ADDIS ABEBA – The Commercial Bank of Ethiopia (CBE) has made loan service charge rates adjustment from the previous 8.63 percent average rate to 9.8 percent, the Bank announced on Friday.
The interest rates adjustment is aimed at balancing the unbalanced income and expense rates of the bank, Abe Sano, President of CBE, told reporters .
The income of CBE is growing with an average of 26 percent rate, while its expense is growing by 39 percent during the last five years, he added.
The borrowing rate of Commercial bank of Ethiopia is much lower that the market borrowing rate, which is an average of 14.5 percent, the president claimed.
The bank has made service charges adjustment to an average of 9.8 percent from the previous 8.63 percent rate, including for merchandise goods (maximum 16.5%), micro finance (maximum 12.5 %), condominium house (12% percent), public enterprises (maximum 12.5%), corporate bond (9%), and coupon bond (10.5 %), among others.
The bank also improved the loan service charges on merchandise goods that earn foreign currency from 5.5 to 9.5 percent.
The latest move is expected to increase the revenue of the Bank which secured 7.4 billion Birr profit in the first half of the 2020/21 fiscal year. The state-run bank currently has assets worth 903.6 billion Birr.