The state-owned Commercial Bank of Ethiopia (CBE) has been made to swallow another state-owned but lesser bank, the Construction & Business Bank (CBB), an official of the Public Financial Institutions Agency disclosed today.
The announcement was made at the headquarters of the CBB, jointly by Sentayehu Woldemichael (PhD), director of the Agency, and Haileyesus Bekele, president of the CBB, but in the absence of Bekalu Zeleke, president of the CBE.
It is a surprise move, unexpected many, including those in the industry.
First created as a mortgage bank in the 1960s, CBB remained in its specialized operation advancing medium term loans, particularly to those in the construction sector. However, CBB has been waning both in size and business reach over the past few years. Operating a little over 100 branches, its miniscule assets of close to seven billion Birr is now matched by some of the private commercial banks. Lately, the Bank’s managers were trying to address a severe liquidity crunch, providing commercial banking services.
CBB will now fall in the folds of the CBE; the latter will assume all its assets and liabilities.
“We’ll honour all their contractual liabilities,” a senior executive of the CBE told Fortune.