It is an honor and a privilege to present the performance report of Dashen Bank for the fiscal year ended June 30, 2016. The just th concluded fiscal year marked the 20 year of Dashen in service. Founded by visionary shareholders and seasoned bankers with few million Birr in initial capital injection, Dashen has grown in folds and bounds in the last two decades. The past fiscal year had been a year of reflections and contemplations as the Bank continues thriving to reach new heights. Though the sailing has always been rough, the two decades journey of Dashen has been a success. So also was the past fiscal year. During the reporting period, the global economy exhibited sluggish growth as a result of weak recovery of developed economies, economic slowdown of emerging markets, rising international debt, declining global commodity prices, and slow growth of international trade. In spite of the fact that the emerging markets continued to enjoy an economic growth premium over the advanced industrialized countries, the recent deceleration underscores their increasing vulnerability to adverse shifts in the world economy. China, which reached 10.6 percent growth in 2010, slowed to 6.8 percent in 2015.
At the domestic frontier, Ethiopia's rapid economic growth, which has mainly been underpinned by public-sector-led development, has continued, albeit at reduced rates, following the adverse impact of the worst drought in decades. Public investments have continued driving growth in the short and medium term with huge investments in infrastructure and the development of industrial parks, prioritized to ease bottlenecks to structural transformation, which will still have to take shape with industry playing a significant role in the economy. Export performance has remained sluggish, despite the substantial increase in imports bills, thereby widening the current-account deficit. On a positive note, the country has been faring well in savings mobilization, capital formation, and containing inflation. Headline inflation remained in single digit as the annual average for the fiscal year stood at 9.7%.
The banking industry continued witnessing robust growth. Driven by the government's policy for domestic resource mobilization to finance mega projects, the unprecedented growth in branch network has continued in full swing spearheaded by the state giant, Commercial Bank of Ethiopia (CBE). The latter also further consolidated its dominant market share following its merger with the other state bank, Construction & Business Bank (CBB), in the third quarter of 2015/16. According to the National Bank of Ethiopia (NBE), the total number of bank branches increased to 3,045 by the end of March 2016 from 2,516 a year ago. As a result, the branch to population ratio dropped to 1:30,281.
Growing competition has been fueling adoption of modern banking technologies, technology-driven products and services, and delivery channels. The reporting period witnessed a major development as the national e-payment switch, Ethio-Pay, serving the integration of Automated Teller Machines (ATMs) and Point of Sale (POS) terminals, was officially launched in May 2016.
The industry, overall, has been challenged by short supply of foreign currency, liquidity crisis and rising cost of doing business. Dashen Bank has not been an exception. The unprecedented branch expansion, which saw opening of 64 new branches in the reporting period, coupled with the unfavorable market conditions and the management's preoccupation in change initiatives, led to a marginal drop in the Bank's bottom-line, as gross profit fell to Birr 950.6 million from Birr 963.8 million in 2014/15.
Nevertheless, the Bank fared well in the other major performance parameters. Total assets grew by 15.4% and reached Birr 28.6 billion. As for deposits, we closed the year with Birr 22.8 billion, which reflected a 14.9% growth over the previous year's record. Total outstanding loans and advances amounted to Birr 12.5 billion, recording a 10% growth compared with last year. The buffer to absorb shocks has also been on the rise as witnessed in the 18.3% and 20.5% growth in total capital and paidup capital, respectively.
During the reporting period, Dashen has been going through various change initiatives, from business model revisit to process improvements and organizational restructuring. While undergoing through the multifaceted change initiatives, the Bank has managed to establish eight District Offices, which spearheaded the opening of 64 branches, the highest ever and twice the number opened in the previous fiscal year. Subsequent to the strategic partnership established last year with American Express, the Bank also launched issuance of Dashen AMEX Gold & Green cards, recording yet another milestone in the Country's banking industry.
Before concluding my remarks, I would like to extend my vote of thanks to all our stakeholders. Our shareholders deserve gratitude for their vision and unwavering commitment demonstrated through the years to create, nurture and bring up Dashen Bank to such stature. The guidance and support of the Board of Directors has been instrumental for the results achieved and I owe them heartfelt gratitude. On behalf of myself and my colleagues, I want to thank our valued customers for their continued loyalty and confidence in the Bank. I would also like to extend my appreciation to the entire Management team and staff of the Bank for their unrelenting effort to prove Dashen unparalled. My appreciation also goes to the National Bank of Ethiopia, Ethio Telecom and all other stakeholders for their continued support and cooperation.
President September 8, 2016