Zemen Bank’s net profit doubled from 29 million birr to 63.5 million birr in the last fiscal year.

Zemen Bank disbursed 633.7 million birr in loans to its customers. Loans to medium and long-term projects amounted to 53 percent of the total loans disbursed.

Although the bank increased loans disbursed to its customers by 67.6 percent, its loan-to-deposits ratio remained at 55 percent, the same as that of the year before. 

The bank collected 60.6 million birr in interest income probably because it increased its interest rate on deposits from 4.5 percent to 5.5 percent, following the central bank’s move to increase the minimum interest rate from four to five per cent in December 2010.

Last fiscal year, Oromia International Bank and Cooperative Bank of Oromia collected 95 million birr, and 62 million birr as interest income, respectively; as much as 50 percent of their operating income.  

Zemen Bank says that its major source of income is not interest on loans. According to the senior manager, the bank largely depends on the areas that are related with foreign currency dealings and services related to import and export.

The largest revenue came from service fees charged on trade operations and gains from foreign exchange related operations, which brought in 87.4 million birr and 65.6 million birr, respectively.

Source: Fortune