The National Bank of Ethiopia (NBE) has issued a new directive allowing commercial banks to invest in capital market service providers, including full ownership of investment banking ventures. This move aims to deepen Ethiopia’s capital markets and enhance banking sector stability.
Effective July 19, 2024, the directive permits commercial banks to acquire up to 100 percent of equity shares in capital market service providers, excluding credit rating agencies. Additionally, banks can hold interests in financial infrastructures and up to 10 percent equity in non-banking businesses other than insurance.
This directive comes as Ethiopia prepares to launch its first fully-fledged stock market, after more than two years of groundwork.
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