Ethiopia’s banks pushed to bulk up before market opens

By Hawi Dadhi
Posted on Wednesday, 22 June 2022 12:13, updated on Thursday, 7 July 2022 16:12

A client uses an automated teller machine (ATM) at the Commercial Bank of Ethiopia in Addis Ababa
A client uses an ATM at the Commercial Bank of Ethiopia in Addis Ababa, Ethiopia, July 31, 2019. REUTERS/Maheder Haileselassie Tadese

The Ethiopian Central Bank warns it will continue to push up minimum capital requirements. The goal: force local banks to be competitive, as the gradual opening up of the sector continues. With Ethiopia's finance sector posting the best returns on equity in the region, investors are watching and waiting.

When the state-owned Commercial Bank of Ethiopia, which has over $16bn in assets, inaugurated its new high-rise HQ in February this year, Prime Minister Abiy warned the financial sector would not remain closed for long.

“The protection provided for the past 30 years will not be any longer,” said the prime minister addressing local banks “As we will open up to the world, you should ready yourselves.”