Comparative Appraisal of Asset Liability Management Between Commercial Bank of Ethiopia (CBE) and Dashen Bank (DB), Ethiopia




The paper evaluates the comparative practices of Asset-liability management between public sector bank - Commercial Bank of Ethiopia (CBE) and private sector bank - Dashen Bank (DB) at corporate level in Ethiopia. The study attempts to verify whether there is any significant differences between the CBE bank and DB on Asset Liability Management (ALM) practices in terms of interest rate risk, solvency risk and liquidity risk management, under different framework and fundamental. Secondary data was analyzed using quantitative data analysis technique such as descriptive, ratios analysis to study and compare the ALM in both banks. The findings of the study reveal that the CBE is less exposed to interest rate risk compared to the DB when measured using Net Interest Margin (NIM), Current Ratio, Return on Assets (ROA), Return on Equity (ROE) and others. Besides that, the study finds that CBE is less exposed to credit risk compared to the DB when measured using loan collection (LC)/ loan disbursement (LD) ratios. In addition to that, the CBE also appear to be less exposed to liquidity risk, compared to its DB when measured using Liquidity ratio but is more risky when measured using in trend. The overall ALM practice in CBE is found better than DB.

KEYWORDS: Asset Liability Committee , Asset Liability Management, Current Ratio, Loan Collection/Loan Disbursement, Return on Asset, Return on Equity, Return on Investment ,Solvency Ratio.



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Annual Reports

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• Annual reports of DB,2009/10 to 2012/13


• Mudaye Niway,Vol.3,No.3, June 2010

• Mudaye Niway,Vol.3,No.4, June 2011

• Mudaye Niway,Vol.3,No.3, June 2012

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• Different brochures, flyers and published financial statements printed and distributed by CBE,DB,NBE from 2010-2014

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ISSN : 2251-1547