Nib International Bank s.c.

This is to show a planning process of Nib International Bank s.c.

 Does the bank analyze its external and internal situation while developing
its over all the bank plan?
 Does the bank try to compile information about what the future would
look like?
 Does it make efforts to make efforts to make certain assumptions based on
forecasts?
 Does the Bank set clear objectives indicating what is to be achieved, where
action should take place, who is to perform it, how it is to be undertaken
and when it is to be accomplished? Does it sufficiently involve subordinates
in this process?
 Does the Bank develop and throughly evaluate its alternative plans/course
of actions againest such factors like cost, risks, benefits, bank facilities, etc.
 How does the bank management or Board of Director select the most
desirable plan?
 How are derivative plans developed in each functional area once the
master plan is developed?
 Does the bank facilitate the development of action plans at different levels
and functional areas?
 What controlling and evaluation mechanism is in place?
 How does the concerned managers monitor and evaluate the
implementation of their plans?
 How is accomplishement of the master plan(overall banks plan) evaluated?

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 Business and Economic Environment

T he performance of banking activities largely depend on the prevailing

macro economic situation of a country and on global economic trends
which impact on the domestic economy.

Economic performance in the country in the first half of 2013/14 was

overshadowed by the unrest following the may 2013 election the incessant like in
world oil prices had also significantly affected the economy by raising the cost of
production and delivery of services which in turn heavily impacted the cost of
living. These phenomena negatively affected the overall economic activities in
general including the banking sector.

Despite the unfavorable situations, according to the preliminary information

obtained from the Ministry Of Finance and Economic Development, the country’s
economy registered real GDP growth of 7.9 percent in fiscal year 2013/14. This
growth was reported to be a continuation of the 8.9 and 11.3 percent growth in
2013/14 was mainly attributed to the growth in the agricultural sector. The
agricultural sector and allied activities grew by 8.8 percent, manufacturing by 6.1
percent and construction by 8.5 percent.

Preliminary data gathered from the Naational Bank of Ethiopia revealed that
inflation in the fiscal year 2013/14 was high as compared to that of 2013/14.
General inflation rose from 6.8 in 2013/14 to 12.3 percent in 2013/14.

This was reflected mainly in food price likes which rose from 7.7 percent in
2013/14 to 14 percent in 2013/14.

Non-food inflation also has risen from 5.2 percent to 8.1 percent. The high
inflation made lending real interest rate to be negative from December 2013 to the
end of the financial year.

National average saving rate remained at 3.08 percent which again was far below
the inflation rate.

Although the exchange rate in the formal market has shown a slight depreciation of
the National currency, 0.03% durring the year, the gap between the formal and the
parallel market has widened by about 4% during the fiscal year.

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This was an indication of either an increase in demand for foreign exchange or
shortage of foreign exchange in the market.

According to the preliminary information gathered from the Ethiopian Customs

Authority, the growth in the performance of export earnings during the financial
year 2013/14 compared to that of the preceding year was substantial. Export
earnings have grown by about 29%. This growth was attributed mainly to export of
flower(167%), live animals(110%), oil seeds(107%), cereals(66%), gold(47%),
meat and meat products(18%), hides and skins(13%), coffee(10%) and chat(7%).

Despite the 9.8% growth in the value of export of coffee, the percentage share of
its export value has fallen from 42.6% in 2013/14 to 36.3% in 2013/14. This is due
to the increase of new export commodities.

Coffee, despite the decline in the volume of its export, still remains the major
export commodity in the country. The total volume of export of coffee has
declined by about 4.2%, due to the limitations on the supply side.

The growth in the value of export of coffee was, thus, mainly attributed to
favorable prices in the world market. Horticulture in general and floriculture in
particular have been attracting a number of local and foreign investors in the past
two preceding years. The share of cut flowers of the total export increased from
0.8% in 2011/12 to 2.0% in 2013/14.

The Bank continued to extend credit facilities to investors in this sub-sector to

enhance earnings of foreign currency for the country.

During this fiscal year, imports have grown by about 46 % making the trade deficit
to widen. Import of industrial supplies, fuel and lubricants, capital goods, transport
equipment and consumer goods have grown by 29%, 15%, 20%, 13.2 % and
13.1% respectively, and thus have contributed to widening of the trade deficit.

Another important development observed during the financial year in the domestic
market was theshortage and extra ordinary rise in the price of cement. This has
held back investment in the real estate and construction sectors.

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 Major Activities And Performance Of The Bank

T he implementation of the revised organizational structure of the Bank

which was launched in the preceding financial year has now become
operational. As a private bank, NIB is cognizant of the fact that its success
very much depends on the dedication, determination and professional abilities of
every member of its employees.

With ths in mind, a number of motivating measures were taken during the year
under review which enhanced the working environment of the bank to a level that
became attractive both to the incumbent staff as well as new entrants.

The measures significantly minimized the number of staffs resigning from the
bank. The major ones being provision fund and health insurance etc. The study for
the provision of credit for housing construction scheme for employees which
started in the financial year is nearly completed.

Another important development in the current financial year was that bank
acquired a leasehold land for the construction of its future Head office at a very
prime area of the city.

Inspite of domestic and international challenges and problems, the overall

performance of Nib International Bank S.C. during the year was gratifying in all
areas of the bank’s operations. Accordingly, its deposits and loans outstanding
grew by 18.6 % and 30.1 % respectively.

At the end of the fisical year, deposits amounted to birr 1.45 billion while loans
and advances stood at birr 1.47 billion.

The profit before and after tax stood at birr 79.6 million and birr 56.5 million
respectively. This reflected an increase of 21.2 % and 23.9 % respectively from the
previous financial year.

The continuing confidence of the public in the Bank, dedication of the Board of
Directors, Management and Commitment of the staff were the major contributors
to the financial result achieved during the year.

Future Plan

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I n 2013/14 financial year, in addition to introducing possible new products
focus will be made on the efficient provision of the existing bank products and
services. Mobilization of various types of deposits, extension of loans and
advances to business establishments and individuals who can use the bank’s
resources efficiently and profitability will be given strong emphasis.

The bank strives to minimize the risk associated in its operational activities. To this
end, the bank pays a special attention to further trim down the non-performing
loans which have been successfully brought down to a single digit level.

The bank has also plans to open eight to ten new branches both in and outside
Addis Ababa. Of the newly planned branches and one sub-branch outside Addis
Ababa in the first and second quarters.

The remaining four to six branches will be opened during the 3 rd and 4th quarters of
the current financial year and also the bank will give special attention for the
delivery of quality customer services in all aspects of its operations.

In connection with close follow-up and monitoring mechanisms will be put in

place to finalize the ongoing compterization program in due time. Basides,
continuous and intensive training will be arranged for employees of the Bank on
various fields. The expansion of the branch network in business corridors and
promising areas of Addis Ababa and regional towns will also continue in the
coming year.

In this future plan process they rise some chatagories

 Branch Expansion.

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 The Bank will be more aggressive in branch opening in the coming year then
the previous years in capital city and also outside of the Addis Ababa

 Information Technology
The company went to rise the necessary requirements to network in all
branches and also to develop the electronic payment systems such as ATM,
POS, Debit and Credit Card.

 Human Resource
In the previous year the Bank recruited 382 new employees during the
reporting period, of which 259 are professional and clerical staff and the
remaining 123 are non- clerical. The staff strength of the Bank at the end of
the financial year rose to 1,329 registering agrowth of 38.9 % from its
previous year. In the coming year they programmed to growth the human
resource to 50 % from the previous year.
During the period under consideration, 25 training programs were conducted
to cope with the changing business services to customers. 487 employees of
the Bank have participated in those programs.
In the future they plan to rise the training programs to provide more efficient
banking services to customers.

 International Banking Operations

In the coming year, they planning an increase the income of Bank relation to
International Banking Operation and the Bank increase to correspondent
banking relationships with major international banks in all over the World.
 Income Development and Expense
In the coming year the bank plan to increase the total income above 65 %
compared to the total income realized in the preceding year and they planed
to reduce the expense of the Bank about 60 % compared than the previous
year.

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 Capital and Reserves
At the end of the financial year the number of share holders of the Bank
stood at 2,943. This shows a growth of 18 % when compared to the previous
financial year. In the next year they planned to rise the capital and
shareholders at list 23 % when compared to the previous financial year.

 Implmentation of the Plan

In each end of the year the management and shareholders have meeting. In
that time every shareholders rise there idea, through and understanding. The
managers gather this infomation and also every branch managers collect the
employees idea, questions and conflict then the top managers and every
branch managers see this ideas and decided in each of them.

After thay start the planning process to increase the satisfaction of

customers, shareholders and also the employees.

That means in this planning process Top Managers, Branch Managers,

Shareholders, Customers and Employees give there contribution.

Controlling and Evaluating Results

A fter the planning process finished up the next step is evaluate the plan. In
this process managers give the planning process for shareholders. If the
shareholders have questions or ideas they can rise it and the management

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department give answer for that question or ideas they can rise it and the
management department give answer for that questions. In every year there is
meeting for this purpose (Annual Plan and Annual Report).

Conclutions and Recommendation

The srengths of the bank’s planning process:

 Day-to-days, Year-tp-years Nib International bank develop the plan because

the number of share holders increase each year that means the company get
much knowledge and understanding and also increase the capital by this
reason they develop the plan.

 In this planning process many people contribute there understanding like

Managers, Shareholders, Employees.

 The training program for employees give various knoweledge and develop
the Bank.

 The expansion of the branch network in business in every area (Addis Ababa
and Regional towns) is give satisfaction for the customers and also minimize
the time.

Weakness of the Planning process

 The management department give(show) planning process for the

shareholders in every year in the conference. In our openion shareholders

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 must know the process and give there ideas not only in the conference they
can gave there ideas through letters, phones and emails in each day.

 In the conference employee not invited. But if they invited they can rise
there opinion that mean shareholders know about theideas of employees not
only the management.

 In the planning process they didn’t rise the employees advantage issue like
hospital, education and advance etc.

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