|
|
Ethiopia: NBE Forces Access to Change to Zemen Bank
 |
|
|||||||||
|
||||||||||
Addis Fortune (Addis Ababa)
17 December 2007
Posted to the web 18 December 2007
Michael Chebud
Addis Ababa
Access Bank S.C. is now Zemen Bank SC. The embattled start-up that aspires to be Ethiopia's only single-branch bank changed its name this week in the latest of several delays to its opening.
The bank, which before two months had been told by the National Bank of Ethiopia (NBE) to re-christen itself, submitted its new name last week on Friday, December 14, eight months after it began its campaign to court investors.
The NBE told the bank's founders that 'Access' was an unacceptable name because a Nigerian Bank exists with the same designation.
According to a banking industry observor, this could have created confusion in the case that the local bank opens a corresponding account with its foreign namesake. Zemen bank's lead promoter, Ermyas Tekil Amelga, declined to comment.
"The Nigerian Bank could also sue the NBE had the name been approved," the observor said.
Nevertheless, there are local banks that have nearly identical names to foreign banks: Ethiopia's United Bank S.C. and United Bank Ltd of Palestine, for example, or locally-based Lion International Bank S.C. and Lion Bank of Nigeria Plc. Access, however, exactly matches its Nigerian counterpart.
Critics are also taken aback by the bank's decision to adopt a trademark with an image of a hut that resembles the trademark of Nigeria's Access Bank.
Nonetheless, Access Bank's executives have finally settled for 'Zemen,' literally translated to 'Era' in Amharic, after a prior suggestion for replacing 'Access' was rejected by the regulatory authorities. 'Zemen' seems to have satisfied both the founders and executives at the NBE, sources disclosed.
Since promotions were launched in April 2007, Zemen has been going through ups and downs. Its fast paced shareholders registration process was put on hold at the Public Notary Office two months ago on the ground that the NBE has not given it a green light. Before shareholders of new banks put their signature at the office, the NBE has to send the memorandum of association and article of the association to the office approving it first.
Though having an acceptable name is a major breakthrough for the bank, it has yet to be given its business license as it has to fulfil further requirements by the NBE.
Setting up its promotional office around Wollo Sefer, Bole District, the bank has fulfilled the threshold capital requirement set by the NBE with 2,700 shareholders.
Lead by Ermias, who returned to Ethiopia in 1996 after 12 years of banking experience in the US, the group of entrepreneurs promoting access bank envision putting the country's banking business in a different level. The future Zemen hopes to garner exceptional returns introducing a new concept in the banking business.
Despite scepticism among some bankers over its long-term feasibility, the bank plans a strategy of providing banking services with only a single branch, which is unprecedented in Ethiopia.
Some, however, contend that an increase in branches does not guarantee a bank will be profitable.
"What matters is the quality of the service that this bank provides with its single branch," Elias Loha, reserve management and foreign exchange department head at the NBE, told Fortune. "The bank can make profits in billions if it is competent enough to attract clients from all corners."
Zemen will enter a financial market that has been delivering leaps in profit to nearly every financial service provider. Following the financial liberalisation of the mid-1990s, Ethiopia's banking system is portrayed as one of the sources of the country's economic growth, though non-performing loans remain a cause for concern.
|
Zemen is one of five new banks - Buna International Bank, Oromia International Bank (OIB), Berhan International Bank and Zamzam International Bank - hoping to tap into the record profits being made in the financial industry. The NBE has given a green light for these entrants to publicly sell shares in a bid to meet the minimum capital requirements, as Zemen has done.
| |||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Copyright © 2007 Addis Fortune. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Make allAfrica.com your home page | RSS Feed | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Top | Site Guide | Who We Are | Advertising | Search | Subscribe | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| Questions or Comments? Contact us. Read our Privacy Statement. | |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
