CBE Posts Record Profit Despite Substantial Loss on Foreign Exchange

The state-owned Commercial Bank of Ethiopia (CBE) recorded strong profit growth and capital expansion for the fiscal year ending June 30, 2025, according to its audited financial statement released this week. The audit report—conducted by the Audit Service Corporation under International Financial Reporting Standards (IFRS)—was approved on August 10, 2026, and signed by Board Chairperson Ahmed Shide and CBE President Abie Sano.

The bank’s net profit after tax surged by 75.8 percent to reach ETB 38.71 billion, up from ETB 22 billion in 2024. Total interest income soared by 30.7 percent to ETB 132.06 billion, compared to ETB 101 billion in the previous year, while interest expenses grew by just 1.8 percent to ETB 45.31 billion. Non-interest income witnessed a staggering 77.5 percent increase to ETB 60.52 billion. However, staff and other operating expenses doubled to ETB 113.71 billion, reflecting significant operational cost pressures. Tax provisions stood unchanged at ETB 4 billion, and dividends paid dropped slightly from ETB 12.36 billion to ETB 11.55 billion.

A core driver of the bank’s bottom-line growth was a ETB 37.04 billion reversal of impairment losses on financial instruments, reversing a ETB 9.51 billion impairment provision maintained in 2024. London-based senior financial analyst Abdulmenan Mohammed (PhD), who closely follows Ethiopia’s banking sector, noted that “a closer look at the sources of this massive growth reveals mixed results,” highlighting that “the reversal of the provision for assets impairment is one of the most important factors for the Bank’s current year improved performance.”

The macro environment also impacted performance, as CBE recorded a loss of ETB 36.71 billion on foreign currency transactions for the period ending June 2025. This compares to a ETB 2.2 billion foreign currency gain in June 2024. According to Abdulmenan, “this loss must have been related to the introduction of a market-based foreign exchange regime by the end of July 2024.”

CBE’s total assets expanded by 49 percent to ETB 2.31 trillion, up from ETB 1.5 trillion in 2024, while liabilities grew from ETB 1.4 trillion to ETB 2.1 trillion. Abdulmenan explained that the asset growth was “mainly attributable to the substantial increase in cash and cash equivalents and debt and equity securities.” Cash and cash equivalents surged by 119.3 percent to ETB 424.52 billion, which he suggested “must have been mainly due to the addition of huge deposits arising from the National Bank of Ethiopia’s massive gold purchase programme.” Total deposits expanded by 44.1 percent to ETB 1.695 trillion, while loans and advances grew 22.5 percent to ETB 516.22 billion—a notable expansion despite a tight monetary policy environment. Investment in debt and equity securities jumped 45.6 percent to ETB 1.115 trillion, though Abdulmenan noted he could not verify specific growth drivers due to a lack of itemized breakdowns in the report.

The state bank also registered a significant capital expansion, with total capital rising to ETB 154.2 billion from ETB 40 billion in 2024. Examining this jump, Abdulmenan pointed out that a ETB 54.7 billion increase stemmed from bonds issued when the Ethiopian government enacted legislation to take over bad debts of state-owned enterprises, echoing a prior recapitalization approach. He added that the remaining capital enhancement most likely originated from World Bank financing support.

Although key financial disclosures were made public, CBE did not publish the full notes accompanying the auditor’s report, leaving specific interest streams and impairment details unverified.