When banks publish annual reports, the headlines usually sound reassuring: assets up, deposits rising, digital users growing. But behind the glossy charts lies a more important question for the public: what do these numbers mean for your money, your business, and the wider economy?
Hibret Bank’s 2024/25 annual report offers a useful window into how Ethiopia’s banking system is adjusting to a tougher, more liberalized economic environment
Deposits Are Rising A Sign of Trust, Not Wealth
Hibret Bank closed the year with Birr 92.7 billion in deposits, up more than 24% from the previous year. On paper, this looks like strong growth. In reality, it signals something more nuanced.
For ordinary savers, rising deposits suggest that people still trust banks as a safe place to hold money, even as inflation and currency changes erode purchasing power. Much of this growth came from savings and demand accounts, not long-term fixed deposits an indication that customers prefer liquidity and flexibility over locking money away. And the bank locking in cheap deposits that pay low interest rates.
Loans Are Growing
Loans and advances rose to Birr 79.3 billion, a solid 15% increase which is below a credit cap set by the regulator for the year. This matters for businesses and job creation, but the details reveal how credit is actually flowing.
Most lending went to imports, manufacturing, exports, and transport, sectors critical for keeping goods moving and factories operating. Small and medium enterprises (SMEs) saw faster percentage growth, but from a low base. This means access to credit is improving, yet still not fast enough to meet the demand of growing businesses.
For entrepreneurs, the message is mixed: banks are lending more, but not to everyone.
Foreign Currency: Strong Earnings, Painful Adjustments
One standout figure is foreign currency earnings, which jumped 47% to $300 million. That helps Ethiopia’s chronic FX shortage and supports importers and exporters alike.
Yet the same FX liberalization that boosted earnings also hurt the bank’s profitability. When the exchange rate was floated, Hibret Bank recorded a Birr 3.76 billion loss due to mismatches between its foreign currency assets and liabilities.
For customers, this explains why banks have become more cautious, fees more visible, and approval processes stricter. FX reform is necessary but the transition is expensive.
Profit Fell but Survival Matters More
Despite higher revenue, Hibret Bank’s pre-tax profit dropped sharply to Birr 749 million, down more than 75% from the previous year.
This is not necessarily a red flag. It reflects the cost of adjusting to currency reforms, higher interest expenses, and regulatory provisioning. In today’s Ethiopia, staying profitable matters less than staying solvent, compliant, and trusted.
For depositors, the key takeaway is reassuring: the bank remains stable, well-capitalized, and operationally intact.
What This Means for You
- If you’re a saver: Banks remain safe, but returns are limited. Liquidity is being prioritized over long-term yield.
- If you’re a business owner: Credit is expanding, but banks are selective. Clean records and FX-generating activities matter more than ever.
- If you’re an investor or shareholder: Growth is real, but volatility is now part of the system.
The Bigger Picture
Hibret Bank’s report is less about one institution and more about Ethiopia’s banking sector learning to operate under market pressure. Liberalized FX, tighter regulation, and digital transformation are forcing banks to adapt quickly.
The era of easy profits is over. The era of disciplined banking has begun.