In a recent turn of events, Amhara Bank has removed its president, Mr. Henok Kebede, from his position.
The decision was made by the bank’s Board of Directors, citing Mr. Kebede’s responsibility for causing a substantial loss of 460 million birr to the institution. This move comes on the heels of Mr. Henok Kebede’s resignation as the CEO of Amhara Bank.
The Board of Directors took the unprecedented step of revoking the signatures of the CEO and the Chief Corporate Service Officer, Mr. Henok Kebede. This action was taken in response to what the chairman of the bank’s board described as a demonstrated weakness in their performance.
The bank announced that, the decision was reached after an evaluation of the senior officers, revealing a consistent failure to meet the bank’s strategic goals and key performance standards since their appointment.
During the fiscal year 2022/23, despite projections of a profit exceeding 306 million birr, the bank instead recorded a substantial loss of 460,286,000 birr.
The resignation of Mr. Henok Kebede was attributed, in part, to an administrative decision he made without proper authority. This decision involved the payment of over 89 million birr, depleting the bank’s capital and contributing to its overall poor performance.
To fill the void left by Mr. Henok Kebede, Mr. Chanyalew Demise, currently serving as the senior manager of banking services, has been appointed as the interim CEO.
Mr.Henok Kebede, a graduate of London’s Norwich University, previously held senior managerial positions at Commercial Bank of Ethiopia and Dashan Bank. He served as the first CEO of Amhara Bank, which was established with a paid-in capital of 5.9 billion birr, for tenure of two years.
Amhara Bank, distinguished as the first bank in Ethiopia in terms of the number of shareholders, has expanded its branches and customer base significantly in recent years.
The bank’s unexpected financial setback contrasts with the typical profit-oriented performance of Ethiopian banks, raising concerns within the financial sector.
Ahadu Bank, another private bank, has also reported a loss of 267 million birr. Despite this setback, the bank aims to achieve a profit of 300 million birr in the coming year.
The occurrence of losses in these banks, considered outliers in the industry, has prompted both institutions to seek new leadership. However, the appointment of new presidents for Amhara Bank and Ahadu Bank is yet to be announced.
Ethiopia, which has not yet permitted foreign banks to operate within its borders, has recently hinted at the possibility of allowing entry starting in 2024. This potential shift follows a directive from the National Bank urging local banks to prepare for increased competition from foreign entities.
The announcement coincides with a challenging period for the banking sector, as two years ago, Wegagen Bank and Anbesa International Bank faced bankruptcy during the conflict in northern Ethiopia. Remarkably, both banks have since managed to recover from their losses.
