Nib International Bank S.C. announced a 2.9 billion Br loss at its annual shareholders meeting, mainly due to foreign exchange revaluation losses amid Ethiopia's economic reforms. The bank also paid 348.4 million Br in penalties for liquidity issues and payment violations. Despite settling major debts, mismanagement from previous leadership exacerbated the financial strain.
During its annual shareholders meeting on Saturday at the Millennium Hall on Africa Avenue, Airport Road, Nib International Bank S.C. (NIB) disclosed a significant net loss of 2.9 billion Br for the fiscal year. This figure was largely driven by extraordinary foreign exchange revaluation losses totaling 4.4 billion Br, resulting from the Birr's depreciation against the US dollar under government-led economic reforms. The currency at times fell to three times its previous value during key debt settlements, wiping out potential profits of 1.5 billion Br.
The bank also incurred penalties of 348.4 million Br, which it has fully settled. These included a 251 million Br fine for liquidity shortages and a 97.4 million Br charge for violations in Real-Time Gross Settlement (RTGS) payments. Previous management contributed to the crisis by issuing Letters of Credit worth over 80 million dollars without adequate foreign currency reserves. This led to difficulties in meeting international obligations, eroding trust with foreign banks and causing many institutions to reject NIB's guarantee documents.
Despite these setbacks, NIB made progress in the recent fiscal year by settling long-standing foreign currency debts. This encompassed obligations to the Ethiopian Shipping & Logistics, fuel Letters of Credit for the Ethiopian Petroleum Supply Enterprise, and guarantees to HAWK International Finance & Construction Co. Ltd. A mismatch between the bank's foreign currency assets and liabilities further amplified the financial pressures, highlighting ongoing challenges in Ethiopia's banking sector amid currency fluctuations.