Ensuring the efficiency and stability of the banking system can play a vita l role for thernsuccessful implementation of the monetary and eco no mi c policies of a country. Yet, tornac hi eve such objective it would be essential to place financial reform measures thatrnenhance the contribution of the banking system to wards economic development. Anrnemblematic reform measure undertaken by the Ethiopian government commencing thernyear 1992 was "liberalizing " the financial sector. The aim of the study is to assess thernimpact of financial liberalization on the ownership structure, market concentration andrnprofitability performance of the Ethiopian banking industry. The stud y found out that thernreform ha s brought a lot of remarkable changes on the structure and performance of thernbanking sector as compared with the situations prevalent before the reform period.rnHowever, the reform ha s restricted the advantages that could be obtained from arndiversified ownership structure via prohibiting operation of foreign banks andrnparticipation of the private sector to the ownership of government banks. Furthermore ,asrntested by both two firm concentration ratio and HHI us in g total deposit s, loan s, ca pit a lrnand assets, the banking industry in Ethiopia can still be distinguished by it s mark etrnconcentrate on toward s the big government owned commercial bank s and by a marketrncharacterized by little and insufficient competition. The profitability of the industry ha srnalso shown a tremendous improvement after the reform measure has bee n taken.rnHowever . the existing government bank s are enjoying having the higher share o f' relistrnfrom the industry and still the pattern of the industry profit is following the profitabilityrnstructure of the giant bank, CBE. The study identified and recommended areas that needrnfurther liberalization measures so as to enhance the performance of the industry. Yet, itrnshould be sec n as a first step , not the last word in this direction.