One of the youngest entrants into the banking industry, Addis International Bank, registered a net profit of 112.9 million Br, an 18pc increase from the previous reporting period.
Despite the moderate increase in profit, shareholders saw their dividend returns unmoved from two years ago, at 17pc par value.
"The surge in capital and the new reporting system contributed to earnings per share being stagnant," said Hailu Alemu, president of the bank.
Aiming to build up capital and a shareholder base, the bank sold shares in the reporting period and boosted its paid-up capital by 16.6pc to 710.45 million Br, reaching a capital adequacy ratio of 40.3pc.
The expansion in capitalization was accompanied by an increase in income from commissions and services, as well as significant earnings in interest on loans. Earned interest rose by 44.4pc, reaching 228.7 million Br and accounting for 60pc of total income.
The Bank disbursed 68.5pc of the 3.1 billion Br it mobilised. A third of that amount went to exporters, while 10pc was disbursed as loans to businesses in the manufacturing industry.
Abdulmenan Mohammed, a financial expert with over a decade and a half of experience, believes this is reasonable given manufacturers and exporters were exempt from the 16pc credit cap imposed by the central bank on lenders in the last fiscal year. The credit cap was implemented in a bid to counter inflationary pressure that may arise as a result of the devaluation of the Birr by 15pc against a basket of major currencies last year.
The cap was accompanied by a two percentage point increase on interest rate floors, bringing the rate to seven percent on deposits. This raised expenses on interest by 53pc, a 135.3 million Br increase as compared to the figures from two years ago.
The increase in expenses was not limited to deposit interest rates, however. Operational and administrative costs showed a jump of 18.6pc to 195.89 million Br.
"The increase was associated with salary adjustments and investment in new branches," Hailu says.
In the reporting period, the bank hired 85 additional staff, bringing the total to 516 employees, filling vacant positions at branches. Its total number of branches currently stands at 59.
Aside from human resources, the bank invested in information technology such as updating its core banking, agent banking and mobile banking systems.
Total assets - income, investments and liabilities - of Addis International Bank expanded by 22.5pc to 4.2 billion Br. Its liquidity level increased to one billion Birr, yet the ratio against its assets declined by three percentage points to 24.6pc.
"This level is much higher than what Addis needs for its operations," said Abdulmenan. "The Bank should use its capital efficiently."
Despite returns that remained unchanged, shareholders were impressed by the bank's performance in the period.
"Given the nation's economic condition, Addis's performance is satisfactory," said Shimelis G. Giorgis, one of 9,949 shareholders of the eight-year-old bank established in 2010 with a paid-up capital of 106.3 million Br.
The Bank needs to work more on building its brand by advertising more to broaden its clientele, suggested Shimelis, who has been a shareholder for three years.
The company invested 3.4 million Br on promotion, advertisement and brand building during the reporting period.