Global Bank Overhauls Leadership as Liquidity Probe Deepens

Global Bank (Ethiopia) has overhauled its senior management after suspending 18 executives as an internal investigation into the bank’s deposit and liquidity management practices intensifies.

The leadership changes come amid scrutiny over the alleged rapid withdrawal of a large time deposit reportedly worth hundreds of millions of birr, prompting both an internal investigation and regulatory attention from the National Bank of Ethiopia (NBE).

The bank’s Board of Directors, chaired by Yoseph Getachew, appointed Chief Corporate Banking Officer Sahilemichael Mekonnen as Acting President after revoking an earlier delegation made by President Tesfaye Boru (PhD), who had assigned Sahilemichael to oversee operations while he was abroad.

According to people familiar with the matter, the Board’s decision followed a shareholder-backed investigation into the bank’s liquidity and deposit management practices. The inquiry is being led by the bank’s Risk and Compliance and Internal Audit teams, with findings reportedly shared with the National Bank of Ethiopia. The central bank has not publicly commented on the case.

By last week, the Board had suspended 18 executives, including President Tesfaye Boru and one board member, as part of the ongoing investigation.

The governance dispute became public on Thursday when the Board convened approximately 50 major shareholders at Addis Ababa’s Skylight Hotel to discuss developments. The meeting reportedly became contentious after disagreements emerged over the participation of Wubshet Zegeye, the bank’s Chief Retail Banking Officer and a board member who is among those suspended.

The meeting was later adjourned, with shareholders expected to reconvene to consider further changes to the bank’s leadership.

A senior bank executive, speaking on condition of anonymity because he was not authorized to comment publicly, said the matter could have been resolved internally.

“The issues should never have escalated to this level. They could have been handled administratively,” the executive said.

Strong Financial Performance Overshadowed

The governance issues come despite Global Bank reporting one of its strongest financial performances in recent years.

For the 2024/25 fiscal year, the bank increased total assets by 42 percent to 34.43 billion birr, while customer deposits rose 41 percent to 25.75 billion birr, representing the largest annual deposit growth in the bank’s history since it began operations in 2012.

Loans and advances expanded to 20.38 billion birr, while profit after tax climbed 56 percent to 756.6 million birr.

Over the past five years, the bank has nearly tripled its deposit base, expanded assets from 11.63 billion birr to 34.43 billion birr, and increased paid-up capital to 5 billion birr, allowing it to meet the National Bank of Ethiopia’s minimum capital requirement ahead of the June 2026 deadline.

Experts Highlight Governance Risks

Banking expert Tilahun Girma, formerly with Oromia Bank and the Commercial Bank of Ethiopia, said the developments point to broader governance and asset-liability management concerns within the banking sector.

He argued that some banks have increasingly relied on expensive short-term time deposits to address liquidity pressures, a practice that can temporarily improve funding positions while masking underlying structural imbalances.

“What we’re seeing is banks relying on short-term and high-cost time deposits as a fire extinguisher when liquidity tightens,” Tilahun said. “It masks deeper asset-liability mismatches.”

He added that internal governance structures—including the Asset-Liability Committee (ALCO), risk management functions, compliance teams, and boards of directors—should have identified and addressed such practices before regulatory intervention became necessary.

Tilahun also called for stronger corporate governance standards, including greater board independence and enhanced banking expertise among directors.

He cautioned that while the leadership changes may be necessary, restoring confidence will ultimately depend on the findings of the investigation and the actions taken by both the Board and the National Bank of Ethiopia.

“The decisions taken on governance, risk oversight, and depositor protection will determine whether this proves to be an isolated governance lapse or exposes deeper weaknesses,” he said.

Source: Addis Fortune