Main Article Content
In Ethiopia, the banking industry remains the fundamental sources of funds for short-term and long-term investment. The shock to this fund mobilization institution has a significant negative impact on the country's economic growth. The study's general objective was to investigate the effect of Coronavirus on the banking portfolio in the context of profitability risk, credit risk, and liquidity risk. The study examined the impact of Coronavirus on the bank-customer relationship and bank operation in Ethiopia. The study used both descriptive and quantitative research designs with primary and secondary source of data. The researcher applied purposive sampling technique to choose the participants. For the aim of data analysis and presentation, the study used both descriptive and multiple regression analysis. The study was discovered that the outbreak of COVID-19 was negatively and significantly affected the banking portfolio's fundamental principles, namely, profitability, liquidity and safety in Ethiopia. The episode of COVID-19 has considerably increased profitability crunch, capital adequacy crisis, credit risk and liquidity risk. Further, the researcher explored that Coronavirus explosion significantly influenced Ethiopia's bank-customer relationship. In managing its investment portfolio, a bank manager must balance the intention of liquidity, safety and profitability to surmount the uncertainty because of the outbreak of COVID-19. The Ethiopian banks should implement a new financial product distribution channel model, such as, bancassurance to diversify revenue sources and credit and liquidity risks rather than stick to fund-based income. The commercial banks must fast the maturity transformation and liquidity provision by taking short-term deposits, making medium-term and long-term loans with monitoring of unintelligible loans through digitalization. Finally, the Ethiopian banking industry must broaden their banking system's digitalization to lessen the extent of profitability, liquidity and credit distress by reaching out the untapped market and bank everywhere than just at bank.