The Commercial Bank of Ethiopia (CBE) is in the process of establishing an investment bank, a move aligned with recent regulatory changes aimed at fostering growth in Ethiopia’s financial sector. This initiative is being coordinated with the involvement of Mr. Zemedeneh Ngatu, an experienced investment consultant and managing director of Fairfax Africa Fund.
Regulatory Changes Enable New Opportunities
The establishment of the investment bank follows the repeal of a 2017 directive that restricted commercial banks from participating in various investment sectors. The annulment of this directive on July 23, 2024, and subsequent provisions in the Capital Market Proclamation now permit commercial banks to own full stakes in non-credit institutions such as investment banks. This regulatory shift is part of broader efforts to build a capital market infrastructure in Ethiopia.
Investment Banks and Their Role in the Economy
Investment banks are central to capital markets, offering advisory services to businesses, start-ups, and other organizations seeking to raise funds. They also act as intermediaries in the issuance and sale of shares, facilitate mergers and acquisitions, and provide consulting services. Their revenue comes from fees generated through these services, making them key players in financial ecosystems.
No Comment Found.