Tsedey Bank Returns to Profit as NPL Ratio Falls to 6.4%
Tsedey Bank has returned to profitability after a difficult financial year, reporting ETB 4.3 billion in gross profit before tax for the 2025/26 fiscal year as institutional reforms helped sharply improve asset quality and strengthen core banking performance.
The turnaround follows the appointment of Yohannes Ayalew (PhD) as President in February 2026, after the bank recorded an ETB 2.13 billion net loss in the previous fiscal year.
According to the bank, its non-performing loan (NPL) ratio declined dramatically from 21.3% to 6.4% during the year, following an ETB 6.1 billion reduction in problem loans. The improvement reflects one of the most significant recoveries in asset quality among Ethiopian commercial banks this fiscal year.
Customer deposits increased to ETB 61.2 billion, up from ETB 45.7 billion a year earlier, while exceeding the bank’s annual target by achieving 101% of plan.
Outstanding loans reached ETB 57 billion, with loan recoveries totaling ETB 30 billion, equivalent to 104% of the bank’s recovery target.
Tsedey Bank also reported a sharp improvement in foreign exchange generation. Forex earnings rose to USD 53.7 million, more than tripling from USD 17.8 million in the previous fiscal year, marking the highest annual foreign currency performance since the bank was established.
In payment services, the bank recorded ETB 51.05 billion in incoming Real Time Gross Settlement (RTGS) transactions against ETB 49.61 billion in outgoing transfers, resulting in a positive net settlement position of approximately ETB 1.43 billion.
Management attributed the improved financial performance to institutional reforms implemented over the past five months, particularly measures aimed at strengthening credit administration, improving loan recovery, and enhancing operational efficiency.
The results were presented during the bank’s 2025/26 performance review and strategic planning forum, where management reaffirmed its long-term ambition of becoming one of Ethiopia’s four largest commercial banks by 2030 and ranking among Africa’s top 40 commercial banks by 2040.
Performance Highlights
| Indicator | FY2025/26 |
| Gross Profit Before Tax | ETB 4.3 billion |
| Customer Deposits | ETB 61.2 billion |
| Outstanding Loans | ETB 57 billion |
| Loan Recoveries | ETB 30 billion |
| NPL Ratio | 6.4% (down from 21.3%) |
| Reduction in NPLs | ETB 6.1 billion |
| Foreign Exchange Earnings | USD 53.7 million |
| RTGS Net Balance | ETB 1.43 billion |
Source: EBR