Commercial Bank of Ethiopia (CBE), Ethiopia's largest bank, announced that it has raised loan service charge rates to 9.8 percent, from the previous 8.63 percent.
Abe Sano, CBE's president, remarked that the raise in interest rates is aimed at balancing the income and expense rates of the bank. Mr. Abe noted that the bank's income has been increasing at a yearly average of 26 percent, against a 39 percent increase in expense during the past five years. The largest bank in East Africa, CBE has secured a profit of 7.4 billion birr ($184.45 million) during the past six months, its total assets now valued at 903.6 billion birr (over $22.52 billion).
The Commercial Bank of Ethiopia has an average borrowing interest rate of 14.5 percent, the president of the bank added, which he pointed out to be much lower than what is prevalent in the market.
While the increase in service charge averaged 9.8 percent from the previous 8.63 percent, some of those items that sustained the highest increases in service charge include merchandise goods (maximum 16.5 percent), microfinance (maximum 12.5 percent), condominium housing (12 percent), public enterprises (maximum 12.5 percent), corporate bonds (9 percent), coupon bond (10.5 percent), and merchandise goods that earn forex (9.5 percent, from 5.5 percent).