The Bank’s deposit base grew to 74.65 billion Br, growing by 15.66pc from the previous year, demonstrating its ability to attract funds. However, it was short of the average 30pc surge seen among private banks, yet still a sizable gain. Savings comprised 45.48pc of total deposits, with demand and time deposits accounting for 33.13pc and 21.39pc, respectively. 

Management’s willingness to accept greater lending risks while pushing deposit growth represented a manifold strategy, mixing expansion with caution.

Aminu Nuru, a finance analyst based in Doha, argued that Hibret Bank’s performance should be viewed in the context of the National Bank of Ethiopia’s (NBE) ongoing monetary tightening. The Central Bank’s push to curb inflation by restricting credit growth and increasing emergency lending rates has limited private banks’ capacity to expand. Mandatory investments in Treasury (T-bill) and Development Bank of Ethiopia (DBE) bonds further squeezed liquidity, reducing the scope for credit growth and affecting trade finance activities.

Though Hibret Bank generated 203.61 million dollars in foreign exchange earnings, the analysts observed that the hard currency shortage and falling export and remittance inflows presented a major hurdle for the industry. 

Hibret Bank recorded a total revenue of 13.23 billion Br, a 28.11pc increase, largely driven by higher interest income. However, expenses jumped 39.63pc, with interest costs alone growing 37.81pc. Wage and staff benefit expenses also climbed, expanding the Bank’s workforce to 9,440. Although these measures build the Bank’s capabilities for long-term growth, they pressured margins in the short run. Pre-tax profit edged up only 0.74pc to 3.08 billion Br, when most private banks enjoyed 32pc growth, revealing a tension between expansion and cost control.

Yet, the net profit margin of 23.29pc displayed that the Bank can convert almost a quarter of its earnings into bottom-line returns, a sign of operational efficiency. The challenge lies in curbing operating costs, which accounted for around 41pc of all expenses. Its asset turnover ratio of 13.7pc could reveal an unutilised potential. Much of this gap might result from a labour-intensive operating model in which personnel and administrative costs absorb a large chunk of total expenses.

The coming period will likely test whether Hibret can translate its bigger balance sheet into stronger earnings without exposing itself to undue risk, especially if inflationary pressures and foreign exchange constraints persist. Analysts caution that unchecked wage increases, staff benefits, and administrative outlay could weigh down future earnings if revenue does not keep pace.

"Narrowing profit margins may persist if operating expenses keep rising at a faster pace than revenues," said Aminu. 

Vice President Sisay Molla was concerned about the higher workforce costs. According to him, earlier branch expansions, along with the regulatory mandate for broader reach, required hiring and investments in employee development.

“These steps control costs while maintaining high service standards and supporting staff growth,” he told Fortune. 

During the reporting year, it opened 26 new outlets — eight in Addis Abeba and 18 in regional towns — bringing the Bank's total branch count to 499.

According to Sisay, optimising staff allocation, introducing more automation, and providing performance-based incentives could moderate expense growth over time. Analysts believe continued vigilance will be needed to balance investments in service quality with the bottom line. 

Hibret Bank’s return on equity (RoE) stood at 24.4pc; shareholders earned roughly 24 cents on each Birr invested.

Long-time shareholder Minas Takele, who has held a stake in the Bank for over a decade, praised Hibret Bank’s performance given the year’s economic realities. 

“They should embrace efficient workflow,” he told Fortune, urging executives to focus on loan management, a key indicator of a Bank’s health.

Hibret Bank introduced the Prepaid Hibir MasterCard service with MasterCard, an initiative that executives hope will improve foreign currency access from international travellers. Mobile banking transactions hit 44.07 billion Br, signalling a rising preference for digital banking channels. 

The Bank remains focused on technological fronts. According to Sisay, digital transformation is essential for streamlining processes, cutting operating expenses, and attracting customers, especially as the industry embraces digitalisation. He attributed Hibret Bank’s strong in-house IT team to a competitive edge that allows it to develop solutions quickly, implement new banking technologies, and stay ahead of market trends. 

"By ramping up digital services, Hibret Bank strengthened customer engagement and enhanced profitability through lower overhead," said Sisay.

While some observers worry about credit risk and liquidity, the Bank reinforced its capital by issuing two billion Birr in fresh shares, lifting paid-up capital to seven billion Birr. Total equity reached 12.65 billion Br, mirroring a trend among private lenders to enlarge their paid-up capital, with some estimates placing the industry-wide jump at around 30pc. An asset-to-equity ratio of 7.64 times unveiled an assertive strategy of funding asset expansion through borrowing, though analysts do not see an immediate cause for alarm at that level. They view this as a sign of growing confidence in the Bank’s performance, as well as a safeguard against the volatility of changing times. 

The change was also seen in the composition of the senior management team.

Following the departure of Melaku Kebede, who served for nearly four years as Hibret Bank's president, where he spent two decades, the Board has nominated a new president. Under Chairperson Samrawit Getamesay, the Board submitted the nomination of Tsigereda Tesfaye, a senior vice president for business and operations, to the National Bank of Ethiopia (NBE) last month. If approved, Tsigereda would become the third woman to head a bank currently, and Hibret Bank would be the only Bank led by a female board chairperson and president. 

Tsigereda has 30 years of banking experience, having previously worked for the now-defunct Construction & Business Bank (CBB) and Dashen Bank before joining Hibret Bank in 2004. She advanced through credit and risk management roles, becoming senior vice president. Since August 2024, she has served as acting president, ensuring continuity as the board formalised its choice.

As operations manager, she is credited for pushing the Bank to diversify revenue streams, including interest-free banking (IFB). It released a separate financial statement for IFB operations, a rare approach in the industry. Sisay credited a knowledgeable Sharia advisory committee for ensuring these services meet faith-based requirements, attracting a dedicated clientele. Partnerships with other financial institutions and Islamic organisations further expanded its IFB offerings. 

Loans and advances grew from 58.8 billion Br to 67.4 billion Br, a 14.5pc increase that stayed within regulatory caps. However, analysts say this lifted Hibret Bank’s loan-to-deposit ratio to 92.28pc, surpassing the 85pc norm many banks target. A higher ratio can boost interest income, which accounts for around 83pc of Hibret Bank’s -about credit quality if economic conditions worsen. Observers say carefully monitoring macroeconomic shifts is essential for safeguarding the bank’s loan portfolio. 

Net operating income rose from 7.075 billion Br to 8.026 billion Br, a growth Sisay characterised as evidence of solid revenue generation.

Despite this progress, net income after tax dropped by two hundred million Birr to 2.3 billion Br, mainly because of higher impairment charges, which soared from 103 million Br to 496 million Br. According to Sisay, Hibret Bank will tighten its follow-up on borrowers to ensure they remain in business and repay their loans. While it has sustained year-on-year (YoY) growth in net operating profit, Sisay attributed the slight dip to strategic outlays meant to boost the Bank’s long-term competitiveness. 

“We acquired assets with high depreciation values and invested in our employees,” he told Fortune. "These measures would position Hibret to keep pace with industry demands."

Sisay disclosed that boosting fee-based services and diversifying sources of revenue are top priorities. Improving digital banking to reduce costs and expand the customer base is also on the agenda, as is streamlining loan reviews to lower non-performing loans (NPLs). Analysts say the surge in impairment charges implies the Bank should remain cautious, but Sisay argued that the NPL ratio of 2.8pc is a level well below regulatory thresholds. 

“We continue to aim for levels below the National Bank’s standards and implement various strategies, which have consistently demonstrated the strong capability of our Bank,” he said.