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Oromia Int’l Bank Posts Record-High Profit from Islamic Banking

Oromia International Bank (OIB) earned ETB217 million profit from interest free banking services (IFB) in the past fiscal year. While this is the highest amongst all private banks that provide IFB services, it is 22Pct higher than 2017/18 financial year. Being the first private bank to provide IFB service, OIB’s IFB window generated a total income of ETB244 million in 2018/19, a nine percent rise compared to the preceding fiscal year, while its total expense of the same window declined by four percent to ETB27 million.

In aggregate, the Bank registered a one billion Birr gross profit from both conventional and IFB services in the past financial year. This is six percent higher than the amount recorded during 2017/18 fiscal year. The Bank also posted a better profit compared to its peers in this regard. While Nib Bank registered a ETB 928 million profit, Wegagen grossed ETB735 gross profit during the same period. However, Oromia registered almost the same profit with Bank of Abyssinia.

Despite witnessing a higher growth in profit, the earnings per ETB1000 share of OIB declined from ETB525 to ETB374. This is justified by the rise in paid up capital of the Bank, which has reached ETB2.3 billion as of June 30, 2019 from being ETB1.6 billion during the same period last financial year.

Abie Sano, President of the Bank, applauded his employees for outstanding performance the Bank achieved last fiscal year, despite facing different challenges that are existed to date. “During the reporting period, OIB has yet again registers positive results withstanding the ever growing industry competition and the difficult business environment,” Abie said.

“Despite the applauded  significance of Ethiopia’s aggregate economy in the region, which is attained by successive average double digit growth over the past decade, the chronic forex shortage, the still unsettled public unrest, the inflationary pressure and unemployment were shadowing the huge efforts being made by the government under new leadership.”

OIB registered a total income of ETB3.2 billion in the past fiscal year, a 31Pct increase compared to 2017/18, while the Bank’s total expense grew by 46Pct to ETB2.2 billion. The jump in the growth of the Bank’s expense is largely attributed to a surge in interest and administrative expenses of the Bank, according to Abie.  The Bank also mobilized a deposit of ETB26.6 billion in the past financial year, showing a 33Pct growth, while its loans showed a 50Pct growth to ETB17.4 billion. Founded a decade ago, OIB’s total assets also grew by 34Pct to ETB32 billion as of the end of last fiscal year. It currently has more than 1.3 million depositors.

Samson Berhane

Editor-in-Chief samson.b@ethiopianbusinessreview.net


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