Dashen Bank 2023 Report 4 Website 2 1

ANNUAL
REPORT
2022/23
27th ANNUAL REPORT FOR THE YEAR ENDED JUNE 30, 2023
CONTENT
OUR SCORECARD BOARD OF DIRECTORS
Total Assets Deposits Oustanding Loans & IFB

(In Millions Birr) (In Millions Birr) Financing Net of Provision
144,641 (In Millions Birr)
114,848
116,037 100,198
91,236
94,697 78,016
74,554
63,903
2020/21 2021/22 2022/23 2020/21 2021/22 2022/23 2020/21 2021/22 2022/23
Total Capital Paid-up Capital Revenue

(In Millions Birr) 19,319 (In Millions Birr) (In Millions Birr) 17,924
9,345
14,380 12,906
6,863
10,259
10,125
4,388
Dulla Mekonnen
Chairman
2020/21 2021/22 2022/23 2020/21 2021/22 2022/23 2020/21 2021/22 2022/23
Expense Profit Before Tax Cost-to-Income Ratio

(In Millions Birr) (In Millions Birr) (Percentage)
12,907 66.8% 63.8%
5,017 60.0%
9,103 3,804
7,833
2,427
2020/21 2021/22 2022/23 2020/21 2021/22 2022/23 2020/21 2021/22 2022/23
Earning Per Share Number of Customers Number of Amole Subscribers

(In Thousands) (In Thousands)
532
471 5,270
442 4,069
3,745
3,777
3,202
Abdulmutelib Beyan Abebe Teklu Getaw Yalew Haile Assegide
2,411
Director Director Director Director
2020/21 2021/22 2022/23 2020/21 2021/22 2022/23 2020/21 2021/22 2022/23
Number of Cardholders Number of Loanees Number of Branches Including Outlets

(In Thousands)
1,888 28,551 28,436 835
1,553 24,216
1,293 582
454
2020/21 2021/22 2022/23 2020/21 2021/22 2022/23 2020/21 2021/22 2022/23
Number of ATMs No. of POS Terminals Number of Staff

(Including Contract Employees)
1,456
403 405 1,340 1,388 17,571
388
12,406 Mekete Dagnew Negussie Demie Rahel Worede Saeed Ahmed

10,492
Director Director Director Director
2020/21 2021/22 2022/23 2020/21 2021/22 2022/23 2020/21 2021/22 2022/23
4 | | 5
SHARI'AH ADVISORY COMMITTEE EXECUTIVE MANAGEMENT
Asfaw Alemu
Chief Executive
Officer
Sheikh Muhammed Yasin Ustaz Mahmoud Hassen

Ibrahim Hussen
Chairman Vice Chairman Alemneh Abebe Asfaw H/Mariam Ayele Teshome Eyerusalem Wagaw
Chief Financial Chief Internal Chief Banking Business Chief People
Officer Auditor Officer Officer
Freegzi Berhane Getnet Dessie Mesfin Bezu Mulugeta Alebachew

Chief Corporate Services Chief Enterprise Risk Mgmt. Chief Interest Free Banking Chief Strategy & Innovation
Dr. Kemal Haji Geletu Ustaz Mustaffa Hamid Ustaz Remedan Ahmed Officer & Compliance Officer Officer Officer
Mamme Yusuf Abdo
Member Member Member
Tesfaye Anene Tibebu Solomon Yihnalem Aknaw Yohannes Million

A/Chief Information Chief Banking Operations Chief Retail, MSME & Chief Digital Banking
Officer Officer Branch Banking Officer Officer
6 | | 7
STATEMENT OF THE BOARD CHAIRMAN
ances. On top of the pressure from the global macro registering a growth of Birr 2.2 Billion or 36.7 %. The Distinguished Shareholders,
environment, economic growth continues to be chal- aggregate loans and advances balance including IFB At the conclusion of the fiscal year, our workforce
lenged by chronic forex shortage, unabated and high financing of the Bank has reached Birr 100.2 Billion, comprised 17,571 employees. Out of this staff strength,
inflation, unemployment, and growing budget deficit registering a year-on-year growth of Birr 22.2 Billion permanent employees constituted 58.4%, while the
and external debt. In the meantime, the government or 28.4% compared to last year’s same period. At the remaining 41.6% were outsourced. The Bank strives
has implemented and is pursuing various fiscal and close of the reporting period, the Bank’s network has to improve gender diversity in its workforce. Women
monetary policies. Among others, the establishment of reached a total of 835 branches, including 41 outlets. comprised 30% of the permanent staff by the close of
a capital market, broadening the tax base, forex liber- This expansion is attributed to the opening of 253 new the reporting period.
alization, FCY retention, treasury bond purchase, etc. branches and outlets, representing an impressive
are worth noting. 43.5% year-on-year growth. During the reporting period, Dashen Bank prioritized
several key IT initiatives and infrastructure mainte-
The banking sector has also witnessed a number of Total assets of the Bank surged to Birr 144.6 billion, nance, with a strong focus on ensuring system relia-
directives (both new and amendment to existing ones), registering a growth of Birr 28.6 Billion and 24.7% bility and performance. The Bank achieved significant
the entry of new banks and non-bank financial insti- growth compared to last year. Owners’ equity also went milestones in process automation and software devel-
tutions into the scene further heightening competition. up to Birr 19.3 billion attaining 34.3% growth relative to opment. A range of tailored applications catering to
The directives directly and indirectly affect the banks’ last year. Half of the growth came from paid-up capital, diverse needs, such as micro-lending, payment collec-
resource availability, operational and compliance costs, which increased by Birr 2.5 Billion or 36.2% compared tion, audit management, and event management, were
and profitability. More importantly, the reinstatement of to last year. In terms of profitability, the Bank was able successfully completed.
the DBE Treasury bond requirement has a significant to earn a profit before tax of Birr 5 Billion registering a
impact on banks’ credit deployment and earnings. 31.9% growth over last year’s same period. The Bank’s fruitful partnership with Ethio Telecom, a
collaboration that has catalysed robust digital lending
Distinguished Shareholders, Distinguished Shareholders, practices in the Country’s financial landscape has
DULLA MEKONNEN, As at June 30, 2023, the number of private banks With the conclusion of the 5-year strategy plan that been a particularly noteworthy accomplishment. This
Chairman, Board of Directors reached 28 with seven new banks. Furthermore, the covered from 2018/19FY to 2022/23FY, the Bank has strategic direction is in alignment with the Bank’s
evolving digital ecosystem and the enabling environ- embarked on an exciting new phase. In partnership overarching objective of rendering accessible and
Honourable Shareholders,
ment have encouraged and increased the presence with McKinsey & Co., the Bank has been crafting a affordable banking services to a broader demographic,
On behalf of the Board of Directors and myself, it gives
of non-bank players in the banking sector, which was 5-year corporate strategy that sets the course for its all the while embracing cutting-edge digital solutions.
me great pleasure to present the highlights of Dashen
dominated by banks for a long time. In a bid to preserve future growth. The strategy will be instrumental in The Bank has also fully implemented its DubeAle
Bank’s performance during the financial year 2022/23.
their market share and remain relevant, banks are driving innovation, enhancing customer experiences, products. The product allow Dashen Bank customers
In the reporting year under consideration, we have strengthening their digital capabilities and offerings and achieving sustainable broad-based growth in the with DubeAle accounts to enjoy the privilege of buying
observed multifaceted global and domestic occur- through partnerships to catch up with the evolving evolving financial landscape. goods and services on a deferred and equal install-
rences that surfaced opportunities on the one hand trend and capture the digital ecosystem opportunity. ment basis rather than paying upfront (i.e., at the time
Distinguished Shareholders,
and challenges on the other. With its multidimensional of purchase).
Despite the challenging environment, I am pleased to Leveraging its hard earned reputation, prudent prac-
ramifications, the Russia – Ukraine war was the most
announce that our Bank has achieved a commendable tices and sound financial position, the Bank has been Dashen Bank has demonstrated a robust commitment
critical one in disrupting the supply chain coupled with
performance during the 2022/23 fiscal year. exploring opportunities with international Development to Corporate Social Responsibility (CSR) through a
China’s Zero-COVID Policy that dampened global
Finance Institutions (DFIs). The effort has borne fruit diverse range of impactful initiatives. The Bank has
output and trade and drove global inflation. The recent
Distinguished Shareholders, with the USD 40 million commitment by the British worked in this area to drive positive community impact
reopening of China and the easing of energy prices
The Bank in the year under consideration has managed International Investment (BII) and the Dutch Entrepre- and socio-economic development.
due to mild winter in Europe points to a near-term posi-
to mobilize incremental deposits of Birr 23.6 billion and neurial Development Bank (FMO). This is a pioneering
tive growth prospect in the largest economies and are
increased the aggregate positional balance to Birr investment by international financial institutions into Distinguished Shareholders,
expected to bring improvements in commodity prices
114.8 billion, which is a 25.9% growth compared to last Ethiopia’s private banking sector after the introduction The Board of Directors and its Sub-committees, i.e.,
and inflation.
year’s same period. The Interest-Free Banking wing of the foreign currency intermediation directive issued Strategy, Audit, Risk, and Human Resources, executed
of the Bank has continued growing, contributing Birr by the NBE. The Bank will extend the fund to local their oversight duties as per their Charters. Based on
Domestically, the reporting period has witnessed
8.1 Billion to the aggregate deposits of the Bank after businesses engaged in forex-generating agricultural its bylaw, the Board conducted twelve ordinary and
socio-political instability and macroeconomic imbal-
investments. two extraordinary meetings and deliberated on and
8 | | 9
THE CEO’S MESSAGE
passed resolutions on various agenda items during the Distinguished Shareholders, Honorable Shareholders,
2022/23 fiscal year. The Board closely oversaw and In conclusion, on behalf of the Board of Directors and I am pleased and honored to present the annual per-
gave directions on issues based on its mandate. These myself, I would like to extend my sincere thanks to our formance of the Bank for the fiscal year ended 30th
included approval of various policies, annual budgets, esteemed customers for their continued confidence June 2023. The ensuing parts of the statement will
and procurement requests above a certain amount. and loyalty in our Bank; our shareholders for their confi- cover the operating environment, the Bank’s overall
The Board also evaluated monthly, quarterly, and dence and sustained commitment; the management performance, the Bank’s business and organizational
semi-annual performance progress reports and gave and staff of the Bank for their diligence, dedication and development, the way forward, and finally, a vote of
feedback to the management. Moreover, the Board outstanding sense of ownership; the National Bank of thanks.
participated and gave direction in the preparation of Ethiopia for their professional guidance; and all other
the Sixth Strategy Plan, which will guide the direction stakeholders for their direct and indirect contribution to The Operating Environment
of the Bank in the next five years to 2027/28 fiscal year. the success of our Bank The global economic outlook continues to remain frag-
Yours Sincerely, ile amidst concern over a slowdown in global econom-
In the reporting period, the Board has critically reviewed ic growth due to the impact of monetary policy tight-
and endorsed its Sub-committee’s quarterly reports. ening by global central banks; continued war between
It discussed and gave comments on Loan Reviews, Russia and Ukraine; trade tensions and continued
ALCO, and Risk Reports on quarterly basis. Delibera- high inflation levels despite moderation from historic
tions were made on the quarterly CAMEL ratings given highs of last financial year. In its latest World Eco-
by the National Bank of Ethiopia. It also conducted the nomic Outlook (July 2023), IMF has projected global
full Board’s, individual board members’, and Sub-com- growth to fall from an estimated 3.5% percent in 2022
mittees’ evaluations semi-annually. to 3.0 percent in both 2023 and 2024.
Dulla Mekonnen,
Board Chairman World trade growth is expected to decline from 5.2
percent in 2022 to 2.0 percent in 2023, before rising to
3.7 percent in 2024, well below the 2000–19 average
of 4.9 percent. The decline in 2023 reflects not only ASFAW ALEMU
the path of global demand but also shifts in its com-
CEO
position toward domestic services, lagged effects of
US dollar appreciation, and rising trade barriers (IMF
The economic growth of the Country is expected to
World Economic Outlook, July 2023).
remain relatively strong at 6.1 percent as the effects
of multiple domestic and external shocks abate. Swift
On the domestic front, the Ethiopian economy grew
implementation of macroeconomic and structural re-
at 6.4 percent in 2022, which is close to the two prior
forms could lead to an even higher growth rate in the
years’ growth figures of 6.1% and 6.3% but a plunge
2023 fiscal year and in the medium term.
from the previous five-year average of 9 percent. In
addition to the pressure from the global macroeco-
The Banking industry has been operating under
nomic environment, the domestic economy continued
challenging conditions in the year under review due
to be challenged by forex shortage, high inflation, un-
to the macro-economic and political situation of our
employment, a growing budget deficit, and external
country as witnessed by the slowing down of the busi-
debt. To address the critical issues challenging the
ness environment, high inflation, shortage of foreign
macroeconomic situation of the Country, the govern-
currency, insecurity in some parts of the country that
ment has been taking various monetary and fiscal pol-
disadvantaged the operation of some of our branch-
icy measures including liberalization and privatization
es and caused difficulty in mobility among others. The
of state-owned enterprises, the establishment of the
unusually prolonged liquidity stress had also taken a
capital market, broadening the tax base, FCY reten-
toll on the sector limiting the credit deployment en-
tion, treasury bond purchase, etc.
deavor of banks. The National Bank of Ethiopia has
10 | | 11
introduced various contractionary measures includ- and stood at Birr 9.3 billion. domestic and international e-commerce transactions. strengthening and nurturing its talent and employee
ing the reinstatement of the DBE treasury bond and During the period under consideration, the Bank has The Ethiopian Minerals, Petroleum, and Bio-fuel Cor- capabilities through up-skilling and re-skilling of our
the introduction of an additional requirement of 20% generated a total revenue of Birr 17.9 billion regis- poration has become the first to be enabled for online employees across all levels and functions. Organiza-
T-Bond purchase. tering a growth of 38.9% over the previous year. All e-commerce transactions. tional talent and capability can be harnessed through
sources of revenue have shown positive growth while an enabling culture and environment. Accordingly, the
On a positive note, the reduction of the percentage of the lion’s share i.e. 75% of the revenue was earned We at Dashen, remain committed to increasing our Bank has embarked on the design and implementa-
forex earnings surrendered to NBE (on export) from from interest income. The Bank has incurred a total footprint and accessibility throughout Ethiopia. During tion of the organizational culture by giving specific fo-
the previous 70% to 50% was a favorable instance. expense of Birr 12.9 billion exhibiting a 41.8% growth 2023, we opened a record-high 253 additional branch- cus to revamping the customer service culture.
With the opening of the industry for diverse players, over last year’s same period. es at various locations bringing us more closer to our
several financial and non-financial institutions have customers. With a customer base of 5.2 plus million, As a responsible corporate citizen, Dashen Bank goes
joined the financial market redefining the competitive As a result, the Bank has registered a profit before tax we continue to place utmost importance on under- beyond its role in the financial sector and strives to
landscape. of Birr 5.0 billion registering a growth of 31.9% over standing and addressing the evolving needs of our empower and create a positive impact on the com-
the previous year with an earning per share of Birr customers. Through our 835 branch networks, 388 munity. As part of our Corporate Social Responsibility
Operating and Financial Performance 442. ATMs, and other digital platforms we strive to deliver (CSR) initiatives, in partnership with MIDROC Ethio-
Despite the global economic challenges and domes- best-in-class banking services tailored to our custom- pia, we have opened the third feeding center in Lemi
tic hurdles, which have a significant impact on our Business and Organizational Development ers’ needs. Kura Sub-city and provided financial support to vari-
Bank’s performance, the strength and resilience we As the fiscal year 2023 marked the end of our five-year ous noble causes. In the fiscal year 2022/23, our Bank
have built over the years has sustained us. Our per- strategy, we have been engaged in the development The unique engagement with development financi- made donations and contributions to the tune of Birr
formance reflected our resilience and determination to of our new strategy and road map taking into account ers and its fruition was an encouraging and exem- 285 million to various initiatives.
deliver optimal value for our stakeholders. internal/external assessments, evolving market dy- plary milestone for the Bank. The Bank went through
namics, current regulatory directions, macroeconomic a successful and detailed due diligence process and Though we are at an early stage on our ESG (En-
In terms of operational performance, our channel ex- developments, and future prospects. secured an unsecured foreign loan to the tune of USD vironmental, Social and Governance) journey, dur-
pansion, customer attraction, resource mobilization 40 million on a joint commitment from the UK’s British ing the fiscal year, we have made a conscious effort
and deployment have recorded positive growth over In continuation with our effort to optimize business International Investment (BII) and Dutch FMO making to scale up our ESG capabilities. Our Bank remains
last year’s same period. The year under consideration growth while providing unparalleled banking servic- our Bank the first Financial Institution in Ethiopia to cognizant of the criticality of adopting the principles
has witnessed a record milestone wherein the Bank’s es to our valued customers, we have announced a obtain medium-term funding from DFIs’ under the For- of ESG into its strategy and activities and is working
resource base and outstanding loans and advances myriad of products/services in the current fiscal year. eign Currency Intermediation Directive for Banks. The towards strengthening the same through developing
surpassed the Birr 100 billion threshold. One of the remarkable achievements in this regards, funding, apart from proving that there are able Ethio- an ESG strategy for the future.
was the successful launch of digital financial services pian Institutions, will also be instrumental in boosting
A review of our financial position reveals positive per- in partnership with Ethio Telecom, which has been in- the Country’s agricultural exports. Our Bank has garnered numerous notable acco-
formance in terms of key performance metrics. strumental in enhancing access to financial services. lades throughout the years. In cognizance of our
We have also launched a Buy-Now-Pay-Later prod- Moreover, it has also been a year wherein our Bank Bank’s efforts in adopting banking technologies in the
The Bank maintained a well-diversified balance sheet uct dubbed DubeAle in collaboration with EagleLion has further enhanced its partnership with regional fast-evolving digital space, we have received the pres-
with Total Assets closing at Birr 144.6 billion register- Systems Technology, which allows users to purchase banks namely Afrexim Bank and Trade and Devel- tigious recognition “Bank of the Year 2022 for Ethio-
ing a growth of 24.7% over last year’s position. The goods and services on credit. opment Bank (TDB), wherein the banks meaningfully pia” Award from the Banker Magazine, an affiliate of
lion’s share of the Assets, Loans, and Advances, and supported the importation of petroleum and capacity Financial Times, in this fiscal year for the 12th time.
IFB financing also witnessed a growth of 28.4% over Further Strengthening our partnership and collabora- building. The Bank also benefited from its close work-
last year’s same period and stood at Birr 100.2 billion. tion with MasterCard, the Bank has introduced an in- ing relationship with the International Finance Corpo- The Way Forward
On the Liability side, the overall positional deposits novative multi-currency international prepaid card that ration (IFC), wherein the Corporation technically sup- The coming fiscal year marks the beginning of our
balance from both the conventional and interest-free offers both plastic and virtual options providing cus- ported the Bank in modernizing its Treasury Manage- new five-year strategic plan and roadmap. As we her-
banking customers grew by 25.9% and reached Birr tomers with the flexibility and convenience to make ment in lieu of the upcoming dynamics in the Sector. ald the next five-year strategy (i.e. 2023/24-2027/28),
114.8 billion by the end of the period under consid- online purchases at any merchant website world- we remain optimistic about our Bank’s future and are
eration. The total equity of the Bank grew by 34.3% wide where MasterCard is accepted. In addition, the As an organization, we believe that our long-term devoted to delivering optimal performance and the
and reached Birr 19.3 billion. The share capital that Bank has enabled the MasterCard Payment Gateway success depends on the progress of our employees best value to our stakeholders.
constitutes 48.4% of the total equity grew by 36.2% (MPGS), which will be instrumental in facilitating both and communities. Our Bank continues to invest in
12 | | 13
BOARD OF DIRECTORS' REPORT
While keeping a watchful eye on uncertainties in the As a Bank, we are audacious to translate possibili- REVIEW OF THE OPERATING ENVIRONMENT
macroeconomic as well as task environment, we will ties into opportunities for sustainable business growth In the fiscal year, the global economy has been facing various challenges that are anticipated to result in a slow-
ensure the effective execution of our strategic priori- through the strong commitment of our talented work- down of economic growth to around 2.7% according to World Economic Outlook report of International Monetary
ties with a renewed spirit. We at Dashen Bank appre- force and the guidance of our strong leadership team Fund. Factors such as geopolitical conflicts, rising inflation, and changes in monetary policies have collectively
ciate the significance of environmental sustainability towards providing banking solutions to our valued contributed to the current weak global economic conditions. Despite some positive indicators like improvements in
and corporate responsibility and are determined to customers and delivering sustainable values to our the labour market and corporate profits, uncertainties persist, particularly concerning global inflation, with projec-
incorporate Environmental, Social, and Governance shareholders. tions suggesting a decline but still remaining relatively high compared to pre-pandemic levels.
(ESG) factors into our strategies and conducts.
Vote Of Thanks On the domestic side, the operating environment has been characterized by persistent challenges, including
In a bid to prepare for the upcoming developments in On behalf of myself and the entire team of Dashen instability and conflict, high inflation, widespread drought, and depreciation in the value of Birr. Positively, there
relation to the establishment of the capital market and Bank, I would like to extend my sincere gratitude to has been a resumption of relations with donor countries and financiers, marking a notable step forward in inter-
entry of foreign competition, our Bank has started an the Board of Directors of our Bank for the guidance national cooperation. Several reform initiatives are actively underway, with significant progress evident in the
internal readiness assessment. and expertise in overseeing our Bank; and our Share- establishment of a robust capital market, anticipated to play a pivotal role in modernizing the business landscape.
holders for the unwavering confidence and support. I
As we chart a new future for our Bank, we aim to in- would also like to express my profound appreciation Moreover, the financial sector has exhibited substantial growth, characterized by the entry of new players and a
crease our customer base, by introducing innovative to the staff of the Bank at all levels whose relentless heightened emphasis on digital innovation. Collaborative efforts with fintech companies and telecom operators
and customized value propositions, and by leveraging efforts and commitment have been the driving force have resulted in an expanded array of financial products and the widespread adoption of digital financial services,
technology providing exceptional Banking services to behind the Bank’s continued success. I am thankful marking a noteworthy evolution in the sector.
our valued customers. We foresee high growth poten- to our cherished customers for their continued trust
tial within emerging MSMEs and will focus on expand- and patronage. Finally yet importantly, my respect OPERATIONAL HIGHLIGHTS
ing our customer base in this regard by leveraging our and gratitude goes to the National Bank of Ethiopia for This section briefly presents the overall operational performance in channel expansion, customer base, resource
digital capabilities. their unreserved support, guidance and responsive- mobilization, resource deployment, and digital and international banking activities for the reporting period.
ness; and to all other stakeholders of the Bank, par-
During the coming years, we will continue to reinvent ticularly Ethio Telecom for their continued cooperation Channel Expansion
ourselves by building on our strengths in line with the and partnership. The Bank’s commitment to enhancing customer accessibility, capturing markets, and gaining a competitive edge
evolving industry landscape and customers’ needs. is evident in its significant expansion of the branch network. At the close of the reporting period, the Bank’s
Thank you,
We are highly confident about achieving growth network has reached a total of 835 branches, including 41 outlets. This expansion is attributed to the opening of
across all of our business segments, in line with our vi- 253 new branches and outlets, representing an impressive 43.5% year-on-year growth.
sion to be a “Best in Class Bank in Africa”. Dashen will
continue its focus on asset quality and on diversifying
its credit as well as deposit portfolio mix. We will also
strengthen the existing and explore new partnership
opportunities, ensure operational efficiency, leverage Asfaw Alemu
on the investments we have made in technology, and CEO
embark on various cost-saving initiatives.
Customer Attraction
The Bank’s total number of customers reached close to 5.3 million as of June 30, 2023 rising by 1.5 million and
a noteworthy year-on-year surge of 39.5%. This achievement can be attributed to the Bank’s aggressive branch
expansion. Leveraging its extensive coverage, the Bank is now actively advancing financial inclusion across the
breadth and width of the Country.
14 | | 15
Deposit Mobilization
In the face of existing challenges, the Bank has achieved commendable progress in deposit mobilization. At the
close of the fiscal year, total deposits surged to Birr 114.8 billion, after achieving a Birr 23.6 billion or 25.9% growth
Loans and IFB Financing
compared to last year. The operating conditions, characterized by a context of moderate domestic economic
Liquidity constraints, partially driven by factors such as allocating funds for acquiring Treasury and Develop-
growth, rising living costs, strong competition, and security challenges, have posed significant obstacles to
ment Bank of Ethiopia Bonds, have been affecting credit deployment efforts. Despite the constraints, the Bank
resource mobilization. Despite these challenges, the Bank has endeavored to attain the aforementioned result
managed to raise its loans and advances and IFB financing to Birr 100.2 billion, registering a year-on-year growth
through extensive channel and customer base expansion, improved value propositions, customer and community
of Birr 22.2 billion or 28.4%. The lower-than-expected local deposits mobilization and the impact of government
engagements, and partnerships established with diverse stakeholders.
bond purchase requirements have impacted registered growth.
The Bank’s funding portfolio is characterized by its diversity, catering to a wide range of customers and business
segments. The loan and financing portfolio covers retail, small, medium, and large corporate clients operating in
various economic sectors. Notably, a significant portion of the Bank’s resource is channelled to Domestic Trade
and Services, International Trade, as well as Manufacturing sectors.
In the pursuit of maintaining a well-rounded approach between deposit stability and funding costs, the Bank’s
overall deposit pool consists of various components. Savings deposits make up 58.1% of the total deposit base.
This crucial category, originating mainly from consumers, provides stable loanable funds.
On the other hand, demand deposits, primarily originating from business entities, constitute a substantial share
of 35.8% of the total deposit, signifying a modest growth in share compared to the previous year. Additionally, the
Bank has optimally managed fixed-term deposits, which made up 6.1% of the total deposit. By limiting the growth
of costly fixed-term deposits and directing efforts towards more stable savings deposits and cost-efficient demand
deposits, the Bank has effectively balanced its deposit portfolio.
Note
‘DTS’ refers to Domestic Trade and Services.
‘CMRWC’ represents Construction Machineries Rental and Working Capital.
‘Consumer loans’ include Personal, Staff Housing Loans, Emergency Staff Loans and Dube Ale Loans.
‘Others’ include Loans & Advances in Litigation, MasterCard Foundation Loan Facility, DBE SME Finance Project, Special Financing Scheme - Hotel and Tourism,
Advance on LC and Mining.
16 | | 17
Digital Banking
Dashen Bank has enhanced Omni-channel financial platform, named Amole, which provides seamless online and
mobile banking experience. The Bank optimized the Amole Lite mobile app to offer a simpler and lighter interface,
ensuring an improved user experience.
Moreover, the Bank has strengthened its digital presence by establishing integrations with renowned payment
gateways, including VISA, MasterCard, FlutterWave, and Thunes. These strategic steps allow local businesses
to effortlessly connect into the online marketplace, offering their products and services worldwide while easily
accepting electronic payments. The mutually beneficial partnerships not only enrich opportunities for esteemed
merchants in the global e-commerce landscape but also enhance the Bank’s foreign currency generation capa-
bilities. IFB Customer Attraction
Driven by the channel expansion, the Bank achieved significant results in customer attraction. By June 30, 2023,
Aligned with the commitment to digital innovation, Dashen has previously formed impactful partnerships with the number of IFB accountholders surged to 720,818, up by 327,417 additional accounts, marking an 83.2% year-
EagleLion and Ethio Telecom. These collaborations have paved the way for ground-breaking digital products, on-year growth.
such as micro-lending and guarantees, crucial tools in deepening financial inclusion in the Country.
During the reporting period, the Bank has enhanced accessibility of its services, tapping into previously unex-
Dashen accepts international cards, including AMEX, Visa, MasterCard, and UnionPay. Notably, the Bank retains plored markets and customer segments.
its prime position as the acquirer and issuer of American Express cards in Ethiopia. The number of POS Merchants
has reached 1,842, showing a year-on-year growth of 29.4% or an increment of 419 merchants.
Catering to a wide spectrum of customers, Dashen’s local card offerings leverage the Bank’s strategic partner-
ship with major players in the retail and hospitality industry to issue co-branded cards. This digital prowess has
not only enriched customer convenience but has also translated into substantial financial gains, as the Bank has
effectively generated USD 40.9 million from international card transactions processed through these channels.
International Banking
The ongoing foreign exchange shortage continues to have an impact on resource mobilization and allocation.
Despite the obstacles, Dashen Bank has displayed resilience and achieved notable progress in foreign currency
mobilization. In the reporting period, the Bank has effectively raised USD 1.0 billion, achieving a year-on-year IFB Deposit Mobilization
growth of 43.7%. The Bank has achieved substantial progress in mobilizing resources from its Interest-Free Banking (IFB) segment.
IFB deposits stood at Birr 8.1 billion at the end of June 2023, representing an encouraging year-on-year growth
INTEREST FREE BANKING OPERATIONAL HIGHLIGHTS of Birr 2.2 billion or 36.7%.
Dashen Bank is registering encouraging strides in the Interest-free Banking business. In the reporting period,
the Bank became member of the global Accounting and Auditing Organization for Islamic Finance Institutions
(AAOIFI). Dashen is the first bank to join AAOIFI from Ethiopia. This section discusses Interest Free Banking
performance of the Bank in terms of channel expansion, customer recruitment and retention, resource mobiliza-
tion and financing for the reporting period.
IFB Channel Expansion

Dashen Bank recognizes the opportunity Interest Free Banking (IFB) presents, and has embarked on a journey to
leverage this potential to the fullest. Aimed at withering competitive challenges from conventional and full-fledged
banks by aligning with broader industry trends and evolving customer needs, the Bank has been expanding its
IFB branches footprint. As a result, the full-fledged IFB branch network has reached 67 with the addition of 23 new This growth in IFB deposits is primarily attributed to the Bank’s channel and customer base expansion efforts.
branches. This represents a year-on-year increase of 52.3%, which is in line with the overall impressive expansion Customer and community engagement programs, and partnerships with value chain actors have also contributed
the Bank achieved during the reporting period. to the result achieved.
18 | | 19
IFB Financing STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
The IFB financing portfolio experienced a paramount increment, totalling Birr 2.0 billion, during the reporting period. Total Income
This brought the net IFB financing position to Birr 5.2 billion, showing a year-on-year growth of 63.7%. Notably, the The Bank has generated a total revenue of Birr 17.9 billion, representing a significant year-on-year growth of
highest sector allocation went to Domestic Trade and Services, comprising 49.3% of the IFB financing portfolio. 38.9%. The composition of the revenue was primarily dominated by interest income, constituting 74.8%, while
Real Estate is the second largest sector that the Bank channelled resources to. The latter is closely followed by the remaining balance was generated from commissions and service charges on both domestic and international
International Banking Services (Export and Import). banking services.
Total Expense
On the expense side, the Bank has incurred a total outlay of Birr 12.9 billion, recording a year-on-year growth of
41.8%. The primary components of the expenditures were personnel expenses, which constituted 36.7%. Interest
Note
‘DTS’ refers to Domestic Trade and Services.
paid on deposits made up 31.5%, while fees along with other operating expenses, contributed to 31.8% of the
‘CMRWC’ represents Construction Machineries Rental and Working Capital. total expenditure.
‘Consumer Financing’ include Personal and Emergency Staff Financings.
‘Others’ include Financing in Litigation and Mining.
FINANCIAL PERFORMANCE
This section discusses major highlights of the consolidated financial results of the Bank for the reporting period.
Total Assets
At the end of the reporting period, the Bank’s total asset reached Birr 144.6 billion with a net increment of Birr 28.6
billion, showing a commendable growth of 24.7% compared to last year.
Total Equity
The review period has brought forth noteworthy advancements in the Bank’s total equity, which has surged to Profitability
Birr 19.3 billion showing a year-on-year growth of 34.3%. Half of the growth came from paid-up capital, which The Bank has demonstrated remarkable financial performance, achieving a pre-tax profit of Birr 5.0 billion with
increased by Birr 2.5 billion or 36.2% compared to last year. an outstanding year-on-year growth of 31.9%. This achievement is grounded in its adept financial management
practices, customer-centric strategies, and proactive risk mitigation efforts.
20 | | 21
During the fiscal year, Return on Assets (ROA) of 2.5% was attained, maintaining the previous year status. In Our People
addition, the Return on Equity (ROE) of the Bank reached 18.4%, lower by 1.8% percentage points compared to Staff Strength and Composition
last year. The lower ROE relative to the preceding year is primarily due to the substantial increase in the paid-up At the conclusion of the fiscal year, our workforce comprised 17,571 employees. Out of this staff strength, perma-
capital. nent employees constituted 58.4%, while the remaining 41.6% were outsourced. The Bank strives to improve
gender diversity in its workforce. Women comprised 30% of the permanent staff by the close of the reporting
period. Age distribution reflects our youthful workforce, with 81% of employees being under the age of 39.
Training and Development

Dashen Bank places significant importance on staff training and development, with 11,851 employees benefiting
from comprehensive trainings provided on diverse themes. The Bank is dedicated to enhancing performance
measurement, as seen through the proactive efforts to create comprehensive guidelines outlining employee
measures. Continual refinement is being made on our performance management practice to better align rewards
with performance and nurture a high performance culture among staff and management.
Proposal On Dividend Pay Out Organizational Culture

The Bank has registered a profit growth of 31.9% in the 2022/23 FY as compared to the last fiscal year. In consid- Wide ranging efforts are being made to further boost the organizational culture in the Bank with particular focus on
eration of the registered growth and the resultant retained earnings, the Board of Directors recommends Birr delivery of best-in-class customer service. Foundational works are being done to foster shared values, purpose,
2,997,400,000 to be distributed as cash dividend. and a collaborative spirit to serve with the end goal of remaining relevant as individuals and a team in this fast
changing business landscape.
BUSINESS AND ORGANIZATIONAL DEVELOPMENT
Strategy Formulation Developments in Digital and IT
With the conclusion of the 5-year strategy plan that covered from 2018/19FY to 2022/23FY, the Bank has During the reporting period, Dashen Bank prioritized several key IT initiatives and infrastructure maintenance,
embarked on an exciting new phase. In partnership with McKinsey & Co., the Bank has been crafting a 5-year with a strong focus on ensuring system reliability and performance. The Bank achieved significant milestones in
corporate strategy that sets the course for its future growth. The strategy will be instrumental in driving innova- process automation and software development. A range of tailored applications catering to diverse needs, such
tion, enhancing customer experiences, and achieving sustainable broad-based growth in the evolving financial as micro-lending, payment collection, audit management, and event management, were successfully completed.
landscape.
In the cybersecurity frontier, regular vulnerability assessments, penetration testing, and cybersecurity maturity
Business Development and Strategic Partnership assessments were made in line with the national Cybersecurity Framework. Additionally, the Bank deployed
The Bank has proactively forged collaborative engagements with various partners, encompassing Federal and advanced security tools like Security Orchestration, Automation, and Response (XSOAR) and Proof Point Cloud
regional government bodies, educational institutions, youth and women empowerment programs, business and to enhance its security posture. Furthermore, the pursuit of ISO 27001:2013 implementation and comprehensive
technology incubators, charitable organizations, microfinancing institutions and other private companies. These disaster recovery planning exemplified a proactive approach to regulatory compliance and risk management.
engagements span across a broad spectrum of professions and sectors, underpinning the Bank’s commitment to In the realm of digital channels and platforms, Dashen Bank demonstrated its commitment to innovation and
better serve and address customers’ needs cultivating mutually beneficial business relationships. customer-centricity. The successful launch of the Amole Lite mobile application and integration with partners like
Safaricom showed its dedication in enhancing customer experiences and convenience.
A particularly noteworthy accomplishment has been the Bank’s recent and fruitful partnership with Ethio Telecom,
a collaboration that has catalysed robust digital lending practices in the Country’s financial landscape. This stra- Risk Management and Compliance
tegic direction is in alignment with the Bank’s overarching objective of rendering accessible and affordable banking During the review period, Dashen Bank prioritized risk management and conducted comprehensive assessments
services to a broader demographic, all the while embracing cutting-edge digital solutions. across various dimensions of its operations to ensure the effective identification and mitigation of potential risks.
Particular engagement was made on the debt servicing performance of key accounts entailing significant risk
Leveraging its hard earned reputation, prudent practices and sound financial position, the Bank has been exploring exposure.
opportunities with international Development Finance Institutions (DFIs). The effort has borne fruit with the USD
40 million commitment by the British International Investment (BII) and the Dutch Entrepreneurial Development In the realm of compliance risk assessment, the Bank diligently complied to Anti-Money Laundering (AML) and
Bank (FMO). This is a pioneering investment by international financial institutions into Ethiopia’s private banking Combating the Financing of Terrorism (CFT) policies and regulations. The Bank’s commitment to robust risk
sector after the introduction of the foreign currency intermediation directive issued by the NBE. The Bank will management was further evident in the vigilant monitoring of all risk exposures. During the reporting period, suspi-
extend the fund to local businesses engaged in forex-generating agricultural investments. cious transactions were monitored and reported on a continuous basis, and AML and CFT trainings were provided
to staff as part of the effort to maintain a secure and compliant banking environment.
22 | | 23
Prudent Banking Practices Social Impact
The Banking industry has been experiencing daunting challenges. One of the challenges is maintaining sound Dashen Bank has demonstrated a robust commitment to Corporate Social Responsibility (CSR) through a diverse
liquidity position. The Bank has endeavoured to maintain sound liquidity and honour all customer requests for range of impactful initiatives. The Bank invested a substantial Birr 285.0 million to drive positive community impact
cash through unrelenting efforts made in the various aspects of our operation particularly, Asset and Liability and socio-economic development. Noteworthy achievements include the construction of feeding centers and
Management and Treasury Management. The professionalism and high standard of stewardship demonstrated educational facilities. Furthermore, the Bank’s compassionate is demonstrated in the support extended to envi-
has been a source of customer satisfaction, while cementing our reputation among customers and the wider ronmental protection and humanitarian relief interventions. By extending support to community organizations and
public as a dependable private bank. local businesses, the Bank also contributed its fair share to societal welfare.
Corporate Governance Branch Renovation

The Board of Directors and its Sub-committees, i.e., Strategy, Audit, Risk, and Human Resources, executed their The Bank has embarked on an exciting journey of refreshing its branches. The renovation being implemented at
oversight duties as per their Charters. Based on its bylaw, the Board conducted twelve ordinary and two extraor- selected branches is creating suitable customer service environment. Beyond the functional benefits, the aesthet-
dinary meetings and deliberated on and passed resolutions on various agenda items during the 2022/23 fiscal ically pleasing space is fostering a welcoming atmosphere for customers.
year. The Board closely oversaw and gave directions on issues based on its mandate. These included approval of
various policies, annual budgets, and procurement requests above a certain amount. The Board also evaluated Along the branch renovation work, the Bank is also building Smart Banking Centres, a testament to its forward-
monthly, quarterly, and semi-annual performance progress reports and gave feedback to the management. More- thinking approach to banking. These centers are designed to integrate cutting-edge technology and innovative
over, the Board participated and gave direction in the preparation of the Sixth Strategy Plan, which will guide the design, creating a hub of convenience and efficiency for customers. With a focus on digital solutions, these centers
direction of the Bank in the next five years to 2027/28 fiscal year. will provide a seamless blend of online and offline banking services, empowering our customers to manage their
finances in a manner that best suits their preferences.
In the reporting period, the Board has critically reviewed and endorsed its Sub-committee’s quarterly reports. It
discussed and gave comments on Loan Reviews, ALCO, and Risk Reports on quarterly basis. Deliberations were Recognition and Awards
made on the quarterly CAMEL ratings given by the National Bank of Ethiopia. It also conducted the full Board’s, In the fiscal year 2022/23, the Bank achieved remarkable recognition and acclaim across various facets of its
individual board members’, and Sub-committees’ evaluations semi-annually. operations. Notably, it earned the prestigious title of “Bank of the Year” from the London based The Banker Maga-
zine, an affiliate of the Financial Times. On December 2, 2022, this esteemed award was bestowed upon the Bank
The Board Human Resource Affairs Sub-committee reviewed and approved the annual training plan of the Bank. for the twelfth time. The recognition was given to the Bank in due consideration of the ground-breaking partnership
It also gave direction on the competency gap assessment to be carried out by external consultants. The Sub-com- with Ethio Telecom for AI-enabled micro-lending products that helped inclusion of millions in the financial system.
mittee further reviewed a mentoring program guideline and provided constructive comments for its finalization and The Bank’s pioneering effort to introduce the first-of-its-kind Tier III Ready Data Center in the financial industry
approval. also contributed for the recognition.
The Board Risk Management Sub-committee discussed and gave comments on loan review and risk assessment Additionally, the Bank’s recognition by the Ministry of Revenue as a “Certified Authorized Economic Operator”
reports; and submitted its findings to the full Board. It also carried out other critical activities related to enterprise in April 2023 reflects its compliance with customs regulations and its pivotal role as a trusted partner in facili-
risk. tating international trade, thereby contributing significantly to the broader economic development of the Country.
It is also worth noting that the Bank received recognition from the Prime Minister of Ethiopia for its contribution
The Board Audit Sub-committee overseen the performance of the Internal Audit Office, reviewed major audit towards the Country’s self-sufficiency endeavours through tax collection. Collectively, these achievements rein-
findings, and selection processes of External Auditors for the next three fiscal years. The Sub-committee hold force the Bank’s position as one of the leading forces in the financial industry.
entrance and exit discussions with External Auditors, and reviewed the rectification status of findings raised by
External Auditors on the Internal Control Mechanisms (ICM) report. Going Forward
Dashen Bank’s strategic focus includes implementing the new strategy plan, enhancing digital banking presence
The Board Strategic Management Sub-committee reviewed the implementation status of the Bank’s five-year via expanding ATMs and POS network, diversifying its products, and revitalizing the organizational culture. The
strategic plan. The implementation status review revealed that positive achievements were registered in both Bank aims to maintain asset quality through prudent financing and strong customer engagement. Additionally, the
financial and non-financial dimensions, while performance lags existed in some other levers, such as customers Bank seeks to strengthen partnerships with DFIs to boost foreign currency generation and support international
and processes. The Sub-committee also endorsed and approved the proposal to formulate the Sixth Strategy trade.
Plan.
As the financial sector evolves with the imminent introduction of capital market, the entry of non-bank players
In the reporting period, Board directors were provided with capacity building trainings locally and abroad. The and the prospect of foreign banks joining the industry, Dashen Bank strives to remain relevant and competitive
capacity building focused on corporate governance and strategic leadership. by prioritizing innovation, digitalization, and expanding product offerings to cater to evolving customer demands.
24 | | 25
PHOTO GALLERY
Maintaining compliance with international and national standards will be crucial in managing risks amid increased
29th Ordinary Shareholders Meeting
competition. Embracing capital market opportunities will diversify funding sources, contributing to the Bank’s
sustainable growth and profitability.
Vote of Thanks
The Board of Directors and Executive Management would like to extend a heartfelt appreciation to the Bank’s
valued customers, partners, shareholders, employees, the National Bank of Ethiopia, and all other stakeholders
for the unwavering togetherness. We are particularly grateful to the International Finance Corporation (IFC), Afrex-
imbank, and Trade and Development Bank (TDB). Your support has been instrumental in propelling the Bank
towards its goals, inspiring it to aspire even higher in the upcoming years. Dashen is committed to further growth
and continuous improvement, aiming to provide an elevated customer experience and generate lasting value for
all esteemed stakeholders. As the Bank moves forward, its determination remains steadfast in exceeding expec-
tations and fostering sustainable progress.
correspondent banks & financing partners
27th Annual Managers' Conference
26 | | 27
COOPORATE SOCIAL RESPONSIBILITY FINANCED PROJECTS
Colba Tannery Plc
Seedlings Plantation at Entoto Hills
Zaf Pharmaceuticals Abreham Abebe General Exporter
Amoudi Tesfa BerhanFeeding Center at Lemi Kura Sub-city in Addis Abeba
Jemal Seid Adem Import & Export Zelalem Eshetu Coffee Exporter
Stay Easy Hotel

Beyeda Primary and Secondary school – Del Yibza Woreda, North Gondar
28 | | 29
REPORT OF THE
SHARI'AH ADVISORY COMMITTEE
በሸሪዐህ መርሆች ላይ
የተመሰረት ከወለድ ነፃ
የባንክ አገልግሎት
ከ 60 በላይ ሙሉ በሙሉ
ከወለድ ነፃ ቅርንጫፎች እና
ከ 700 በላይ መስኮቶች
አቅርበንላችኋል
| 31
Dashen Bank Share Company
Report and Financial Statements
For the year ended 30 June 2023
AUDITORS' REPORT
AA Bromhead Certified Audit Firm and UK
Registered Auditor
CONTENTS Pages
Company Information 33-36
Directors’ Report 37
Statement of Directors’ Responsibilities 38
Independent Auditor’s Report 39-42
Statement of Profit or Loss and other Comprrehnsive Income 43
Statement of Financial Postion 44

Statement of Changes in Equity 45-46
Statement of Cash Flows 47
Notes to the Financial Statements 48-120
32 | | 33
Dashen Bank Share Company Dashen
Dashen Bank
Bank Share Company
Report and Financial Statements Report
Report and
and Financial
Financial Statements
Statements
For the year ended 30 June 2023 For
For the year ended 30June
the year ended 30 June2023
2023
Company information (Continued)
Corporate Registered Office
Dashen Bank S.C.

Headquarters Building
Sudan Street
Tel. +251-115-183091
[email protected]
www.dashenbanksc.com
P.O Box 12752
SWIFT Code: DASHETAA
Addis Ababa, Ethiopia
Company Secretary
Aberra Bekele Gebreyohannes

Dashen Bank S.C.
P.O Box 12752, Tel.+251-114-661380
Addis Ababa, Ethiopia
Correspondent banks
Citibank NA New York 111 Wall Street, New York, USA

Citibank NA , London Citigroup Centre, Canary Wharf 33 Canada Square London, E14
5LB United Kingdom
Commerzbank AG Frankfurt Kaiserstrasse 16, Frankfurt AM, Germany
Standard Chartered Bank 1095 Avenue of the Americas, New York, USA
Banque Pour Le Commerce Et L'industrie- Rue Clochette, Djibouti
Mer Rouge
Bank of Africa group 10 place Lagarde - BP 88 - Djibouti
Intesa Sanpaolo spa, (Head Office) Via Monte di Pietà, 8,20121 Milano
Natixis(Formerly Natexis Bankque 21, Boulevard Haussmann,BP 265,Paris, 75427
Populaire Paris)
The Bank of Tokyo-Mitsubishi, UFJ 2-7-1, Marunouchi, Chiyoda-ku, Tokyo, Japan
EBI SA (LA DEFENSE) - ECOBANK Les Collines de l'Arche,76 Route De La Demi-Lune,Paris-La
Defense, 92057
The Standard Bank of South Africa Limited 9th Floor Standard Bank Centre 5 Simmonds Street Johannesburg
Gauteng 2001 South Africa
SWED Bank Landsvägen 40, 172 63 Sundbyberg. Postal
address: 105 34 Stockholm
Commercial Bank of Dubai Al Ittihad Street ,Port Saeed, P.O.Box 2668 Dubai, Swift Code-
CBDUAEAD
CAC International Bank Immeuble Dar Al-Karam,Ruede Marseille,
Djibouti city, Swift code CACDDJJD
EAST Africa Bank Place du 27 Juin, P.O.Box 2022, Djibouti,
Republic of Djibouti
Equity Bank (Kenya) Limited Equity Center, Hospital Road, Upper Hill.
P.O.Box 75104-00200 Nairobi, Kenya
EXIM Bank Djibouti SA Batiment Ougoul, P.O.Box 4455,Avenue
Mohamed Farah Dirir, Djibouti
SABA Africa Bank, Djibouti Avenue Franchet D'Esperey, BP: 166 Djibouti
__________________________________
A.A. Bromhead Certified Audit Firm and UK Registered Auditor
P.O. Box 709, Addis Ababa, Ethiopia, Telephone +251 11 552 42 85 /552 45 58, Fax +251 11 552 4576,
Email: - [email protected] 3
34 | | 35
Dashen
Dashen Bank
Bank Share Company Dashen
Bank Share Company
Report
Report and
and Financial
Statements Report
Report and
and Financial
Statements
For
For the
the year
yearended
ended3030June
June2023
2023 For
the year ended 30 June 2023
2023
Company information (Continued) Directors' report
Principal banker in Ethiopia The Directors submit their report together with the financial statements for the year ended 30 June 2023 to the
shareholders of Dashen Bank Share Company ("Dashen" or the "Bank"). This report discloses the financial
National Bank of Ethiopia Sudan Avenue. P.O.Box: 5550, Addis Ababa, Ethiopia performance and state of affairs of the Bank.
Actuaries
Incorporation and address
QED Actuaries and Consultants (Pty) Ltd Dashen Bank Share Company was incorporated in Ethiopia in 1995 as a privately owned financial institution and
P.O.Box 413313, Craighall 2024 is domiciled in Ethiopia.
1st Floor, The Bridle, Hunts End Office Park, 38 Wierda Road West, Wierda Valley
Telephone: +27 11 038 3754, +27 60 673 2994 Principal activities
Website: www.qedact.com The Bank is principally engaged in the provision of a diverse range of financial products and services to
Email: [email protected] corporate, retail and SME clients based in the Ethiopian market.
Sandton, Johannesburg
South Africa
Share capital
Independent auditor The Bank has a paid up capital of ETB 9,344,559,000 (2022: ETB 6,863,215,000) divided into 9,344,559 (2022:
6,863,215) ordinary shares of par value of ETB 1,000.
A.A. Bromhead Certified Audit Firm
Jomo Kenyata Street, EECMY Building, 4th Floor Operating Results
P.O. Box 709, Addis Ababa, Ethiopia
The Bank's results for the year ended 30 June 2023 are set out on page 11. 43. The profit for the year has been
transferred to retained earnings. The summarised results are presented below:
2023 2022
ETB'000 ETB'000
Net interest income 9,347,068 6,452,498
Profit before tax 5,016,753 3,803,785

Income tax expense (1,455,666) (899,223)
Profit for the year 3,561,087 2,904,562
Other comprehensive income, net of taxes 50,233 24,247
Total comprehensive income for the year 3,611,320 2,928,809
Basic EPS 442 532
Directors
The Board of Directors who held office during the year and to the date of this report are set out on page 33.
1.
Dulla Mekonnen Mosissa

Chairman, Board of Directors
25 September 2023
__________________________________ __________________________________
A.A. Bromhead Certified Audit Firm and UK Registered Auditor A.A. Bromhead Certified Audit Firm and UK Registered Auditor
P.O. Box 709, Addis Ababa, Ethiopia, Telephone +251 11 552 42 85 /552 45 58, Fax +251 11 552 4576, P.O. Box 709, Addis Ababa, Ethiopia, Telephone +251 11 552 42 85 /552 45 58, Fax +251 11 552 4576,
Email: - [email protected] 4 Email: - [email protected] 5
36 | | 37
Dashen Bank Share Company Dashen Bank
Bank Share
Share Company
Company
Report
Report and
and Financial
Statements Report and
For
2023 For the year ended 30 June
2023
Statement of Directors' responsibilities Independent Auditor's Report to the Shareholders of Dashen Bank Share Company
Report on the Financial Statements
The Commercial Code of Ethiopia of 2021 requires the Directors to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of the Bank as at the end of the financial year Opinion
and of the operating results of the Bank for that year. The Code also requires the Directors to ensure that the
Bank keeps proper accounting records which disclose, with reasonable accuracy, at any time, the financial We have audited the accompanying financial statements of Dashen Bank Share Company ("the Bank") set out
position of the Bank. They are also responsible for safeguarding the assets of the Bank. on pages 11 to 88, which comprise the statement of financial position as at 30 June 2023, statement of profit or
loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year
then ended, and notes to the financial statements, including a summary of significant accounting policies and
The Directors are responsible for the preparation of financial statements that give a true and fair view in
other explanatory information.
accordance with the International Financial Reporting Standards (IFRSs), the requirements of the Commercial
Code of Ethiopia of 2021, the Banking Business Proclamation No. 592/2008 and Banking (Amendment) In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position
Proclamation No. 1159/2019, NBE Directives and the Accounting and Auditing Board of Ethiopia's instructions of of the Bank as at 30 June 2023 and of its financial performance and cash flows for the year then ended in
30 October 2019, and for such internal controls as the Directors determine are necessary to enable the accordance with International Financial Reporting Standards (IFRSs).
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Basis for Opinion
The Directors accept responsibility for these financial statements, which have been prepared using appropriate We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under
accounting policies supported by reasonable and prudent judgments and estimates, in conformity with IFRSs, the those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements
requirements of the Commercial Code of Ethiopia of 2021, the Banking Business Proclamation No. 592/2008 and section of our report. We are independent of the Bank in accordance with the ethical requirements that are
Banking (Amendment) Proclamation No. 1159/2019, NBE Directives, NBE Circulars and the Accounting and relevant to our audit of the financial statements in Ethiopia, and we have fulfilled our other ethical responsibilities
Auditing Board of Ethiopia's instructions of 30 October 2019. The Directors are of the opinion that the financial in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
statements give a true and fair view of the state of the financial affairs of the Bank and of its operating results. appropriate to provide a basis for our opinion.
The Directors further accept responsibility for the maintenance of accounting records which may be relied upon in
the preparation of financial statements, as well as adequate systems of internal financial control. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
The Directors also accept responsibility for: the financial statements of the current period. These matters were addressed in the context of our audit of the
i) Designing, implementing and maintaining such internal control as they determine necessary to enable the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
presentation of financial statements that are free from material misstatement, whether due to fraud or error; on these matters.
ii) Selecting suitable accounting policies and applying them consistently; and
Nature of Key Audit Matters
iii) Making accounting estimates and judgements that are reasonable in the circumstances.
1. Significant management's judgments, estimates and assumptions in the determination of expected credit loss
The Directors acknowledge that the independent audit of the financial statements does not relieve them of their (ECL).
responsibilities. The carrying value of financial instruments within the scope of IFRS 9 ECL may be materially misstated if
judgements or estimates made by the management are not accurate.
Nothing has come to the attention of the Directors to indicate that the Bank will not remain a going concern for at
least the next twelve months from the date of this statement. ● Significant Increase in Credit Risk (SICR) - the Bank’s identification of a significant increase in credit risk
(SICR) based on the National Bank of Ethiopia (NBE)’s Directive No. SBB/69/2018 as qualitative indicators
Signed on behalf of the Directors by: for identifying a significant increase in credit risk are highly judgemental and can materially impact the ECL
recognised for loans and advances. The SICR determines whether to apply the 12 months ECL or the
lifetime ECL.
● The Bank has applied the NBE's definition for “Non-performing” loans and advances to determine defaults
of loans and advances and has applied probability of default (PD) of 100% for loans and advances that are
classified under “Sub-Standard”, “Doubtful” and “Loss”.
Dulla Mekonnen Mosissa Asfaw Alemu Tessema ● To estimate the loss given default (LGD), assumptions and estimates are made in the determination of
Chairman, Board of Directors Chief Executive Officer the value of collateral and the corresponding sales proceeds as well as the time of the sales.
25 September 2023
__________________________________ __________________________________
38 | | 39
Dashen
Dashen Bank
Bank Share Company
Share Company Dashen
Dashen Bank
Bank Share Company
Share Company
Report
Report and
and Financial
Statements Report
Report and
and Financial
Statements
For
2023 For
2023
Independent Auditor's Report to the Shareholders of Dashen Bank Share Company (Continued) Independent Auditor's Report to the Shareholders of Dashen Bank Share Company (Continued)
Report on the Financial Statements (Continued) Report on the Financial Statements (Continued)
Key Audit Matters (Continued) Key Audit Matters (Continued)
Nature of Key Audit Matters (Continued) 2. Information Technology (IT) Access management (Continued)
● Economic base case – IFRS 9 requires the Bank to measure ECL on a forward-looking basis, incorporating Our Results
future macro-economic variables (MEVs) reflecting a range of future conditions, that might differ from We considered the user access management control to be acceptable.
expectations.
● Complex model used – Complex statistical matrices are used in the determination of probability of default Other Information
(PD). The Directors are responsible for the other information, which comprises the Directors' report in accordance with
The effect of these matters is that, as part of our risk assessment, we determined that the value of ECL has a Article 315(6)(c) of the Commercial Code of Ethiopia of 2021. Our opinion on the financial statements does not
high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality cover the other information and we do not express any form of assurance or conclusion thereon.
for the financial statements as a whole.
In connection with our audit of the financial statements, our responsibility is to read the other information
Our Response identified above and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If,
Our audit procedures focused on the significant areas of judgement and estimations that could result in material
based on the audit work we have performed on the other information that we obtained prior to the date of this
misstatements in the financial statements. These procedures included:
auditor's report, we conclude that there is a material misstatement of this other information, we are required to
● Understanding the methodology used to determine the ECL; report that fact. We have nothing to report in this regard.
● Ascertaining the completeness of data used in the determination of ECL;
Responsibilities of Management and Those Charged with Governance for the Financial Statements
● Ascertaining the correctness of the classification of financial assets to stages, stage 1 or 2 or 3;
● For a sample of loans and advances, the values of collateral used in the determination of LGD were The management of the Bank is responsible for the preparation of financial statements that give a true and fair
checked with the collateral values assessed by management; view in accordance with International Financial Reporting Standards and the requirements of the Commercial
Code of Ethiopia of 2021, the Banking Business Proclamation No. 592/2008 and Banking (Amendment)
● For a sample of loans and advances, the accuracy of LGD and ECL were tested for accuracy; and
Proclamation No. 1159/2019, NBE's Directives and the Accounting and Auditing Board of Ethiopia's instructions
● Reviewing the adequacy of disclosures of management judgments, estimates and assumptions;
of 30 October 2019, and for such internal controls as management determines are necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Our Results
In preparing the financial statements, the management is responsible for assessing the Bank's ability to continue
We considered the credit impairment charge, the provision recognised and the related disclosures to be as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
acceptable. of accounting unless the management either intends to liquidate the Bank or to cease operations, or has no
2. Information Technology (IT) Access management realistic alternative but to do so.
Our audit approach relied extensively on automated controls and, therefore, on the effectiveness of controls over Those charged with governance are responsible for overseeing the Bank's financial reporting process.
IT systems. Access management controls are critical to ensure that changes to applications and underlying data
are made in an appropriate manner. Appropriate access and change controls contribute to mitigating the risk of Auditor's Responsibilities for the Audit of the Financial Statements
potential fraud or errors as a result of changes to applications and data.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
Our Response from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
Access rights were tested over applications, operating systems and databases relied upon for financial reporting.
accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from
Specifically, the audit tested that:
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
● New access requests for joiners were properly reviewed and authorised; to influence the economic decisions of users taken on the basis of these financial statements.
● User access rights were removed on a timely basis when an individual left or changed role;
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional
● Access rights to applications, operating systems and databases were periodically monitored for
scepticism throughout the audit. We also:
appropriateness;
● Highly privileged access was restricted to appropriate personnel; and
i) Identified and assessed the risks of material misstatement of the financial statements, whether due to fraud
● Existence of strict procedures on password policies, security configurations, controls over changes to code,
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
data and configuration.
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
__________________________________ __________________________________
40 | | 41
Dashen
Dashen Bank
Bank Share
ShareCompany
Company Dashen Bank Share Company
Report
and Financial Statements Report and Financial Statements
For the year ended 30 June 2023 For the year ended 30 June 2023
Statement
Statement ofofprofit
Profitor or Loss
loss andand other
other Comprehnsive
comprehensive Income
income
Independent Auditor's Report to the Shareholders of Dashen Bank Share Company (Continued)
2023 2022
Report on the Financial Statements (Continued) Notes ETB'000 ETB'000
Auditor's Responsibilities for the Audit of the Financial Statements (Continued)
Interest income 5 13,407,751 9,854,633
ii) Obtained an understanding of internal control relevant to the audit in order to design audit procedures that Interest expense 6 (4,060,683) (3,402,135)
were appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Bank's internal control. Net interest income 9,347,068 6,452,498
iii) Evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the management. Fees and commission income 7 3,873,151 2,695,326
Fees and commission expense 7 (206,653) (140,822)
iv) Concluded on the appropriateness of the management's use of the going concern basis of accounting and
based on the audit evidence obtained, whether a material uncertainty existed related to events or conditions
Net fees and commission income 3,666,498 2,554,504
that may have cast significant doubt on the Bank's ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in our auditor's report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our Other operating income 8 643,191 356,461
conclusions were based on the audit evidence obtained up to the date of our auditor's report. However, (Loss) on foreign exchange (342,900) (681,224)
future events or conditions may cause the Bank to cease to continue as a going concern.
v) Evaluated the overall presentation, structure and content of the financial statements, including the Total operating income 13,313,857 8,682,239
disclosures and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation. Loans impairment charge 9 (497,601) (215,517)
Impairment charge on IFB financing 9 (31,359) (17,169)
We communicated with those charged with governance regarding, among other matters, the planned scope and Impairment losses on other financial assets 10 (75,184) (37,399)
timing of the audit and significant audit findings including any significant deficiencies in internal control that we Net operating income 12,709,713 8,412,154
identified during our audit.
Employee benefits expenses 11 (4,736,756) (2,988,428)
Report on Other Legal and Regulatory Requirements
Other operating expenses 12 (2,956,204) (1,619,941)
We have no comment to make on the report of your Directors so far as it relates to these financial statements Profit before income tax 5,016,753 3,803,785
and pursuant to Article 349 (1 and 2) of the Commercial Code of Ethiopia of 2021, recommend approval of them.
Income tax expense 13(a) (1,455,666) (899,223)
Profit for the year 3,561,087 2,904,562
Other comprehensive income (OCI)

Items that will not be subsequently reclassified
to profit or loss:
A.A. Bromhead Certified Audit Firm and
Remeasurement gain / (loss) on retirement benefits obligations 24(c) 403 (109,912)
UK Registered Auditor 25 September 2023
Auditor's of Dashen Bank Share Company Addis Ababa Remeasurement gain on financial assets at FVTOCI 16(a) 71,365 144,551
Deferred tax (expense) 13(a) (21,535) (10,392)
50,233 24,247
Total comprehensive income for the year 3,611,320 2,928,809
Earnings per share (EPS):
Basic EPS 26 442 532

Diluted EPS 26 442 532
The notes
notes on
onpages
pages48
16toto 88are
120 areananintegral
integralpart
partofofthese
thesefinancial
financialstatements.
statements.
__________________________________
__________________________________ A.A. Bromhead Certified Audit Firm and UK Registered Auditor
A.A. Bromhead Certified Audit Firm and UK Registered Auditor P.O. Box 709, Addis Ababa, Ethiopia, Telephone +251 11 552 42 85 /552 45 58, Fax +251 11 552 4576,
P.O. Box 709, Addis Ababa, Ethiopia, Telephone +251 11 552 42 85 /552 45 58, Fax +251 11 552 4576, Email: - [email protected] 11
42 | | 43
44 |
through
EQUITY
ASSETS
Statement
OCI
Total equity
Other assets
LIABILITIES
Total assets
Share capital
IFB financing
Legal reserve
Other liabilities
Other reserves
Share premium
Special reserve
Total liabilities
Debt securities
Intangible assets
Reserve for IFRS

Retained earnings
Customer deposits
Current income tax
Deferred tax assets
Investment security:
Investment properties
As at 30 June 2023
The notes on pages 48

Statement ofoffinancial
Property and equipment
16 to
Defined benefits obligation
Financial
Dulla Mekonnen Mosissa

LIABILITIES AND EQUITY
Total liabilities and equity
to120
Regulatory credit risk reserve
Financial assets at fair value
Cash and balances with banks
Chairman, Board of Directors

position
Loans and advances to customers
at amortised cost
Postion
The financial statements on pages 11

Reserve with National Bank of Ethiopia
43 toto120
on 25 September 2023 and were signed on its behalf by:
32
31
30
29
28
27
23
22
21
20
19
17
25(b)
25(a)
16(c)
15(b)
15(a)
14(b)
24(a)
13(d)
13(e)
16(a)
14(a)
Notes
Email: - [email protected]
__________________________________
88 are an integral part of these financial statements.

2023
5,152,367
144,640,932
8,548,363
95,045,806
19,318,541
1,503,113
4,417,405
2,999,509
9,344,559
125,322,391
1,439,956
114,848,093
144,640,932
8,299,585
6,836,735
11,206,670
11,957,305
32,049
128,300
893,506
485,979
87,651
651,407
730,279
4,250,560
422,567
100
ETB'000
Asfaw Alemu Tessema

Chief Executive Officer
2022
3,147,590
116,036,845
9,117,185
74,867,993
14,380,420
1,824,326
3,527,133
1,270,328
6,863,215
101,656,425
116,036,845
6,499,675
4,774,838
2,774,486
12,171,707
10,404,444
12,593
900,908
396,772
906,584
91,235,884
172,188
184,595
747,260
292,069
100
(18,183)
ETB'000
88 were approved and authorised for issue by the Board of Directors
12
Statement of changes
Dashen in equity
DashenBank
BankShare
ShareCompany
Company Regulatory
Report and Financial Statements Share Share Retained Legal Reserve credit risk Other Special
For the year ended 30 June 2023 capital premium earnings reserve for IFRS reserve reserve reserve Total
Statement of changes in equity Notes ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000
Statement of Changes in Equity Regulatory
As at 1 July 2021 4,387,996
Share -
Share 1,161,185
Retained 2,800,992
Legal 922,013
Reserve 895,233
credit risk (42,430) 100 10,125,089
Other Special
Profit for the year 27 -
capital -
premium 2,904,562
earnings -
reserve -
for IFRS -
reserve - -
reserve reserve 2,904,562
Total
Other comprehensive income: Notes ETB'000 ETB'000 -
ETB'000 -
ETB'000 -
ETB'000 -
ETB'000 - -
ETB'000 ETB'000 -
ETB'000
Remeasurement (loss) on
As atretirement
1 July 2021 benefits obligations 32 -
4,387,996 -- -
1,161,185 -
2,800,992 -
922,013 -
895,233 (76,938)
(42,430) -
100 (76,938)
10,125,089
Change
Profit for thein fair
yearvalue of financial 27 - - 2,904,562 - - - - - 2,904,562
Otherassets
comprehensive through
at fair valueincome: - - - - - - -
OCI
Remeasurement (loss) on 32 - - - - - - 101,185 - 101,185
retirement benefits obligations 32 -
4,387,996 - -
4,065,747 -
2,800,992 -
922,013 -
895,233 (76,938)
(18,183) -
100 (76,938)
13,053,898
Change in fair value of financial
assets at fair value through
Transaction with owners in their
OCI 32 - - - - - - 101,185 - 101,185
capacity as owners and
transfers within equity: 4,387,996 - 4,065,747 2,800,992 922,013 895,233 (18,183) 100 13,053,898
Transfer to legal reserve 29 - - (726,141) 726,141 - - - - -
Transfer
Transaction to capital
with owners in their 27 660,086 - (660,086) - - - - - -
Shares issued
capacity as owners and 1,815,133 12,593 - - - - - - 1,827,726
Transfer
transfers regulatory
to within credit
equity:
risk reserve
Transfer to legal reserve 31
29 -- -- (929,093)
(726,141) -
726,141 -- 929,093
- -- -- --
Dividends
Transfer topaid capital 27
27 -
660,086 -- (499,066)
(660,086) -- -- -- -- -- (499,066)
-
Transfer from reserve for IFRS
Shares issued 28 -
1,815,133 -
12,593 21,105
- -- (21,105)
- -- -- -- -
1,827,726
Directors'
Transfer toremuneration
regulatory credit 27 - - (2,138) - - - - - (2,138)
risk reserve 31 2,475,219
- 12,593
- (2,795,419)
(929,093) 726,141
- (21,105)
- 929,093 - - 1,326,522
-
Dividends
As at 30 Junepaid 2022 27 -
6,863,215 -
12,593 (499,066)
1,270,328 -
3,527,133 -
900,908 -
1,824,326 -
(18,183) -
100 (499,066)
14,380,420
Transfer from reserve for IFRS 28 - - 21,105 - (21,105) - - - -
Directors' remuneration 27 - - (2,138) - - - - - (2,138)
2,475,219 12,593 (2,795,419) 726,141 (21,105) 929,093 - - 1,326,522
As at 30 June 2022 6,863,215 12,593 1,270,328 3,527,133 900,908 1,824,326 (18,183) 100 14,380,420
__________________________________
| 45
__________________________________
Dashen
DashenBank
BankShare Company
ShareCompany
46 |
Report
Statementand
Reportand Financial
Financial
of changes Statements
in Statements
equity (Continued)
For
For the
theyear ended
yearended 3030 June
June 2023
2023
Regulatory
Statement Changes in Equity (Continued) credit risk
Statement ofof
changes in equity (Continued) Share Share Retained Legal Reserve Other Special
reserve
capital premium earnings reserve for IFRS reserve reserve Total
Regulatory
Notes ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000
credit risk
Share Share Retained Legal Reserve Other Special
reserve
As at 1 July 2022 capital
6,863,215 premium
12,593 1,270,328 reserve
earnings 3,527,133 for
900,908
IFRS 1,824,326 reserve reserve
(18,183) Total
100 14,380,320
Profit for the year Notes
27 -
ETB'000 -
ETB'000 3,561,087
ETB'000 -
ETB'000 -
ETB'000 -
ETB'000 -
ETB'000 -
ETB'000 3,561,087
ETB'000
Other comprehensive income:
As
Remeasurement
at 1 July 2022gain on 6,863,215 12,593 1,270,328 3,527,133 900,908 1,824,326 (18,183) 100 14,380,320
Profit for the year
retirement benefits obligations 3227 -- -- 3,561,087
- -- -- -- -
282 -- 3,561,087
282
Other
Change comprehensive
in fair value ofincome:
financial
Remeasurement
assets at fair value gain on
through
OCIretirement benefits obligations 3232 -- -- -- -- -- -- 49,950
282 -- 49,950
282
Change in fair value of financial 6,863,215 12,593 4,831,415 3,527,133 900,908 1,824,326 32,049 100 17,991,739
assets at fair value through
32 - - - - - - 49,950 - 49,950
Transaction
OCI with owners in their
capacity as owners and 6,863,215 12,593 4,831,415 3,527,133 900,908 1,824,326 32,049 100 17,991,739
transfers within equity:
Transaction
Transfer to legal owners in their
withreserve - - 29
(890,272) 890,272 - - - - -
capacity
Transfer as owners
to share and
capital 695,626 - 27
(695,626) - - - - - -
transfers
Shares issued within equity:
for cash 1,785,718 115,707 - - - - - - 1,901,425
Transfer
Transferfromto legal
regulatory
reservecredit 29 - - (890,272) 890,272 - - - - -
Transfer to share capital
risk reserve 3127 695,626
- -- (695,626)
321,213 -- -- -
(321,213) -- -- --
Shares issued
Dividends paid for cash 27 1,785,718
- 115,707
- (572,669)- -- -- -- -- -- 1,901,425
(572,669)
Transfer
Transferfrom regulatory
fromreserve credit
for IFRS 28 - - 7,402 - (7,402) - - - -
risk reserve
Directors' remuneration 2731 -- -- 321,213
(1,954) -- -- (321,213)
- -- -- -
(1,954)
Dividends paid 27 2,481,344 - 115,707 - (1,831,906)
(572,669) 890,272 - -
(7,402) -
(321,213) -- -- (572,669)
1,326,802
Transfer from reserve for IFRS 28 9,344,559 - 128,300 - 2,999,509 -
7,402 4,417,405 893,506
(7,402) 1,503,113- -
32,049 -
100 19,318,541 -
As at 30 June 2023
Directors' remuneration 27 - - (1,954) - - - - - (1,954)
2,481,344 115,707 (1,831,906) 890,272 (7,402) (321,213) - - 1,326,802
The at 30 June
As notes on pages
202316 to 88 are an integral part of9,344,559
these financial 128,300
statements. 2,999,509 4,417,405 893,506 1,503,113 32,049 100 19,318,541

16to 88 are an integral part of these financial statements.
to120
__________________________________
__________________________________
14
For
Report
For the
Dashen
Statement
and
the year
Dividends paid
Dashen Bank
Income tax paid

Statement ofofcash
Purchase of shares
Defined benefits paid
year ended
Bank Share

Financial
48 to
ended 30
Cashflows
Directors' remuneration paid
to120
Flows
Proceeds from issued shares

Purchase of intangible assets
Payment for right-of-use assets

30 June
Cash generated from operations
Purchase of investment properties

Share Company
Company
Cash and cash equivalents at 1 July

Purchase of property and equipment
June 2023
Statements
Cash flows from investing activities

Cash flows from financing activities

2023
Cash flows from operating activities
Net cash (used in) investing activities
Cash and balances with banks at 30 June

Net increase in cash and cash equivalents
Net collection of bills, bonds and time deposits
Proceeds from sale of property and equipment
Net cash generated from financing activities

Net cash generated from operating activities
__________________________________
27
33
19
20
88 are an integral part of these financial statements.

27
33
16(c)
14(a)
21(a)
16(a)
24(a)
13(d)
Notes
21(b),37(a)

-
2023
10,404,444
1,552,861
1,328,756
1,901,425
3,356,161
965,037
ETB'000
11,957,305
2,409,669
(572,669)
(837,504)
(637,045)
(1,954)
(908,881)
(2,185,564)
(1,627,044)
(59,133)
(35,657)
10,125
2022
3,018,559
1,328,660
1,827,726
506,358
2,646,160
(499,066)
(312,391)
(323,344)
(415,457)
(2,138)
(625,662)
(55,268)
(627)
(35,380)
(16,070)
ETB'000
11,327
10,404,444
7,385,885
2,002,290
15
| 47
Dashen
Bank Share Company Dashen Bank Share Company
Company
Report and
and Financial
and Financial
Statements
For the year
year ended 30June
ended 30 June 2023
2023 For the year
year ended 30June
ended 30 June 2023
2023
Notes to the financial statements Notes to the financial statements (Continued)
2 Summary of significant accounting policies (Continued)
1 General
Dashen Bank Share Company ("Dashen" or the "Bank") is a private Commercial Bank domiciled in 2.2.2 Changes in accounting policies and disclosures
Ethiopia. The Bank was established on 20 September 1995 in accordance with the Commercial Code of a. New Standards, amendments, interpretations issued, effective and adopted during the year
Ethiopia of 1960 and the Licensing and Supervision of Banking Business Proclamation No. 84/1994. The
Bank's registered office is: Effective for annual periods
beginning on or after
Dashen Bank Share Company Headquarters Building New Standards or amendments
Sudan Street
Addis Ababa Amendments to IAS 8 - Definition of Accounting
Ethiopia Estimates 1-Jan-23
The Bank is principally engaged in the provision of a diverse range of financial products and services to Amendments of IAS 1 and IFRS Practice statement 2 -
corporate, retail and SME clients based in the Ethiopian market. Disclosure of Accounting Policies 1-Jan-23
Amendments to IAS 12 - Deferred Tax related to Assets
2 Summary of significant accounting policies
to Assets and Liabilities arising from a single transaction
2.1 Introduction to summary of significant accounting policies 1 January 2023 1-Jan-23
The principal accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated. b. New standards, amendments and interpretations issued but not effected for the reporting period
2.2 Basis of preparation Effective for annual periods

The financial statements for the year ended 30 June 2023 have been prepared in accordance with beginning on or after
International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards New Standards or amendments
Board (IASB). Additional information required by the national regulations is included where appropriate.
Amendments to IFRS 16 - Lease liability in a sale and
The financial statements comprise the statement of profit or loss and other comprehensive income, the lease back 1-Jan-24
statement of financial position, the statement of changes in equity, the statement of cash flows and the Amendments to IAS 1 - Classification of liabilities as
notes to the financial statements. current or Non - current (including amendments to IAS 1 -
Classification of laibilities as current as current or non-
The financial statements have been prepared on the going concern basis under the historical cost deferral if effective date issued in July 2020) 1-Jan-24
concept. All values are rounded to the nearest thousand, except when otherwise indicated. The financial Amendments to IAS 1 - Non - Current liabilities with
statements are presented in thousands of Ethiopian Birr (ETB' 000). Covenants 1-Jan-24
Management is of the view that the adoption of these standards, amendments and interpretations will not
The preparation of financial statements in conformity with IFRSs requires the use of certain critical
have a significant effect on its financial statements when they become effective.
accounting estimates. It also requires management to exercise its judgment in the process of applying the
Bank’s accounting policies. Changes in assumptions may have a significant impact on the financial
statements in the period the assumptions change. Management believes that the underlying assumptions
are appropriate and that the Bank's financial statements therefore present the financial position and
results fairly. The areas involving a higher degree of judgment or complexity, or areas where assumptions
and estimates are significant to the financial statements, are disclosed.
2.2.1 Going concern

The financial statements have been prepared on a going concern basis. The management has no doubt
that the Bank will remain in existence for the next 12 months.
__________________________________ __________________________________
48 | | 49
Bank Share
Company Dashen
Bank Share Company
and Financial Statements
For the year ended
ended 30
30 June
June 2023
2023 For
2023
Notes to the financial statements (Continued) Notes to the financial statements (Continued)
2 Summary of significant accounting policies (Continued) 2.4 Recognition of income and expenses (Continued)
2.4.1 Interest and similar income and expense
2.3 Foreign currency translation
a) Functional and presentation currency For all government bills and bonds and interest bearing financial assets measured at amortised cost
interest income or expense is recorded using the Effective Interest Rate (EIR), which is the rate that
Items included in the financial statements are measured using the currency of the primary economic exactly discounts estimated future cash payments or receipts through the expected life of the financial
environment in which the Bank operates ('the functional currency'). The functional currency and instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or
presentation currency of the Bank is the Ethiopian Birr (ETB). financial liability. The calculation takes into account all contractual terms of the financial instrument (for
example, prepayment options) and includes any fees or incremental costs that are directly attributable to
b) Transactions and balances the instrument and are an integral part of the Effective Interest Rate (EIR), but not future credit losses.
Foreign currency transactions are translated into the functional currency using the exchange rates The carrying amount of the government bills and bonds is adjusted if the Bank revises its estimates of
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the payments or receipts. The adjusted carrying amount is calculated based on the original EIR and the
settlement of foreign currency transactions and from the translation at exchange rates of monetary assets change in carrying amount is recorded as 'Interest and similar income' for financial assets and 'Interest
and liabilities denominated in currencies other than the Bank's functional currency are recognised in profit and similar expense' for financial liabilities.
or loss. Monetary items denominated in foreign currency are translated using the closing rate as at the
Once the recorded value of a financial asset or a similar other assets have been reduced due to an
reporting date.
impairment loss, interest income continues to be recognised using the rate of interest used to discount the
future cash flows for the purpose of measuring the impairment loss.
Changes in the fair value of monetary securities denominated in foreign currency classified as amortised
cost are analysed between translation differences resulting from changes in the amortised cost of the
2.4.2 Fees and commission
security and other changes in the carrying amount of the security. Translation differences related to
changes in amortised cost are recognised in profit or loss, and other changes in carrying amount are Fees and commission income and expenses that are integral to the effective interest rate on government
recognised in other comprehensive income. bills and bonds are included in the measurement of the effective interest rate. Other fees and commission
income (for example commission on purchase orders, Cash Payment Orders (CPOs), letters of
Translation differences on non-monetary financial assets and liabilities such as equities held at fair value guarantees etc) are recognised as the related services are performed.
through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation When a loan commitment is not expected to result in the draw-down of a loan, loan commitment fees are
differences on non-monetary financial assets measured at fair value, such as equities classified as recognised on a straight-line basis over the commitment period.
FVTOCI, are included in other comprehensive income.
2.4.3 Dividend income
2.4 Recognition and measurement of income and expenses Dividend is recognised when the Bank’s right to receive the payment is established, which is generally
Revenue is measured at the fair value of the consideration received or receivable and represents the when the shareholders approve and declare the dividend.
amounts receivable for services provided in the normal course of business, net of taxes or duty. 2.4.4 Foreign exchange revaluation gains or losses
Revenue is recognised at an amount that reflects the consideration to which the Bank expects to be These are gains and losses arising on settlement and translation of monetary assets and liabilities
entitled for performing its services for a customer. Income is measured based on the consideration denominated in foreign currencies at the functional currency’s spot rate of exchange at the reporting date.
specified in a contract with a customer and excludes amounts collected on behalf of third parties. The The monetary assets and liabilities include financial assets within the external reserves, foreign currencies
Bank recognises income when it has fulfilled its obligation and the right to receive the related sum as deposits received and held on behalf of third parties.
assured. 2.5 Financial instruments - initial recognition and subsequent measurement
Revenue comprises the fair value of considerations received or receivable in the ordinary course of the A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
Bank’s activities. Income is recognised when it is probable that the economic benefits associated with a or equity instrument of another entity.
transaction will flow to the Bank and the amount of income, and associated costs incurred or to be a) Initial recognition and measurement
incurred can be measured reliably.
The Bank initially recognises loans and advances, deposits, debt securities issued and subordinated
The Bank earns income from interest on loans given to domestic trade and services, import, export, liabilities on the date on which they are originated. All other financial instruments (including regular-way
transport, real estate, building and construction, manufacturing, agriculture and personal loans, purchases and sales of financial assets) are recognised on the trade date, which is the date on which the
commission and service charges. Bank becomes a party to the contractual provisions of the instrument.
The Bank recognises income from Interest Free Banking (IFB) services at the fair value of considerations A financial asset or financial liability is measured initially at fair value plus, for an item not at fair value
received or receivable. through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.
__________________________________ __________________________________
50 | | 51
Dashen Bank
Dashen Bank Share
Share Company
Company Dashen Bank
Dashen Bank Share
Share Company
Company
Report and Financial Statements Report and Financial Statements
For the
For the year ended 30
30 June
June 2023
2023 For the
30 June
June 2023
2023
2 Summary of significant accounting policies (Continued) 2 Summary of significant accounting policies (Continued)
2.5 Financial instruments - initial recognition and subsequent measurement (Continued)
b) Classification and subsequent measurement (Continued)
a) Initial recognition and measurement (Continued)
(i) Financial assets (continued)
'Day 1' profit or loss
Business model assessment
When the transaction price differs from the fair value of other observable current market transactions in
the same instrument or based on a valuation technique whose variables include only data from observable The Bank assesses the objective of a business model in which an asset is held at a portfolio level
markets, the Bank immediately recognises the difference between the transaction price and fair value (a because this best reflects the way the business is managed and information is provided to management.
‘Day 1’ profit or loss) in ‘Other operating income’. The information considered includes:
• the stated policies and objectives for the portfolio and the operation of those policies in practice. In
If fair value is evidenced by a quoted price in an active market for an identical asset or liability based on a
particular, whether management’s strategy focuses on earning contractual interest revenue, maintaining a
valuation technique that uses only data from observable markets, then the difference is recognised in
particular interest rate profile, matching the duration of the financial assets to the duration of the liabilities
profit or loss on initial recognition (i.e., day 1 profit or loss). In all other cases, the fair value will be adjusted
that are funding those assets or realising cash flows through the sale of the assets;
to bring it in line with the transaction price (i.e., day 1 profit or loss will be deferred by including it in the
initial carrying amount of the asset or liability). • how the performance of the portfolio is evaluated and reported to the Bank’s management;
• the risks that affect the performance of the business model (and the financial assets held within that
After initial recognition, the Bank recognises the price difference as gain or loss only to the extent that
arises from a change in a factor (including time) that market participants would take into account when business model) and its strategy for how those risks are managed;
pricing the asset or liability. • how managers of the business are compensated (e.g. whether compensation is based on the fair value of
the assets managed or the contractual cash flows collected); and
b) Classification and subsequent measurement
• the frequency, volume and timing of sales in prior periods, the reasons for such sales and its expectations
(i) Financial assets
about future sales activity. However, information about sales activity is not considered in isolation, but as
On initial recognition, a financial asset is classified either as measured at either amortised cost, fair value part of an overall assessment of how the Bank’s stated objective for managing the financial assets is
through other comprehensive income (FVOCI) or fair value through profit or loss (FVTPL). achieved and how cash flows are realised.
The Bank measures a financial asset at amortised cost if it meets both of the following conditions and is Financial assets that are held for trading or managed and whose performance is evaluated on a fair value
not designated at FVTPL: basis are measured at FVTPL because they are neither held to collect contractual cash flows nor held
both to collect contractual cash flows and to sell financial assets.
• the asset is held within a business model whose objective is to hold assets to collect contractual cash
flows; and Financial assets are not reclassified subsequent to their initial recognition, except in the period after the
• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely Bank changes its business model for managing financial assets.
payments of principal and interest (SPPI).
Assessment of whether contractual cash flows are solely payments of principal and interest
A debt instrument is measured at FVOCI only if it meets both of the following conditions and is not
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial
designated at FVTPL:
recognition. ‘Interest’ is defined as the consideration for the time value of money and for the credit risk
• the asset is held within a business model whose objective is achieved by both collecting associated with the principal amount outstanding during a particular period of time and for other basic
contractual cash flows and selling financial assets; and lending risks and costs (e.g. liquidity risk and administrative costs), as well as profit margin.
• the contractual terms of the financial asset give rise on specified dates to cash flows that are SPPI. In assessing whether the contractual cash flows are SPPI, the Bank considers the contractual terms of the
instrument. This includes assessing whether the financial asset contains a contractual term that could
On initial recognition, an equity investment that is held for trading is classified at FVTPL. However, for an change the timing or amount of contractual cash flows such that it would not meet this condition. In
equity investment that is not held for trading, the Bank may irrevocably elect to present subsequent making the assessment, the Bank considers:
changes in fair value in other comprehensive income (OCI). This election is made on an investment-by-
investment basis. • contingent events that would change the amount and timing of cash flows;
All other financial assets that do not meet the classification criteria at amortised cost or FVOCI above, are • prepayment and extension terms;
classified as measured at FVTPL. • terms that limit the Bank’s claim to cash flows from specified assets (e.g. non-recourse loans); and
• features that modify consideration of the time value of money (e.g. periodical reset of interest rates).
In addition, on initial recognition, the Bank may irrevocably designate a financial asset that otherwise
meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates
or significantly reduces an accounting mismatch that would otherwise arise.
__________________________________ __________________________________
52 | | 53
Bank Share
Company Dashen Bank
Dashen Bank Share
ShareCompany
Company
Report and Financial Statements Report and
Report and Financial
Statements
For the
30 June
June 2023
2023 For the year
2023
b) Financial instruments - initial recognition and subsequent measurement (Continued) c) Impairment (continued)
2.5 (ii) Classification and subsequent measurement (Continued)
Financial liabilities (iii)(i) Measurement of ECL
The Bank classifies its financial liabilities, other than financial guarantees and loan commitments, as ECL is a probability-weighted estimate of credit losses. It is measured as follows:
measured at amortised cost or FVTPL. • for financial assets that are not credit-impaired at the reporting date (stage 1 and 2): as the present value
A financial guarantee is an undertaking/commitment that requires the issuer to make specified payments of all cash shortfalls (i.e., the difference between the cash flows due to the Bank in accordance with the
to reimburse the holder for a loss it incurs because a specified party fails to meet its obligation when due contract and the cash flows that the Bank expects to receive);
in accordance with the contractual terms. • for financial assets that are credit-impaired at the reporting date (stage 3): as the difference between the
gross carrying amount and the present value of estimated future cash flows;
Financial guarantees issued by the Bank are initially measured at their fair values and, if not designated as • for undrawn loan commitments: as the present value of the difference between the contractual cash flows
at FVTPL are subsequently measured at the higher of: the amount of the obligation under the guarantee, that are due to the Bank if the commitment is drawn down and the cash flows that the Bank expects to
as determined in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets; and the receive; and
amount initially recognised less, where appropriate, cumulative amortisation recognised in accordance • for financial guarantee contracts: as the expected payments to reimburse the holder less any amounts that
with the revenue recognition policies. the Bank expects to recover.
c) Impairment (ii) Restructured financial assets
At each reporting date, the Bank assesses whether there is objective evidence that financial assets Where the terms of a financial asset are renegotiated or modified or an existing financial asset is replaced
(except equity investments), other than those carried at FVTPL, are impaired. with a new one due to financial difficulties of the borrower, then the Bank assesses whether the financial
The Bank recognises loss allowances for expected credit losses (ECL) on the following financial asset should be derecognised and ECL are measured as follows:
instruments that are not measured at FVTPL: • If the expected restructuring will not result in derecognition of the existing asset, then the expected cash
• financial assets that are debt instruments; and flows arising from the modified financial asset are included in calculating the cash shortfalls from the
• financial guarantee contracts issued. existing asset.
• If the expected restructuring will result in derecognition of the existing asset, then the expected fair value
No impairment loss is recognised on equity investments. of the new asset is treated as the final cash flow from the existing financial asset at the time of its
The Bank measures loss allowances at an amount equal to lifetime ECL, except for the following, which derecognition. This amount is included in calculating the cash shortfalls from the existing financial asset
are measured as 12-month ECL: that are discounted from the expected date of derecognition to the reporting date using the original
effective interest rate of the existing financial asset.
• debt investment securities that are determined to have low credit risk at the reporting date; and (iii) Credit-impaired financial assets
• other financial instruments (other than lease receivables) on which credit risk has not increased
significantly since their initial recognition. At each reporting date, the Bank assesses whether financial assets carried at amortised cost, debt
• Loss allowances for lease receivables are always measured at an amount equal to lifetime ECL. financial assets carried at FVOCI, and finance lease receivables are credit impaired (referred to as ‘Stage
3 financial assets’).
12-month ECL is the portion of ECL that results from default events on a financial instrument that is
possible within the 12 months after the reporting date. Financial instruments for which a 12-month ECL is
recognised are referred to as ‘Stage 1 financial instruments’.
Lifetime ECL is the ECL that results from all possible default events over the expected life of the financial
instrument. Financial instruments for which a lifetime ECL is recognised but which are not credit-impaired
are referred to as ‘Stage 2 financial instruments’.
__________________________________ __________________________________
54 | | 55
Bank Share
Company Bank Share
Company
For the
30 June
June 2023
2023 For the year ended
ended 30
30 June
June 2023
2023
2.5 Financial instruments - initial recognition and subsequent measurement (Continued) 2.5 Financial instruments - initial recognition and subsequent measurement (Continued)
(iii) Classification of financial assets and financial liabilities (Continued) (iii) Classification of financial assets and financial liabilities (Continued)
c) Impairment (Continued)
c) Impairment (Continued)
(iii) Credit-impaired financial assets (Continued) (vi) Non-integral financial guarantee contracts
A financial asset is considered ‘credit impaired’ when one or more events that have a detrimental impact The Bank assesses whether a financial guarantee contract held is an integral element of a financial asset
on the estimated future cash flows of the financial asset have occurred. that is accounted for as a component of that instrument or is a contract that is accounted for separately.
Evidence that a financial asset is credit-impaired includes the following observable data: Where the Bank determines that the guarantee is an integral element of the financial asset, then any
premium payable in connection with the initial recognition of the financial asset would be treated as a
• significant financial difficulty of the borrower or issuer; transaction cost of acquiring it. The Bank considers the effect of the protection when measuring the fair
• a breach of contract such as a default or past due event; value of the debt instrument and when measuring ECL.
• the restructuring of a loan or advance by the Bank on terms that the Bank would not consider otherwise;
• it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or Where the Bank determines that the guarantee is not an integral element of the debt instrument, then it
• the disappearance of an active market for a security because of financial difficulties. recognises an asset representing any prepayment of guarantee premium and a right to compensation for
credit losses.
A loan that has been renegotiated due to deterioration in the borrower’s condition is considered to be
d) Derecognition
credit-impaired unless there is evidence that the risk of not receiving contractual cash flows has reduced
significantly and there are no other indicators of impairment. In addition, a loan that is overdue for 90 days (i) Financial assets
or more is considered as credit-impaired even when the regulatory definition of default is different.
Financial asset are derecognised when:
(iv) Presentation of allowance for ECL in the statement of financial position • The contractual right to the cash flows from the financial asset expires, or
• The rights to receive the contractual cash flows in a transaction in which substantially all of the risks
Loss allowances for ECL are presented in the statement of financial position as follows: and rewards of ownership of the financial asset are transferred; or
• for financial assets measured at amortised cost: as a deduction from the gross carrying amount of the • The Bank neither transfers nor retains substantially all of the risks and rewards of ownership and it does
assets; not retain control of the financial asset.
• for loan commitments and financial guarantee contracts: generally, as a provision;
On derecognition of a financial asset, the difference between the carrying amount of the asset (or the
• where a financial instrument includes both a drawn and an undrawn component, and the Bank cannot
carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the consideration
identify the ECL on the loan commitment component separately from those on the drawn component: the
received (including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or
Bank presents a combined loss allowance for both components. The combined amount is presented as a
loss that had been recognised in OCI are recognised in profit or loss.
deduction from the gross carrying amount of the drawn component. Any excess of the loss allowance over
the gross amount of the drawn component is presented as a provision; and Any cumulative gain/loss recognised in OCI in respect of equity investment securities designated as at
FVOCI are not recognised in profit or loss on derecognition of such securities.
• for debt instruments measured at FVOCI: no loss allowance is recognised in the statement of financial
position because the carrying amount of these assets is their fair value. However, any loss allowance is Any interest in transferred financial assets that qualify for derecognition that is created or retained by the
disclosed and is recognised in the fair value reserve (other reserve). Bank is recognised as a separate asset or liability.
(v) Write-off (ii) Financial liabilities

Financial liabilities are derecognised when the contractual obligations are discharged or cancelled, or
Loans and debt securities are written off (either partially or in full) when there is no reasonable expectation
expire.
of recovering the amount in its entirety or a portion thereof. This is generally the case when the Bank
determines that the borrower does not have assets or sources of income that could generate sufficient e) Modifications of financial assets and financial liabilities
cash flows to repay the amounts subject to the write-off. This assessment is carried out at the individual
asset level.
If the terms of a financial asset are modified, then the Bank evaluates whether the cash flows of the
Recoveries of amounts previously written off are included in ‘impairment losses on financial instruments’ in modified asset are substantially different.
the statement of profit or loss and OCI.
If the cash flows are substantially different, then the contractual rights to cash flows from the original
Financial assets that are written off could still be subject to enforcement activities in order to comply with financial asset are deemed to have expired. In this case, the original financial asset is derecognised and a
the Bank’s procedures for recovery of amounts due. new financial asset is recognised at fair value plus any eligible transaction costs. Any fees received as part
of the modification are accounted for as follows:
__________________________________ __________________________________
56 | | 57
Dashen Bank
Dashen Bank Share
Share Company
Company Dashen Bank
Dashen Bank Share
Share Company
Company
For the
30 June
June 2023
2023 For the
30 June
June 2023
2023
2.5 Financial instruments - initial recognition and subsequent measurement (Continued) 2.5 Financial instruments - initial recognition and subsequent measurement (Continued)
e) Modifications of financial assets and financial liabilities (Continued) g) Designation at fair value through profit or loss
(i) Financial assets (Continued)
• fees that are considered in determining the fair value of the new asset and fees that represent At initial recognition, the Bank may designate certain financial assets as at FVTPL because this
reimbursement of eligible transaction costs are included in the initial measurement of the asset; and designation eliminates or significantly reduces an accounting mismatch, which would otherwise arise.
• other fees are included in profit or loss as part of the gain or loss on derecognition.
(ii) Financial liabilities
If cash flows are modified when the borrower is in financial difficulties, then the objective of the
modification is usually to maximise recovery of the original contractual terms rather than to originate a new The Bank designates certain financial liabilities as at FVTPL in either of the following circumstances:
asset with substantially different terms. • the liabilities are managed, evaluated and reported internally on a fair value basis; or
• the designation eliminates or significantly reduces an accounting mismatch that would otherwise arise.
If the Bank plans to modify a financial asset in a way that would result in forgiveness of cash flows, then it
would first consider whether a portion of the asset should be written off before the modification takes 2.6 Net interest income
place. Effective interest rate and amortised cost
a)
Where the modification of a financial asset measured at amortised cost or FVOCI does not result in Interest income and expense are recognised in profit or loss using the effective interest method. The
derecognition of the financial asset, then the Bank would first recalculate the gross carrying amount of the ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts
financial asset using the original effective interest rate of the asset and recognise the resulting adjustment through the expected life of the financial instrument to:
as a modification gain or loss in profit or loss. Any costs or fees incurred and fees received as part of the
modification to adjust the gross carrying amount of the modified financial asset is amortised over the • the gross carrying amount of the financial asset; or
remaining term of the modified financial asset. • the amortised cost of the financial liability.
When calculating the effective interest rate for financial instruments other than credit-impaired assets, the
Where such a modification is carried out because of financial difficulties of the borrower, then the gain or Bank estimates future cash flows considering all contractual terms of the financial instrument, but not
loss would be presented together with impairment losses. In other cases, it is presented as interest expected credit losses. For credit-impaired financial assets, a credit-adjusted effective interest rate is
income calculated using the effective interest rate method. calculated using estimated future cash flows including expected credit losses.
(ii) Financial liabilities
The calculation of the effective interest rate includes transaction costs and fees paid or received that are
The Bank derecognises a financial liability when its terms are modified and the cash flows of the modified an integral part of the effective interest rate. Transaction costs include incremental costs that are directly
liability are substantially different. In this case, a new financial liability based on the modified terms is attributable to the acquisition or issue of a financial asset or financial liability.
recognised at fair value. The difference between the carrying amount of the financial liability derecognised
and consideration paid is recognised in profit or loss. Consideration paid includes non-financial assets b) Amortised cost gross carrying amount
transferred, if any, and the assumption of liabilities, including the new modified financial liability. The ‘amortised cost’ of a financial asset or financial liability is the amount at which the financial asset or
financial liability is measured on initial recognition minus the principal repayments, plus or minus the
Where the modification of a financial liability is not accounted for as derecognition, then the amortised cost cumulative amortisation using the effective interest method of any difference between that initial amount
of the liability is recalculated by discounting the modified cash flows at the original effective interest rate and the maturity amount and, for financial assets, adjusted for any expected credit loss allowance (or
and the resulting gain or loss is recognised in profit or loss. Any costs and fees incurred are recognised as impairment allowance before 1 July 2018).
an adjustment to the carrying amount of the liability and amortised over the remaining term of the modified
financial liability by re-computing the effective interest rate on the instrument. The ‘gross carrying amount of a financial asset’ is the amortised cost of a financial asset before adjusting
for any expected credit loss allowance.
f) Offsetting
c) Calculation of interest income and expense
Financial assets and financial liabilities are offset and the net amount presented in the statement of
financial position when, and only when, the Bank currently has a legally enforceable right to set off the In calculating interest income and expense, the effective interest rate is applied to the gross carrying
amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability.
simultaneously. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest
Income and expenses are presented on a net basis only when permitted under IFRSs, or for gains and income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If
losses arising from a Bank of similar transactions such as in the Bank’s trading activity. the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.
For financial assets that were credit-impaired on initial recognition, interest income is calculated by
applying the credit-adjusted effective interest rate to the amortised cost of the asset. The calculation of
interest income does not revert to a gross basis, even if the credit risk of the asset improves.
__________________________________ __________________________________
58 | | 59
Dashen Bank
Dashen Bank Share
ShareCompany
Company Dashen Bank
Dashen Bank Share
ShareCompany
Company
Report and
Statements
For the year ended 30 June
For the year ended 30 2023
June 2023 For the year
2023
2.6 Net interest income (Continued) 2.8 Property and equipment (Continued)
d) Presentation An item of property and equipment and any significant part initially recognised is derecognised upon
disposal or when no future economic benefits are expected from its use. Any gain or loss arising on
Interest income and expense presented in the statement of profit or loss and OCI include:
derecognition of the asset (calculated as the difference between the net disposal proceeds and the
• interest on financial assets and financial liabilities measured at amortised cost calculated on an effective carrying amount of the asset) is included in profit or loss when the asset is derecognised.
interest basis; The residual values, useful lives and methods of depreciation of property and equipment are reviewed at
• interest on debt instruments measured at FVOCI calculated on an effective interest basis; each financial year end and adjusted prospectively, if appropriate.
Interest income and expense on all trading assets and liabilities are considered to be incidental to the Intangible assets
Bank’s trading operations and are presented together with all other changes in the fair value of trading 2.9
assets and liabilities in net trading income. Intangible assets acquired separately are measured on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated
impairment losses, if any. Internally generated intangibles, excluding capitalised development costs, are
Interest income and expense on other financial assets and financial liabilities at FVTPL are presented in
not capitalised and the related expenditure is reflected in profit or loss in the period in which the
net income from other financial instruments at FVTPL.
expenditure is incurred.
2.7 Cash and cash equivalents
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with
Cash and cash equivalents comprise balances with less than three months maturity from the date of finite lives are amortised over the useful economic life. The amortisation period and the amortisation
acquisition, including cash in hand, deposits held at call with banks and other short-term highly liquid method for an intangible asset with a finite useful life are reviewed at least at each financial year-end.
investments with original maturities of three months or less. Changes in the expected useful life, or the expected pattern of consumption of future economic benefits
embodied in the asset, are accounted for by changing the amortisation period or methodology, as
For the purposes of the cash flow statement, cash and cash equivalents include cash and restricted appropriate, which are then treated as changes in accounting estimates. The amortisation expenses on
balances with National Bank of Ethiopia. intangible assets with finite lives is presented as a separate line item in the profit or loss.
2.8 Property and equipment Amortisation is calculated using the straight–line method to write down the cost of intangible assets to their
residual values over their estimated useful lives, as follows:
Property and equipment is stated at cost, net of accumulated depreciation and accumulated impairment
losses, if any. Such cost includes the cost of replacing part of the property and equipment if the Useful life
recognition criteria are met. When significant parts of property and equipment are required to be replaced Intangibles 6 years
at intervals, the Bank recognises such parts as individual assets with specific useful lives and depreciates Intangibles-Contract based contract period
them accordingly. All other repair and maintenance costs are recognised in profit or loss as incurred.
2.10 Investment property
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as Property that is held for long-term rental yields or for capital appreciation or both, are classified as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the investment properties.
Bank and the cost of the item can be measured reliably. The carrying amount of the replaced part is
derecognised. Recognition of investment properties takes place only when it is probable that the future economic
benefits that are associated with the investment property will flow to the Bank and the cost can be reliably
Depreciation is calculated using the straight-line method to allocate costs less residual values over the measured. This is usually when all risks are transferred.
estimated useful lives of property and equipment as follows:
Investment properties are measured initially at cost, including transaction costs. The Bank has opted to
Asset class Depreciation rate (years) subsequently carry investment property at cost and disclose fair value. Fair value is based on active
market prices, adjusted if necessary, for any difference in the nature, location or condition of the specific
Buildings 50 years
asset. If this information is not available, the Bank uses alternative valuation methods, such as recent
Elevator 15 years
prices on less active markets or discounted cash flow projections. Valuations are performed as of the
Motor vehicles 10 years
reporting date by professional valuers who hold recognised and relevant professional qualifications and
Computers and related items 7 years
have recent experience in the location and category of the investment property being valued. These
Medium-Life furniture and fittings 10 years
valuations form the basis for the carrying amounts in the financial statements.
Long-Life furniture and fittings 20 years
Short-Life equipment 5 years The fair value of investment properties reflects, among other things, rental income from current leases
Long-Life equipment 10 years and assumptions about rental income from future leases in the light of current market conditions.
The Bank commences depreciation when the asset is available for use. Freehold land is not depreciated. Investment properties are derecognised when they are disposed. Gains or losses arising from disposal of
investment property are determined as the difference of the net disposal proceeds and the carrying
Construction in progress is not depreciated as the assets are not yet available for use. amount of the asset and recognised in profit or loss statement.
__________________________________ __________________________________
60 | | 61
Dashen Bank
Dashen Bank Share
Share Company
Company Dashen
Dashen Bank
Bank Share Company
Share Company
For the
30 June
June 2023
2023 For
2023
2.13 Fair value measurement
2.11 Impairment of non-financial assets
The Bank measures financial instruments, such as investment in financial instruments classified as
The Bank assesses, at each reporting date, whether there is an indication that an asset may be impaired.
FVTOCI and investments in financial instruments classified as FVTPL at each statement of financial
If any indication exists, or when annual impairment testing for an asset is required, the Bank estimates the
position date. Fair value related disclosures for financial instruments and non-financial assets that are
asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating
measured at fair value or where fair values are disclosed are, summarised in the following notes:
unit’s (CGU) fair value less costs of disposal and its value in use. The recoverable amount is determined
for an individual asset, unless the asset does not generate cash inflows that are largely independent of
• Significant estimates and assumptions, disclosures for valuation methods (Note 3 and Note 4.6.1).
those from other assets. When the carrying amount of an asset or CGU exceeds its recoverable amount,
• Quantitative disclosures of fair value measurement hierarchy (Note 4.6.2).
the asset is considered impaired and is written down to its recoverable amount.
• Financial instruments (including those carried at amortised cost).
In assessing value in use, the estimated future cash flows are discounted to their present value using a Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
pre-tax discount rate that reflects current market assessments of the time value of money and the risks transaction between market participants at the measurement date. The fair value measurement is based
specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken on the presumption that the transaction to sell the asset or transfer the liability takes place either:
into account. If no such transactions can be identified, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or • In the principal market for the asset or liability, or
other available fair value indicators. • In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to / by the Bank.
For assets excluding goodwill, an assessment is made at each reporting date to determine whether there
is an indication that previously recognised impairment losses no longer exist or have decreased. If such The fair value of an asset or a liability is measured using the assumptions that market participants would
indication exists, the Bank estimates the asset’s or CGU’s recoverable amount. A previously recognised use when pricing the asset or liability, assuming that market participants act in their economic best
impairment loss is reversed only if there has been a change in the assumptions used to determine the interest.
asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that
the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount The Bank uses valuation techniques that are appropriate in the circumstances and for which sufficient
that would have been determined, net of depreciation, had no impairment loss been recognised for the data are available to measure fair value, maximising the use of relevant observable inputs and minimising
asset in prior years. Such reversal is recognised in the profit or loss. the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
2.12 Other assets
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is
Other assets are generally defined as claims held against other entities for the future receipt of money, significant to the fair value measurement as a whole:
goods or services and also includes stock of materials and supplies. Other assets in the Bank's financial
• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
statements include the following:
• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value
(a) Prepayments measurement is directly or indirectly observable.
Prepayments are payments made in advance for services to be enjoyed in future. The amount is initially • Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value
capitalised in the reporting period in which the payment is made and subsequently amortised over the For assets and liabilities that are recognised in the financial statements on a recurring basis, the Bank
period in which the service is to be enjoyed. determines whether transfers have occurred between Levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is significant to the fair value measurement as a whole)
(b) Other receivables
at the end of each reporting period.
Other receivables are recognised on the occurrence of transactions and are de-recognised on
The Bank’s management determines the policies and procedures for both recurring fair value
(c) Inventory measurement, such as available-for-sale financial assets.
Materials and supplies are measured at the lower of cost or net realisable value. The Bank applies the For the purpose of fair value disclosures, the Bank has determined classes of assets and liabilities on the
weighted average cost method to determine the cost of materials and supplies. Materials and supplies are basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy
charged to profit or loss when consumed. as explained above.
__________________________________ __________________________________
62 | | 63
Dashen Bank
Dashen Bank Share
Share Company
Company Dashen Bank
Dashen Bank Share
Share Company
Company
Report and
Statements Report and Financial Statements
2023 For the
30 June
June 2023
2023
2.14 Employee benefits 2.15 Provisions
The Bank operates various post-employment schemes, including both defined benefit and defined Provisions are recognised when the Bank has a present obligation (legal or constructive) as a result of a
contribution pension plans and post employment benefits. past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Bank
(a) Defined contribution plan
expects some or all of a provision to be reimbursed, for example, under an insurance contract, the
The Bank operates two defined contribution plans; reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain.
The expense relating to a provision is presented in profit or loss net of any reimbursement.
i) A pension scheme in line with the provisions of the Ethiopian Pension of Private Organisation Employees
Proclamation No. 715/2011. Funding under the scheme is 7% and 11% by employees and the Bank, If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate
respectively. In addition, 4% of salary is held as provident fund in the name of each employee. that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in
the provision due to the passage of time is recognised as other operating expenses.
ii) A provident fund contribution, funding under this scheme is 7% and 15% by employees and the Bank,
respectively; 2.16 Share capital
Both schemes are based on the employees' salaries. Employer's contributions to this scheme are charged Incremental costs directly attributable to the issue of new shares or options or to the acquisition of a
to profit or loss and other comprehensive income in the period in which they relate. business are shown in equity as a deduction, net of tax, from the proceeds.
(b) Profit-sharing and bonus plans 2.17 Leases
The Bank recognises a liability and an expense for bonuses and profit-sharing based on a formula that Lease is a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a
takes into consideration the profit attributable to the Bank's shareholders after certain adjustments. The period of time in exchange for consideration. This definition is more focused on who controls the right-of-
Bank recognises a provision where contractually obliged or where there is a past practice that has created use asset.
a constructive obligation.
(a) Bank as a lessee
(c) Defined benefit obligations
The Bank implemented a single accounting model, requiring lessees to recognise assets and liabilities for
The Bank operates an unfunded severance pay plan for its employees who have served the Bank for 5 all leases excluding exceptions listed in the standard. The Bank elected to apply exemptions for short term
years and more and are below the retirement age (i.e. have not met the requirement to access the leases in relation to leases of residential buildings.
pension fund). The final pay-out is determined by reference to current benefit’s level (monthly salary) and
number of years in service and is calculated as 1 month salary for the first year in employment plus 1/3 of Based on the accounting policy applied, the Bank recognises a right-of-use asset and a lease liability at
monthly salary for each subsequent year in employment to a maximum of 12 months final monthly salary. the commencement date of the contract for all leases conveying the right to control the use of an identified
asset for a period of time. The commencement date is the date on which a lessor makes an underlying
This qualifies as a defined benefit plan. Typically defined benefit plans define an amount of benefit that an asset available for use by a lessee.
employee will receive on retirement, usually dependent on one or more factors such as age, years of
service and compensation. The right-of-use assets are initially measured at cost, which comprises:
– the amount of the initial measurement of the lease liability,
The liability recognised in the statement of financial position in respect of the defined benefit pension plan
– any lease payments made at or before the commencement date, less any lease incentives,
is the present value of the defined benefit obligation at the end of the reporting period less the fair value of
– any initial direct costs incurred by the lessee,
plan assets. The defined benefit obligation is calculated annually by independent actuaries using the
– an estimate of costs to be incurred by the lessee in dismantling and removing the underlying
projected unit credit method. The present value of the defined benefit obligation is determined by
assets or restoring the site on which the assets are located.
discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are
denominated in the currency in which the benefits will be paid, and that have terms to maturity After the commencement date the right-of-use assets are measured at cost less any accumulated
approximating to the terms of the related pension obligation. In countries where there is no deep market in depreciation and any accumulated impairment losses and adjusted for any re-measurement of the lease
such bonds, the market rates on government bonds are used. liability. Depreciation is calculated using the straight-line method over the estimated useful lives (lease
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are term). The Bank depreciates the right-of-use asset from the commencement date to the end of the useful
charged or credited to equity in other comprehensive income in the period in which they arise. Past- life of the right-of-use asset.
service costs are recognised immediately in profit or loss.
A lease liability is initially measured at the present value of the lease payments that are not paid at that
date. These include:
– fixed payments, less any lease incentives receivable;
– variable lease payments that depend on an index or a rate, initially measured using the index or
rate as at the commencement date;
– payments of penalties for terminating the lease, if the lease term reflects the lessee exercising
an option to terminate the lease;
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64 | | 65
Dashen Bank
Dashen Bank Share
Share Company
Company Bank Share
Company
For the
30 June
June 2023
ended 30
30 June
June 2023
2023
2.17 Leases (Continued) 2.18 Income tax
(a) Bank as a lessee (Continued)
(a) Current income tax
A lease liability is initially measured at the present value of the lease payments that are not paid at that
date. These include: The income tax expense or credit for the period is the tax payable on the current period’s taxable income
– fixed payments, less any lease incentives receivable; based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets
– variable lease payments that depend on an index or a rate, initially measured using the index or and liabilities attributable to temporary differences and to unused tax losses.
rate as at the commencement date;
– payments of penalties for terminating the lease, if the lease term reflects the lessee exercising The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted
an option to terminate the lease; at the end of the reporting period in Ethiopia. The management periodically evaluates positions taken in
tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It
Variable lease payments not included in the initial measurement of the lease liability are recognised establishes provisions where appropriate on the basis of amounts expected to be paid to the tax
directly in the profit or loss. authorities.
Lease payments are discounted using the Bank’s incremental borrowing rate of 7%. The lease term (b) Deferred tax
determined by the Bank comprises: Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised
– non-cancellable period of lease contracts, if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial
– periods covered by an option to extend the lease if the Bank is reasonably certain to exercise recognition of an asset or liability in a transaction other than a business combination that at the time of the
that option, transaction affects neither accounting nor taxable profit or loss.
– periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise
that option. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by
the balance sheet date and are expected to apply when the related deferred tax asset is realised or the
After the commencement date the Bank measures the lease liability by: deferred tax liability is settled.
– increasing the carrying amount to reflect interest on the lease liability,
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be
– reducing the carrying amount to reflect lease payments made, and
available against which the temporary differences can be utilised.
– re-measuring the carrying amount to reflect any reassessment or lease modifications.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
(b) Bank as a lessor
assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes
The Bank makes assessment of leases on the commencement date of leases and classifies them as levied by the same taxation authority on either the same taxable entity or different taxable entities where
either operating or finance leases. Leases where a significant portion of the risks and rewards of there is an intention to settle the balances on a net basis.
ownership are retained by the lessor are classified as operating leases.
2.19 Joint arrangements
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to Under IFRS 11 Joint Arrangements: investments in joint arrangements are classified as either joint
ownership to the lessee. Examples of situations where the risks and rewards of ownership are considered operations or joint ventures. The classification depends on the contractual rights and obligations of each
as having been transferred to the lessee are as follows: investor, rather than the legal structure of the joint arrangement. Dashen Bank has a joint operation.
− the lease transfers ownership of the asset to the lessee by the end of the lease term,
Interests in joint operations
− the lessee has the option to purchase the asset at a price that is expected to be sufficiently lower
than the fair value at the date the option becomes exercisable for it to be reasonably certain, at the A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have
inception of the lease, that the option will be exercised, rights to the assets and obligations for the liabilities, relating to the arrangement. Joint control is the
− the lease term is for at least 3/4 of the economic life of the asset even if title is not transferred, contractually agreed sharing of control of an arrangement, which exists only when decisions about the
− at the inception of the lease the present value of the minimum lease payments amounts to at least relevant activities require unanimous consent of the parties sharing control.
90% of the fair value of the leased asset; or
− the leased assets are of such a specialised nature that only the lessee can use them without major When the Bank undertakes its activities under joint operations, the Bank as a joint operator, recognises in
modifications. relation to its interest in a joint operation:
• Its assets, including its share of any assets held jointly;
• Its liabilities, including its share of any liabilities incurred jointly;
• Its revenue from the sale of its share of the output arising from the joint operation;
• Its share of the revenue from the sale of the output by the joint operation; and
• Its expenses, including its share of any expenses incurred jointly.
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66 | | 67
Bank Share
Company
and Financial
Statements
For the
30 June
June 2023
2023 For the year
year ended 30June
ended 30 June 2023
2023
2 Summary of significant accounting policies (Continued) 3 Significant accounting judgements, estimates and assumptions (Continued)
2.19 Joint arrangements (Continued) 3.1 Judgements, Estimates and assumptions (Continued)
The Bank accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint Impairment losses on loans and advances
operation in accordance with the IFRSs applicable to the particular assets, liabilities, revenues and
expenses. The estimation of potential credit losses is inherently uncertain and depends upon many factors, including
general economic conditions, changes in individual customer's circumstances, structural changes within
When the Bank transacts with a joint operation in which the Bank is a joint operator (such as a sale or industries that alter competitive positions and other external factors such as legal and regulatory
contribution of assets), the Bank is considered to be conducting the transaction with the other parties to requirements.
the joint operation, and gains and losses resulting from the transactions are recognised in the Bank’s
financial statements only to the extent of other parties’ interests in the joint operation. Impairment is measured for all accounts that are identified as non-performing. All relevant considerations
that have a bearing on the expected future cash flows are taken into account which include but are not
When the Bank transacts with a joint operation in which the Bank is a joint operator (such as a purchase limited to future business prospects for the customer, realisable values of securities, the Bank's position
of assets), the Bank does not recognise its share of the gains and losses until it resells those assets to a relative to other claimants and the existence of any court injunctions placed by the borrower. Subjective
third party. judgments are made in this process of cash flow determination both in value and timing and may vary
from one person to another and team to team. Judgments may also change with time as new information
Details of the joint operation are set out in note 18. becomes available.
2.20 Comparatives
The Bank reviews its loans and advances at each reporting date to assess whether an allowance for
Where necessary, comparative information has been adjusted to conform with changes with current year's impairment should be recognised in profit or loss. In particular, judgment by the Directors is required in the
presentation. estimation of the amount and timing of future cash flows when determining the level of allowance required.
Such estimates are based on the assumptions about a number of factors and actual results may differ,
3 Significant accounting judgements, estimates and assumptions resulting in future changes in the allowance.
The preparation of the Bank’s financial statements requires management to make judgements, estimates
and assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the Fair value measurement of financial instruments
accompanying disclosures, as well as the disclosure of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustment to the carrying When the fair values of financial assets and financial liabilities recorded in the statement of financial
amount of assets or liabilities affected in future periods. position cannot be measured based on quoted prices in active markets, their fair value is measured using
valuation techniques including the discounted cash flow (DCF) model. The inputs to these models are
Other disclosures relating to the Bank’s exposure to risks and uncertainties include: taken from observable markets where possible, but where this is not feasible, a degree of judgement is
required in establishing fair values. Judgements include considerations of inputs such as liquidity risk,
• Capital management Note 4.5 credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of
• Financial risk management Note 4 financial instruments. See Note 4.6 for further disclosures.
• Sensitivity analyses disclosures Notes 4.4.2 (ii)
Depreciation and carrying value of property and equipment
3.1 Judgements, Estimates and assumptions
The estimation of the useful lives of assets is based on the management judgement. Any material
In the process of applying the Bank’s accounting policies, management has made the following adjustment to the estimated useful lives of items of property and equipment will have an impact on the
judgements, which have the most significant effect on the amounts recognised in the financial statements: carrying value of these items.
The key assumptions concerning the future and other key sources of estimation at the reporting date, that Impairment of non-financial assets
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year, are described below. The Bank based its assumptions and estimates on Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable
parameters available when the financial statements were prepared. Existing circumstances and amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less
assumptions about future developments, however, may change due to market changes or circumstances costs of disposal calculation is based on available data from binding sales transactions, conducted at
beyond the control of the Bank. Such changes are reflected in the assumptions when they occur. arm’s length, for similar assets or observable market prices less incremental costs for disposing of the
asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget
for the next five years and do not include restructuring activities that the Bank is not yet committed to or
significant future investments that will enhance the asset’s performance of the CGU being tested. The
recoverable amount is sensitive to the discount rate used for the discounted cash flow model as well as
the expected future cash-inflows and the growth rate used for extrapolation purposes.
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68 | | 69
Dashen Bank
Dashen Bank Share
ShareCompany
Company Dashen Bank
Dashen Bank Share
Share Company
Company
Report and
Statements Report and Financial Statements
For the year
ended 30
30 June
June 2023
2023
3 Significant accounting judgements, estimates and assumptions (Continued) 4 Financial risk management (Continued)
3.1 Judgements, Estimates and assumptions (Continued) 4.1 Introduction (Continued)
IFRS 16 leases a) The Bank’s risk exposure is within the limits established by the Board of Directors (BoD)
b) Risk taking decisions are in line with the business strategy and objectives set by the BoD
The application of IFRS 16 requires the Bank to make judgments that affect the valuation of the lease c) The expected payoffs compensate the risks taken
liabilities and the valuation of right-of-use assets. These include: determining contracts in scope of IFRS d) Risk taking decisions are explicit and clear
16, determining the contract term and determining the interest rate used for discounting of future cash e) Availability of sufficient capital for the prevailing risk exposure
flows.
The lease term determined by the Bank generally comprises the non-cancellable period of lease In line with this, the Bank considers risk management as an integral part of its day-to-day core business
contracts, periods covered by an option to extend the lease if the Bank is reasonably certain to exercise activities.
that option and periods covered by an option to terminate the lease if the Bank is reasonably certain not to
exercise that option. 4.1.1 Risk management structure
The Bank will continue to monitor these assumptions in the future as a result of a review of the industry Philosophy
practice and the evolution of the accounting interpretations in relation to estimation of the lease terms.
The Bank duly strives for the realisation of the following:
The present value of the lease payment is determined using the discount rate representing the rate of
● Create awareness and embed risk management into the culture of the Bank through regular
nominal interest rate the Bank pays to depositors of savings accounts. The expenses relating to leases for
risk awareness activities, training, open communication lines among units, continuous interaction
which the Bank applied the practical expedient described in IFRS 16 (leases with the contract term of less
with senior management, and employing other feasible means
than 12 months) are recognised in profit or loss.
● Manage risks in accordance with best practices
Taxes ● Be responsive to changing social, political, environmental and legislative requirements, whilst
effectively managing the related risks and exploiting opportunities
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and ● Prevent loss, interruptions, injury, damage and failure with a view to reducing unwarranted costs
the amount and timing of future taxable income. Given the wide range of international business ● Make every employee to be a ‘risk manager’
relationships and the long-term nature and complexity of existing contractual agreements, differences ● Specific risk owners are responsible to manage the type of risks associated with their respective
arising between the actual results and the assumptions made, or future changes to such assumptions, functions
could necessitate future adjustments to tax income and expense already recorded. The amount of such ● Make the Risk Management and Compliance Department independent from the risk taking
provisions is based on various factors, such as experience of previous tax audits and differing functions in order to ensure the check and balance system and enable the department to oversee
interpretations of tax regulations by the taxable entity and the responsible tax authority. the level of risk taken independent of the risk taking activities.
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit Risk management committees
will be available against which the losses can be utilised. Significant Directors judgement is required to
determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the The Bank has the following management sub-committees with respect to different risk classifications:
level of future taxable profits together with future tax planning strategies.
● Credit Risk Management Committee
4 Financial risk management ● Asset Liability Management Committee / (ALCO)
● Operation Risk Management Committee
4.1 Introduction
Each committee has established its own terms of reference which specifies the activities and
Management recognises that the banking industry experiences significant and rapid changes, including
responsibilities of the respective committees. The roles in relation to risk management of each committee
increased competition from other non-bank financial services providers. The industry is also subject to
are indicated in the risk management procedures.
liquidity requirement changes, reserve requirement changes, interest rate changes, changes in banking
laws and regulations and foreign currency rate changes. Therefore, the management recognises that a
4.1.2 Risk measurement and reporting systems
comprehensive credit, liquidity, operational and market risk policy is essential to effectively manage the
Bank’s risks and to meet regulatory requirements. The Bank earnestly strives to apply best practices in Internal control and risk management
identifying, evaluating, and cost-effective controlling of risks to ensure that any residual risks are at an
acceptable level. Whilst it is not possible to eliminate risk absolutely, the Bank actively promotes and An effective internal control and risk management is the foundation of safe and sound banking. When risk
applies best practices at all levels and to all of its activities, including its business relationship with external management is properly designed and consistently enforced, it helps management to maximise profit,
partners. With this framework, the Bank ensures that: safeguard the Bank's resources, produce reliable financial reports, increase employee satisfaction, and
comply with laws and regulations. It also reduces the possibility of significant errors and irregularities, as
well as assist in their timely detection when they do occur.
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70 | | 71
Dashen Bank
Dashen BankShare
ShareCompany
Company Dashen Bank
Dashen BankShare
ShareCompany
Company
Statements Report and FinancialStatements
4 Financial risk management (Continued) 4 Financial risk management (Continued)
4.1 Introduction (Continued) 4.1 Introduction (Continued)
4.1.2 Risk measurement and reporting systems (Continued) 4.1.3 Risk assessment (Continued)
Risk impact assessment matrix Risks in the below four categories described are evaluated throughout the Bank including sub-risk in
each categories.
The following risk impact level and consequences are used by the Bank in determining the risk
exposures.
i. Credit risk assessment
ii. Liquidity risk assessment
Risk impact level Consequences Remark iii. Market risk assessment and
Very Low Insignificant Very minimal or minor impact on strong financial position, iv. Operational risk assessment
customer, satisfaction, efficient business process, and
employee satisfaction. May be with very short term effect and These risks are rated as very high, high, moderate, low and very low. Among factors considered in
can be very easily and quickly fixed. this assessment of risk are the inherent level of such risk in the specified risk, the trend of risk in that
Low Minor Minimal impact on strong financial position, customer, activity (e.g., increasing, decreasing, or stable), the adequacy of risk measurement and monitoring
satisfaction, efficient business process, and employee processes and tools, and the quality of risk management practices and controls in place to control
satisfaction. May be with short term effect and can be easily such risks. The risk assessment is conducted by concerned risk work units. The assessment
fixed. identifies the most significant, or key controls and includes an opinion about the effectiveness of the
Moderate Moderate Minor impact on strong financial position, customer design of control in mitigating the related risk. As per the NBE risk management guideline, the Bank
satisfaction, efficient business process and employee conducts the following under listed risk assessment in detail every quarter and briefly every month,
satisfaction. May be with more than short term effect that can submits, and reviews this assessment with the Board Risk Management Committee of the Bank. The
be expensive to recover. results of the inherent risk assessment are also provided to other concerned organs.
High Major Significant impact on strong financial position, customer
satisfaction, efficient business process, and employee 4.2 Credit risk
satisfaction. May be very difficult and possibly takes medium
term to recover. Credit risk is the risk of loss arising from the failure of a borrower, issuer, or counterparty to meet their
Very High Extreme Critical impact on strong financial position, customer financial obligations to the Bank. The Bank manages this risk by applying a strict set of criteria in
satisfaction, efficient, business process and employee credit granting. It ensures the lending activities are based on strong underwriting standard, KYC
satisfaction. May be very difficult and possibly takes more than (Know Your Customer) principles, confining its dealings to institutions and individuals of high
medium term time span to recover creditworthiness and ensuring exposures to counterparties are appropriately secured. The Bank has
high risk appetite for credit risk by taking into account expected returns, the external environment, and
Risk tolerance developments in the composition of the Bank’s balance sheet.
The key risk management objective is to ensure that the bank maintains an appropriate balance
between risk and reward. To achieve this overall strategic objective, risk appetite and tolerance limits The main credit risk identification methods used by the Bank are financial statements analysis risk
are set considering the risk capacity that the Bank can assume given its available financial resources. identification method, stress testing risk identification method and audit approach risk identification
The Management of the Bank desires to manage risks at a level that permits the Bank to grow and method. In rare cases, the Bank applies incident investigation risk identification method to identify the
achieve its strategic business objectives, while conducting business in a safe and sound manner, level of credit risk exposure.
complying with all applicable regulations, and provide a return to shareholder that meets or exceeds
their expectations. The Board of Directors sets risk tolerance levels annually through several means. In measuring credit risk of loans and advances to various counterparties/borrowers, the Bank
The overall risk environment of the Bank is considered annually in conjunction with the strategic considers the character and capacity of the obligor to pay meet contractual obligations, current
planning process of Board of Directors and the Management. In this regard, the strategic plan exposures to the counter party/obligor and its likely future developments, credit history of the
includes a Risk Appetite Statement, specific level of risk tolerance within key business units, such as counterparty/obligor; and the likely recovery ratio in case of default obligation value of collateral and
credit/lending, interest rate and liquidity, are set through the review, and if necessary, amendment of other ways out. The Bank's credit exposure comprises corporate segment, micro, retail, small and
the Bank’s business programs related to those areas. Specific risk tolerance limits and guidelines are medium enterprise segment which are developed to reflect the needs of its customers. The Bank's
included, as appropriate, in the risk procedures and risk management program. policy is to lend principally on the basis of its customers’ repayment capacity through quantities and
qualitative evaluation. However, the Bank ensures that its loans and advances are backed by
4.1.3 Risk assessment collateral to mitigate the credit risk in case of default.
An effective internal control program cannot be structured without having effective risk assessment
process. Risk management is defined as the ability of the Bank to identify measure, monitor, assess
and control risks. The Bank, through the Board, the management and risk function assess the
changing circumstances and address risks that might arise from changing business or economic
condition, a decline in the effectiveness of internal controls, the initiation of new business activities or
the offering of new products and services. The risk assessment begins with an evaluation on inherent
risk.
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72 | | 73
Dashen
DashenBank
BankShare
ShareCompany
Company Dashen
DashenBank
BankShare
ShareCompany
Company
Statements Report and Financial
Statements
4.2 Credit risk (Continued) 4.2 Credit risk (Continued)
4.2.1 Credit quality analysis 4.2.2 Credit quality analysis (Continued)
The table below sets out information about the credit quality of financial assets and debt instruments Credit quality analysis disclosures for off-balance sheet facilities are as follows:
measured at amortised cost. Unless specifically indicated, for financial assets, the amounts in the table
12 Lifetime ECL Lifetime ECL
represent gross carrying amounts.
months credit not credit 2023
The loss allowance for loans and advances to customers also includes the loss allowances for loan Classification ECL impaired impaired Total
commitments and financial guarantee contracts. ETB'000 ETB'000 ETB'000 ETB'000
2023 2022
Stage 1 Stage 2 Stage 3 Total Total Pass 2,460,029 2,460,029
ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 Special mention - - - -
Loans and advances to Non-performing - - - -
customers at amortised Total exposure 2,460,029 - - 2,460,029
cost Loss allowance (489) - - (489)
Stage 1 – Pass 87,975,070 - - 87,975,070 68,135,265 Carrying amount 2,459,540 - - 2,459,540
Stage 2 – Special mention - 3,249,344 - 3,249,344 3,450,200
Stage 3 - Non performing - - 4,870,619 4,870,619 3,834,135 12 Lifetime ECL Lifetime ECL
Total gross exposure 87,975,070 3,249,344 4,870,619 96,095,033 75,419,600 months credit not credit 2022
Loss allowance (308,710) (23,728) (716,790) (1,049,228) (551,607) Classification ECL impaired impaired Total
Net carrying amount 87,666,360 3,225,616 4,153,829 95,045,805 74,867,993 ETB'000 ETB'000 ETB'000 ETB'000
Pass 13,964,764 - - 13,964,764

2023 2022
Special mention - - - -
Stage 1 Stage 2 Stage 3 Total Total
Non-performing - - - -
ETB'000 ETB'000 ETB'000 ETB'000 ETB'000
IFB financing Total exposure 13,964,764 - - 13,964,764
Loss allowance (846) - - (846)
Stage 1 – Pass 4,727,822 - - 4,727,822 3,011,351
Stage 2 – Special Carrying amount 13,963,918 - - 13,963,918
mention - 380,737 - 380,737 84,979 4.2.2 Collateral held
Stage 3 - Non performing - - 95,282 95,282 71,377
Total gross exposure 4,727,822 380,737 95,282 5,203,841 3,167,707 The Bank holds collateral against certain of its credit exposures. The following table sets out the principal
Loss allowance (16,853) (18,072) (16,552) (51,477) (20,117) types of collateral held against different types of financial assets.
Net carrying amount 4,710,969 362,665 78,730 5,152,364 3,147,590
Type of financial asset Note 2023 2022 Principal type of collateral
2023 ETB'000 ETB'000 held
ETB'000 Loans and advances to Cash and cash substitutes,
Gross Loss Net carrying customers and IFB 15 191,833,297 181,634,240 share certificates, bank
Other financial assets (debt instruments) exposure allowance amount financing guarantees, Buildings, vehicles
and machineries, negotiable
Cash, bank balances and reserve with NBE 12,021,561 (64,256) 11,957,305 bills of payment and deposits.
Investment securities (debt instruments) 11,207,279 (609) 11,206,670 I Loans and advances to corporate customers
Other receivables and financial assets 2,394,083 (24,432) 2,369,651
25,622,923 (89,297) 25,533,626 The general creditworthiness of a corporate customer tends to be the most relevant indicator of credit
quality of a loan extended. However, collateral provides additional security and the Bank generally
2022 requests that corporate borrowers provide it. The Bank may take collateral in the form of a first charge
ETB'000 over real estate, floating charges over all corporate assets and other liens and guarantees.
Gross Loss Net carrying
Other financial assets (debt instruments) exposure allowance amount Because of the Bank’s focus on corporate customers’ creditworthiness, the Bank does not routinely
update the valuation of collateral held against all loans and advances to corporate customers. Valuation
Cash, bank balances and reserve with NBE 20,261,072 (656) 20,260,416 of collateral is updated when the loan is put on a watch list and the loan is monitored more closely. For
Investment securities (debt instruments) 11,217,533 (666) 11,216,867 credit-impaired loans, the Bank obtains appraisals of collateral because it provides input into determining
Other receivables and financial assets 3,297,493 (57,894) 3,239,599 the management credit risk actions.
34,776,098 (59,215) 34,716,883
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74 | | 75
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Dashen BankShare
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Company Dashen
DashenBankBankShare
ShareCompany
Company
Report and FinancialStatements
Report and Financial Statements Report and Financial
Statements
4.2.2 Collateral held (Continued)
4.2.3 Amounts arising from ECL (Continued)
I Loans and advances to corporate customers (Continued) II Credit risk grades (Continued)
At 30 June 2023, the gross carrying amount of credit-impaired loans and advances to corporate b. Overdraft exposures
customers amounted to ETB 1,066.06 million (2022: ETB 1,544 million) and the value of identifiable
collateral held against those loans and advances amounted to ETB 2,290 million (2022: ETB 4,196 • Payment record - this includes overdue status as well as a range of variables about payment ratios
million). • Utilisation of the granted limit
II Investment securities designated at FVTPL • Requests for and granting of forbearance
• Existing and forecast changes in business, financial and economic conditions
At 30 June 2023, the Bank had no exposure to credit risk on the investment securities designated at
FVTPL. III Generating the term structure of PD
Credit risk grades are a primary input into the determination of the term structure of PD for exposures.
4.2.3 Amounts arising from ECL The Bank collects performance and default information about its credit risk exposures analysed by type of
product and borrower as well as by credit risk grading. The Bank employs statistical models to analyse
I Significant increase in credit risk the data collected and generate estimates of the remaining lifetime PD of exposures and how these are
When determining whether the risk of default on a financial instrument has increased significantly since expected to change as a result of the passage of time.
initial recognition, the Bank considers reasonable and supportable information that is relevant and
available without undue cost or effort. This includes both quantitative and qualitative information and IV Determining whether credit risk has increased significantly
analysis, based on the Bank’s historical experience and expert credit assessment and including forward- The Bank assesses whether credit risk has increased significantly since initial recognition at each
looking information. reporting date. Determining whether an increase in credit risk is significant depends on the characteristics
The objective of the assessment is to identify whether a significant increase in credit risk has occurred for of the financial instrument and the borrower.
an exposure by comparing: The credit risk may also be deemed to have increased significantly since initial recognition based on
qualitative factors linked to the Bank’s credit risk management processes that may not otherwise be fully
• the remaining lifetime probability of default (PD) as at the reporting date;
reflected in its quantitative analysis on a timely basis. This will be the case for exposures that meet
• with the remaining lifetime PD for this point in time that was estimated at the time of initial recognition
certain heightened risk criteria, such as placement on a watch list. Such qualitative factors are based on
of the exposure (adjusted where relevant for changes in prepayment expectations).
its expert judgment and relevant historical experiences.
• the Bank uses three criteria for determining whether there has been a significant increase in credit risk:
• quantitative test based on movement in PD; As a backstop, the Bank considers that a significant increase in credit risk occurs no later than when an
• qualitative indicators; and asset is more than 30 days past due. Days past due are determined by counting the number of days
• a backstop of 30 days past due. since the earliest elapsed due date in respect of which full payment has not been received. Due dates are
II Credit risk grades determined without considering any grace period that might be available to the borrower.
The Bank allocates each exposure to a credit risk grade based on a variety of data that is determined to If there is evidence that there is no longer a significant increase in credit risk relative to initial recognition,
be predictive of the risk of default and applying experienced credit judgement. Credit risk grades are then the loss allowance on an instrument returns to being measured as 12-month ECL. Some qualitative
defined using qualitative and quantitative factors that are indicative of risk of default. These factors vary indicators of an increase in credit risk, such as delinquency or forbearance, may be indicative of an
depending on the nature of the exposure and the type of borrower. increased risk of default that persists after the indicator itself has ceased to exist. In these cases, the
Bank determines a probation period during which the financial asset is required to demonstrate good
Credit risk grades are defined and calibrated such that the risk of default occurring increases behaviour to provide evidence that its credit risk has declined sufficiently. When contractual terms of a
exponentially as the credit risk deteriorates so, for example, the difference in risk of default between credit loan have been modified, evidence that the criteria for recognising lifetime ECL are no longer met
risk grades 1 and 2 is smaller than the difference between credit risk grades 2 and 3. Each exposure is includes a history of up-to-date payment performance against the modified contractual terms.
allocated to a credit risk grade on initial recognition based on available information about the borrower.
Exposures are subject to ongoing monitoring, which may result in an exposure being moved to a different
credit risk grade. The monitoring typically involves use of the following data; The Bank monitors the effectiveness of the criteria used to identify significant increases in credit risk by
regular reviews to confirm that:
a. Term loan exposures
• the criteria are capable of identifying significant increases in credit risk before an exposure is in default;
• Information obtained during periodic reviews of customer files – e.g. audited financial statements,
• the criteria do not align with the point in time when an asset becomes 30 days past due;
management accounts, budgets and projections. Examples of areas of particular focus are: gross
• the average time between the identification of a significant increase in credit risk and default appears
profit margins, financial leverage ratios, debt service coverage, compliance
reasonable;
• Data from NBE, press articles
• exposures are not generally transferred directly from 12-month ECL measurement to credit impaired;
• Actual and expected significant changes in the political, regulatory and technological environment of and
the borrower or in its business activities
• there is no unwarranted volatility in loss allowance from transfers between 12-month PD (Stage 1)
• Internally collected data on customer behaviour – e.g. utilisation of credit card facilities and lifetime PD (Stage 2).
• Affordability metrics
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4.2.3 Amounts arising from ECL (Continued) 4.2.3 Amounts arising from ECL (Continued)
VI Incorporation of forward-looking information (Continued)
V Definition of default
The key drivers for credit risk for each of the Bank’s economic sectors is summarised below:
The Bank considers a financial asset to be in default when: Sector (Product) Macro economic factors
• the borrower is unlikely to pay its credit obligations to the Bank in full, without recourse by the Bank to
Cluster 1
actions such as realising security (if any is held); Goods
Agriculture, personal loans and staff loans -
• the borrower is more than 90 days past due on any material credit obligation to the Bank. exports, USD
• Overdrafts are considered as being past due once the customer has breached an advised limit or
been advised of a limit smaller than the current amount outstanding; or Cluster 2
• it is becoming probable that the borrower will restructure the asset as a result of bankruptcy due Domestic trade and services - - -
to the borrower’s inability to pay its credit obligations.
In assessing whether a borrower is in default, the Bank considers indicators that are: Cluster 3
Real GDP per
Building and construction and manufacturing and Goods Nominal GDP,
capita, USD
• qualitative: e.g. breaches of covenant; production imports, USD USD
(2010 prices)
• quantitative: e.g. overdue status and non-payment on another obligation of the same issuer to the
Bank; and
• based on data developed internally and obtained from external sources. Cluster 4
Goods
• Inputs into the assessment of whether a financial instrument is in default and their significance may Export and import - -
imports, USD
vary over time to reflect changes in circumstances.
To sum up, the definition of default largely aligns with that applied by the Bank for regulatory capital
The economic scenarios used as at 30 June 2023 include the following key indicators for Ethiopia:
purposes.
VI Incorporation of forward-looking information Macro-Economic Variable

2023 2024 2025
The Bank incorporates forward-looking information into both the assessment of whether the credit risk of
Goods exports, USD bn 4,137 4,393 4,740
an instrument has increased significantly since its initial recognition and the measurement of ECL.
Goods import, USD bn 15,798 16,433 17,419
For each segment, the Bank formulates three economic scenarios: a base case, which is the median
scenario, and two less likely scenarios, one upside and one downside. For each sector, the base case is Nominal GDP, USD bn 115,100 130,089 144,653
aligned with the macroeconomic model’s information value output, a measure of the predictive power of Real GDP per capita, USD bn (2010 prices) 567 589 614
the model, as well as base macroeconomic projections for identified macroeconomic variables for each
sector. The upside and downside scenarios are based on a combination of a percentage error factor of Goods imports, USD bn 15,798 16,433 17,419
each sector model as well as simulated optimistic and pessimistic macroeconomic projections based on a
measure of historical macroeconomic volatilities.
Predicted relationships between the key indicators and default rates on various portfolios of financial
External information considered includes economic data and forecasts published by Fitch Solutions assets have been developed based on analysing semi-annual historical data over the past 5 years.
formerly known as Business Monitor International, an external and independent market intelligence and
research institution. This is in addition to industry level, semi-annual NPL trends across statistically
comparable sectors. As at 30 June 2023 Optimistic Base Downturn
Cluster 1 9% 91% 0%
Periodically, the Bank carries out stress testing of more extreme shocks to calibrate its determination of Cluster 2 0% 100% 0%
the upside and downside representative scenarios. A comprehensive review is performed at least Cluster 3 48% 52% 0%
annually on the design of the scenarios by a panel of experts that advises the Bank’s senior Cluster 4 9% 91% 0%
management. The Bank has identified and documented key drivers of credit risk and credit losses for
each portfolio of financial instruments and, using an analysis of historical data, has estimated
relationships between macroeconomic variables and credit risk and credit losses.
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VIII Measurement of ECL (Continued)
VII Modified financial assets
The contractual terms of a loan may be modified for a number of reasons, including changing market LGD is the magnitude of the likely loss if there is a default. The Bank estimates LGD parameters based
conditions, customer retention and other factors not related to a current or potential credit deterioration of on the history of recovery rates of claims against defaulted counterparties. The LGD models consider the
the customer. An existing loan whose terms have been modified may be derecognised and the structure, collateral, seniority of the claim, counterparty industry and recovery costs of any collateral that
renegotiated loan recognised as a new loan at fair value in accordance with the accounting policy set out. is integral to the financial asset.
EAD represents the expected exposure in the event of a default. The Bank derives the EAD from the
When the terms of a financial asset are modified and the modification does not result in derecognition, current exposure to the counterparty and potential changes to the current amount allowed under the
the determination of whether the asset’s credit risk has increased significantly reflects comparison of: its contract and arising from amortisation. The EAD of a financial asset is its gross carrying amount at the
remaining lifetime PD at the reporting date based on the modified terms; with the remaining lifetime PD time of default. For lending commitments, the EADs are potential future amounts that may be drawn
estimated based on data on initial recognition and the original contractual terms. under the contract, which are estimated based on historical observations and forward-looking forecasts.
For financial guarantees, the EAD represents the amount of the guaranteed exposure when the financial
When modification results in derecognition, a new loan is recognised and allocated to Stage 1 (assuming guarantee becomes payable. For some financial assets, EAD is determined by modelling the range of
it is not credit-impaired at that time). possible exposure outcomes at various points in time using scenario and statistical techniques.
The Bank renegotiates loans to customers in financial difficulties (referred to as ‘forbearance activities’) to As described above, and subject to using a maximum of a 12-month PD for Stage 1 financial assets, the
maximise collection opportunities and minimise the risk of default. Under the Bank’s forbearance policy, Bank measures ECL considering the risk of default over the maximum contractual period (including any
loan forbearance is granted on a selective basis if the debtor is currently in default on its debt or if there is borrower’s extension options) over which it is exposed to credit risk, even if, for credit risk management
a high risk of default, there is evidence that the debtor made all reasonable efforts to pay under the purposes, the Bank considers a longer period.
original contractual terms and the debtor is expected to be able to meet the revised terms.
The maximum contractual period extends to the date at which the Bank has the right to require repayment
The revised terms usually include extending the maturity, changing the timing of interest payments and
of an advance or terminate a loan commitment or guarantee.
amending the terms of loan covenants. Both retail and corporate loans are subject to the forbearance
policy. The Bank Credit Committee regularly reviews reports on forbearance activities. However, for overdrafts that include both a loan and an undrawn commitment component, the Bank
measures ECL over a period longer than the maximum contractual period if the Bank’s contractual ability
For financial assets modified as part of the Bank’s forbearance policy, the estimate of PD reflects whether to demand repayment and cancel the undrawn commitment does not limit the Bank’s exposure to credit
the modification has improved or restored the Bank’s ability to collect interest and principal and the losses to the contractual notice period. These facilities do not have a fixed term or repayment structure
Bank’s previous experience of similar forbearance action. As part of this process, the Bank evaluates the and are managed on a collective basis. The Bank can cancel them with immediate effect but this
borrower’s payment performance against the modified contractual terms and considers various contractual right is not enforced in the normal day-to-day management, but only when the Bank becomes
behavioural indicators. aware of an increase in credit risk at the facility level. This longer period is estimated taking into account
Generally, forbearance is a qualitative indicator of a significant increase in credit risk and an expectation the credit risk management actions that the Bank expects to take, and that serve to mitigate ECL. These
of forbearance may constitute evidence that an exposure is credit-impaired. A customer needs to include a reduction in limits, cancellation of the facility and/or turning the outstanding balance into a loan
demonstrate consistently good payment behaviour over a period of time before the exposure is no longer with fixed repayment terms.
considered to be credit-impaired/in default or the PD is considered to have decreased such that the loss
allowance reverts to being measured at an amount equal to Stage 1. Where modelling of a parameter is carried out on a collective basis, the financial instruments are grouped
on the basis of shared risk characteristics that include:
VIII Measurement of ECL • instrument type;
The key inputs into the measurement of ECL are the term structure of the following variables: • credit risk grading;
• collateral type;
• probability of default (PD);
• LTV ratio for retail mortgages;
• loss given default (LGD); and
• date of initial recognition;
• exposure at default (EAD).
• remaining term to maturity;
ECL for exposures in Stage 1 is calculated by multiplying the 12-month PD by LGD and EAD. Lifetime • industry; and
ECL is calculated by multiplying the lifetime PD by LGD and EAD. • geographic location of the borrower.
The groupings are subject to regular review to ensure that exposures within a particular group remain
PD is an estimate of the likelihood of default over a given time horizon. It is estimated as at a point in appropriately homogeneous.
time. The calculation is based on statistical rating models, and assessed using rating tools tailored to the
various categories of counterparties and exposures.
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IX Loss allowance IX Loss allowance (Continued)
The tables below show reconciliations from the opening to the closing balance of the loss allowance by 2023
class of financial instrument: ETB'000
Loans and advances to customers and Investment Other

2023 Cash and securities receivables
IFB financing at amortised cost
ETB'000 bank (debt and financial
(on balance sheet exposures)
balances instruments) assets Total
Stage 1 Stage 2 Stage 3 Total
Balance as at 1 July 2022 656 666 12,862 14,184
Balance as at 1 July 2022 124,620 20,678 426,426 571,724 64,015
Net remeasurement of loss allowance (57) 11,570 75,528
Transfer to stage 1 (12 months ECL) 3,298 (2,071) (1,226) 1 New financial assets originated or
Transfer to stage 2 (Lifetime ECL not credit purchased - - - -
impaired) (12,204) 12,788 (584) - Financial assets derecognised - - - -
Transfer to stage 3 (Lifetime ECL credit Balance as at 30 June 2023 64,671 609 24,432 89,712
impaired) (189,685) (17,990) 207,674 (1)
Net re-measurement of loss allowance 259,598 9,058 126,261 394,917
2022
New financial assets originated or
purchased 168,915 27,279 7,981 204,175 ETB'000
Financial assets derecognised (28,988) (7,932) (33,192) (70,112) Investment Other
Balance as at 30 June 2023 325,554 41,810 733,340 1,100,704 Cash and securities receivables
bank (debt and financial
Loans and advances to customers 1,049,228 balances instruments) assets Total
IFB financing 51,476
1,100,704 Balance as at 1 July 2021 359 904 8,245 9,508
Net remeasurement of loss allowance 297 (238) 4,617 4,676
Loans and advances to customers and
IFB financing at amortised cost 2022
purchased - - - -
(on balance sheet exposures) ETB'000
Financial assets derecognised - - - -
Stage 1 Stage 2 Stage 3 Total Balance as at 30 June 2022 656 666 12,862 14,184
Balance as at 1 July 2021 92,244 12,066 240,755 345,065

Transfer to stage 1 (12 months ECL) 2,387 (1,705) (682) -
Transfer to stage 2 (Lifetime ECL not credit
impaired) (10,989) 11,149 (160) -
Transfer to stage 3 (Lifetime ECL credit -
impaired) (253,167) (22,482) 275,649 -
Net re-measurement of loss allowance 241,550 15,083 (94,848) 161,785
purchased 65,032 8,487 42,664 116,183
Financial assets derecognised (12,437) (1,920) (36,952) (51,309)
Balance as at 30 June 2022 124,620 20,678 426,426 571,724
Loans and advances to customers 551,607

IFB financing 20,117
571,724
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4.2.3 Amounts arising from ECL (Continued) 4.2.4 Concentrations of credit risk (Continued)
IX Loss allowance (Continued) a) Loans and advances 2023 2022

ETB'000 ETB'000
The following table provides a reconciliation between amounts shown in the above tables reconciling Domestic trade and services 27,108,794 19,951,305
opening and closing balances of loss allowance per class of financial instrument; and the ‘impairment Manufacturing 19,757,874 16,486,510
losses on financial instruments’ line item in the statement of profit or loss and other comprehensive Export 17,616,784 12,745,644
income. Real estate 8,657,936 7,886,634
2023 Transport 1,519,824 1,352,573
ETB'000 Construction, machinery and working capital 1,655,999 1,710,952
Import 3,600,454 2,925,996
Loans and Personal 8,789,145 6,213,855
advances to Investment Other financial Staff housing loans 3,774,630 2,835,801
customers securities assets & off Loans and advances under litigation 575,621 615,024
and IFB (debt balance sheet Total charge/ Agriculture 509,871 387,865
financing instruments) exposures (credit) Emergency staff loans 723,434 616,364
Advances on letters of credit 493,469 736,842
Net remeasurement of loss allowance 394,918 (846) 3 394,075 Mining - 250,753
New financial assets originated or Special financing scheme-hotel and tourism 20,255 62,729
purchased 204,144 489 - 204,633 Mastercard Foundation loan facility 220,702 289,089
Financial assets derecognised (70,112) - - (70,112) DBE SME finance project 50,592 351,664
Amounts directly written off during the year - - - - Loans against AEC business consulting PLC 207 -
Telebirr financial services 981,059 -
528,950 (357) 3 528,596 Dube Ale 38,384 -
96,095,034 75,419,600
2022 b) IFB financing
ETB'000
Domestic trade and services 3,273,968 1,963,570
Manufacturing 513,957 329,818
Loans and
Real estate 1,194,883 863,206
advances to Investment
Transport 129,703 149,986
customers at securities
Construction, machinery and working capital 3,891 6,646
amortised (debt Other financial Total charge/
cost instruments) assets (credit)
Import 393,944 717,953
Export 681,582 65,888
Personal 324,908 174,905
Net remeasurement of loss allowance 161,792 - 5,470 167,262 Emergency staff loan 34,500 21,229
New financial assets originated or Agriculture 7,265 11,445
purchased 116,177 - - 116,177 Mining 80,690 44,189
Financial assets derecognised (51,310) - - (51,310) Litigation - 3,006
Amounts directly written off during the year 6,027 - 32,168 38,195 (1,435,448) (1,184,134)
Defrred profit murabaha
232,686 - 37,638 270,324 5,203,843 3,167,707
4.2.5 Collateral held and its financial effect
The general creditworthiness of a customer tends to be the most relevant indicator of credit quality of a
4.2.4 Concentrations of credit risk loan extended. However, collateral provides additional security and the Bank generally requests that
Gross loans and advances to customers and IFB financing per sector are analysed as follows: corporate borrowers provide it. Staff loans other than staff housing loans are secured to the extent of the
employees' continued employment in the Bank.
The Bank holds collateral against loans and receivables to customers in the form of bank guarantees,
cash, residential, commercial and industrial property, such as vehicles, plant and machinery. The Bank
does not sell or repledge the collateral in the absence of default by the owner of the collateral. In addition
to the Bank's focus on creditworthiness, the Bank aligns with its credit policy guide to periodically update
the validation of collaterals held against all loans to customers.
For impaired loans, the Bank obtains appraisals of collateral because the fair value of the collateral is an
input to the impairment measurement.
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4.2 Credit risk (Continued) 4.3 Liquidity risk (Continued)
4.2.5 Collateral held and its financial effect (Continued) 4.3.1 Maturity analysis of financial liabilities
The fair value of the collateral is based on the last revaluations carried out by the Bank's in-house The table below analyses the Bank’s financial liabilities into relevant maturity groupings based on the
engineers. The valuation technique adopted for properties is in line with the Bank's valuation manual and remaining period at the statement of financial position date to the contractual maturity date. The cash
the revalued amount is similar to fair values of properties with similar size and location. flows presented are the undiscounted amounts to be settled in the future.
The fair value of collateral other than as share certificates, cash, treasury bills, treasury bonds, etc. as Days
disclosed at the carrying amount as management is of the opinion that the cost of the process of 0 - 30 31 - 90 91 - 180 181 - 365 Over 1 year
establishing the fair value of the collateral exceeds benefits accruable from the exercise. 2023 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000
4.2.6 Credit related commitments risks
Deposits from customers 1,328,000 2,475,000 1,841,000 2,143,000 107,061,093
The Bank makes available to its customers guarantees which may require the Bank to make payments on
Other financial liabilities 5,279,243 1,217,936 190,168 319,717 368,780
their behalf and enters into commitments to extend lines to secure their liquidity needs. Letters of credit
and guarantees (including standby letters of credit) commit the Bank to make payments on behalf of 6,607,243 3,692,936 2,031,168 2,462,717 107,429,873
customers in the event of a specific act, generally related to the import or export of goods. Such
commitments expose the Bank to similar risks to loans and are mitigated by the same control processes
0 - 30 31 - 90 91 - 180 181 - 365 Over 1 year
and policies.
2022 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000
4.2.7 Statement of prudential adjustments
Deposits from customers 748,074 2,154,651 1,109,222 1,456,543 85,767,394
During the year ended 30 June 2023, the Bank transferred ETB 321 million from credit risk reserve to
Other liabilities 6,027,510 1,370,611 214,007 359,795 341,247
retained earnings (2022: [ETB 929 million]). This amount represented the difference between the
provision for credit and other known losses as determined under the NBE Directives, NBE Circulars and 6,750,502 3,525,262 1,323,229 1,816,338 86,133,723
the impairment reserve in compliance with IFRS 9.
4.3.2 Financial assets pledged as collateral
The Bank complied with the requirements of the NBE Circular No. BSD/22/2023 and FIS/BSD/1794/2022
with respect to loans, advances and IFB financing of the Tigray Region. Financial assets are pledged as collateral as part of securities for borrowings under terms that are usual
and customary for such activities.
2023 2022
ETB'000 ETB'000 The total financial assets recognised in the statement of financial position that have been pledged as
Suspended interest 979,846 769,729 collateral for liabilities at 30 June 2023 are disclosed in the table below.
Total impairment based on IFRSs (1,125,116) (584,586) Pledged as
Total impairment based on NBE Directives 1,648,382 1,639,183 collateral
ETB'000
1,503,113 1,824,326
Cash and balances with banks 10,919
4.2.8 Nature of security in respect of loans and advances Investment securities 5,839,196
The Bank holds collateral against loans and advances to customers in the form of bank guarantees, cash, 5,850,115
residential, commercial and industrial property; vehicles, plant and machinery.
Assets pledged as collateral are not available for the Bank's operation.
4.3 Liquidity risk
4.4 Market risk
Liquidity risk is the risk that the Bank cannot meet its maturing obligations when they become due at
Market risk is the risk of loss resulting from changes in the value of assets and liabilities (including off-
reasonable cost and in a timely manner. It arises from funding of long-term assets by short-term liabilities.
balance sheet assets and liabilities) due to fluctuations in risk factors such as interest rates, foreign
Liquidity risk management is mainly determined by asset liability management committee which bears the
exchange rates and stock prices and the risk of loss resulting from changes in earnings generated from
overall responsibility for liquidity risk. The main objective of the Bank’s liquidity risk management
assets and liabilities. Since, the Bank does not engage in trading activity as there is no active markets in
framework is to maintain sufficient liquidity in order to ensure that the Bank meets its maturing obligations
Ethiopia, the market risk exposure of the Bank is limited to Interest rate and Foreign exchange rate risks.
timely. Prudent liquidity risk management implies that sufficient cash is maintained and that sufficient
funding is available to meet liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or damage to the Bank’s reputation. 4.4.1 Objective of market risk management
The main objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return on risk. Market risk is monitored by the Enterprise
Risk and Compliance Management Department regularly to identify any adverse movement in the
underlying variables.
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4.4 Market risk (Continued) 4.4 Market risk (continued)
4.4.2 Management of market risk 4.4.2 Management of market risk (continued)
(ii) Foreign exchange risk
Market risk is monitored by the Risk Management and Compliance Department regularly, to identify any
2023 2022
adverse movement in the underlying variables.
Foreign currency denominated balances ETB'000 ETB'000
(i) Interest rate risk Cash and balances with banks 5,795,476 3,113,051
Liability (9,720,614) (11,958,723)
The risk of loss resulting from changes in interest rates. As a result of a mismatch of interest rates on its
assets and liabilities and/or timing differences in the maturity thereof, the Bank may suffer a loss or a (3,925,138) (8,845,672)
decline in profit due to changes in interest rates. Sensitivity analysis for foreign exchange risk
The sensitivity analysis for currency rate risk shows how changes in the fair value or future cash flows of
The table below sets out information on the exposures to fixed and variable interest instruments. a financial instrument will fluctuate because of changes in market rates at the reporting date.
The sensitivity of the Bank's earnings to fluctuations in exchange rates is reflected by varying the
30-Jun-23 Interest Non-interest
exchange rates at 10% as shown below:
Bearing bearing Total
2023
ETB'000 ETB'000 ETB'000
ETB'000
Assets
Currency 10 % 10 %
Cash and balances with banks 1,776,048 10,181,257 11,957,305
Carrying Depreciation Appreciation
Reserve with National Bank of Ethiopia - 8,299,585 8,299,585
Assets
Loans and advances to customers 95,045,806 - 95,045,806
USD 5,627,580 (562,758) 562,758
IFB financing - 5,152,367 5,152,367
GBP 18,798 (1,880) 1,880
Debt securities at amortised cost 11,206,670 - 11,206,670
Euro 68,899 (6,890) 6,890
108,028,524 23,633,209 131,661,733
Others 80,199 (8,020) 8,020
Liabilities 5,795,476 (579,548) 579,548
Deposits from customers 106,738,369 8,109,724 114,848,093 Liabilities
Other liabilities 95,989 7,279,855 7,375,844 USD 9,321,704 932,170 (932,170)
106,834,358 15,389,579 122,223,937 GBP 37,320 3,732 (3,732)
Euro 359,898 35,990 (35,990)
30-Jun-22 Interest Non-interest Others 1,692 169 (169)
Bearing bearing Total 9,720,614 972,061 (972,061)
ETB'000 ETB'000 ETB'000 Total increase/(decrease) 3,925,138 392,514 (392,514)
Assets Tax charge at 30% - 117,754 (117,754)
Cash and balances with banks 5,298,069 5,106,706 10,404,775 Effect on net profit 3,925,138 (274,760) 274,760
Loans and advances to customers 74,867,993 - 74,867,993 2022
IFB financing - 4,331,724 4,331,724 ETB'000
Debt securities at amortised cost 12,171,707 - 12,171,707 Currency 10 % 10 %
92,337,769 15,938,430 108,276,199 Carrying Depreciation Appreciation
Assets
Liabilities USD 2,882,050 (288,205) 288,205
Deposits from customers 85,304,256 5,931,628 91,235,884 GBP 37,006 (3,701) 3,701
Other liabilities 74,853 8,238,317 8,313,170 Euro 115,405 (11,541) 11,541
85,379,109 14,169,945 99,549,054 Others 78,590 (7,859) 7,859
3,113,051 (311,305) 311,305
Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will
Liabilities
fluctuate due to the changes in foreign exchange rates. The Bank is exposed to exchange rate risks to
USD 11,474,777 1,147,478 (1,147,478)
the extent of balances and transactions denominated in a currency other than the Ethiopian Birr. The
GBP 34,645 3,465 (3,465)
Bank’s foreign currency bank accounts act as a natural hedge for these transactions. Management has
Euro 449,301 44,930 (44,930)
set up a policy to manage the Bank’s foreign exchange risk against its functional currency.
11,958,723 1,195,872 (1,195,872)
Total increase/(decrease) 8,845,672 884,567 (884,567)
Tax charge at 30% - 265,370 (265,370)
Effect on net profit 8,845,672 (619,197) 619,197
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ShareCompany
Company Dashen
DashenBank
BankShare
ShareCompany
Company
Statements Report
Reportand
andFinancial Statements
4.5 Capital management 4.6 Fair value of financial assets and liabilities (Continued)
4.6.1 Valuation models (Continued)
The Bank’s objectives when managing capital are to comply with the capital requirements set by the NBE,
safeguard its ability to continue as a going concern, and to maintain a strong capital base so as to ● Level 1: Inputs that are quoted market prices (unadjusted) in active markets for identical assets or
maintain investor, creditor and market confidence and to sustain future development of its business. liabilities.
● Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or
4.5.1 Capital adequacy ratio liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes
According to the Licensing & Supervision of Banking Business Directive No SBB/78/2021 of the National instruments valued using: quoted market prices in active markets for similar instruments; quoted prices
Bank of Ethiopia, the Bank has to maintain capital to risk weighted assets ratio of 8% at all times, the risk for identical or similar instruments in markets that are considered less than active, or other valuation
weighted assets being calculated as per the provisions of Directive No SBB/9/95 issued on 18 August technique in which all significant inputs are directly or indirectly observable from market data.
1995.
In conclusion, this category is for valuation techniques for which the lowest level input that is significant to
The capital adequacy ratio is the quotient of the capital base of the Bank and the Bank’s risk weighted the fair value measurement is directly or indirectly observable.
asset base. ● Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable
Capital includes paid-up capital, retained earnings, legal reserve and other reserves approved by the inputs). This category includes all assets and liabilities for which the valuation technique includes inputs
NBE. not based on observable data and the unobservable inputs have a significant effect on the asset or
2023 2022 liability's valuation. This category includes instruments that are valued based on quoted prices for similar
ETB'000 ETB'000 instruments for which significant unobservable adjustments or assumptions are required to reflect
Capital differences between the instruments.
Share capital 9,344,559 6,863,215
Share Premium 128,300 12,593 4.6.2 Financial instruments measured at fair value - Fair value hierarchy
Retained earnings 2,999,509 1,270,328 The following table summarises the carrying amounts of financial assets and liabilities at the reporting
Reserve for IFRS 893,506 900,908 date by the level in the fair value hierarchy into which the fair value measurement is categorised. The
Legal reserve 4,417,405 3,527,133 amounts are based on the values recognised in the statement of financial position.
Special reserve 100 100
Regulatory Credit Risk Reserve 1,503,113 1,824,326 30-Jun-23 Carrying
Other reserves 32,049 (18,183) amount Level 1 Level 2 Level 3 Total
19,318,541 14,380,420
Financial assets
Risk weighted assets Cash and balances with
Risk weighted balance for on-balance sheet items 106,271,280 83,175,180 banks - - - - -
Credit equivalents for off-balance sheet items 24,652,170 23,423,520 Loans and receivables - - - - -
Total risk weighted assets 106,598,700 106,598,700 Financial assets at fair
value through OCI 422,567 422,567 422,567
Risk-weighted Capital Adequacy Ratio with primary capital 13% 10% Financial assets at - - - - -
Risk-weighted Capital Adequacy Ratio with total capital 15% 12% amortised cost
Minimum required capital 8% 8% Total 422,567 - 422,567 - 422,567
4.6 Fair value of financial assets and liabilities

IFRS 13 requires an entity to classify measured or disclosed fair values according to a hierarchy that Carrying Level 1 Level 2 Level 3 Total
reflects the significance of observable inputs. amount
Financial liabilities ETB'000 ETB'000 ETB'000 ETB'000 ETB'000
All assets and liabilities for which fair value is measured or disclosed in the financial statements are Deposits from customers - - - - -
categorised within the fair value hierarchy, comprising of three levels described below, based on the Other liabilities - - - - -
lowest level inputs significant to the fair value measurement as a whole.
Total - - - - -
4.6.1 Valuation models
IFRS 13 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation
techniques are observable or unobservable. Observable inputs reflect market data obtained from
independent sources; unobservable inputs reflect the Bank's market assumptions.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole.
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Report
Financial Statements Report
Report and
and Financial
Statements
For the year ended 30 June 20232023 For
2023
4 Financial risk management (Continued) 2023 2022
4.6 Fair value of financial assets and liabilities (Continued)
ETB'000 ETB'000
4.6.2 Financial instruments measured at fair value - Fair value hierarchy (Continued)
5 Interest income
30-Jun-22 Carrying
Interest on loans and advances 12,087,748 8,904,674
amount Level 1 Level 2 Level 3 Total
Interest income from NBE bills, treasury bills and government bonds 1,183,766 788,472
Interest income from foreign deposits 4,197 33
Financial assets
Cash and balances with Interest income from local deposits 132,040 161,454
banks - - - - - 13,407,751 9,854,633
Loans and receivables - - - - -
Financial assets at fair Included within various line items under interest income for the year ended 30 June 2023 is a total of ETB
- -
value through OCI 292,069 292,069 292,069 210 million (30 June 2022: ETB 440 million) relating to impaired financial assets.
Financial assets at - - - - -
amortised cost 2023 2022
Total 292,069 - 292,069 - 292,069 ETB'000 ETB'000
6 Interest expense
Financial liabilities
Deposits from customers - - - - - Interest on savings deposits 3,263,827 2,805,573
Other liabilities - - - - - Interest on demand deposits 11,655 11,061
Total - - - - - Interest on time deposits 750,248 538,674
Finance charge on lease liability 23,659 19,237
4.6.3 Valuation technique using significant unobservable inputs – Level 3 Interest on borrowings 11,294 27,590
4,060,683 3,402,135
The Bank has no financial asset measured using significant unobservable inputs.
7 Net fees and commission income
4.6.4 Transfers between the fair value hierarchy categories
Fees and commission income
During the reporting periods covered by these annual financial statements, there were no movements
between levels as a result of significant inputs to the fair valuation process. Service charges 1,667,211 1,001,876
Commission on CPOs and FTs 59,092 139,769
4.7 Offsetting financial assets and financial liabilities Commission on letters of credit 756,498 443,464
There are no offsetting arrangements. Financial assets and liabilities are disclosed on a gross basis. Transaction fees 1,045,299 793,602
Commission on guarantees issued 342,628 316,615
Credit related commissions 2,423 -
3,873,151 2,695,326
Fees and commission expense (206,653) (140,822)
Net fees and commission income 3,666,498 2,554,504
8 Other operating income

Sundry income 79,678 33,250
Rental income 97,632 92,939
Investment income 25,307 15,777
Income from IFB financing 440,574 214,495
643,191 356,461
9 Loans & IFB financing impairment charge

Loans impairment charge (note 17c) (497,601) (215,517)
Impairment charge on IFB financing (note 17c) (31,359) (17,169)
(528,960) (232,686)
__________________________________
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Company Dashen
Report and
and Financial
Statements
For the year ended
ended 30
30 June
June 2023
2023 For
2023
2023 2022 2023 2022
ETB'000 ETB'000 ETB'000 ETB'000
10 Impairment losses on other financial assets 13 Company income and deferred tax
Receivables - charge for the year (note 17c) (11,570) (36,784) 13(a) Income tax expense
Cash and bank balances - charge for the year (note 17c) (64,015) (297) Current income tax (note 13b) 1,392,664 966,182
Investment securities (debt instruments) - charge for the Deferred tax expense / (income) - profit or loss 63,002 (66,959)
year (note 17c) 57 238 Total charge to profit or loss 1,455,666 899,223
LCs and financial guarantee contracts Deferred tax expense - OCI 21,535 10,392
- charge for the year (note 17c) 345 (556) Total tax in statement of comprehensive income 1,477,201 909,615
(75,183) (37,399) 13(b) Taxation charge
11 Employee benefits expenses The tax on the Bank’s profit before income tax differs from the theoretical amount that would arise using the
statutory income tax rate as follows:
Salaries and wages 2,869,940 1,997,352 2023 2022
Staff allowances 960,692 335,881
ETB'000 ETB'000
Other staff expenses 378,521 322,238
Pension costs – Defined contribution plan 383,913 263,196 Profit before tax 5,016,753 3,803,785
Retirement benefits expense - defined benefit plan 125,417 56,506 Non-deductible expenses
Life and GPA insurance 18,273 13,255 Depreciation and amortisation per IFRS 519,066 352,814
Impairment charge on loans & advances as per IFRS 497,601 215,517
4,736,756 2,988,428 Impairment of IFB financing 31,359 17,169
12 Other operating expenses Impairment charge on receivables and other exposures 75,184 37,399
Impairment of non-financial assets 4,623 21,393
Rental expense 8,736 23,394 Severance expense 125,267 56,506
Depreciation property and equipment 331,852 253,198 Entertainment 60,000 19,832
Advertisement and promotions 333,004 119,857 Family medical expense - 699
Donations and contributions 284,965 42,858 Others 2,388 -
Repairs and maintenance 100,057 45,442 Penalty and gift 5,631 496
Printing and stationery 80,010 32,115 Donations 167 2,113
Amortisation of intangible assets 170,233 82,127 Unrealised foreign exchange loss 33,595 207,052
Sundry expenses 99,171 50,220 Provision for accrued leave expense 101,180 80,748
Depreciation of investment property 16,981 17,489 Amortisation of prepaid staff benefits expense net of
Representation allowances 48,444 33,668 additional interest income recognised on discounted staff loans
Transportation 54,621 21,210 at market rate (1,917) 64,611
Utilities 56,801 35,953 Interest computed on staff loans at market rate 169,297 135,235
Insurance 16,074 17,248 Interest charge on lease liability 23,659 19,237
Per diems 42,923 12,424 Depreciation expense of right-of-use-asset 532,570 318,814
Less:
Entertainment 60,000 20,443
Interest income from NBE bills, treasury bills and government bonds (1,183,766) (788,472)
Office expenses 10,379 4,961 Depreciation as per tax law (565,416) (408,747)
Outsourced service fees 423,533 226,721 Provision for loss on loans and advances, IFB financing
Hardware and software service fees 259,765 221,071 and receivables as per tax law (7,359) (581,505)
Directors' related expenses 2,064 1,778 Rent expense and land operating lease amortisation expense (584,193) (361,283)
Audit fees 2,213 2,034 Dividend income taxed at source (25,307) (15,777)
License and registration fees 1,794 947 Interest income on local deposits (taxed at source) (132,040) (161,454)
Legal and professional fees 8,191 11,268 Severance and farewell benefits paid (35,657) (16,070)
Postage and stamps 65 26 Interest on foreign deposits (to be taxed at 10%) (4,197) (33)
Loss on disposal of fixed assets 1,504 2,786 Leave payments made during the year (13,102) (5,002)
Penalty charges (38) (2) Gain on disposal of property and equipment (4,574) (4,613)
Gifts 5,669 498 Taxable income 4,640,812 3,010,464
Depreciation of right-of-use-asset 532,570 318,814 Current tax expense (30%) 1,392,244 903,139
Impairment loss on non financial assets 4,623 21,393 Current tax expense - income on foreign deposits (10%) 420 3
2,956,204 1,619,941 Tax payment made upon tax audit - 63,040
Total current tax expense 1,392,664 966,182
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Bank Share Company Dashen
Bank Share Company
Report
Report and
and Financial
and Financial
Statements
For
2023 For the year
year ended 30June
ended 30 June 2023
2023
13 Company income and deferred tax (Continued) 13 Company income and deferred tax (Continued)
13(c) Reconciliation of effective tax to statutory tax 13(e) Deferred tax assets / (liabilities) (Continued)
The tax on the Bank’s profit before income tax differs from the theoretical amount that would arise using the Credit/ Credit/ Credit/
statutory income tax rate as follows: Deferred income tax At 1 July (charge) to (charge) to (charge) to At 30 June
assets/(liabilities): 2021 P/L equity or equity or OCI 2022
2023 2022
ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000
Profit before tax 5,016,753 3,803,785 Property and equipment (52,218) 1,879 - - (50,339)
Post employment benefits -
Profit tax at the applicable rate of 30% 1,505,026 1,141,136 obligation 53,983 12,131 - - 66,114
Tax effect of income taxed at source (402,334) (289,712) Unrealised fair value (gain) / loss
Tax effect of disallowed expenses 289,552 114,755 on equity instruments (1,760) - (43,365) - (45,125)
Tax effect of income on foreign deposits (10%) 420 3 Actuarial loss 19,944 - 32,973 - 52,917
Unrealised foreign exchange loss 24,973 37,143 - - 62,116
Tax expense 1,392,664 966,182 Right-of-use-asset and lease -
liability 33,243 (6,969) - - 26,274
13(d) Current income tax liability Provision for accrued leave 37,456 22,775 - - 60,231
Balance at the beginning of the year 906,584 560,667 Total deferred tax
Charge for the year (note 13b) 1,392,664 966,182 assets/(liabilities) 115,621 66,959 (10,392) - 172,188
Withholding tax paid (2,297) (1,955)
Payment during the year (906,584) (623,707) 14 Cash balances with banks and reserve with National Bank of Ethiopia
Income tax payable on share premium 49,589 5,397 2023 2022
Balance at the end of the year 1,439,956 906,584 14(a) Cash and balances with banks ETB'000 ETB'000
13(e) Deferred tax assets Cash in hand 3,982,509 2,654,434

Balance held with National Bank of Ethiopia 1,696,444 2,452,272
The analysis of deferred tax assets is as follows: Deposits with local banks maturing in three months 51 51
To be recovered after more than 12 months 87,651 172,188 Deposits with foreign banks 4,761,326 3,035,955
To be recovered within 12 months - - Treasury Bills maturing in three months 1,581,231 2,262,063
87,651 172,188 12,021,561 10,404,775
Impairment allowance-bank balances (64,256) (331)
Deferred income tax assets and liabilities, deferred income tax charge/(credit) in profit or loss (P/L), in equity 11,957,305 10,404,444
and other comprehensive income are attributable to the following items:
Credit/ Credit/ Credit/ Impairment allowance-bank balances ETB 64.13 million is the missing cash from the Mekele District's
Deferred income tax At 1 July (charge) to (charge) to (charge) to At 30 June branches.
assets/(liabilities): 2022 P/L equity or equity or OCI 2023
14(b) Reserve with National Bank of Ethiopia
Property and equipment (50,339) (61,780) - - (112,119)
Post employment benefits Reserve with National Bank of Ethiopia 8,300,000 6,500,000
obligation 66,114 26,883 - - 92,997 Impairment allowance - reserve with National Bank of Ethiopia (415) (325)
Unrealised fair value (gain) / loss (45,125) (21,415) - (66,540) 8,299,585 6,499,675
on equity instruments
Actuarial loss 52,917 (120) - 52,797 The reserve account balance maintained with the National Bank of Ethiopia is restricted for current use.
Unrealised foreign exchange loss 62,116 (52,038) - - 10,078
Right-of-use-asset and lease
liability 26,274 (2,490) - - 23,784
Provision for accrued leave 60,231 26,423 - - 86,654
Total deferred tax
assets/(liabilities) 172,188 (63,002) (21,535) - 87,651
__________________________________ __________________________________
96 | | 97
Dashen
Dashen Bank
Bank Share
Share Company
Company Dashen
Report
Reportand
andFinancial
Statements Report
Report and
and Financial
Statements
For
2023 For
2023
15 Loans and advances and IFB financing 2023 2022 2023 2022
15(a) Loans and advances to customers ETB'000 ETB'000 15 Loans and advances and IFB financing (Continued) ETB'000 ETB'000
Domestic trade and services 27,108,794 19,951,305
15(b) IFB financing
Manufacturing 19,757,874 16,486,510
Export 17,616,784 12,745,644 Domestic trade and services 3,273,968 1,963,570
Real estate 8,657,936 7,886,634 Manufacturing 513,957 329,818
Transport 1,519,824 1,352,573 Real estate 1,194,883 863,206
Construction, machinery and working capital 1,655,999 1,710,952 Transport 129,703 149,986
Import 3,600,454 2,925,996 Construction, machinery and working capital 3,891 6,646
Personal 8,789,145 6,213,855 Import 393,944 717,953
Staff housing loans 3,774,630 2,835,801 Export 681,582 65,888
Loans and advances under litigation 575,621 615,024 Personal 324,908 174,905
Agriculture 509,871 387,865 Emergency staff loan 34,500 21,229
Emergency staff loans 723,434 616,364 Agriculture 7,265 11,445
Advances on letters of credit 493,469 736,842 Mining 80,690 44,189
Mining - 250,753 Litigation - 3,006
Special financing scheme-hotel and tourism 20,255 62,729 Defrred profit murabaha (1,435,448) (1,184,134)
Mastercard Foundation loan facility 220,702 289,089 Gross amount 5,203,843 3,167,707
Loans against AEC business consulting PLC 207 - Less:
Dube Ale 38,384 - Impairment loss allowance (note 4.2.3) (51,476) (20,117)
Telebirr financial services 981,059 -
5,152,367 3,147,590
DBE SME Finance project 50,592 351,664
Maturity analysis
Gross amount 96,095,034 75,419,600
Less:
Current 1,780,032 1,044,952
Impairment loss allowance (note 4.2.3) (1,049,228) (551,607)
Non-current 3,372,335 2,102,638
95,045,806 74,867,993
5,152,367 3,147,590
Maturity analysis
Current 27,961,768 18,079,589 The Bank complied with the requirements of the NBE Circular No. BSD/22/2023 and FIS/BSD/1794/2022
Non-current 67,084,038 56,788,404 with respect to loans, advances and IFB financing of the Tigray Region.
95,045,806 74,867,993
16 Investment security 2023 2022
16(a) Financial assets at fair value through OCI ETB'000 ETB'000
Balance at the beginning of the year 292,069 112,138
Changes in the fair value of financial assets at FVTOCI 71,365 144,551
Additional investments made during the year 59,133 35,380
Balance at the end of the year 422,567 292,069
16(b) The Bank holds equity investments in Ethswitch S.C of 5.59% (2022: 6.63%%), Nyala Insurance S.C of 5%
(2022: 5%), Ethiopian Reinsurance S.C of 2.01% (2022: 3.61%) and Society of Worldwide Interbank
Financial Telecommunication (SWIFT) S.C of 0.005% (2022: 0.005%), Addis Africa International
Conventional Center of 3.22% (2022: 1.14%) and Capital Financial Excellence Center (CaFEC) S.C. of
3.24% (2022: nill). These investments are unquoted equity securities measured at cost except for SWIFT,
which has been measured at fair value.
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Dashen Bank
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Share Company
Company
Report
Report and
and Financial
Statements Report
Reportand
andFinancial
Statements
For
2023 For
2023
16 Investment security (Continued) 17(c) Movement of impairment loss allowance
2023 2022
16(c) Debt securities at amortised cost Charge /
ETB'000 ETB'000
As at 1 (reversal) for As at 30
Fixed term deposits with local banks 717,123 1,128,715 July 2022 Adjustment year June 2023
Treasury Bills 6,812,420 10,427,355 ETB'000 ETB'000 ETB'000 ETB'000
Ethiopian Government bonds 3,677,736 616,303
Gross amount 11,207,279 12,172,373 Loans and advances 551,607 20 497,601 1,049,228
Less: IFB financing 20,117 - 31,359 51,476
Impairment allowance-Bills & Bonds (609) (666) LC and guarantees 846 - (345) 501
11,206,670 12,171,707 Debt securities at amortised cost 666 - (57) 609
Maturity analysis Receivables 12,862 - 11,570 24,432
Bank balances 656 - 64,015 64,671
Current 7,529,543 11,556,070
Non-current 3,677,127 615,637 Total 586,754 20 604,143 1,190,917
11,206,670 12,171,707 18 Joint operations
17 Other assets The Bank has a 40% interest in a joint arrangement in the Tana Department Store Building in Addis Ababa
17(a) Other financial assets which was set up as a partnership together with MIDROC Ethiopia PLC to earn rental income. Dashen Bank
manages and administers the affairs of the building.
Clearing account balances 1,676,350 868,981
Other receivables 500,011 163,102
The joint operation agreement in relation to the Tana Building partnership require unanimous consent from
Trust fund with Ethio Telecom 171,522 -
all parties for all relevant activities. The two partners have direct rights to the assets of the partnership and
Sharia complaint DBE-bond 46,200 15,710
are jointly and severally liable for the liabilities incurred by the partnership. This entity is, therefore, classified
2,394,083 1,047,793 as a joint operation and the Bank recognises its direct right to the jointly held assets, liabilities, revenues and
Impairment allowance for receivables (24,432) (12,862) expenses as described in note 2.20.
2,369,651 1,034,931
% of ownership 2023 2022
17(b) Non-financial assets Name of operation interest ETB'000 ETB'000
Staff advances 2,733 2,211
Prepayments 999,009 1,089,656 Tana Building Administration 40%
Prepaid staff benefits 657,735 494,148 Total assets 214,613 193,879
Acquired properties 81,956 49,389 Total liabilities 8,625 8,144
Inventory 138,804 103,479 Total income 24,390 20,822
Other non-financial assets 672 672
Total expenses 3,098 3,438
1,880,909 1,739,555
Gross amount 4,250,560 2,774,486
Maturity analysis
Current 3,372,065 2,127,470
Non-current 878,495 647,016
4,250,560 2,774,486
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100 | | 101
Bank Share
Company Dashen
Report and
and Financial
Statements
For the year ended
ended 30
30 June
June 2023
2023 For
2023
19 Investment properties 2023 2022 20 Intangible assets License Software Total
ETB'000 ETB'000
ETB'000 ETB'000 ETB'000
Cost:
Cost:
At the beginning of the year 849,043 848,416
Acquisitions - 627 As at 1 July 2021 44,653 390,894 435,547
At the end of the year 849,043 849,043 Acquisitions 4,318 50,950 55,268
Write off (44,653) (52,677) (97,330)
Accumulated depreciation:
Reclasification 136,817 (136,817) -
At the beginning of the year 101,783 84,294 141,135 252,350 393,485
As at 30 June 2022
Charge for the year 16,981 17,489
At the end of the year 118,764 101,783
As at 1 July 2022 141,135 252,350 393,485
Net book values 730,279 747,260
Additions 139,084 497,961 637,045
19(a) Amounts recognised in profit or loss for investment properties and other properties classified Reclasification 44,653 52,677 97,330
under PE As at 30 June 2023 324,872 802,988 1,127,860
Rental income from investment and other properties classified under PE 97,632 92,939
Depreciation of investment properties 16,981 17,489 Accumulated amortisation and impairment losses
19(b) Fair value measurement of the Bank's Investment properties As at 1 July 2021 (44,653) (179,440) (224,093)
Investment properties include those held for rental purposes and those in which the Bank occupies an Amortisation for the year (936) (81,191) (82,127)
insignificant portion. These properties are held to earn rentals and for capital appreciation. There are Write off 44,653 52,677 97,330
currently no restrictions on the realisability of these properties. Reclasification (83,430) 83,430 -
Investment properties are initially measured at fair value as deemed cost and subsequently measured at As at 30 June 2022 (84,366) (124,524) (208,890)
depreciated cost (less any accumulated impairment losses). Depreciation is calculated using the straight-
line method to allocate costs less residual values over the estimated useful lives of 50 years. The fair As at 1 July 2022 (84,366) (124,524) (208,890)
value of investment properties has been disclosed as required.
Amortisation for the year (123,712) (46,521) (170,233)
The fair value of the Bank's investment property as at 30 June 2023 is ETB 2.1 billion (2022: ETB 1.64 Reclasification (44,653) (52,677) (97,330)
billion). The fair value of the Bank's investment property has been arrived at by in-house engineers, As at 30 June 2023 (252,731) (223,722) (476,453)
qualified estate surveyors and valuers. These valuers have appropriate qualifications and recent
experience in the valuation of properties in the relevant locations. The fair value was determined based on Net book values
the replacement cost concept which approximates the estimated amount for which a property should
As at 30 June 2022 56,769 127,826 184,595
exchange on the date of valuation between knowledgeable willing parties in an arm's length transaction
after proper marketing, prudently and without compulsion. This implies a market comparable approach As at 30 June 2023 72,141 579,266 651,407
that reflects the recent transaction prices for similar properties. In estimating the fair value of the
properties, the highest and best use of the properties is their current use. There has been no change to
the valuation technique during the year. 21 Property and equipment (PE) 2023 2022
ETB'000 ETB'000
19(c) Fair value hierarchy
Details of the Bank's Investment properties and information about the fair value hierarchy at 30 June 2023 Property and equipment (21a) 4,552,653 3,271,395
and 30 June 2022 are as follows: Right-of-use-assets (21b) 2,284,082 1,503,443
6,836,735 4,774,838
Level 1 Level 2 Level 3
2023 ETB'000 ETB'000 ETB'000
Investment properties - - 2,100,254
2022
Investment properties - - 1,637,004
19(d) Investment properties include ETB 27m freehold land with indefinite economic life that is not depreciated.
__________________________________ __________________________________
102 | | 103
Dashen
Notes to the financial Share Company
Bankstatements (Continued)
104 |
21 Property and equipment (PE) (continued)
21(a)
Property and equipment (PE)
Office and
Motor other Furniture Computer Construction
Buildings vehicles equipment and fittings equipment in progress Total
ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000
Cost:
As at 1 July 2021 2,269,274 405,360 332,566 309,598 854,586 31,569 4,202,953
Additions - 4,547 111,391 118,099 138,847 42,573 415,457
Reclassifications - - (4,496) (142) (3,891) - (8,529)
Disposals (2,773) (5,956) (2,409) (959) (11,892) - (23,989)
As at 30 June 2022 2,266,501 403,951 437,052 426,596 977,650 74,142 4,585,892
As at 1 July 2022 2,266,501 403,951 437,052 426,596 977,650 74,142 4,585,892
Additions 42,014 214,440 272,750 632,793 431,462 33,585 1,627,044
Reclassifications - - - - - (6,019) (6,019)
Disposals - (5,171) (48) (11,280) (37) - (16,536)
As at 30 June 2023 2,308,515 613,220 709,754 1,048,109 1,409,075 101,708 6,190,381
-
Accumulated depreciation
and impairment losses:
As at 1 July 2021 (144,487) (164,568) (188,774) (129,693) (454,958) - -
(1,082,480)
Charge for the year (44,744) (33,999) (45,210) (28,218) (101,027) - (253,198)
Impairment loss - - (1,824) (964) (2,869) - (5,657)
Reclassifications - - 3,926 62 2,326 - 6,314
Disposals 299 5,358 2,380 872 11,615 - 20,524
As at 30 June 2022 (188,932) (193,209) (229,502) (157,941) (544,913) - (1,314,497)
-
As at 1 July 2022 (188,932) (193,209) (229,502) (157,941) (544,913) - (1,314,497)
Charge for the year (45,279) (39,663) (62,163) (46,830) (137,917) - (331,852)
Impairment loss - - (930) (1,988) (1,705) - (4,623)
Disposals - 3,663 47 9,502 32 - 13,244
As at 30 June 2023 (234,211) (229,209) (292,548) (197,257) (684,503) - (1,637,728)
Net book values
As at 30 June 2022 2,077,569 210,742 207,550 268,655 432,737 74,142 -
3,271,395
As at 30 June 2023 2,074,304 384,011 417,206 850,852 724,572 101,708 4,552,653
__________________________________
21
For
Report
the
Dashen
Reportand
year
DashenBank
Additions
Additions
Adjustments
Adjustments
ended
Bank Share
andFinancial
30
21(b) Right-of-use assets

Balance at 1 July 2022

Balance at 1 July 2021
Balance at 30 June 2023

Balance at 30 June 2022
Share Company
impairment is not required.

Company
June2023
FinancialStatements
Statements
2023
Depreciation (charge for the year)

Depreciation (charge for the year)
Notes to the financial statements (Continued)
21(a) Property and equipment (PE) (continued)

Property and equipment (PE) (continued)
2,228,798
1,447,583
1,447,583
424,768
884,180
419,568
347,847
993,989
Office rent
(527,733)
(313,821)
ETB'000
Mekonnen Bridge, Shewaber, Adama, Jimma, Lideta and Dessie.
__________________________________
Rent for
8,952
3,818
8,356
8,356
2,914
8,558
439
705
ATM spaces
(3,661)
(3,821)
ETB'000

-
-
-
-
land
46,332
47,504
47,504
48,676
(1,172)
(1,172)
ETB'000
Leasehold
21.3 Property and equipment include ETB 33m freehold land with indefinite economic life that is not depreciated.
Total
| 105
2,284,082
1,503,443
1,503,443
1,051,223
428,586
884,619
422,482
348,552
(532,566)
(318,814)
ETB'000
amounts as at the end of the reporting period. Thus, the management is of the opinion that allowance for
21.2 Upon impairment review, the net book values of property and equipment does not exceed its recoverable
21.1 Construction in progress represents directly attributable costs related to construction of buildings at Ras
73
Dashen
Dashen Bank
Bank Share Company
Dashen Bank
Bank Share Company
Share Company
Report
and Financial Statements Report
Report and
and Financial
Statements
For
2023 For the
the year ended 30June
year ended 30 June 2023
2023
22 Customer deposits 24 Defined benefits obligation
2023 2022
22(a) Deposits from conventional customers Severance, retirement and gratuity benefits
ETB'000 ETB'000
Demand deposits 38,904,029 30,169,300 The Bank operates an unfunded severance pay plan for its employees who have served the Bank for 5
Savings deposits 60,824,894 49,983,423 years and more and are below the retirement age (i.e., have not met the requirement to access the
Time deposits 7,009,446 5,151,533 pension fund). The final pay-out is determined by reference to current benefit’s level (monthly salary) and
106,738,369 85,304,256 number of years in service and is calculated as 1 month salary for the first year in employment plus 1/3 of
monthly salary for each subsequent year in employment to a maximum of 12 months final monthly salary.
22(b) Deposits from interest free banking customers
Qard deposits 2,209,043 1,788,401 The Bank also pays employees who retire with 15 years or more of service a reward gratitude of two (2)
Wadia savings deposits 5,897,347 4,141,348 months salary calculated on the basis of the last salary of the employee.
Mudaraba savings 3,334 1,879
24(a) Liability recognised in the financial position
8,109,724 5,931,628
2023 2022
Total Deposits 114,848,093 91,235,884 ETB'000 ETB'000
Maturity analysis
Current 7,787,000 5,468,490 Defined benefits obligation 485,979 396,772
Non-current 107,061,093 85,767,394
114,848,093 91,235,884 The movement in the defined benefit obligation over the years is as follows:
23 Other liabilities 2023 2022

ETB'000 ETB'000
Current service cost (note 24b) 30,722 19,161
Financial liabilities
Accruals 6,647 4,261 Interest cost (note 24b) 94,545 37,345
Borrowing-local 95,989 74,853 Remeasurement (gain) / losses (note 24c) (403) 109,912
Banking instruments payables 2,676,794 5,321,732 Benefits paid (35,657) (16,070)
Customers payables 768,590 458,598 At the end of the year 485,979 396,772
Margins held on letters of credit 2,907,265 1,669,096
Hamish Jidia held accounts 61,786 81,768 24(b) Amount recognised in the profit or loss
Staff payables 489,491 360,769
Impairment allowance for LCs & guarantees 502 846 Gross service cost 30,722 19,161
Lease liabilities 368,780 341,247 Interest cost 94,545 37,345
7,375,844 8,313,170 125,267 56,506
Non-financial liabilities
24(c) Amount recognised in other comprehensive income:
Deferred income 177,320 153,888
Defined contribution liabilities 44,752 15,253 Actuarial losses/(gains) on economic assumptions 2,239 (7,927)
Sundry payables 715,931 502,931 Actuarial (gains)/losses on experience (2,642) 117,839
Stamp duty payable 14,052 9,164 (403) 109,912
Withholding tax and value added tax payables 28,725 25,994
Other tax payable 111,507 56,076 24(d) The significant actuarial assumptions were as follows:
Provision 80,232 40,709
1,172,519 804,015 i) Financial assumption long term average
2023 2022
Gross amount 8,548,363 9,117,185
Discount rate per annum 20.50% 23.10%
Maturity analysis
Inflation rate 15.08% 17.30%
Current 8,179,583 8,775,938
Non-current 368,780 341,247 Long term salary increases 17.08% 19.30%
8,548,363 9,117,185
__________________________________ __________________________________
106 | | 107
Dashen Bank
Dashen Bank Share
Share Company
Company Dashen Bank
Dashen BankShare
ShareCompany
Company
Statements
For the
For the year
year ended
ended 30
30 June
June 2023
June 2023
24 Defined benefits obligation 24(d) The significant actuarial assumptions were as follows: (Continued)
24(d) The significant actuarial assumptions were as follows: (Continued)
iii) Withdrawal from service (Continued)
i) Financial assumption long term average (Continued)
The above sensitivity analysis is based on a change in an assumption while holding all other assumptions
Discount rate
constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated.
IAS19 requires that the discount rate be set based on the yields of appropriate term high quality corporate When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the
bonds. If no deep market in such bonds is available, accounting standards require that the yield on same method (present value of the defined benefit obligation calculated with the projected unit credit
government bonds of appropriate term be applied in the setting of this assumption. method at the end of the reporting period) has been applied as when calculating the pension liability
recognised within the statement of financial position.
In Ethiopia, there is neither a deep market in corporate nor Government bonds. Furthermore, the market
for treasury bills in Ethiopia is inefficient and does not appear to be market-determined. IAS19 does not The duration of the liabilities, on which the assumptions have been set, was calculated to be 6 years in the
provide guidance for setting the discount rate in a country with limited Government bonds or instruments. current valuation assumptions and data (2022: 6 years).
2023 2022
The Ethiopian Banking Association (EBA) has therefore advised on the use a discount rate of 20.50 % as 25 Share capital and share premium ETB'000 ETB'000
at 30 June 2023 (30 June 2022: 23.10%).
25(a) Share capital
Long term salary increases Authorised 12,000,000 12,000,000
Future salary increases are usually linked with a long-term future inflation assumption, plus a margin in Paid-up 9,344,559 6,863,215
respect of merit or promotional increases. Long term salary increases of 2% higher than the assumed long-
The par value of each share is ETB 1,000.
term inflation rate on average, have been applied.
The holders of ordinary shares are entitled to receive dividends when declared and are entitled to one vote
ii) Mortality in service per share at the general meetings of the Bank.
In determining an appropriate mortality table to use for the valuations, the Bank considered the mortality 2023 2022
rates published in the Demographic and Health Survey (“DHS”) 2016 report compiled by the Central ETB'000 ETB'000
Statistic Authority (CSA). 25(b) Share premium 128,300 12,593
2023 2022
26 Earnings per share
Male Female Male Female
Mortality Mortality Mortality Mortality Basic earnings per share (EPS) is calculated by dividing the profit after taxation by the weighted average
Age number of ordinary shares in issue during the year.
rate rate rate rate
20 0.306% 0.223% 0.306% 0.223% 2023 2022
25 0.303% 0.228% 0.303% 0.228% ETB'000 ETB'000
30 0.355% 0.314% 0.355% 0.314% Profit attributable to shareholders 3,561,087 2,904,562
35 0.405% 0.279% 0.405% 0.279%
Weighted average number of ordinary shares in issue 8,060 5,458
40 0.515% 0.319% 0.515% 0.319%
45 0.450% 0.428% 0.450% 0.428% Basic and diluted earnings per share 442 532
50 0.628% 0.628% 0.628% 0.628% Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares
55 0.979% 0.979% 0.979% 0.979% outstanding to assume conversion of all dilutive potential ordinary shares. There were no potentially
60 1.536% 1.536% 1.536% 1.536% dilutive shares at the reporting date (30 June 2022: nil), hence the basic and diluted earnings per share
have the same value.
iii) Withdrawal from service
2023 2022
The withdrawal rates are believed to be reasonably representative of the Ethiopian experience. The 27 Retained earnings ETB'000 ETB'000
valuation assumed a rate of withdrawal of 1% at the youngest ages and 2% at age 50 and above.
At the beginning of the year 1,270,328 1,161,185
The sensitivity of the overall defined benefit liability to changes in the weighted principal assumption is: Profit for the year 3,561,087 2,904,562
Directors' remuneration (1,954) (2,138)
Impact on defined benefit obligation
Transfer to legal reserve (note 29) (890,272) (726,141)
2023 2022
Dividends paid (572,669) (499,066)
Change in Impact of an Impact of a Impact of an Impact of a
Transfer from / (to) regulatory risk reserve (note 31) 321,213 (929,093)
assumption increase Decrease increase decrease
ETB'000 ETB'000 ETB'000 ETB'000 Transfer from reserve to IFRS (note 28) 7,402 21,105
Discount rate 1.0% (20,830) 23,813 (16,785) 17,673 Transfer to share capital (695,626) (660,086)
At the end of the year 2,999,509 1,270,328
__________________________________ __________________________________
108 | | 109
DashenBank
Dashen BankShare
ShareCompany
Company Dashen
Dashen Bank
Bank Share Company
Share Company
Forthe
For theyear
year ended
ended 30
30 June
June 2023
2023 For
2023
28 Reserve for IFRS 2023 2022
2023 2022 30 Special reserve ETB'000 ETB'000
ETB'000 ETB'000
At the beginning of the year 100 100
At the end of the year 100 100
Transfer to retained earnings (7,402) (21,105)
At the end of the year 893,506 900,908 The Bank has opted to maintain a special reserve in compliance with Proclamation No. 592/2008, Art.
21(7).
28(a) The Accounting and Auditing Board of Ethiopia (AABE) by its letter of 30 October 2019 (19 Tikemt 2012)
2023 2022
prohibited the distribution to shareholders by way of cash dividends and/or capital increase of the
amounts that arise from remeasurement adjustments from first time adoption of IFRSs and adoption of 31 Regulatory credit risk reserve ETB'000 ETB'000
new standards maintained in retained earnings and under any other account(s) until a directive is issued At the beginning of the year 1,824,326 895,233
in this regard. Transfer from retained earnings (321,213) 929,093

29 Legal reserve 2023 2022
ETB'000 ETB'000
The regulatory risk reserve is a non-distributable reserve required by the regulations of the National Bank
At the beginning of the year 3,527,133 2,800,992 of Ethiopia (NBE) to be kept for impairment losses on loans and receivables in excess of the IFRS charge
Transfer from profit or loss 890,272 726,141 as derived using an expected credit loss model.
Where the loan loss impairment determined using the NBE guidelines is higher than the loan loss
impairment determined using the expected credit loss model under IFRS, the difference is transferred to
The NBE Directive No. SBB/4/95 requires the Bank to transfer annually 25% of its annual net profit to its regulatory risk reserve and it is non-distributable to the owners of the Bank.
legal reserve account until such account equals its capital. When the legal reserve account equals the
capital of the Bank, the amount to be transferred to the legal reserve account will be 10% (ten percent) of Where the loan loss impairment determined using the NBE guidelines is less than the loan loss
the annual net profit. impairment determined using expected credit loss model under IFRS, the difference is transferred from
regulatory risk reserve to retained earnings to the extent of the non-distributable reserve previously
recognised.
2023 2022
32 Other reserves ETB'000 ETB'000
At the beginning of the year (18,183) (42,430)
Remeasurement gain / (loss) on retirement benefits

obligations, net of tax 282 (76,938)
Changes in the fair value of financial assets at FVTOCI 49,950 101,185
At the end of the year 32,049 (18,183)
Other reserves are made up as follows:-
Fair value reserve 155,241 105,291
Defined benefits obligations reserve (123,192) (123,474)
32,049 (18,183)
The fair value reserve represents the surplus or losses arising on valuation of financial assets at FVTOCI
and is non-distributable.
The defined benefit obligations reserve represents the remeasurement gains and losses arising from
experience adjustments and changes in actuarial assumptions. They are recognised in the period in which
they occur directly in other comprehensive income.
__________________________________ __________________________________
110 | | 111
Dashen Bank
Dashen Bank Share
Share Company
Company Dashen Bank
Dashen Bank Share
Share Company
Company
For the year ended
ended 30
30 June
June 2023
2023 For the
30 June
June 2023
2023
2023 2022 34 Related party transactions
33 Cash generated from operating activities ETB'000 ETB'000
Parties are considered to be related if one party has the ability to control the other party or exercise
Profit before tax 5,016,753 3,803,785 significant influence over the other party in making financial or operation decisions, or one other party
controls both.
Adjustments for non-cash items:
Depreciation of investment properties 16,981 17,489 In the normal course of business, a number of banking transactions are entered into with related parties
Depreciation of property and equipment 331,852 253,198 including staff, Board of Directors, their associates and companies associated with Directors. These
include loans, deposits and foreign currency transactions. Loans and advances to customers include
Amortisation of intangible assets 170,233 82,127
loans and advances to Board Directors and to companies associated with Directors.
Depreciation expense on right-of-use assets 532,566 318,814
Impairment of property and equipment 4,623 5,657 Contingent liabilities include guarantees and letters of credit for companies associated with Directors.
Adjustments on right-of-use assets (428,586) (422,482)
Dividend Income A number of transactions were entered into with related parties at arm's length in the normal course of
Adjustments on property and equipment 6,019 2,215 business. These are disclosed below:
Gain on disposal of property and equipment (6,833) (7,862)
34(a) Directors and employees
Impairment charge on loans and advances 497,601 215,517
Impairment charge on IFB financing 31,359 17,169 i) The average number of staff employed by the Bank during the year was as follows:
Impairment charge on receivables and other exposures 75,184 37,240
2023 2022
2022
Defined benefit obligation expense 125,267 56,506
Number
Number Number
Number
Changes in operating assets and liabilities:
Executive management
Senior and middle management 13
1,125 13
824
Senior and middle management 1,125 824
Changes in loans and advances (20,675,414) (13,433,338) Line management 1,275 853
Changes in IFB financing (2,036,136) (2,095,785) Line management 1,275
6,871 853
4,553
Professional
Change in other assets (1,551,258) (1,109,201) Professional
Clerical 6,871
405 4,553
284
Changes in reserve with NBE (1,799,910) (2,770,000) Clerical
Non-clerical 405
580 284
650
Changes in customer deposits 23,612,209 16,682,378 Non-clerical
Executive management 580
13 650
13
Changes in income tax on share premium 49,589 5,397 10,269 7,177
7,177
Changes in other liabilities (615,938) 987,336
Cash generated from operating activities 3,356,161 2,646,160 ii) The table below shows the number of employees' emoluments in the year and were within the bands
stated.
In the statement of cash flows, profit on sale of property and equipment (PE) comprise: 2023 2022
Salary / month band ETB'000 ETB'000
Proceeds on disposal 10,125 11,327 0 - 9,999 407 570
Net book values of property and equipment disposed (3,292) (3,465)
10,000 - 30,000 7,392 4,997
Gain on sale of property and equipment 6,833 7,862 30,001 - 50,000 2,133 1,393
50,001 - 100,000 314 204
Above 100,000 23 13
10,269 7,177
34(b) Loans and advances
Loans to Board of directors and executive management 2023 2022
ETB'000 ETB'000
Board of Directors
Abebe Teklu G/Selassie 910 1,351
Dulla Mekonnen 2,168 2,317
Abdulmutalib Biyan - 3,433
Total 3,078 7,101
__________________________________ __________________________________
112 | | 113
Dashen Bank
Dashen Bank Share
Share Company
Company Dashen Bank
Dashen Bank Share
ShareCompany
Company
Statements
For the
30 June
June 2023
June 2023
34 Related party transactions (Continued) 34 Related party transactions (Continued)
34(b) Loans and advances (Continued) 2023 2022 34(d) Key management compensation (Continued) 2023 2022
Executive Management ETB'000 ETB'000
ETB'000 ETB'000
Chief Executive Officer 1,200 -
Salary, other short-term and Post-employment benefits
Other Executive Officers (In total) 96,751 0 60,304
Total 97,951 60,304 Chief Executive Officer 7,638 6,378
Other Executive Officers (In total) 43,876 28,767
Total 51,514 35,145
34(c) Customer deposits
Compensation of the Bank's key management personnel includes salaries and contributions to the post-
Directors and key management personnel employment defined benefits plans.
At the beginning of the year 8,319 2,440 35 Contingent liabilities
Net movement during the year 23,510 5,879
35(a) Claims and litigation
At the end of the year 31,830 8,319
The Bank is a party to a number of legal actions brought by different entities and individuals arising from
The above outstanding balances arose from the ordinary course of business and are substantially on the its normal business operations. The maximum exposure of the Bank arising from these legal cases as at
same terms, including interest rates as for comparable transactions with third-party counterparties. 30 June 2023 was ETB 760.9 million (2022: ETB 37.3 million). The major case involving ETB 705 million
34(d) Key management compensation is held in the Republic of China in which the Bank is summoned as a third party respondent in order to
submit its defence against the plaintiff's claim for the cessation of payment to the defendant as per an
Key management has been determined to be the members of the Board of Directors and the executive advance payment guarantee issued by the Bank. The directors believe that it is not probable that
management of the Bank. The compensation paid or payable to key management excluding annual economic benefits would flow out of the Bank in respect to these legal cases.
Directors' remuneration (note 27) is shown below.
35(b) Guarantees and letters of credit
2023 2022 The Bank conducts business involving performance bonds and guarantees. These instruments are given
ETB'000 ETB'000 as security to support the performance of customers to third parties. As the Bank will only be required to
Board of Directors fee meet these obligations in the event of the customers' default, the cash requirements of these instruments
are expected to be considerably below their nominal amounts.
Abdulmutalib Biyan Hamza 185 185
The table below summarises the fair value amount of contingent liabilities for the account of customers:
Abebe Teklu G/selassie 185 185
Dulla Mekonnen Mosissa 185 185 2023 2022
ETB'000 ETB'000
Getaw Yalew Endashaw 185 185
Haile Assegide Haile 185 185 Loan commitments 2,355,263 2,379,413
Unutilised overdraft facilities 2,847,244 1,387,005
Mekete Dagnew Anteneh 185 185
Guarantees 38,418,686 38,433,881
Neway Beyene Mulatu - 84 13,653,949 12,414,502
Letters of credit
Negussie Demie Buta 185 87 57,275,142 54,614,801
Total
Rahel Werede Amdebirhan 185 185
Saeed Ahmed Hassen 185 185 36 Operating lease commitments - the Bank as lessee
Total 1,662 1,648
The Bank leases various properties under non-cancellable operating lease agreements. The lease terms
are between two and five years, and the majority of these lease agreements are renewable at end of the
each lease period at market rate.
The Bank has determined, based on an evaluation of the terms and conditions of the arrangements, such
as the lease term not constituting a substantial portion of the economic life of the commercial property,
that it does not retain all the significant risks and rewards of ownership of these properties and accounts
for the contracts as operating leases.
__________________________________ __________________________________
114 | | 115
Dashen Bank
Dashen Bank Share
Share Company
Company Dashen
Dashen Bank
Bank Share Company
Share Company
Report and
Statements Report
Report and
and Financial
Statements
2023 For
2023
40 Notes on Interest Free Banking(IFB) Service
37 Lease liability and commitments
a) Lease liabilities in (ETB '000) Dashen Bank's interest free banking (IFB) became operational on 5 March 2018. The Bank has
established a separate book of accounts for IFB as per the requirements of the National Bank of Ethiopia
As at 1 Paid during Interest charge As at 30 June
Directive No. SBB/72/2019. As at the end of the reporting period, the financial performance and position
July 2022 Additions Adjustment the year for the year 2023
of the Interest Free Banking operations of the Bank do not fulfil the quantitative threshold of 10% in line
Office rent (326,639) (46,979) 36,051 6,264 (22,615) (353,918)
with IFRS 8 - Operating Segments. However, the management believes that voluntary disclosure is
ATM (5,805) (136) (1,438) 1,012 (418) (6,785)
necessary to provide useful information to users of the financial statements particularly the regulatory
Leasehold land (8,803) - 12 1,333 (613) (8,071)
authority in the way presented as follows:
Total (341,247) (47,115) 34,625 8,609 (23,646) (368,774)
As at 1 Paid during Interest charge As at 30 June Segment Reporting

July 2021 Additions Adjustment the year for the year 2022 Statement of Profit or Loss
Office rent (309,967) (25,007) 6,622 19,891 (18,178) (326,639)
Interest Free Conventional
ATM (4,942) (201) (1,484) 1,232 (410) (5,805)
Leasehold land (9,512) - 26 1,333 (650) (8,803) banking Banking Total
(341,247) ETB'000 ETB'000 ETB'000
Total (324,421) (25,208) 5,164 22,456 (19,238)
Interest income - 13,407,751 13,407,751
b) Lease commitments in (ETB'000)
Interest expense - (4,060,683) (4,060,683)
1 July 2023 1 July - 9,347,068 9,347,068
Net interest and IFB Financing income
up to 2024 up 1 July 2025 1 July 2026 1 July 2027
30 June to 30 up to 30 up to up to Fee and commission income 78,254 3,794,897 3,873,151
2024 June June 2026 30 June 2027 30 June 2028 Above
Fee and commission expense (36,567) (170,086) (206,653)
ATM 3,244 1,523 553 203 - - 41,687 3,624,811 3,666,498
Net fee and commission income
Leasehold land 1,285 1,280 1,236 1,236 1,236 5,191
Office rent 118,974 73,903 56,770 7,075 - 1,972 Financing and advances 440,574 - 440,574
Total 123,503 76,706 58,559 8,514 1,236 7,163 Other operating income 2,313 200,304 202,617
(Loss) on foreign exchange (75) (342,825) (342,900)
38 Operating lease commitments - the Bank as lessor Total operating income 484,498 12,829,359 13,313,857
Rental income earned during the year was ETB million 97.6 million (2022: ETB 92.6 million). At the end
Loan & IFB financing impairment (charge) (31,359) (497,601) (528,960)
of the reporting year, the Bank had contracted with tenants for the following future lease receivables:
Impairment losses on other exposures (74) (75,110) (75,184)
2023 2022 Net operating income 453,065 12,256,648 12,709,713
ETB'000 ETB'000
Employee benefits expense (219,271) (4,517,485) (4,736,756)
No later than 1 year 57,825 51,000 Other operating expenses (77,934) (2,878,270) (2,956,204)
Later than 1 year and no later than 5 years 143,790 111,682
Profit before tax 155,860 4,860,893 5,016,753
Later than 5 years 1,803 1,200
Total 203,418 163,882
39 Events after reporting period

39(a) The Bank has assessed the impact of the conflict in the northern Ethiopia on its assets and its obligations
and have accounted for all known losses in these financial statements.
39(b) There were no significant post balance sheet events which could have a material effect on the state of
affairs of the Bank as at 30 June 2023 and its profit for the year then ended, which have not been
adequately provided for or disclosed. (2022: none)
__________________________________ __________________________________
116 | | 117
Dashen Bank
Bank Share
Share Company
Dashen Dashen Bank Share Company
Report and
and Financial
Statements
For the
For the year
year ended
ended 30
30 June
June 2023
2023 For
2023
40 Notes on Interest Free Banking (IFB) Service (Continued) 40 Notes on Interest Free Banking (IFB) Service (Continued)
Segment Reporting Segment Reporting

Statement of Financial Position Statement of Profit or Loss
As at 30 June 2023 For the year ended 30 June 2022
Interest Free Conventional Interest Free Conventional
Banking Banking Total banking Banking Total
ETB'000 ETB'000 ETB'000 ETB'000 ETB'000 ETB'000
ASSETS
Interest income - 9,854,633 9,854,633
Cash and balances with banks 897,245 11,060,060 11,957,305 Interest expense - (3,402,135) (3,402,135)
Reserve with National Bank of Ethiopia 8,299,585 8,299,585
Net interest income - 6,452,498 6,452,498
Loans and advances to customers - 95,045,806 95,045,806
IFB Financing 5,152,367 - 5,152,367
Fee and commission income 42,079 2,653,247 2,695,326
Financial assets at fair value through OCI - 422,567 422,567 (57,345) (83,477) (140,822)
Fee and commission expense
Debt instruments at amortised cost - 11,206,670 11,206,670
Net fee and commission income (15,266) 2,569,770 2,554,504
Other assets 2,239,413 2,011,147 4,250,560
Investment properties - 730,279 730,279 Financing and advances 213,542 - 213,542
Intangible assets - 651,407 651,407 459 142,460 142,919
Other operating income
Property and equipment 93,945 6,742,790 6,836,735
(Loss) on foreign exchange (7,347) (673,877) (681,224)
Deferred tax assets - 87,651 87,651
8,382,970 136,257,962 144,640,932 Total operating income 191,388 8,490,851 8,682,239
Total Assets
Loan impairment charge (17,169) (215,517) (232,686)
LIABILITIES
Impairment losses on other assets - (37,399) (37,399)
Customer deposits 8,109,724 106,738,369 114,848,093
Net operating income 174,219 8,237,935 8,412,154
Current income tax 46,758 1,393,198 1,439,956
Other liabilities 117,386 8,430,977 8,548,363 Employee benefits expense (117,224) (2,871,204) (2,988,428)
Defined benefits obligation - 485,979 485,979 Other operating expenses - (1,619,941) (1,619,941)
Total Liabilities 8,273,868 117,048,523 125,322,391 Profit before tax 56,994 3,746,790 3,803,785
EQUITY
Share capital - 9,344,559 9,344,559
Retained earnings 109,102 2,890,407 2,999,509
Reserve for IFRS - 893,506 893,506
Legal reserve - 4,417,405 4,417,405
Special reserve - 100 100
Regulatory risk reserve - 1,503,113 1,503,113
Share premium - 128,300 128,300
Other reserves - 32,049 32,049
Total equity 109,102 19,209,439 19,318,541
Total Equity and Liabilities 8,382,970 136,257,962 144,640,932
__________________________________ __________________________________
118 | | 119
Dashen
Dashen Bank
Bank Share
Share Company
Company
Report
Report and
and Financial
Statements
For
2023
Notes to the financial statements (Continued)
40 Notes on Interest Free Banking (IFB) Service (Continued)
Segment Reporting
Statement of Financial Position
As at 30 June 2022
Interest Free Conventional
Banking Banking Total
ETB'000 ETB'000 ETB'000
ASSETS
Cash and balances with banks 590,853 9,813,591 10,404,444
Loans and advances to customers - 74,867,993 74,867,993
IFB Financing 3,147,590 - 3,147,590
Financial assets at fair value through OCI - 292,069 292,069
Debt instruments at amortised cost 12,171,707 12,171,707
Other assets 2,303,177 471,309 2,774,486
Investment properties - 747,260 747,260
Intangible assets - 184,595 184,595
Property and equipment 44,030 4,730,808 4,774,838
Deferred tax assets - 172,188 172,188
Total Assets 6,085,650 109,951,195 116,036,845
LIABILITIES
Customer deposits 5,931,628 85,304,256 91,235,884
Current income tax - 906,584 906,584
Other liabilities 97,028 9,020,157 9,117,185
Defined benefits obligation - 396,772 396,772
Total Liabilities 6,028,656 95,627,769 101,656,425
EQUITY
Share capital - 6,863,215 6,863,215
Retained earnings 56,994 1,213,334 1,270,328
Reserve for IFRS - 900,908 900,908
Legal reserve - 3,527,133 3,527,133
Special reserve - 100 100
Regulatory risk reserve - 1,824,326 1,824,326
Share premium 12,593 12,593
Other reserves - (18,183) (18,183)
Total equity 56,994 14,323,426 14,380,420
Total Equity and Liabilities 6,085,650 109,951,195 116,036,845
__________________________________
120 |
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ANNUAL

Total Assets Deposits Oustanding Loans & IFB

2020/21 2021/22 2022/23 2020/21 2021/22 2022/23 2020/21 2021/22 2022/23

Total Capital Paid-up Capital Revenue

2020/21 2021/22 2022/23 2020/21 2021/22 2022/23 2020/21 2021/22 2022/23

Expense Profit Before Tax Cost-to-Income Ratio

2020/21 2021/22 2022/23 2020/21 2021/22 2022/23 2020/21 2021/22 2022/23

Earning Per Share Number of Customers Number of Amole Subscribers

Director Director Director Director

2020/21 2021/22 2022/23 2020/21 2021/22 2022/23 2020/21 2021/22 2022/23

Number of Cardholders Number of Loanees Number of Branches Including Outlets

2020/21 2021/22 2022/23 2020/21 2021/22 2022/23 2020/21 2021/22 2022/23

Number of ATMs No. of POS Terminals Number of Staff

12,406 Mekete Dagnew Negussie Demie Rahel Worede Saeed Ahmed

2020/21 2021/22 2022/23 2020/21 2021/22 2022/23 2020/21 2021/22 2022/23

Sheikh Muhammed Yasin Ustaz Mahmoud Hassen

Freegzi Berhane Getnet Dessie Mesfin Bezu Mulugeta Alebachew

Tesfaye Anene Tibebu Solomon Yihnalem Aknaw Yohannes Million

IFB Channel Expansion

Training and Development

Proposal On Dividend Pay Out Organizational Culture

Corporate Governance Branch Renovation

correspondent banks & financing partners

27th Annual Managers' Conference

Colba Tannery Plc

Seedlings Plantation at Entoto Hills

Zaf Pharmaceuticals Abreham Abebe General Exporter

Amoudi Tesfa BerhanFeeding Center at Lemi Kura Sub-city in Addis Abeba

Stay Easy Hotel

Company Information 33-36

Statement of Directors’ Responsibilities 38

Independent Auditor’s Report 39-42

Statement of Profit or Loss and other Comprrehnsive Income 43

Statement of Financial Postion 44

Statement of Cash Flows 47

Notes to the Financial Statements 48-120

Dashen Bank S.C.

Aberra Bekele Gebreyohannes

Citibank NA New York 111 Wall Street, New York, USA

Net interest income 9,347,068 6,452,498

Profit before tax 5,016,753 3,803,785

Basic EPS 442 532

Dulla Mekonnen Mosissa

Profit for the year 3,561,087 2,904,562

Other comprehensive income (OCI)

Basic EPS 26 442 532

Reserve for IFRS

The notes on pages 48

Property and equipment

Dulla Mekonnen Mosissa

Total liabilities and equity

Chairman, Board of Directors

Loans and advances to customers

The financial statements on pages 11

Reserve with National Bank of Ethiopia

A.A. Bromhead Certified Audit Firm and UK Registered Auditor

Asfaw Alemu Tessema

88 were approved and authorised for issue by the Board of Directors

The notes on pages 48

Income tax paid