It appears the opening up of private commercial
banks is the order of the day. Little does it seem
to matter that the regulators have put the bar so
high that banks being established now have to raise
seven times more capital than the ones that opened
back in the 1990s.
The enterprising effort of setting up a founding
group, visiting the central bank in order to be
granted the permit to raise equity from the public,
and marketing the project idea has become all too
often a case. Not only in banking, but also in all
sorts of sectors. There are now close to 10 such
projects competing to raise close to one billion
Birr in capital, constituting 25pc of the loans the
banking sector advanced last year.
There are now initial offerings available from
Habesha Cement to Hagere Construction; from Messob
Foods to Sheger Taxi; and from Access Capital Real
Estate to Sky Bus; all are lined up in the
marketplace of equity. Add to these the number of
commercial banks in the pipeline from Brehan to
Buna. The latter has reportedly advanced well and
will soon open its door for business.
Nevertheless, regulators at the central bank have
declined to approve the appointment to the Board of
Directors of Kebede Temesgen, former chief of United
and Abyssinia banks, gossip disclosed. He was not
alone; Masetntu Feleke, a founding committee chair
of Buna, was not accepted by the central bank as he
is currently battling charges brought against him by
prosecutors for his alleged role in issuing
financial guarantee bonds while running Nile
Insurance as its CEO.
While Buna is dashing to launch operations, trekking
behind Oromia International Bank (OIB), another one
with a regional touch is being conceived: Debub
International Bank (DIB), gossip disclosed.
Indeed, its promoters, mainly Tsegaye Gebreweld,
manager of Ethio-Investment Promotion, would like to
stay away from regional association and are keen to
identify the word Debub (South) as only an
expression of direction, gossip heard. What stirs
curiosity among the grapevine is the type of people
he enlisted as a group of promoters, gossip
Gossip claims that Tilahun Abay, one of the longest
serving presidents of the state owned Commercial
Bank of Ethiopia (CBE), is one of the promoters.
Debub will become his second debut, following his
association with the Habesha Cement project.
However, Debub will be his first association with a
commercial bank after his release from jail last
year, after having spent five years behind bars
following accusations of policy breach while running
His prison fellow, Abate Kisho, former chief of the
Southern Regional State, is in the group of
promoters of Debub International Bank. After his
release, Abate resigned himself to the growing town
of the South, Hawassa, where he now runs a
bed-and-breakfast type of business which
incorporates 15 rooms, according to gossip.
Initiators of this bank are hoping that Abate's
popularity in the South could be an asset in raising
the required capital from potential subscribers from
the coffee endowed region of the South, claims