Zemen Bank's Profit Grew by Two Million birr

Zemen Bank, the youngest but one of the prominent financial firms in the country, has registered two million birr more in profit in the 2011/12 fiscal year than the preceding year.

The bank, which joined the financial market three years ago, has registered 123 million birr in profit before taxes in the last fiscal year, while Zemen’s profit in the 2010/11 fiscal year was 121 million birr before taxes.

According to the statement of the bank, the net profit after tax is 86 million birr and for the second year straight, the bank delivered 58 percent earning per share in returns to its shareholders. In the 2010/11 fiscal year the bank’s net profit after tax was 84.7 million birr, which is 1.3 million birr less than the 2011/12 fiscal year.

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Ermias Eshetu, Vice President of Marketing and Corporate Services of Zemen Bank, informed Capital that, though the bank’s profit growth is slower compared to its previous year’s profit performance, the bank’s investment and capital has been tied up in provisional investment costs of the construction of its future head quarters and the National Bank of Ethiopia (NBE) bonds.  

In the last fiscal year the bank has purchased half a billion birr worth of bonds from NBE and settled compensations and other land deal duties for the plot of Zemen’s 33 storey future headquarters which will be located in front of Addis Ababa University School of Commerce.   
According to the bank’s report, deposit mobilization has grown significantly in the last fiscal year. The statement indicated that it has grown by 54 percent, rising from 1.162 billion birr to 1.792 billion birr, while gross loans surpassed the 1 billion birr mark in June 2012 compared to the 645 million birr a year earlier. Foreign exchange inflow collected by the bank rose to 15 million dollars per month and showed a 24 percent increase from the previous fiscal year. 

The statement of the bank indicated that Zemen Bank attributes its continued strong financial and operational performance partially to its unique business model which relies mainly on a single branch whose activities are supplemented by multiple service points such as ATMs, Internet Banking, Foreign Exchange Bureaus, and Banking Kiosks.  

This distinctive business model has facilitated the rapid introduction of innovative banking services and allowed for low overhead costs, without impacting the Bank’s deposit-taking, lending, and international banking activities.    
According to the report, the rollout of non-branch service centers expanded in 2011/12 and the bank’s six specialized Banking Kiosks are now mainly serving dedicated corporate clients. Usage of other service delivery channels such as ATMs, Internet Banking, and Corporate Payroll services were also expanded. 

Zemen Bank’s ATMs are now being used by over 12,000 customers every month who make over 19 million birr in monthly cash withdrawals and internet banking, which is being utilized by over 3700 customers per month to fulfil their banking needs, including electronic fund transfers to other accounts. The bank’s specialized corporate payroll service benefits over 12,000 employees, ranging from field workers at the nation’s largest commercial farms, to the staff of embassies and international organizations within Addis Ababa. 
In the current fiscal year, the bank is working on several on-going and soon to-be-launched initiatives, including an increase in the bank’s paid-up capital, an expansion of the bank’s unique “Doorstep Banking” services, whereby the Bank delivers or picks up cash from corporate clients who are signed up for the service, and the launch of a mobile banking service, dubbed ‘Z-Birr’, that is to be available to all mobile phone users (pending NBE approval).