NBE Rejects Global Bank Acting President Nominee Amid Liquidity Investigation

The National Bank of Ethiopia has forced Global Bank S.C. back to the drawing board after rejecting the lender’s choice of Sahlemichael Mekonen as acting president, leaving the bank searching for new leadership while it remains under regulatory scrutiny.

The decision means Global Bank’s Board cannot simply formalise the executive arrangement it put in place following the suspension of former President Tesfaye Boru (PhD). The lender has instead been instructed by the central bank to submit another candidate.

The NBE cited leadership eligibility requirements in rejecting Sahlemichael’s nomination. Under the rules referenced by the regulator, bank presidents must have at least 12 years of relevant industry experience, including five years in senior executive positions, as well as a graduate-level qualification from an accredited institution.

Sahlemichael’s rejection is particularly notable because he had already been running the bank on an acting basis after Tesfaye was suspended. He previously served as Global Bank’s Chief Corporate Banking Officer and has more than two decades of banking experience.

The regulatory decision now creates another leadership gap at a bank already dealing with an investigation into its financial and governance practices.

Leadership Dispute Becomes a Regulatory Test

Global Bank’s management problems emerged after the NBE conducted a special inspection that examined the lender’s corporate governance, lending operations, foreign exchange activities and financial management.

The inspection followed concerns over irregular movements involving a large time deposit. The episode subsequently triggered the suspension of Tesfaye and a wider review involving senior executives.

The NBE later determined that the findings warranted stronger action against Tesfaye, removing him from office and prohibiting him from holding senior executive or board positions at Ethiopian financial institutions for five years.

Global Bank’s Board subsequently attempted to maintain operational continuity by putting Sahlemichael in charge.

The NBE’s rejection shows that maintaining continuity is not enough when the regulator’s requirements for executive appointments are not satisfied.

Growth Has Outpaced Governance?

The leadership crisis comes against a backdrop of rapid expansion at Global Bank.

The lender increased its assets by 42 percent to 34.43 billion birr in 2024/25, while deposits climbed 41 percent to 25.75 billion birr. Profit after tax also increased to 756.6 million birr, up from 486 million birr the previous year.

That growth has placed greater importance on the bank’s internal controls, liquidity management and governance structures.

The current episode therefore raises a broader question for Ethiopia’s smaller and rapidly expanding banks: can governance and risk-management systems keep pace with balance-sheet growth?

Global Bank’s experience comes as the NBE is placing greater emphasis on corporate governance, liquidity management and the accountability of boards and senior executives across the banking industry.

Another Appointment Awaits

For Global Bank, the immediate task is straightforward but consequential: identify a new candidate who satisfies the NBE’s requirements and can take charge while the wider regulatory process continues.

The bank’s next appointment will be more than a routine management change. It will come under the scrutiny of a regulator that has already intervened directly in the lender’s leadership.

The episode also reinforces a broader shift in Ethiopia’s banking sector, where regulatory approval is becoming increasingly important in determining who can lead financial institutions—and where strong financial performance alone may not shield banks from governance intervention.

Source: The Reporter