Addis Ababa – Nib International Bank S.C. has reported a significant pre-tax loss of 2.9 billion birr for the fiscal year ended 2017, marking one of the largest annual losses recorded in Ethiopia’s private banking sector.
In its latest annual report, the bank attributed the loss primarily to a foreign exchange (FX) revaluation adjustment of 4.4 billion birr, a direct consequence of the Ethiopian government’s recent decision to unify the country’s multiple foreign exchange markets.
According to the report, the loss does not reflect a decline in the bank’s operational performance. Instead, it stems from an accounting revaluation of longstanding foreign currency obligations that had been recorded at artificially low exchange rates under the old system. The government’s monetary policy reform, aimed at reducing distortions and improving transparency in the forex market, effectively more than doubled the value of the birr against foreign currencies, significantly increasing the cost of settling foreign-denominated liabilities.
“The loss is a one-time accounting adjustment and not a result of our operational inefficiency,” the bank clarified, emphasizing that core banking activities remained stable and profitable.
The FX revaluation led to a 28 percent contraction in total assets, forcing the bank to forgo dividend payments to shareholders for the year.
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