congratulate the Board of Directors, shareholders, the
economic activity had been hit hard by the slowdown and particularly Bank’s management team as well as the entire staff for the hard work
hotel and tourism, as well as transport sectors were significantly affect- and effort exerted toward this year’s delightful achievement. I would
ed. also like to take this opportunity to acknowledge the positive impacts
and interventions made by the National Bank of Ethiopia in navigating
Just at the close of the fiscal year, the Banking sector has seen a new the industry toward a stable and safe banking environment. My sin-
bank join the industry in the name of a full-fledged Interest Free Bank. cere appreciations also goes to our customers and the entire business
This is known to be tip of the iceberg as there are already well over community who worked with us all year long and helped us serve them
20 others in their formation stages a few of which are finalizing their better.
licensing requirements. It is also in this reporting period that the regu-
latory organ markedly rose the minimum capital requirement necessary
to establish a bank. The government has also successfully undertaken
the initiative to change the national currency notes with new ones in Thank you,
this fiscal year. The intervention had been a positive contribution and
opportunity to the entire sector as money in banks increased markedly
and improved security and control was possible by the government.
Abay Bank decorated its tenth year anniversary with a remarkable per-
formance. The Bank’s achievements against all known industry KPIs
had been impressive. Its performance in resource mobilization had
seen its total deposits grow by 49% hitting as high as Birr 23.9 billion as
at end of the fiscal year. The financing side had an all the more striking Ethiopia Tadesse
growth with total loans and advances expanding by 72% year-on-year. Chairperson, Board of Directors
Abay Bank SC
The Bank was also able to attract and keep its happy customers which
grew by about 46% to reach well above 1.2 million. It has also mark-
edly expanded its service outlet by opening 63 new branches across
7
ABAY BANK S.C
I am delighted to present to you Our branch expansion efforts in the year which resulted in opening of
our Bank’s annual performance 63 new branches across the country and various other corporate as
report as I walk you through well as branch level initiatives helped our Bank achieve great results
the salient aspects and devel- in mobilizing deposits which stood at Birr 23.9 billion by the end of
opments that have happened the fiscal year, witnessing a 49% growth year-on-year. The Bank also
over the fiscal year. continued to finance various economic sectors growing its outstanding
Over the past fiscal year, the loans by Birr 8.4 billion and recording a 72% expansion which put the
COVID-19 pandemic continued total amount at Birr 20.1 billon by the close of the fiscal year. The per-
to be the forerunning agenda formance in profits before tax which hit Birr 1.15 billion had, as a result,
on the global stage as it caused been an encouraging one with a record 80% year-on-year growth.
a world-wide health and eco-
nomic crisis unprecedented in Our Bank has also been strengthening its risk management and compli-
scale and impact. The world ance functions through raising awareness and by successfully running
output (GDP) growth had been and deploying an advanced AML/CTF system. In terms of discharging
negative at 3.1% for the fiscal its corporate social responsibility, our Bank has also made marked in-
year with all advanced econo- volvement in several interventions contributing well over Birr 35.5 mil-
mies as well as emerging mar- lion during the fiscal year.
kets and developing economies
registering a much reduced produce. Nevertheless, the year had also While we concluded a largely fruitful fiscal year in the just ended FY
been regarded as one that has seen the fastest of recoveries ever over 2020/21, the challenges awaiting us ahead appear quite formidable.
quite a long time leading to a growth projection of as high as 5.6% in The new fiscal year starts with a yet again another wave of corona virus
2021. The recovery driven by and largely attributable to the unequal infection spike aggravated by the new delta-variant. We also hope that
yet steady distribution and access to the vaccine, thus, seems to have the peace and security of our country would improve and the economy
concentrated only in few advanced economies while emerging markets would rebound with better employment opportunities, lessen inflation
and developing economies are lagging way behind. and trigger savings. As we navigate through the challenges and har-
ness all opportunities the prevailing environment could possibly offer,
According to the World Bank Report 2021, COVID-19 had been spread- we would strive for better results with the help and support of our cus-
ing in the sub-Saharan Africa more slowly than initially expected re- tomers, shareholders, employees and all stakeholders.
sulting in less contraction in GDP while growth in agriculture and com-
modity prices were strong. In Ethiopia, the pandemic also left it late to I would like to extend my appreciation and gratefulness to all employ-
spread gradually and inflict the death tolls putting the country among ees and management staff as well as the Board of Directors for their
the four most affected countries in Africa (Africa-CDC). No sooner had efforts in contributing toward Abay’s achievements. Needless to men-
the 2020/21 fiscal year ended than the third-wave erupted with the tion, our customers have been the strongest source of our success and
spread of the new delta variant which since then claimed quite many we shall pay them back with unmatched service they deserve. I would
lives. The impacts of the pandemic on the economy had been severe as also like to thank our shareholders, the National Bank of Ethiopia as
it crippled business and created a marked slowdown in economic activ- well as other stakeholders for supporting us undertake our activities.
ity. Unfortunately, the economy had also to suffer from the unavoidable
war that our country got into in order to restore law and order in north-
ern region since back in November 2020. Still, the Ethiopian economy
managed to grow by 6.1% in the year under review withstanding stagna- Thank you
tion in large economic sectors such as transport, and hotel and tourism.
The annual headline inflation had also been in double-digits throughout
the year. These unfavorable developments, however, couldn’t deter a
20.9% national savings in the reporting period.
8
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
16,099
11,754
11,598
9,566 7,711
6,003
6,792
4,274
3,333 2,711 2,711
2,628
2,016
Total Operating Income (In Million Birr) 3,411 Gross Profit (In Million Birr) 1,153
2,088
683
1,837
640
1,316
419
872
249
2016/17 2017/18 2018/19 2019/20 2020/21 2016/17 2017/18 2018/19 2019/20 2020/21
29,999 2,813
Total Asset (In Million Birr) Paid-up Capital (In Million Birr)
2,171
20,204
1,671
15,106
1,325
12,325
1,000
8,624
2016/17 2017/18 2018/19 2019/20 2020/21 2016/17 2017/18 2018/19 2019/20 2020/21
1,201,319
3,928
3,284
2,689 824,890
2,534
624,566
475,386
337,120
2016/17 2017/18 2018/19 2019/20 2020/21 2016/17 2017/18 2018/19 2019/20 2020/21
223 4,189
192 4,158
162 4,080
144 3,929
2016/17 2017/18 2018/19 2019/20 2020/21 2016/17 2017/18 2018/19 2019/20 2020/21
9
ABAY BANK S.C
Top Management
10
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
ዓመት
11
ABAY BANK S.C
12,076 The Bank’s prudent financing practices kept its NPL rate
far below the regulatory requirements, and its book of
4,963 2,957
891 1066
records exhibited a good quality of assets as usual.
15
ABAY BANK S.C
Note: Others include consumer loans, Hotel & Tourism, mines, power and Water resource, and Agriculture.
16
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
1.1.3. International Banking Operations penses took a share of 5% of the aggregate expenses.
Despite the impact of COVID-19 on international trade
and remittances coupled with the lack of western-based 2259
correspondent banking relations, the Bank’s foreign
currency generation has registered a growth of 27% 1448
operating globally. Figure 5: Performance of Major Expense category (in million Birr)
Interest Income Figure 6: Performance of Major Expense category (in million Birr)
72%
17
ABAY BANK S.C
18
22
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
23
ABAY BANK S.C
23
24
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
25
ABAY BANK S.C
26
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
27
ABAY BANK S.C
28
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
32 to 61
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30
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ABAY BANK S.C
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ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
33
ABAY BANK S.C
34
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
35
ABAY BANK S.C
36
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
37
ABAY BANK S.C
38
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
39
ABAY BANK S.C
40
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
41
ABAY BANK S.C
42
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
43
ABAY BANK S.C
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ABAY BANK S.C
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ABAY BANK S.C
48
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
49
ABAY BANK S.C
50
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
51
ABAY BANK S.C
52
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
53
ABAY BANK S.C
54
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
55
ABAY BANK S.C
56
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
57
ABAY BANK S.C
58
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
59
ABAY BANK S.C
60
ዓባይ - ታማኝ አገልጋይ!
Abay : The Trustworthy Bank !
ANNUAL REPORT 2020/21
61
ABAY BANK S.C