posted on 2024-09-05, 23:35authored byLegas Abdu Yesuf
Financial sector reform is so important to ensure well-organized and stable financial system to
increase the contribution of the banking system towards economic development. An exemplary
reform measures undertaken by the Ethiopian government start the year 1992 was “liberalizing”
the financial sector. Thus, this study was conducted under the title “performance Evaluation of
Commercial Bank of Ethiopia: pre and post Liberalization”. The rational of this study is let the
CBE and NBE know the performance of the bank in the pre and post liberalization and hence, to
comment and recommend them on what they have to do, for the banks’ prosperity. The main
objective of the study is to evaluate the financial performance of the Commercial Bank of Ethiopia
in the pre and post liberalization. The researcher employed before and after study design using
case study approach to evaluate how the bank has been financially performing in the pre and post
liberalization. Both primary and secondary data were used in the study. Primary data gathered
through structurally designed questionnaire from the selected employees’ and management who
are working in seven different operations of the bank and secondary data from the annual reports
for CBE for the period covering the year 1976 to 2009 were used in the study. The researcher
employed financial statement analysis and test the hypothesis using t-test statistical tools. The
major findings of the study indicate that performance of the bank after the liberalization is better
than before liberalization. However, further reform measures in the deposit market, in
establishing strong legal ground for providing technology banking services, let the bank to do
business with financial institutions of their own choice, improving the capacity and independence
of the regulatory/supervisory organ and full liberalization of the foreign market needs to be areas
that need further liberalization or reform measures. Finally, the study suggested that the bank
should use its maximum effort to further improve its performance and reform measures should be
initiated on lifting the minimum interest rate for deposit to be determined on market basis,
modify the commercial code to incorporate new article to enhance IT, fully liberalizing the foreign
market, and encouraging the bank to do business with a financial institutions of their own choice.
History
Publisher
Mekelle University
Citation
Yesuf Legas Abdu (2010) Performance Evaluation of the Commercial Bank of Ethiopia: pre and post Liberalization, Thesis. Mekelle:MU.