The Commercial Bank of Ethiopia (CBE) announced that it has raised interest rates on corporate bond and condominium houses borrowings as well as service charges to an average of 9.8 percent from the previous 8.63 percent.
Briefing journalists on Friday, President of the Bank Abe Sano said the increase in the interest rates and service charges aims at rescuing the bank from bankruptcy in the long run.
He said the income of the bank has grown on average rate of 26 percent while its expense has seen a 39 percent increase during the last five years. “The giant bank will go bankrupt if it does not improve the way it does business,” the president warned.
Accordingly, the bank increased interest rate for corporate bond borrowing by one percent from 8 to 9 percent , condominium houses from the previous 9.5 percent to 12 percent.
The bank also raised interest rates for merchandise goods to maximum 16.5 percent, micro finance 12.5 percent, public enterprises to 12.5 and coupon bond to 10.5 percent among others.
The bank also improved the loan service charges on merchandise goods that earn foreign currency from 5.5 to 9 percent. Video: