ADDIS ABABA – Lion International Bank (LIB) has reported a 336 million Birr drop in annual gross profit owing it to the impacted of security situation in Northern Ethiopia.
In its annual report, the Bank said has secured 414.1 million birr profit before tax the end of the budget year as compared to the 780.6 million birr in the previous year.
“The outbreak of conflict in the northern part of the country rendered almost all branches in the region remain dysfunctional,” writes Dr. Gebrehiwot Ageba, chair of the bank’s board of directors, on the report.
He also said many branches have been looted and damaged, “causing immense financial damage”.
“Many of our borrowers also have their businesses affected, hence remain unable to repay, with consequences on bad debts and losses,” he said. “These, together, significantly impacted the performance of the Bank during the reporting period.”
In the concluded budget year, the LIB report shows it has dispersed loans and advances of Birr 5.4 billion, showing a 14.6 percent increase as the preceding Year.
This has pushed the outstanding loan balance to 21.8 billion birr while its total non-performing loans to total loans ratio grew higher than 5% threshold set by the national bank and the industry average.
The Bank’s total capital and reserve, however, grew to 3.6 billion birr from the previous year’s 3.5 billion birr, while its paid-up capital increased by 16% to reach 2.5 billion Birr.
At the end of June 30, LIB’s total assets has also increased by 1.3 percent compared to the previous year and reached 32.2 billion Birr. The Bank also opened 13 new branches in the budget year, taking its total branches to 276.
Overall, Gebrehiwot told stakeholders of the bank thag the performance could be considered as encouraging, given that the “extraordinary challenges” it encountered last year.