Commercial Bank of Ethiopia (CBE), was ranked 46th on the list of 2011's top 200 best performing African banks, compiled by The Africa Report magazine. The yearly list, published on the August-September 2011 issue of the magazine, indicates that CBE has dropped down five places from the previous year's rankings.
Other Ethiopian banks that made the top 200 list include Dashen Bank ranked 146th, Awash International Bank ranked 174th, and Bank of Abyssinia ranked 195, one spot above last year's rankings. Both Dashen and Awash have been bumped up three places from the previous year's list.
The list is compiled on a yearly basis using total assets. Net interest income, loans and deposits are also reported as indicator of bank performance. Data about these indicators was collected from 269 banks. Although the comparison is based on data from the 2010 financial year, the list has used data from 2009 for some banks, including CBE and the Bank of Abyssinia.
On the list, CBE's total asset was reported to be 4.6 billion dollars, with conversion rates applicable on December 12, 2010, used to determine the sum. The current sum posted on the banks website features 73.3 billion Br in total assets as of June 30, 2011.
This figure amounts to 4.4 billion dollars, if like The Africa Report, the conversion rate of December 12, 2010, is applied; and if the current conversion rate of one US dollar to 17 Br is used, CBE's total asset would be worth 4.3 billion dollars. If these total asset figures were put in the 2011 rankings, CBE would have been placed further down the list, ranked at 50th and 52nd place, respectively.
The Bank of Abyssinia, however, would have improved in rankings if the current worth of total assets is used. The list stated that Bank of Abyssinia had total assets worth 424.7 million dollars based on a 2009 report. The current total asset of Bank of Abyssinia is estimated to be around 7.3 billion Br, Aneteneh Assefa, vice president of the bank, told Fortune.
This would amount to 438.9 million dollars, using the conversion rate of the African Report, and 429.2 million dollars if current currency exchange rates are applicable. According to these new numbers the Bank of Abyssinia would have been ranked either in 19oth or 194th place, respectively.
Since the 2009 figure was used in order to rank the report, the ranking is not a fair indicator of the bank's performance, especially since 2010 figures were used for most other banks on the list, Anteneh explained.
Awash International Bank was happy about the improvement in rankings, said Tsehai Shiferaw, bank president. The bank has performed much better with this year's profits before tax amounting to over 500 million Br, he noted.
Ethiopia was hailed as one of the fastest growing economies by the World Bank, and CBE, Awash Bank, Dashen and Wegagen have reported that they have had a successful year, an indication that the sector is doing well. However, the list of top 200 banks shows that the country is yet to be strongly competitive in the banking sector on a regional and continental level. On the list, South African banks lead the pack, holding first to fourth place. North African countries like Egypt, Morocco, Algeria and Libya hold the following spots. Banks from Togo Angola and Mauritus were also placed before CBE.
The indicator used to compile the rankings does not show the whole picture, says Eyob Tesfaye (PhD), macroeconomic analyst.
"Using total assets as a performance indicator is not an adequate measure to analyse the position of a bank. There are other parameters such as capital adequacy, loan portfolio quality, availability of liquidity and rate of return on both assets and equity," he said.
If these parameters have been used, CBE would have performed much better in the rankings as other banks in the region are heavily influenced by the worldwide financial crisis which has affected their loan performance, the analyst said.
CBE has so far reported a very successful fiscal year, with profits amounting to 5.9 billion Br and a total deposit of 86.5 million Br.
Copyright © 2011 Addis Fortune. All rights reserved.
Other Ethiopian banks that made the top 200 list include Dashen Bank ranked 146th, Awash International Bank ranked 174th, and Bank of Abyssinia ranked 195, one spot above last year's rankings. Both Dashen and Awash have been bumped up three places from the previous year's list.
The list is compiled on a yearly basis using total assets. Net interest income, loans and deposits are also reported as indicator of bank performance. Data about these indicators was collected from 269 banks. Although the comparison is based on data from the 2010 financial year, the list has used data from 2009 for some banks, including CBE and the Bank of Abyssinia.
On the list, CBE's total asset was reported to be 4.6 billion dollars, with conversion rates applicable on December 12, 2010, used to determine the sum. The current sum posted on the banks website features 73.3 billion Br in total assets as of June 30, 2011.
This figure amounts to 4.4 billion dollars, if like The Africa Report, the conversion rate of December 12, 2010, is applied; and if the current conversion rate of one US dollar to 17 Br is used, CBE's total asset would be worth 4.3 billion dollars. If these total asset figures were put in the 2011 rankings, CBE would have been placed further down the list, ranked at 50th and 52nd place, respectively.
The Bank of Abyssinia, however, would have improved in rankings if the current worth of total assets is used. The list stated that Bank of Abyssinia had total assets worth 424.7 million dollars based on a 2009 report. The current total asset of Bank of Abyssinia is estimated to be around 7.3 billion Br, Aneteneh Assefa, vice president of the bank, told Fortune.
This would amount to 438.9 million dollars, using the conversion rate of the African Report, and 429.2 million dollars if current currency exchange rates are applicable. According to these new numbers the Bank of Abyssinia would have been ranked either in 19oth or 194th place, respectively.
Since the 2009 figure was used in order to rank the report, the ranking is not a fair indicator of the bank's performance, especially since 2010 figures were used for most other banks on the list, Anteneh explained.
Awash International Bank was happy about the improvement in rankings, said Tsehai Shiferaw, bank president. The bank has performed much better with this year's profits before tax amounting to over 500 million Br, he noted.
Ethiopia was hailed as one of the fastest growing economies by the World Bank, and CBE, Awash Bank, Dashen and Wegagen have reported that they have had a successful year, an indication that the sector is doing well. However, the list of top 200 banks shows that the country is yet to be strongly competitive in the banking sector on a regional and continental level. On the list, South African banks lead the pack, holding first to fourth place. North African countries like Egypt, Morocco, Algeria and Libya hold the following spots. Banks from Togo Angola and Mauritus were also placed before CBE.
The indicator used to compile the rankings does not show the whole picture, says Eyob Tesfaye (PhD), macroeconomic analyst.
"Using total assets as a performance indicator is not an adequate measure to analyse the position of a bank. There are other parameters such as capital adequacy, loan portfolio quality, availability of liquidity and rate of return on both assets and equity," he said.
If these parameters have been used, CBE would have performed much better in the rankings as other banks in the region are heavily influenced by the worldwide financial crisis which has affected their loan performance, the analyst said.
CBE has so far reported a very successful fiscal year, with profits amounting to 5.9 billion Br and a total deposit of 86.5 million Br.
Copyright © 2011 Addis Fortune. All rights reserved.
No comments:
Post a Comment