4. MONETARY DEVELOPMENTS · 2005/06Q1 Q2 Q3 Q4 2006/07Q1 Q2 Q3 Q4 2007/08Q1 Q2 Q3 Q4 2008/09Q1 Q2 Q3 Q4 2009/10Q1 Q2 Q3 Q4 2010/11Q1 Q2 Q3 Q4 2011/12Q1 Q2 Q3 Q4 2012/13Q1 Q2 Q3 In

4. MONETARY DEVELOPMENTS

4.1. Money Supply and Credit

Broad money supply (M2) reached Birr 225.6

billion at the end of the third quarter of the

fiscal year 2012/13, revealing quarterly and

annual growth rates of 9.4 percent and 31.5

percent, respectively. The annual growth rate

was mainly attributed to the increase in

domestic credit while the quarterly growth was

caused by the rise in net foreign asset and

domestic credit by 18.2 and 9.1 percent,

respectively.

On annual basis, domestic credit expanded by

26.2 percent due to 30.8 percent increase in

credit to the non-central government, which

offset the 18.4 percent fall in net credit to

central government sector. Similarly, net

foreign assets increased by 2.6 percent on

annual and 18.2 percent quarterly basis, and

reached nearly Birr 47.0 billion at the end of

the third quarter. (Table 4.1)

Table 4.1: Factors Influencing Broad Money ( In Millions of Birr)

2012/13

Qtr. III Qtr. II Qtr. III(Mar. 12) (Dec. 12) (Mar. 13)

A B C1. External Assets (net) 45,771.8 39,754.6 46,981.5 2.6 18.2 2.2 37.42. Domestic Credit 170,731.8 197,503.1 215,542.1 26.2 9.1 82.9 93.4 . Claims on Central Gov't (net) 15,673.9 12,067.1 12,792.2 -18.4 6.0 -5.3 3.8 . Claims on Non-Central Gov't 155,057.9 185,435.9 202,749.9 30.8 9.3 88.2 89.6 . Financial Institutions 11,870.0 13,307.0 14,807.0 24.7 11.3 5.4 7.8 . Others 143,187.9 172,128.9 187,942.9 31.3 9.2 82.8 81.83. Other Items (net) 44,999.4 30,992.2 36,935.8 -17.9 19.2 -14.9 30.84. Broad Money (M2) 171,504.3 206,265.4 225,587.9 31.5 9.4 100.0 100.0

Contributions ofeach componentto broad boney

growth

C/A C/B

2011/12

Particulars

Percentage Change

Annual Quarterly

Source: Staff computation, NBE



The third quarter of the fiscal year 2012/13

also witnessed an annual and quarterly rise

in all components of broad money.

Accordingly, narrow money that comprises

currency outside banks and net demand

deposits grew by 31.0 percent on annual

and 11.1 percent quarterly terms. On the

other hand, quasi-money that embraces both

saving and time deposits depicted an annual

and quarterly increment of 32.0 and 7.7

percent, respectively. Hence, year-on-year

basis, both narrow money and quasi-money

contributed 48.8 and 51.2 percent share to

the annual broad money growth rate (Table

4.2).

The annual and quarterly rise in currency

outside banks reflects the continuous rise in

income and public preference to hold cash.

Similarly, the surge in quasi-money

indicates the successful efforts of both

public and private banks in expanding their

branch network to augment deposit

mobilization and improve service outreach.

Table 4.2: Components of Broad Money

2012/13

Qtr. III Qtr. II Qtr. III(Mar. 12) (Dec. 12) (Mar. 13)

A B C

1. Narrow Money Supply 84,974.1 100,201.7 111,345.7 31.0 11.1 48.8 57.7 . Currency outside banks 37,727.7 42,677.0 45,142.4 19.7 5.8 13.7 12.8 . Demand Deposits (net) 47,246.4 57,524.7 66,203.3 40.1 15.1 35.1 44.92. Quasi-Money 86,530.1 106,063.7 114,242.2 32.0 7.7 51.2 42.3 . Saving Deposits 76,393.8 93,133.7 100,726.5 31.9 8.2 45.0 39.3 . Time Deposits 10,136.4 12,930.1 13,515.7 33.3 4.5 6.2 3.03. Broad Money Supply 171,504.3 206,265.4 225,587.9 31.5 9.4 100.0 100.0

2011/12Contributions ofeach componentto broad money

growth

(In Millions of Birr)

Particulars

Percentage Change

Annual QuarterlyC/BC/A

Source: Staff Computation, NBE


4.2. Developments in Reserve Money and Monetary Ratio

Reserve money reached Birr 70.8 billion at

the end of the third quarter of the fiscal year

2012/13, depicting an annual growth of 13.2

percent albeit a quarterly fall of 5.6 percent.

Excess reserves of commercial banks,

however, decreased significantly (298.8

percent) on annual basis but, recorded a

181.9 percent quarterly surge mainly due to

their increased participation in weekly T-

bills market, presumably in association with

the reduction of the reserve requirement

from 10 to 5 percent as of March 1st, 2013.

The money multiplier measured by the ratio

of broad money to reserve money, grew by

16.2 percent on annual basis implying the

growing monetization of the economy.

Similarly, the ratio of narrow money to

reserve money increased by 15.7 percent

mainly due to surge in demand deposit by

40.1 percent on annual basis.

Regarding other monetary ratios, narrow-

money to broad money ratio decreased by

0.38 percent on annual basis while quasi

money to broad money ratio increased by

0.37 percent (Table 4.3).

Table 4.3: Monetary Aggregates and Ratios

2012/13Qtr. III Qtr. II Qtr. III

(Mar. 12) (Dec. 12) (Mar. 13)Particulars A B C C/A C/B

1. Reserve Requirement (CB's) 16,897.23 20,293.62 10,887.12 -35.57 -46.352. Actual Reserve (CB's) 10,669.49 24,685.06 23,267.02 118.07 -5.743. Excess Reserve (CB's)* -6,227.74 4,391.44 12,379.90 -298.79 181.914. Reserve Money 62,580.80 75,066.38 70,843.96 13.20 -5.62 . Currency in Circulation 44,710.64 50,971.94 54,292.91 21.43 6.52 . Banks deposits at NBE** 17,870.17 24,094.44 16,551.06 -7.38 -31.315. Money Multiplier (Ratio): . Narrow Money to Reserve Money 1.36 1.33 1.57 15.75 17.74 . Broad Money to Reserve Money 2.74 2.75 3.18 16.19 15.896. Other Monetary Ratios (%): . Currency to Narrow Money 52.62 50.87 48.76 -7.33 -4.15 . Currency to Broad Money 26.07 24.71 24.07 -7.68 -2.61 . Narrow Money to Broad Money 49.55 48.58 49.36 -0.38 1.60 . Quasi Money to Broad Money 50.45 51.42 50.64 0.37 -1.51

Percentage Change

(In millions of Birr unless otherwise indicated)

2011/12

Source: NBE and Commercial Banks.

* The data is obtained from commercial banks balance sheet.

** The data is obtained from NBE balance sheet.

Third Quarter 2012/1332



-10,000.0

-5,000.0

0.0

5,000.0

10,000.0

15,000.0

20,000.0

25,000.0

30,000.0

2005/06Q1Q2Q3Q4

2006/07Q1Q2Q3Q4

2007/08Q1Q2Q3Q4

2008/09Q1Q2Q3Q4

2009/10Q1Q2Q3Q4

2010/11Q1Q2Q3Q4

2011/12Q1Q2Q3Q4

2012/13Q1Q2Q3

In m

illio

ns o

f Bi

rr

Fig IV.5: Monetary Aggregates(Third Quarter of 2012/13)

RequiredReserve

ActualReserve

ExcessReserve

Source: staff computation, NBE

4.3. Interest Rate Developments [

Average savings deposit and lending rates

remained at 5.4 and 11.88 percent,

respectively, both on quarterly and annual

basis. Weighted average time deposit rate,

however, registered annual increment of

0.18 percentage point. The weighted

average yield on T-bills also went up from

0.8 percent to 1.3 percent on yearly terms.

Considering annual headline inflation of 7.6

percent during the quarter under review,

average lending rate was positive while

deposit rates and T-bill yields remained

negative in real terms. (Table 4.4)

34Third Quarter 2012/13

Table 4.4: Interest Rate Structure of Commercial Banks (Percent per annum)

Particulars

2011/12 2012/13 Percentage Changes

QIII QII QIII Annual Quarterly

1. Savings Deposit Rate

Minimum 5 5 5 0.0 0.0

Maximum 5.75 5.75 5.75 0.0 0.0

Average Saving Rate 5.4 5.4 5.4 0.0 0.0

2. Time Deposits

Up to 1yr 5.61 5.82 5.79 3.16 -0.55

1-2 years 5.71 5.92 5.90 3.28 -0.31

Over 2 yrs 5.76 5.96 5.95 3.35 -0.17

Average Time Dep. Rate (Weighted) 5.70 5.90 5.88 3.26 -0.34

3. Demand Deposit (Weighted) 0.03 0.03 0.03 -8.08 -6.56

4. Lending Rate

Minimum 7.5 7.5 7.5 0.0 0.0

Maximum 16.25 16.25 16.25 0.0 0.0

Average Lending Rate 11.88 11.88 11.88 0.0 0.0

5. T-bills Rate (Weighted) 0.87 1.353 1.333 53.2 -1.5

6. Bond Yield (Simple Average) 4 4 4 0.0 0.0

7. Headline Inflation 32.8 14.9 7.6 -76.7 -48.78

8. Food Inflation 41.1 15.2 5.2 -87.23 -65.5

9. Core/non-food Inflation 22.2 14.6 10.5 -52.9 -28.2

Source: NBE and commercial banks


Source: NBE and Commercial Banks



4.4. Developments in the Financial Sector

Banks, insurance companies and

microfinance institutions are the main

financial institutions in Ethiopia. The

number of banks operating in the country

reached 19 as at the end of March 2013 of

which 16 banks are privately owned.

During the review quarter, 101 new bank

branches were opened, raising the total

number of bank branches to 1,616 of which

791 or 48.9 percent were private owned. As

a result, the ratio of bank branches to total

population went down to 53,155.9 from

56,699.7 in the preceding quarter, reflecting

a significant improvement in financial

service outreach.

About 33.5 percent of the total bank

branches were located in Addis Ababa.

Meanwhile, the total capital of the banking

system reached Birr 20.96 billion at the end

of the third quarter of the fiscal year

2012/13, of which 49.4 percent was held by

private banks. Commercial Bank of

Ethiopia, the biggest state owned bank,

accounted for 36.2 percent of the total

capital of the banking system. The

remaining balance (14.4 percent) belongs to

the two public banks namely, Development

Bank of Ethiopia and Construction and

Business Bank of Ethiopia. (Table 4.5)

The total number of insurance companies

operating in the country reached 16 of

which 15 were privately owned. Their

branches also rose to 264 from 232 a year

ago. Of the total branches, about 53.8

percent are located in Addis Ababa.

During the review quarter, the total capital

of the insurance industry increased by 28.6

percent to Birr 1.37 billion of which the

share of private insurance companies was

73.2 percent.(Table 4.6)

On the other hand, there are 31 micro-

finance institutions (MFIs) operating in the

country. These MFIs have mobilized

savings deposit to the fine of Birr 6.9

billion, which is 41.0 percent higher than

last year same period. Similarly,

outstanding credit of the MFIs scaled up by

43.3 percent on annual basis and reached

Birr 10.8 billion. Their total assets also

increased by 37.2 percent to Birr 16.5

billion by the end of March 2013 (Table

4.7).

Given their intended purpose, MFIs in the

country are contributing to poverty

reduction by providing loans to and

mobilizing savings from the low-income

segments of the population.


The top five largest MFIs (Amhara,

Dedebit, Oromia, Omo and Addis Credit

and Savings institutions accounted for 85.1

percent of the total capital, 93.2 percent of

the savings, 89.7 percent of the credit and

89.8 percent of the total assets of the

industry.

Capital2011/12

395 103 498 42.2 543 132 675 44.6 560 133 693 42.9 6,231.0 7,586.0 7,586.248 29 77 6.5 57 34 91 6.0 62 38 100 6.2 364.0 479.0 464.831 1 32 2.7 31 1 32 2.1 31 1 32 2.0 2,454.0 2,556.0 2,556.0

474 133 607 51.4 631 167 798 52.7 653 172 825 51.1 9049 10621 10,607.0

37 44 81 6.9 41 55 96 6.3 46 62 108 6.7 1,254.0 1,443.0 1,457.136 37 73 6.2 45 47 92 6.1 50 52 102 6.3 1,157.0 1,353.0 1,353.129 32 61 5.2 35 32 67 4.4 38 42 80 5.0 687.0 839.0 842.733 27 60 5.1 34 33 67 4.4 35 36 71 4.4 1,267.0 1,478.0 1,488.726 36 62 5.2 30 40 70 4.6 30 41 71 4.4 785.0 876.0 878.519 34 53 4.5 25 40 65 4.3 27 40 67 4.1 1,241.0 1,361.0 1,380.344 6 50 4.2 51 8 59 3.9 55 8 63 3.9 287.0 420.0 479.117 13 30 2.5 23 20 43 2.8 23 21 44 2.7 341.0 396.0 401.728 11 39 3.3 34 15 49 3.2 39 18 57 3.5 374.0 456.0 464.5

2 4 6 0.5 3 4 7 0.5 3 5 8 0.5 290.0 206.0 399.811 10 21 1.8 17 12 29 1.9 17 12 29 1.8 236.0 290.0 317.9

6 8 14 1.2 10 9 19 1.3 11 11 22 1.4 170.0 247.0 292.418 2 20 1.7 35 9 44 2.9 36 9 45 2.8 204.0 265.0 285.3

1 3 4 0.3 2 6 8 0.5 2 7 9 0.6 137.0 170.0 190.10 0 0 0.0 2 0 2 0.1 10 3 13 0.8 0.0 124.0 125.3

Enat Bank S.C 0 2 2307 267 574 48.6 387 330 717 47.3 422 369 791 48.9 8,430.0 9,924.0 10,356.5781 400 1181 100.0 1018 497 1515 100.0 1075 541 1616 100.0 17,479.0 20,545.0 20,963.5

QuarterIIIA.A Total

Wegagen Bank

2012/132012/132011/12

Commercial Bank of EthiopiaConstruction & Business BankDevelopment Bank of Ethiopia

Reg. A.A TotalReg.Banks

Branch Network

Total%

Share

Addis Interational Bank

United BankNib International BankCooperative Bank of Oromiya

Zemen BankBuna International Bank

Dashen BankAbyssinia Bank

2. Private BanksAwash International Bank

Reg A.A

Total Public Banks

Lion International BankOromia International Bank

Berhan International BankAbay Bank

3.Grand Total BanksTotal Private Banks

Debub Global Bank

Table 4.5: Capital and Branch Network of Banking System at End of March 31,2013

%Share

1. Public Banks

QuarterIII

QuarterII

Quarter IIIQuarter IIQuarter III

(Branch in Number and Capital in Millions of Birr)

%Share

Source: Bank Supervision Directorate, NBE

Reg. Stands for Region

National Bank of Ethiopia


Source: staff computations, NBE

QuarterIII

QuarterII

QuarterIII

S.No. A.A Reg Total A.A Reg Total A.A Reg Total 2011/12 2012/13 2012/131 11 32 43 11 35 46 11 37 48 292.2 350.6 368.32 19 11 30 20 12 32 20 12 32 103.7 121.2 117.53 6 7 13 6 7 13 6 7 13 87.6 98.9 103.3

4 9 8 17 9 9 18 9 10 19 46.1 37.0 45.75 15 8 23 16 8 24 16 8 24 89.1 126.4 135.16 6 4 10 6 4 10 6 4 10 27.9 31.7 36.17 11 10 21 11 10 21 11 11 22 121.3 132.5 151.08 9 8 17 12 8 20 12 9 21 103.6 132.5 139.89 14 8 22 14 8 22 15 8 23 99.7 77.2 126.3

10 6 5 11 9 5 14 10 5 15 30.4 41.1 48.111 0 0 0 2 0 2 3 0 3 5.3 23.9 15.612 10 8 18 11 8 19 11 8 19 29.5 51.8 55.413 1 2 3 1 2 3 1 2 3 10.0 10.3 12.714 Berhan insurance S.C 4 0 4 6 0 6 6 1 7 11.0 11.2 6.815 - - - 5 0 5 5 0 5 11.4 10.4 4.116 - - - - - - 0 0 0 - - 8.7

121 111 232 139 116 255 142 122 264 1,068.7 1256.7 1,374.5Source: Insurance Supervision Directorate, NBE

Table 4.6: Branch Network & Capital of Insurance Companies at End of March 31,2013 (Branch in number and Capital in Millions of Birr)

Insurance Companies

Branch

Lion Insurance Company

Capital

Quarter III 2012/13

Ethiopian Insurance CorporationAwash Insurance CompanyAfrica Insurance Company

National Insurance Corporation of Ethiopia

Quarter III2011/12

Quarter II2012/13

Ethio-Life Insurance CompanyOromia Insurance CompanyAbay Insurance Company S.C.

Tsehay Insurance S.C.

TOTAL

United Insurance CompanyGlobal Insurance CompanyNile Insurance CompanyNyala Insurance CompanyNib Insurance Company

Lucy Insurance S.C.



2011/12 2012/13 2011/12% ChangeQtr.III Qtr.II Qtr.III

Particulars A B C C/A C/B

Total Capital 3,491,468.0 4,092,187.9 4,289,245 22.8 4.8Saving 4,903,920.0 5,962,351.8 6,913,012 41.0 15.9Credit 7,514,288.0 10,282,277.0 10,770,101 43.3 4.7Total Assets 12,048,730.0 14,719,290.3 16,535,690 37.2 12.3

Table 4.7: Microfinance Institutions Performance as of March 2013 (In Thousands of Birr)

Source; Microfinance Supervision Directorate, NBE

4.5. Activities of the Banking System

4.5.1. Resource Mobilization

Total resources mobilized by the banking

system reached Birr 26.6 billion showing a

4.0 percent growth due to 89.0 percent surge

in net change in borrowing and 18.9 percent

increase in loan collection. (Table 4.8)



Qtr.III2011/12

Qtr.II2012/13

Qtr.III2012/13

A B C C/A C/B1.Deposits (net change) 11,688.1 10,214.7 3,805.7 5,392.0 17,158.3 15,493.8 15,606.7 -9.0 0.7 -Demand 7,722.0 6,097.3 1,330.8 1,325.1 7,382.3 9,052.8 7,422.4 0.5 -18.0 -Saving 3,017.1 4,077.7 2,612.9 3,518.4 4,817.3 5,630.1 7,596.1 57.7 34.9 -Time 949.0 39.7 -138.1 548.5 4,958.7 810.9 588.2 -88.1 -27.52. Borrowing (net change) -485.9 2,624.7 0.0 0.0 1,389.0 -485.9 2,624.7 89.0 -640.2 -Local -815.3 2,392.6 0.0 0.0 1,407.4 -815.3 2,392.6 70.0 -393.5 -Foreign 329.4 232.1 0.0 0.0 -18.4 329.4 232.1 -1,359.3 -29.53. Collection of Loans 4,931.7 4,163.2 4,640.2 4,239.2 7,068.7 9,571.9 8,402.4 18.9 -12.24. Total Resources Mobilized (1+2+3) 16,133.9 17,002.6 8,445.9 9,631.2 25,616.1 24,579.8 26,633.8 4.0 8.45. Disbursement 7,297.8 12,959.2 6,823.5 4,030.6 14,604.6 14,121.3 16,989.8 16.3 20.36. Change in Liquidity (4-5) 8,836.1 4,043.5 1,622.4 5,600.6 11,011.4 10,458.5 9,644.1 -12.4 -7.8 Memorandum Item:

A. Outstanding Credit* 80,230.7 90,330.7 40,798.8 42,601.1 103,126.2 121,029.5 132,931.8 28.9 9.8 B. Outstanding Interbank Lending 218.8 189.3 0.0 0.0 98.4 218.8 189.3 92.3 -13.5Source: Commercial Banks and staff computation

Table 4.8: Summary of Resource Mobilization & Disbursement of Banking System during Third Quarter of 2012/13


Particulars

Public Banks Private Banks Grand Total

% Change

1 2 (3) = (1) + (2)

Qtr.II2012/13

Qtr.III2012/13

Qtr.II2012/13

Qtr.III2012/13




4.5.1.1. Deposit Mobilization

Total deposit liabilities of the banking system

reached Birr 222.0 billion at the end of the

third quarter of the fiscal year 2012/13,

indicating annual growth rate of 23.5 percent.

The growth in deposit mobilization was

partly attributed to the rise in the number of

bank branches opened by commercial banks

and improvements in economic activities.

Component wise, demand deposits, which

accounted for 48.3 percent of total deposits,

reached Birr 107.3 billion showing yearly

growth rate of 22.0 percent. Similarly, saving

deposits, with 45.4 percent share in total

deposits increased by 26.5 percent during the

same period. Time deposits, which constituted

6.3 percent of the total deposit liabilities, also

went up by 14.1 percent compared to the same

period last year.

The share of public banks in total deposit

mobilization was 67.8 percent while private

banks took the remaining balance. (Table 4.9)




Quarter III Quarter II Quarter IIIA B C C/A C/B

Demand Deposit 87,905.9 48.9 99,857.3 48.4 107,279.7 48.3 22.0 7.4Saving Deposit 79,612.1 44.3 93,142.0 45.1 100,738.1 45.4 26.5 8.2Time Deposit 12,277.1 6.8 13,415.3 6.5 14,003.5 6.3 14.1 4.4Total 179,795.1 100.0 206,414.6 100.0 222,021.3 100.0 23.5 7.6Share of Public Banks 67.9 67.9 67.8Share of Private Banks 32.1 32.1 32.2

% Change% ShareTypes of Deposits % Share% Share

2011/12 2012/13

Table 4.9: Stock of Deposits Mobilized by Banking System as at the end of March 2013 (Qrt. III 2012/13)

Source: Commercial Banks and DBE


4.5.1.2. Collection of Loans

During the review period, the banking

system collected Birr 8.4 billion, about

18.9 percent higher than last year (Table

4.8). Of the total loan collection, the share

of private banks was Birr 4.2 billion (50.5

percent) and that of public banks Birr 4.2

billion (49.5 percent) (Table 4.11). Of the

total loan collection 73.0 percent was from

private enterprises followed by state

enterprises (14.2 percent) and cooperatives

(12.4 percent) (Table 4.12).



4.5.1.3. Borrowing

Total outstanding borrowing of the banking

system was Birr 20.6 billion depicting a

29.3 percent, annual growth due to higher

borrowing both from domestic and

foreign sources. Of the total borrowing,

Birr 18.8 billion (91.4 percent) was from

domestic sources and the remaining Birr

1.8 billion (8.6 percent) from foreign

sources(Table4.10).

2011/12Quarter III Quarter II Quarter III

A B C C/B C/ADomestic Borrowing 14,975.1 16,437.8 18,830.5 14.6 25.7Foreign Borrowing 954.8 1,539.1 1,771.2 15.1 85.5Total 15,929.9 17,977.0 20,601.7 14.6 29.3

Table 4.10: Outstanding Borrowing of the Banking System by Sources as at the End of March 2013

BanksPercentage change

(In Millions of Birr)2012/13

Source: Commercial Banks and Development Bank of Ethiopia

4.5.2. Disbursement of Fresh Loans

During the third quarter of the fiscal year,

total disbursement of fresh loans by the

banking system reached Birr 17.0 billion,

indicating an annual increase of 16.3 percent

(Table 4.8). Of the new loans disbursed, the

share of public banks was Birr 13.0 billion

(76.3 percent) while the remaining balance

was by private banks (Table 4.12).

About 98.0 percent of new loan disbursement

by private banks went to private enterprises

while public banks lent (44 percent) to

private sector with public enterprises taking

up the balance. (Table 4.12)

Sector wise, industry was the largest

beneficiary accounting for Birr 6.7 billion

(39.2 percent) followed by agriculture (27.9

percent), international trade (9.7 percent),

housing and construction (8.0 percent) and

domestic trade (7.3 percent) (Table 4.11).




D** C** O/S** D** C** O/S ** D** C** O/S** Central Government * 0.0 0.0 3129.7 0.0 0.0 2376.2 0.0 0.0 5505.9 Agriculture 4,677.2 1,203.1 19178.2 62.6 58.5 596.6 4739.8 1261.6 19774.8 Industry 6,202.6 1,518.5 39773.3 458.6 510.6 5492.1 6661.1 2029.0 45265.5 Domestic Trade 264.4 193.5 2411.3 978.8 1502.8 11945.1 1243.1 1696.3 14356.3 International Trade 415.5 329.2 14699.0 1231.5 1170.1 11588.0 1647.0 1499.3 26287.0 Export 132.6 136.7 5677.4 714.6 436.6 5964.0 847.2 573.4 11641.4 Imports 282.8 192.5 9021.6 584.9 733.4 5668.5 867.7 925.9 14690.1 Hotels and Tourism 102.5 39.9 573.9 139.1 100.9 1998.2 241.6 140.8 2572.1 Transport & Communication 116.8 172.6 2334.9 254.6 262.7 2341.5 371.3 435.4 4676.4 Housing & Construction 730.6 527.7 7870.8 634.8 540.5 6978.3 1365.4 1068.2 14849.1 Mines, Power & Water Res. 0.0 0.0 0.0 70.2 4.7 92.3 70.2 4.7 92.3 Others 446.0 142.7 3156.7 67.0 49.3 1168.4 513.0 192.0 4325.1 Personal 3.6 2.9 143.2 65.5 39.2 356.1 69.2 42.1 499.3 Inter-Bank Lending 0.0 33.1 189.3 0.0 0.0 0.0 0.0 33.1 189.3

Total 12,959.2 4,163.2 93,460.4 4,030.6 4,239.2 44,977.2 16,989.8 8,402.4 138,437.7

(2) (3)

Table 4.11: Summary of Loans and Advances by Banks and Receiving Sectors from July to March 2013 (In Millions of Birr)

** D = Disbursement, C = Collection, O/S= Outstanding Credit

Source: Commercial Banks and staff computation Notes: *Refers to government borrowing in the form of bonds and treasury bills from commercial banks and other sectors other than NBE

Borrowing Sector

Public Banks Private Banks Total(1)



4.5.3. Outstanding Credit

Total outstanding credit of the banking

system (excluding credit to government)

increased to Birr 132.9 billion at the end of

March 2013, up by 9.8 percent against the

preceding quarter (Table 4.8).

About 94.5 percent of outstanding loan of

private banks was a claim on private

enterprises, (including cooperatives) and

5.3 percent on central government. As for

public banks, 42.7 percent of the

outstanding loan was a claim on

government (including state enterprises)

and 53.7 percent on private enterprises

(Table 4.12).

Sector wise, credit to industry stood first

with Birr 45.3 Billion (32.7 percent)

followed by international trade (19.0

percent), agriculture (14.3 percent),

housing & construction (10.9 percent),

domestic trade (10.4 percent), and other

sectors (12.7 percent) (Table 4.11).

The share of private banks in total

outstanding loan stood at 32.5 percent

while that of public banks was 67.5

percent. (Table 4.12)


ParticularsLoan

Disbursement % ShareLoan

Collection % ShareOutstanding

Loan % SharePublic Banks 12,959.2 76.3 4,163.2 49.5 93,460.4 67.5Central Government* 0.0 0.0 0.0 0.0 3,129.7 3.3State Enterprises 5,950.7 45.9 1,185.2 28.5 39,937.1 42.7Cooperatives 4,021.7 31.0 999.0 24.0 15,827.6 16.9Private Enterprises 2,986.7 23.0 1,945.9 46.7 34,376.7 36.8Inter-bank Lending 0.0 0.0 33.1 0.8 189.3 0.2Private Banks 4,030.6 23.7 4,239.2 50.5 44,977.2 32.5Central Government* 0.0 0.0 0.0 0.0 2,376.2 5.3State Enterprises 66.2 1.6 6.4 0.2 93.7 0.2Cooperatives 15.0 0.4 45.7 1.1 496.2 1.1Private Enterprises 3,949.5 98.0 4,187.2 98.8 42,011.2 93.4Inter-bank Lending 0.0 0.0 0.0 0.0 0.0 0.0Grand Total 16,989.8 100.0 8,402.4 100.0 138,437.7 100.0

Table 4.12: Breakdown of Loans & Advances of Banking System by Clients,during Third Quarter of 2012/13

Source: Commercial banks and DBE

Notes: *Refers to government borrowing in the form of bonds and treasury bills from commercial banks and other

sectors other than NBE




4.6. Financial Activities of NBE

As at March 31, 2013, total claims of NBE

on the central government reached Birr

50.4 Billion, declining by 9.2 percent vis-à-

vis the same period last year. Of the total

loans and advances on the central

government, direct advance accounted for

99.6 percent and bonds 0.4 percent. Direct

advance surged by 8.6 percent while bonds

dropped by 98 percent as compared to last

year.

Meanwhile, deposits of the central

government and financial institutions at the

NBE stood at Birr 34.9 Billion, up by 15.8

percent against the balance of the same

period last year. Of the total deposits, 51.4

percent was deposit of the central

government which increased by 50.1

percent (Table 4.13). Deposit by financial

institutions, however, went down by 6.7

percent during the same period.



(In Millions of Birr)2011/12

Qtr.III Qtr.II Qtr.IIIA B C C/A C/B

1.Loans and Advances 67,432.5 59,761.6 65,261.6 -3.2 9.21.1. To Central Government 55,562.5 46,454.6 50,454.6 -9.2 8.6

Direct Advance 46,264.9 46,264.9 50,264.9 8.6 8.6 Bonds 9,297.5 189.7 189.7 -98.0 0.0

1.2.To Development Bank of Ethiopia 11,870.0 13,307.0 14,807.0 24.7 11.32.Deposit Liabilities 30,147.3 37,194.4 34,924.5 15.8 -6.1

2.1. Government 11,962.1 12,778.1 17,952.5 50.1 40.5 2.2. Financial Institutions 18,185.2 24,416.3 16,972.0 -6.7 -30.5

O/W: -Banks 18,177.0 24,394.7 16,948.1 -6.8 -30.5 -Insurance companies 8.1 21.7 23.9 194.4 10.33.Net Claims of NBE 37,285.2 22,567.2 30,337.1 -18.6 34.4

% Change Particulars

2012/13

Table 4.13: Financial Activites of NBE during Third Quarter of 2012/13

Source: NBE

4.7. Developments in Financial Markets

4.7.1. Treasury Bills Market

During the third quarter of the fiscal year

2012/13, the amount of T-bills supplied to

the weekly auction market was Birr 24.1

billion showing a 29.2 percent increase over

the same period last year. The demand for T-

bills also rose by 41 percent to Birr 26.4

billion, up by 41.1 percent (Table 4.14).

Of the total T-bills sold, the share of

commercial banks was 37.9 percent while

that of non bank institutions increased to

62.1 percent.

The stock of T-bills at the end of the quarter

reached Birr 23.7 billion, reflecting a 38.7

percent growth over the same period last

year.

The annual average weighted yield of T-bills

was 1.93 percent; the highest yield being for

short-term (28-day bill) maturity (Table

4.14).



Table 4.14: - Results of Treasury Bills Auction (In Millions)2011/12

Quarter III Quarter II Quarter IIIA B C C /A C/B

Number of Bidders 116 161 140 20.69 -13.04 Public 49 79 65 32.65 -17.72 Private 67 82 75 11.94 -8.54Number of Bids received 169 157 307 81.66 95.54 Public 59 95 143 142.37 50.53 Private 110 62 164 49.09 164.52Amount Demanded (Mn. Birr) 18,679.58 25,725.36 26,359.14 41.11 2.46 28-day bill 6,964.92 12,218.00 10,833.00 55.54 -11.34 91-day bill 7,594.66 9,173.36 10,366.14 36.49 13.00 182-day bill 2,120.00 2,664.00 2,160.00 1.89 -18.92 364-day bill 2,000.00 1,670.00 3,000.00 50.00 79.64Amount Supplied (Mn. Birr) 18,629.00 29,677.76 24,065.36 29.18 -18.91 28-day bill 6,441.64 15,447.00 8,868.00 37.67 -42.59 91-day bill 7,667.36 8,056.76 9,177.36 19.69 13.91 182-day bill 3,220.00 3,304.00 3,020.00 -6.21 -8.60 364-day bill 1,300.00 2,870.00 3,000.00 130.77 4.53Amount Sold (Mn. Birr) 18,679.58 25,725.36 26,359.14 41.11 2.46 Banks 6,902.52 11,888.00 10,003.00 44.92 -15.86 Non-Banks 11,777.06 13,837.36 16,356.14 38.88 18.20

99.164 99.001 99.155 -0.01 0.16 28-day bill 99.786 99.777 99.779 -0.01 0.00 91-day bill 99.682 99.654 99.650 -0.03 0.00 182-day bill 99.468 99.472 99.469 0.00 0.00 364-day bill 97.721 97.100 97.721 0.000 0.64

1.874 1.534 1.929 2.91 25.76 28-day bill 2.794 2.918 2.883 3.212 -1.19 91-day bill 1.279 1.393 1.410 10.22 1.22 182-day bill 1.074 1.824 1.072 -0.21 -41.26 364-day bill 2.351 0.000 2.351 0.00

17,061.38 21,438.36 23,669.14 38.73 10.41 Banks 890.00 2,461.00 2,993.00 236.29 21.62 Non-Banks 16,171.38 18,977.36 20,676.14 27.86 8.95

Average Weighted Yield for Successful bids (%)

Outstanding bills at the end of Period (Mn.Br.)

Particulars

Average Weighted Price for Successful bids (%)

% Change2012/13

Source: NBE





0

2500

5000

7500

10000

12500

15000

17500

20000

22500

25000

27500

30000

32500

35000

I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III

2003/04 2004/05 2005/06 2006/07 2007/08 2008/9 2009/10 2010/11 2011/12 2012/13

(In m

illio

ns o

f Birr

)Fig IV.13: Developments in T-Bills Market

Demand Supply

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

II III IV I II III IV I II III IV I II III IV I II III Iv I II III IV I II III IV I II III IV I II III IV I II III

2004/05 2005/06 2006/07 2007/08 2008/9 2009/10 2010/11 2011/12 2012/13

(In p

erce

nt)

Fig IV.14: Developments in Average Weighted Yields of T-bills with DifferentMaturities

28-day 91-day 182-day 364-day



4.7.2. Inter- Bank Money Market

No inter-bank money market transaction

was conducted during the quarter under

review (Table 4.12).

4.7.3. Corporate Bond Market

Corporate bond market is not well developed

in Ethiopia and the big players are few public

institutions and regional governments. The

purchaser of these bonds is the Commercial

Bank of Ethiopia (CBE).

During the quarter under review, CBE

purchased corporate bonds worth Birr 5.1

billion, of which 70.6 percent was issued by

public enterprises and the rest by the Addis

Ababa City Administration.

At the end of March 2013, the stock of

corporate bonds held by CBE stood at Birr

74.4 billion, of which 83 percent was claims

on public enterprises (98.6 percent of which

was issued by EEPCO) and the remaining

balance was on regional states (Table 4.15).



Table 4.15 Corporate Bond by Holders (Millions of Birr)

Issuer of the Bond

2011/12 2012/13

QIII QII QIII

NP Red O/S NP Red O/S NP Red O/S

1.Puplic Enterprises 6,100.0 0.0 45,770.9 6,900.0 799.8 58,188.7 3,600.0 0.0 61,788.7

EEPCO 6,000.0 0.0 43,900.0 6,700.0 0.0 57,300.0 3,600.0 0.0 60,900.0

ETC 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

DBE 100.0 0.0 1,870.9 0.0 799.8 688.7 0.0 0.0 688.7

SHDE* 0.0 0.0 0.0 200.0 0.0 200.0 0.0 0.0 200.0

2. Regional Governments 1,350.0 449.5 10,222.5 1,676.0 657.8 11,647.8 1,500.0 516.8 12,631.0

Oromia 0.0 0.0 1,993.3 0.0 58.2 1,889.7 0.0 69.3 1,820.4

Amhara 0.0 213.0 1,080.0 0.0 304.5 145.2 0.0 125.3 19.9

Tigray 0.0 34.1 724.1 0.0 13.9 695.0 0.0 37.6 657.4

SNNPRS 0.0 38.3 821.0 0.0 8.3 748.6 0.0 70.4 678.1

Dire Dawa 0.0 4.8 216.0 0.0 2.2 202.9 0.0 1.3 201.6

Harari 0.0 12.8 109.6 0.0 0.0 94.7 0.0 10.0 84.6

Addia Ababa 1,350.0 146.5 5,278.5 1,676.0 270.8 7,871.8 1,500.0 202.8 9,168.9

3.Grand Total(1+2) 7,450.0 449.5 55,993.4 8,576.0 1,457.6 69,836.5 5,100.0 516.8 74,419.7

Note: NP= New Purchase, Red. = Redemption, O/S= outstanding

*Saving Houses Development Enterprise

Documents

4. MONETARY DEVELOPMENTS · 2005/06Q1 Q2 Q3 Q4 2006/07Q1 Q2 Q3 Q4 2007/08Q1 Q2 Q3 Q4 2008/09Q1 Q2 Q3 Q4 2009/10Q1 Q2 Q3 Q4 2010/11Q1 Q2 Q3 Q4 2011/12Q1 Q2 Q3 Q4 2012/13Q1 Q2 Q3 In