4. monetary developments - nbe bank · 2019. 4. 3. · broad money supply 150,809.9 189,398.8...

4. MONETARY DEVELOPMENTS

4.1. Money Supply and Credit

Broad money supply (M2) reached Birr 192.1

billion at the end of the first quarter of the

fiscal year 2012/13, revealing quarterly and

annual growth rates of 1.4 percent and 27.4

percent, respectively. The annual growth rate

was mainly attributed to the increase in

domestic credit. Meanwhile the quarterly

growth rate of 1.4 percent was entirely caused

by a fall in other items net (18.7 percent)

offsetting the decline in net foreign and

domestic assets.

On annual basis, domestic credit expanded by

36.8 percent, mainly due to 46.7 percent

increase in credit to the non-central

government sector while claims on the central

government went down by 19.0 percent.

Meanwhile, net foreign assets declined by 29.2

percent and 1.2 percent on annual and quarterly

basis, respectively, and reached Birr 39.3

billion at the end of the first quarter (Table

4.1).

National Bank of Ethiopia

First Quarter 2012/13

26

Table 4.1: Factors Influencing Broad Money (In Millions of Birr)

2011/12

Qtr. I Qtr. IV Qtr. I(Sept. 11) (June 12) (Sept. 12)

A B C1. External Assets (net) 55,479.8 39,787.7 39,304.6 -29.2 -1.2 -39.2 -18.02. Domestic Credit 135,111.2 189,080.8 184,842.9 36.8 -2.2 120.5 -158.3 . Claims on Central Gov't (net) 20,343.2 21,557.4 16,480.8 -19.0 -23.5 -9.4 -189.6 . Claims on Non-Central Gov't 114,768.0 167,523.4 168,362.1 46.7 0.5 129.9 31.3 . Financial Institutions 7,400.0 12,502.0 12,502.0 68.9 0.0 12.4 0.0 . Others 107,368.0 155,021.4 155,860.1 45.2 0.5 117.5 31.33. Other Items (net) 39,781.1 39,469.7 32,071.0 -19.4 -18.7 -18.7 -276.34. Broad Money (M2) 150,809.9 189,398.8 192,076.5 27.4 1.4 100.0 100.0Source: NBE

Particulars

Percentage Change

Contibutions of Each Component to Broad Money

Growth

C/A C/B

2012/13

Annual Quarterl

y



27

Source: National Bank of Ethiopia



28


The first quarter of the fiscal year 2012/13

also witnessed annual rise in all components

of broad money while narrow money

declined marginally on quarterly basis.

Accordingly, narrow money that comprises

currency outside banks and net demand

deposits grew by 18.3 percent on annual

basis but showed a 2.5 percent decline vis-à-

vis the preceding quarter. On the other hand,

quasi-money that embraces both saving and

time deposits depicted an annual and

quarterly increment of 37.1 and 5.4 percent,

respectively. Year-on-year basis, both

narrow money and quasi-money contributed

34.7 and 65.3 percent share to the annual

broad money growth rate (Table 4.2).

The annual rise in currency outside banks, as

a component of narrow money, reflects the

continuous rise in income and public

preference to hold cash. Similarly, the surge

in quasi-money indicates the result of a

successful effort made by both public and

private banks in expanding their branch



29

network to improve their deposit

mobilization and service outreach.

Table 4.2: Components of Broad Money (In Millions of Birr)

2011/12 2012/13

Qtr. I Qtr. IV Qtr. I Percentage

Change

Contributions of Each Component to Broad

Money Growth

(Sept. 11) (June 12) (Sept. 12) Particulars A B C C/A C/B Annual Quarterly

1. Narrow Money Supply 78,142.2 94,849.9 92,462.3 18.3 -2.5 34.7 -89.2 . Currency outside banks 32,073.6 38,537.1 37,917.5 18.2 -1.6 14.2 -23.1 . Demand Deposits (net) 46,068.6 56,312.7 54,544.8 18.4 -3.1 20.5 -66.0 2. Quasi-Money 72,667.7 94,548.9 99,614.3 37.1 5.4 65.3 189.2 . Savings Deposits 67,987.8 82,487.8 87,501.8 28.7 6.1 47.3 187.2 . Time Deposits 4,679.9 12,061.1 12,112.5 158.8 0.4 18.0 1.9

3. Broad Money Supply 150,809.9 189,398.8

192,076.5 27.4 1.4 100.0 100.0 Source: National Bank of Ethiopia



30


4.2. Developments in Reserve Money and Monetary Ratio

Reserve money reached Birr 66.3 billion at

the end of the first quarter of 2012/13,

depicting a reduction of 2.7 percent on

annual basis, mainly due to the fall in banks

deposits at NBE1. But reserve money

increased by 0.5 percent compared to the

1 The decline in bank deposit at the central bank was mainly explained by the downward revision of reserve requirement of commercial banks from 15 to 10 percent of net deposit.

preceding quarter. Excess reserves of

commercial banks also declined

significantly on both annual and quarterly

basis due to their participation in the weekly

T- bills market.

The money multiplier measured by the ratio

of broad money to reserve money, grew by

30.9 percent on annual basis implying the

increased monetization of the economy.



31

Similarly, on annual basis ratio of narrow

money to reserve money increased by 21.6

percent.

Narrow-money to broad money ratio,

however, decreased by 7.1 percent on annual

basis while quasi money to broad money

ratio increased by 7.6 percent. (Table 4.3)

Table 4.3: Monetary Aggregates and Ratios (In millions of Birr unless otherwise indicated)

2011/12 2012/13

Qtr. I Qtr. IV Qtr. I (Sept. 11) (June 12) (Sept. 12)

Percentage Change

Particulars A B C C/A C/B 1. Reserve Requirement (CB's) 21,564.43 18,080.56 18,664.40 -13.45 3.23 2. Actual Reserve (CB's)* 27,855.43 21,791.83 19,616.67 -29.58 -9.98 3. Excess Reserve (CB's) 6,291.00 3,711.26 952.27 -84.86 -74.34 4. Reserve Money 68,122.56 65,972.62 66,276.05 -2.71 0.46 . Currency in Circulation 38,732.57 45,785.24 46,183.34 19.24 0.87 . Banks deposits at NBE** 29,389.99 20,187.38 20,092.72 -31.63 -0.47 5. Money Multiplier (Ratio): . Narrow Money to Reserve Money 1.15 1.44 1.40 21.62 -2.96 . Broad Money to Reserve Money 2.21 2.87 2.90 30.91 0.95 6. Other Monetary Ratios (%): . Currency to Narrow Money 49.57 48.27 49.95 0.77 3.47 . Currency to Broad Money 25.68 24.17 24.04 -6.38 -0.54 . Narrow Money to Broad Money 51.82 50.08 48.14 -7.10 -3.88 . Quasi Money to Broad Money 48.18 49.92 51.86 7.63 3.89

Source: National Bank of Ethiopia and Commercial Banks.

* The data is obtained from commercial banks balance sheet. ** The data is obtained from NBE balance sheet.


32


-10,000.0

-5,000.0

0.0

5,000.0

10,000.0

15,000.0

20,000.0

25,000.0

30,000.0

20

05

/06Q

1Q

2Q

3Q

42

00

6/0

7Q

1Q

2Q

3Q

42

00

7/0

8Q

1Q

2Q

3Q

42

00

8/0

9Q

1Q

2Q

3Q

42

00

9/1

0Q

1Q

2Q

3Q

42

01

0/1

1Q

1Q

2Q

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01

1/1

2Q

1Q

2Q

3Q

42

01

2/1

3Q

1

In m

illi

on

s of

Bir

r

Fig IV.5: Monetary Aggregates(First Quarter of 2012/13)

Required Reserve

Actual Reserve

Excess Reserve



34

4.3. Interest Rate Developments

Average saving deposit and lending rates

were unchanged and remained at 5.4 and

11.88 percent, respectively, on quarterly

and annual basis. Weighted average time

deposit rate, however, registered annual

increment of 7.6 percent. On the other hand,

the weighted average yield on T-bills

increased from 1.604 percent to 2.43

percent on annual basis. However,

considering annual headline inflation of

18.9 percent during the quarter under

review, all deposit rates, lending rates and

yields remained negative in real terms

(Table 4.4).

Particulars 2011/12 2012/13QI QIV QI Annual Quarterly

1. Savings Deposit RateMinimum 5 5 5 0 0

Maximum 5.75 5.75 5.75 0 0

Average Saving Rate 5.4 5.4 5.4 0 0

2. Time DepositsUp to 1yr 5.23 5.65 5.68 8.49 0.48

1-2 years 5.38 5.74 5.77 7.40 0.59

Over 2 yrs 5.43 5.79 5.81 6.96 0.40

Average Time Dep. Rate (Weighted) 5.35 5.73 5.75 7.61 0.43

3. Demand Deposit (Weighted) 0.03 0.03 0.03 0.00 0.00

4. Lending RateMinimum 7.5 7.5 7.5 0 0

Maximum 16.25 16.25 16.25 0 0Average Lending Rate 11.88 11.88 11.88 0 0

5. T-bills Rate (Weighted) 1.604 1.621 2.43 51.50 49.916. Bond Yield (Simple Average) 3.67 3.67 3.67 0.00 0.007. Headline Inflation 40.1 20.9 18.9 -52.87 -9.578. Food Inflation 51.3 21.5 17.6 -65.69 -18.149. Core/non-food Inflation 24.7 19.8 21.0 -14.98 6.06

Table 4.4 : - Interest Rate Structure of Commercial Banks (Percent per annum)Percentage Changes


35

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

Val

ue in

%

Quarters

Fig IV.6: Interest Rate Structure of Commercial Banks (In percent per annum)

Simple Av. Sav. Dep. Rate Weighted Av. Time Dep. RateSimple Av. Lend. Rate Bond Yield

Source: National Bank of Ethiopia and Commercial Banks

Source: National Bank of Ethiopia staff compilation


36

4.4. Developments in Financial Sector

Banks, insurance companies and

microfinance institutions are the main

financial institutions in Ethiopia. The

number of banks operating in the country

reached 18 at the end of September 2012 of

which 15 banks were privately owned.

During the review quarter, 87 new bank

branches were opened, raising the total

number of bank branches to 1,376. As a

result, the ratio of total bank branch to total

population went down to 58,139.5 from

62,063.6 in the preceding quarter, reflecting

an improvement in financial service

outreach.

About 33.3 percent of the total bank

branches were located in Addis Ababa. Of

the total bank branches, the share of the

private banks increased to 48.3 percent

from 47.6 percent in the preceding quarter

due to the opening of 51 new branches by

private banks surpassing 36 new branches

opened by the public bank during the

review quarter.

Computed based on the assumption that total population was 80 million

Meanwhile, the total capital of the banking

system reached Birr 20.2 billion at the end

of the first quarter of 2012/13, of which

private banks accounted for 46.9 percent.

Commercial Bank of Ethiopia, the biggest

state owned bank, accounted for 37.5

percent of the total capital of the banking

system. The remaining balance (15.6

percent) was taken up by the Development

Bank of Ethiopia and Construction Bank of

Ethiopia (Table 4.5).

The total number of insurance companies

operating in the country reached 15 during

the review quarter, of which 14 were

privately owned. The number of branches

increased to 252 from 227 compared to the

same period last year. Of the total branches,

about 54.4 percent were located in Addis

Ababa.

During the review quarter, the total capital

of the insurance industry surged by 27.6

percent on annual basis and reached Birr

1.23 billion. The share of private insurance

companies in total capital was 71.5 percent

against 73.3 percent in the preceding

quarter. (Table 4.6)

On the other hand, there were 31 micro-

finance institutions (MFIs) operating in the


37

country. These MFIs mobilized a total

saving deposit of Birr 5.6 billion, which

was 43.1 percent higher than last year

same period. Similarly, outstanding credit

of the MFIs scaled up by 37.5 percent on

annual basis to reach Birr 9.8 billion.

Likewise, their total assets increased by

34.2 percent and reached Birr 13.7 billion

by the end of September 2012 (Table 4.7).

Given their intended purpose, MFIs in the

country are contributing to poverty

reduction by providing loans to and

mobilizing savings from the low-income

segments of the population.

The top five largest MFIs namely Amhara

Credit & Saving, Dedebit Credit & Saving,

Oromia Credit & Saving, Omo Credit &

Saving and Addis Credit and Saving

Institutions, accounted for 86.2 percent of

the total capital, 93.3 percent of the

savings, 89.2 percent of the credit and 89.8

percent of the total assets of the industry.


38

Capital

2012/13

358 96 454 44.6 448 111 559 43.4 476 116 592 43.0 6,231.0 6,231.0 7,586.0

17 17 34 3.3 53 31 84 6.5 54 33 87 6.3 307.0 363.0 479.0

31 1 32 3.1 31 1 32 2.5 31 1 32 2.3 2,253.0 2,540.0 2,678.0

406 114 520 51.1 532 143 675 52.4 561 150 711 51.7 8791 9134 10743

37 35 72 7.1 39 47 86 6.7 40 47 87 6.3 1,112.0 1,257.0 1,347.0

31 34 65 6.4 38 37 75 5.8 42 44 86 6.3 1,157.0 1,381.0 1,352.0

25 32 57 5.6 29 32 61 4.7 32 32 64 4.7 532.0 691.0 741.0

29 24 53 5.2 33 27 60 4.7 34 29 63 4.6 1,095.0 1,269.0 1,353.0

18 32 50 4.9 29 40 69 5.4 29 40 69 5.0 731.0 785.0 860.0

19 32 51 5.0 20 38 58 4.5 24 40 64 4.7 989.0 1,242.0 1,311.0

38 5 43 4.2 45 6 51 4.0 51 8 59 4.3 217.0 338.0 380.0

17 13 30 2.9 19 17 36 2.8 21 18 39 2.8 323.0 357.0 379.0

26 11 37 3.6 29 12 41 3.2 33 15 48 3.5 281.0 393.0 412.0

0 3 3 0.3 3 4 7 0.5 3 4 7 0.5 200.0 290.0 313.0

3 7 10 1.0 14 11 25 1.9 15 11 26 1.9 224.0 257.0 269.0

4 8 12 1.2 7 8 15 1.2 8 9 17 1.2 145.0 211.0 231.0

12 1 13 1.3 21 4 25 1.9 21 6 27 2.0 178.0 250.0 259.0

0 1 1 0.1 1 4 5 0.4 2 5 7 0.5 120.0 155.0 157.0

0 0 0 0.0 0 0 0 0.0 2 0 2 0.1 0.0 0.0 122.0

259 238 497 48.9 327 287 614 47.6 357 308 665 48.3 7,304.0 8,876.0 9,486.0

665 352 1017 100.0 859 430 1289 100.0 918 458 1376 100.0 16,095.0 18,010.0 20,229.0

2012/132011/12 2011/12

Addis Interational Bank

Total%

Share

Lion International Bank

2. Private Banks

1. Public Banks

Commercial Bank of Ethiopia

Quarter IV

Quarter I

A.A Total%

Share%

ShareTotalReg.

Quarter IV

Reg

Table 4.5: Capital and Branch Network of Banking System at End of September 30,2012

Banks

Quarter I

Quarter I

(Branch in Number and Capital in Millions of Birr)Branch Network

Quarter IA.AA.AReg.

Oromia International Bank

Cooperative Bank of Oromiya

Zemen Bank

Berhan International Bank

United Bank

Dashen Bank

Abyssinia Bank

Wegagen Bank

Buna International Bank

Nib International Bank

Debub Global Bank

Awash International Bank

Construction & Business Bank

Abay Bank

Development Bank of Ethiopia

Total Public Banks

3.Grand Total Banks

Total Private Banks

Source: Bank Supervision Directorate, NBE Reg. stands for regions

0.010.020.030.040.050.060.070.0

perc

enta

ge

Fig:4.5 Capital and Branch Network of Banking System

Source: Bank Supervision Directorate, NBE



39

Source: Insurance Supervision Directorate, NBE Reg. stands for regions

Table 4.7: Microfinance Institutions Performance as of September 2012 (In Thousands of Birr)

2011/12 2012/13

Qtr.I Qtr.IV Qtr.I

% Change

Particulars A B C C/A C/B

Total Capital 3,046,358.0 3,755,479.9 3,884,805 27.5 3.4

Saving 3,943,802.0 5,450,593.5 5,644,039 43.1 3.5

Credit 7,130,180.0 9,289,642.6 9,800,571.4 37.5 5.5

Total Assets 10,193,248.0 13,308,200.1 13,681,725.52 34.2 2.8

Source: Microfinance Supervision Directorate, NBE

Table 4.6: Branch Network & Capital of Insurance Companies at End of September 30,2012 (Branch in number and Capital in Millions of Birr) Branch Capital

2011/12 2012/13 2011/12 2012/13

Quarter I Quarter IV Quarter I Quarter

I Quarter

IV Quarter

I

S.No. Insurance Companies A.A Reg Total A.A Reg Total A.A Reg Total 2011/12 2011/12 2012/13

1 Ethiopian Insurance Corporation 11 30 41 11 35 46 11 35 46 303.4 321.0 351.6

2 Awash Insurance Company 19 11 30 20 11 31 20 12 32 94.9 113.9 116.8

3 Africa Insurance Company 6 7 13 6 7 13 6 7 13 83.3 96.7 111.1

4 National Insurance Corporation of Ethiopia

9 8 17 9 8 17 9 8 17 15.2 52.5 45.4

5 United Insurance Company 15 8 23 15 8 23 16 8 24 89.5 121.9 136.5

6 Global Insurance Company 6 4 10 6 4 10 6 4 10 27.1 29.8 31.2

7 Nile Insurance Company 11 10 21 11 10 21 11 10 21 92.5 122.9 125.7

8 Nyala Insurance Company 9 8 17 10 8 18 11 8 19 96.0 126.0 116.5

9 Nib Insurance Company 14 8 22 14 8 22 14 8 22 88.2 102.7 75.0

10 Lion Insurance Company 6 5

11 6 5 11 9 5 14 22.5 35.2 34.2

11 Ethio-Life Insurance Company 0 0 - 0 0 0 2 0 2 5.3 5.3 17.0

12 Oromia Insurance Company 8 8 16 11 8 19 11 8 19 26.3 39.6 41.5

13 Abay Insurance Company S.C. 1 2 3 1 2 3 1 2 3 11.7 10.4 10.1

14 Berhan insurance S.C 3 0 3 6 0 6 6 0 6 10.9 11.4 10.3

15 Tsehay Insurance S.C. - - - 3 0 3 4 0 4 0.0 10.9 10.4

TOTAL 118 109 227 129 114 243 137 115 252 966.7 1200.1 1233.3



40

4.5. Activities of the Banking System 4.5.1. Resource Mobilization Total resources mobilized by the banking

system (as measured by the sum of net

change in deposit, loans collected and net

change in borrowings) went down by 35.8

percent against the preceding quarter due to

the decline in net deposit and loan collection

by 70.7 percent and 4.8 percent,

respectively(Table 4.8). Similarly, year-on-

year basis, total resources mobilized by the

banking system decreased by 15.5 percent

owing to the decline in net deposit and net

borrowing by 46.8 percent and 24.1 percent,

respectively.

Table 4.8: Summary of Resource Mobilization & Disbursement of Banking System during First Quarter of 2012/13

(In Millions of Birr) Public Banks Private Banks Grand Total

1 2 (3) = (1) + (2)

Qtr .I 2011/12

Qtr. IV 2011/12

Qtr. I 2012/13 % Change Particulars

Qtr. IV 2011/12

Qtr. I 2012/13

Qtr. IV 2011/12

Qtr .I 2012/13 A B C C/A C/B

1.Deposits (net change) 8,859.0 952.6 3,541.3 2,677.6 6,826.5 12,400.3 3,630.2 -46.8 -70.7

-Demand 3,149.0 -2,012.4 1,242.8 562.1 3,433.3 4,391.8 -1,450.3 -142.2 -

133.0 -Saving 4,174.0 2,910.8 1,910.7 2,106.5 3,390.7 6,084.7 5,017.3 48.0 -17.5 -Time 1,536.0 54.2 387.8 9.0 2.5 1,923.8 63.2 2,419.3 -96.7 2. Borrowing (net change) 1,003.2 1,529.8 0.0 0.0 2,016.6 1,003.2 1,529.8 -24.1 52.5 -Local 923.8 1,354.3 0.0 0.0 2,062.9 923.8 1,354.3 -34.4 46.6 -Foreign 79.4 175.6 0.0 0.0 -46.2 79.4 175.6 -479.7 121.2 3. Collection of Loans 6,527.4 6,363.4 4,610.9 4,236.2 9,809.3 11,138.3 10,599.6 8.1 -4.8 4. Total Resources Mobilized (1+2+3) 16,389.5 8,845.8 8,152.2 6,913.8 18,652.4 24,541.8 15,759.6 -15.5 -35.8 5. Disbursement 13,540.2 5,461.2 2,947.4 4,409.2 11,551.6 16,487.6 9,870.4 -14.6 -40.1 6. Change in Liquidity (4-5) 2,849.4 3,384.6 5,204.8 2,504.6 7,100.8 8,054.2 5,889.2 -17.1 -26.9 Memorandum Item:

A. Outstanding Credit* 75,250.1 73,938.2 34,950.

5 36,703.0 84,647.7 73,632.4 110,641.2 30.7 50.3 B. Outstanding Interbank Lending 276.4 247.5 0.6 0.6 43.2 277.1 248.1 473.8 -10.4 Source: Commercial Banks and staff computation

Notes: *Excludes government borrowing in the form of bonds and treasury bills from commercial banks and other sectors other than NBE



41

Source: NBE

4.5.1.1. Deposit Mobilization

Total deposit liabilities of the banking system

reached Birr 190.9 billion at the end of the

first quarter of 2012/13, indicating quarterly

and annual growth rates of 1.9 and 29.6

percent, respectively. The growth in deposit

mobilization was partly attributed to the rise

in the number of bank branches opened by

commercial banks and improvements in

economic activities.

Component wise, demand deposits, which

accounted for 47.6 percent of total deposits,

reached Birr 90.8 billion, showing annual

growth rate of 22.3 percent. Similarly, saving

deposits, with 45.8 percent share in total

deposits increased by 28.8 percent during the

same period. Time deposits, which constituted

6.6 percent of the total deposit liabilities, also

went up by 144.1 percent over last year same

period.

The share of public banks in total deposits

mobilization decreased marginally from 68.1

percent last year to 67.3 percent, while the

share of private banks increased to 32.7 from

31.9 percent (Table 4.9).



42

Table 4.9: Stock of Deposits Mobilized by Banking System as at June 30, 2012 (In Millions of Birr)

2011/12 2012/13 Quarter

I Quarter

IV Quarter

I % Change Types of Deposits A

% Share B

% Share C

% Share C/A C/B

Demand Deposit 74,275.7 50.4 92,254.8 49.3 90,804.5 47.6 22.3 -1.6

Saving Deposit 67,919.4 46.1 82,494.6 44.0 87,511.9 45.8 28.8 6.1

Time Deposit 5,163.1 3.5 12,541.3 6.7 12,604.4 6.6 144.1 0.5Total 147,358.3 100.0 187,290.7 100.0 190,920.8 100.0 29.6 1.9

Share of Public Banks 63.7 68.1 67.3

Share of Private Banks 36.3 31.9 32.7 Source: Commercial Banks and DBE

Source: Commercial Banks and DBE

4.5.1.2. Collection of Loans

During the review period, the banking

system collected Birr 10.6 billion, about 8.1

percent higher than a year ago (Table 4.8).

Of the total loan collection, the share of

private banks was Birr 4.2 billion (40.0

percent) while public banks collected about

60.0 percent. Of the total loan collection

52.5 percent was from cooperatives

followed by private enterprises (26.2



43

percent) and state enterprises (20.8

percent).

4.5.1.3. Borrowing

Total outstanding borrowing of the banking

system reached Birr 18.5 billion, up by 57.8

percent, over last year due to significant

growths both in domestic and foreign

borrowings. Of the total borrowing, Birr

17.3 billion (93.4 percent) came from

domestic and the remaining Birr 1.2 billion

(6.6 percent) from foreign sources. (Table

4.10)

Table 4.10: Outstanding Borrowing of Banking System by Sources as at September 30, 2012 (In Millions of Birr)

2011/12 2012/13 Quarter I Quarter IV Quarter I Percentage change

Banks A B C C/B C/A Domestic Borrowing 10,729.4 15,898.9 17,253.2 8.5 60.8 Foreign Borrowing 973.2 1,034.1 1,209.7 17.0 24.3

Total 11,702.6 16,933.1 18,462.9 9.0 57.8 Source: Commercial banks and DBE

4.5.2. Disbursement of Fresh Loans

During the first quarter of the fiscal year,

total fresh loans by the banking system

reached Birr 9.9 billion, indicating a 14.6

percent slow down compared to the last year

(Table 4.8). Public banks disbursed Birr 5.5

billion (55.3 percent) and private banks the

remaining balance (Table 4.12).

About 99.7 percent of the new loan disbursed

by private banks went to private enterprises,

52.5 percent, 34.3 percent and 13.2 percent of

the loan by public banks disbursed to state

enterprises, private enterprises and

cooperatives, respectively (Table 4.12).

Sector wise, Industry was the largest

beneficiary (29.9 percent), followed by

Agriculture (24.9 percent), Domestic Trade

(15.3 percent), International Trade (13.4

percent) and Housing and Construction (10.9

percent) (Table 4.11).



44

Source: Commercial banks and DBE Table 4.11: Summary of Loans and Advances by Banks and Receiving Sectors during the First Quarter of 2012/13 (In Millions of Birr)

Public Banks Private Banks Total

(1) (2) (3) Borrowing Sector D** C** O/S** D** C** O/S ** D** C** O/S**

Central Government * 0.0 0.0 3573.1 0.0 0.0 5089.2 0.0 0.0 8662.3 Agriculture 2,381.9 3,543.2 15,594.1 77.7 60.2 598.3 2,459.6 3,603.5 16,192.4 Industry 2,277.6 1,404.3 30,097.7 674.6 431.2 5,085.5 2,952.2 1,835.5 35,183.1 Domestic Trade 39.5 276.7 2,103.0 1,472.1 1,550.3 10,078.1 1,511.6 1,827.0 12,181.1 International Trade 60.3 284.4 13,138.1 1,258.7 1,359.7 10,214.3 1,319.0 1,644.1 23,352.4 Export 49.1 126.1 4,258.1 379.2 565.8 4,385.6 428.3 691.9 8,643.6 Imports 11.2 158.3 8,880.1 879.5 793.9 5,828.5 890.7 952.1 14,708.6 Hotels and Tourism 16.0 30.0 487.7 107.6 74.9 1,510.0 123.6 104.8 1,997.7 Transport & Communication 31.8 179.3 2,559.2 200.5 231.1 2,071.1 232.3 410.4 4,630.3 Housing & Construction 536.3 446.3 6,941.1 535.0 442.8 6,026.4 1,071.3 889.1 12,967.5 Mines, Power & Water Res. 0.0 0.0 0.0 0.1 7.1 11.6 0.1 7.1 11.6 Others 115.6 160.1 2,643.8 38.0 44.7 777.3 153.5 204.8 3,421.1 Personal 2.2 5.3 126.0 44.9 34.1 330.6 47.2 39.5 456.6 Inter-Bank Lending 0.0 33.7 247.5 0.0 0.0 0.0 0.0 33.7 247.5

Total 5,461.2 6,363.4 77,511.3 4,409.2 4,236.2 41,792.2 9,870.4 10,599.6 119,303.5

Source: Commercial Banks and staff computation Notes: *Refers to government borrowing in the form of bonds and treasury bills from commercial banks and other sectors other than NBE ** D = Disbursement, C = Collection, O/S= Outstanding Credit



45

4.5.3. Outstanding Credit

Total outstanding credit of the banking

system (excluding credit to government)

increased to Birr 110.6 billion at the end of

September 2012, up by 30.7 and 50.3

percent against last year and the preceding

quarter, respectively (Table 4.8).

Sector wise, credit to industry stood at 31.8

percent followed by international trade

(21.7 percent), agriculture (14.6 percent),

housing & construction (11.7 percent) and

domestic trade (11.0 percent) (Table 4.11).

The share of private banks in total

outstanding loan was at 35 percent.

Table 4.12: Breakdown of Loans & Advances of Banking System by Clients, during First Quarter of 2012/13 (In Millions of Birr)

Particulars Loan

Disbursement % Share Loan

Collection % Share Outstanding

Loan % Share Public Banks 5,461.2 55.3 6,363.4 60.0 77,511.3 65.0 Central Government* 0.0 0.0 0.0 0.0 3,573.1 4.6State Enterprises 2,865.3 52.5 1,322.2 20.8 31,035.6 40.0Cooperatives 720.7 13.2 3,342.2 52.5 10,674.4 13.8Private Enterprises 1,875.2 34.3 1,665.3 26.2 31,980.6 41.3Inter-bank Lending 0.0 0.0 33.7 0.5 247.5 0.3Private Banks 4,409.2 44.7 4,236.2 40.0 41,792.2 35.0Central Government* 0.0 0.0 0.0 0.0 5,089.2 12.2

State Enterprises 4.7 0.1 0.4 0.0 32.1 0.1Cooperatives 7.8 0.2 92.0 2.2 449.2 1.1Private Enterprises 4,396.8 99.7 4,143.8 97.8 36,221.8 86.7Inter-bank Lending 0.0 0.0 0.0 0.0 0.0 0.0 Grand Total** 9,870.4 100.0 10,599.6 100.0 119,303.5 100.0

Source: Commercial banks and DBE Notes: *Refers to government borrowing in the form of bonds and treasury bills from commercial banks and other sectors other than NBE ** Grand Total includes government borrowing.



46

Source: Commercial Banks and DBE

4.6. Financial Activities of NBE

As at September 30, 2012, total claims of

NBE on the central government reached

Birr 55.5 billion, slightly (0.1 percent)

lower than last year. Of the total loans and

advances, direct advance accounted for

83.3 percent, and banks 16.7 percent.

Direct advance remains unchanged

compared to both the preceding quarter and

the last year. In contrast, NBE’s holdings of

government bonds declined by 0.6 percent

compared to last year same period.

Meanwhile, deposits of the central

government and financial institutions at the

NBE declined 21.0 percent by Birr 38.7

billion, down in contrast to a year ago but,

increased by 25.9 percent compared to the

preceding quarter. Of the total deposits,

43.6 percent was deposit of the central

government which declined by 11.7 percent

year –on-year basis despite a 65.4 percent

vis-a-vis last quarter (Table 4.13). On the

other hand, deposit by financial institutions

went down by 27 annually but, increased

by 6.2 percent quarterly.



47

Table 4.13: Financial Activites of NBE during First Quarter of 2012/13(In Millions of Birr)

2012/13Qtr.I Qtr.IV Qtr.I

A B C C/A C/B1.Loans and Advances 62,966.5 68,064.5 68,016.4 8.0 -0.1

1.1. To Central Government 55,566.5 55,562.5 55,514.4 -0.1 -0.1 Direct Advance 46,264.9 46,264.9 46,264.9 0.0 0.0 Bonds 9,301.5 9,297.5 9,249.4 -0.6 -0.5

1.2.To Development Bank of Ethiopia 7,400.0 12,502.0 12,502.0 68.9 0.0

2.Deposit Liabilities 49,029.6 30,756.9 38,728.5 -21.0 25.9 2.1. Government 19,133.3 10,218.4 16,902.0 -11.7 65.4 2.2. Financial Institutions 29,896.3 20,538.5 21,826.5 -27.0 6.3

O/W:

-Banks 29,890.9 20,523.5 21,806.1 -27.0 6.2 -Insurance companies 5.4 15.0 20.4 275.1 36.23.Net Claims of NBE 13,936.8 37,307.6 29,287.9 110.1 -21.5

% Change Particulars

2011/12

Source: NBE

4.7. Developments in Financial Markets 4.7.1. Treasury Bills Market

During the first quarter of 2012/13, T-bills

supplied to the weekly auction market

amounted to Birr 28.7 billion; about 54.9

and 4.9 percent higher than the preceding

quarter and the same period last year,

respectively. The demand for T-bills, on

the other hand, reached Birr 30.2 billion,

up by 54.7 and 45.7 percent during same

period (Table 4.14).

Of the total T-bills sold, the share of

commercial banks increased to 61.9

percent from 35.2 and 27.5 percent in the

preceding quarter and last year respectively

as they were encouraged to use part of their

excess reserves to purchase T-bills. As a

result, the share of non-bank institutions

decreased to 38.1 percent from 72.5

percent last year.

The stock of T-bills at the end of the

quarter reached Birr 23.8 billion, reflecting

19 percent growth over the preceding

quarter and 120.6 percent compared to a

year earlier.

The annual average weighted yield of T-

bills declined by 3.4 percent to 1.617

percent. The highest yield was for short-

term (28-day bill) maturity (Table 4.14).



48

Table 4.14: Results of Treasury Bills Auctions

2011/12 2012/13

Qtr. I Qtr. IV Qtr. I % Change Particulars A B C C/A C/B

Number of Bidders 53 135 167 215.09 23.70 Public 41 64 57 39.02 -10.94 Private 12 71 110 816.67 54.93 Number of Bids Accepted 71 177 295 315.49 66.67 Public 48 68 73 52.08 7.35 Private 23 109 222 865.22 103.67 Amount Demanded (Mn. Birr) 20,701.36 19,497.56 30,169.22 45.74 54.73 28-day bill 11,940.0 7,569.20 19,992.46 67.44 164.13 91-day bill 6,541.4 7,828.36 8,056.76 23.17 2.92 182-day bill 2,220.0 2,704.00 2,120.00 -4.50 -21.60

364-day bill 1,396.00 0.00 0.00 -100.00

Amount Supplied (Mn. Birr) 27,366.90 18,538.08 28,713.32 4.92 54.89 28-day bill 11,640.0 6,166.72 16,564.96 42.31 168.62 91-day bill 9,305.9 7,367.36 7,928.36 -14.80 7.61 182-day bill 6,421.0 3,704.00 2,970.00 -53.75 -19.82

364-day bill 1,300.00 1,250.00 0.00 -3.85

Amount Sold (Mn. Birr) 18,201.36 18,101.56 30,169.22 65.75 66.67 Banks 5,010.0 6,379.20 18,682.46 272.90 192.87 Non-Banks 13,191.4 11,722.36 11,486.76 -12.92 -2.01

Average Weighted Price for Successful Bids(Birr) 99.536 99.143 99.633 0.097 0.494 28-day bill 99.86 99.79 99.78 -0.08 -0.01 91-day bill 99.65 99.59 99.65 0.00 0.06 182-day bill 99.09 99.48 99.47 0.38 -0.01

364-day bill 97.72 0.00 -100.00

Average Weighted Yield for Successful Bids (%) 1.674 1.621 1.617 -3.411 -0.267 28-day bill 1.779 1.563 2.880 61.89 84.28 91-day bill 1.405 1.086 1.410 0.35 29.81 182-day bill 1.837 0.835 0.560 -69.52 -32.93

364-day bill 3.000 0.00 -100.00 Outstanding bills at the end of Period (Mn.Br.) 10,796.62 20,011.86 23,820.76 120.63 19.03 Banks 900.000 2383.500 5,964.000 562.67 150.22 Non-Banks 9,896.620 17,628.360 17,856.760 80.43 1.30 Source: NBE



49

Source: NBE

Source: NBE


50 First Quarter 2012/13

4.7.2. Inter- Bank Money Market No inter-bank money market transaction

was conducted during the quarter under

review (Table 4.12).

4.7.3. Corporate Bond Market

Corporate bond market is not well developed

in Ethiopia. The big players are few public

institutions and regional governments. The

purchaser of these bonds is solely the

Commercial Bank of Ethiopia (CBE).

During the quarter under review, CBE

purchased corporate bond worth of Birr 2.5

billion of which 68.4 percent was issued by

public enterprises and the rest by regional

governments.

At the end of September 30, 2012, the stock of

corporate bonds held by the CBE stood at Birr

61.4 billion, of which 84.8 percent was claims

on public enterprises while the remaining

balance was a claim on regional states (Table

4.15). The amount of corporate bond issued by

EEPCO account for 82.4 percent of the total

outstanding corporate bond; about 97.1

percent of the bonds were issued by public

enterprises.

Table 4.15: Corporate Bonds by Holders

(In millions Birr) 2011/12 2012/13

QI QIV QI Issuer of the Bond NP Red O/S NP Red O/S NP Red O/S

1.Puplic Enterprises 3,100.0 0.0 34,500.0 5,000.0 4,318.6 50,770.9 1,700.0 382.3 52,088.6

EEPCO 3,100.0 0.0 32,700.0 5,000.0 0.0 48,900.0 1,700.0 0.0 50,600.0

ETC 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

DBE 0.0 0.0 1,800.0 0.0 4,318.6 1,870.9 0.0 382.3 1,488.6

2. Regional Governments 751.0 274.6 9,344.7 1,550.0 753.9 11,015.8 786.2 10,629.6 9,344.7

Oromia 0.0 10.9 1,993.3 0.0 0.4 1,993.0 45.1 1,947.9 1,993.3

Amhara 0.0 0.0 1,393.1 0.0 329.0 751.1 301.4 449.6 1,393.1

Tigray 40.0 26.7 787.4 0.0 2.4 721.7 12.9 708.9 787.4

SNNPRS 0.0 114.8 874.0 0.0 29.5 791.5 34.6 756.9 874.0

Dire Dawa 11.0 1.1 223.6 0.0 5.6 210.4 5.2 205.1 223.6

Harari 0.0 13.4 145.5 0.0 14.7 94.8 0.1 94.7 145.5

Addia Ababa 700.0 107.7 3,927.9 1,550.0 372.3 6,453.4 386.8 6,466.6 3,927.9

3.Grand Total(1+2) 3,851.0 274.6 43,844.7 6,550.0 5,072.5 61,786.7 2,486.2 11,011.9 61,433.3

Source: National Bank of Ethiopia Note: NP= New Purchase, Red. = Redemption, O/S= outstanding

4. monetary developments - nbe bank · 2019. 4. 3. · broad money supply 150,809.9 189,398.8...

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