Amana Bank achieves 89% growth in 9-month PBT

CEO Mohamed Azmeer

Amana Bank continued its impressive profitability trend as it recorded a significant 89% YoY growth in Profit Before Tax for the nine months ending 30 September 2021 to close at Rs. 736.3 million in comparison to Rs. 389.4 million

recorded for the corresponding period of 2020. 

During Q3, a period in which Sri Lanka was worst hit by the pandemic, Amana Bank’s PBT grew YoY by 66% to close at Rs. 230.6 million compared to Rs. 138.9 million achieved a year ago. The bank reported a Profit After Tax of Rs. 143.9 million during Q3 to reflect a YoY growth of 80%, resulting in a cumulative Profit After Tax of Rs. 433.2 million for the nine months ending 30 September 2021, reflecting a 73% YoY growth. 

In terms of its customer portfolios, the bank recorded double digit growth in both advances and deposits, where Customer Advances grew by 17% to reach Rs. 73.2 billion while Customer Deposits grew by 10% to close at Rs. 91.8 billion, showcasing a healthy growth momentum during the three quarters, despite the on-going challenges of the COVID-19 pandemic. The growth in customer deposits was achieved whilst maintaining a healthy CASA ratio of 46.2%. 

The Bbank’s NPA continued to remain below the industry average where Gross NPA and Net NPA stood at 3.7% and 1.0% respectively, owing to prudent portfolio management and timely customer engagement. Total Assets of the bank improved to Rs. 113. 7 billion, reflecting a nine month growth of 14%, while the same period saw the bank’s Net Asset Per Share improving from Rs. 4.79 to Rs. 4.96. 

As a result of the bank’s growth in advances coupled with a balanced portfolio of low cost deposits, the bank’s Net Financing Income improved by 36% to close the nine months at Rs. 3.17 billion, of which Rs. 1.18 billion was posted during Q3 alone. Net Operating Income after accounting for impairment closed at Rs. 2.90 billion, up YoY by 13%. 

The bank continued to reduce its operating expenses, which has witnessed a declining trend since September 2020, helping improve the bank’s Cost to Income ratio.  Having curtailed nine-month operating expenses by a further 3% in comparison to the corresponding period of 2020 and along with its impressive top line performance, the bank went on to post an Operating Profit before VAT on Financial Services of Rs. 1 billion, reflecting a healthy 62% YoY growth against the nine months of 2020. The bank’s aggregate tax contribution as of Q3, amounting to Rs. 570.7 million, accounted for 57% of the bank’s Operating Profit before all taxes. 

Owing to the bank’s continuous profitability, the quarter also saw the bank announcing its fourth consecutive dividend in terms of a scrip dividend in line with CBSL directions, which amounted to Rs. 260.1 million, 30% higher than the previous dividend paid. The quarter also witnessed Fitch Ratings affirming the bank’s National Long Term Rating at BB+ with a stable outlook, after having assessed the bank’s financial strength and sustained trend in performance amidst challenging economic conditions.

As part of its support to COVID-19 affected customers, particularly the SMEs, the bank, over and above the moratorium and refinancing relief measures put forth by CBSL, continued to offer relief measures on its own initiative based on the values of its banking model, such as salary advances, facility restructuring and abstaining from charging penalties.

Commenting on its financial performance, the bank’s Chief Executive Officer Mohamed Azmeer said: “Despite the strong headwinds owing to the third wave of the pandemic which marred a recovering economy, Amana Bank was able to once again demonstrate strong resilience to record an impressive quarter. Such resilient performance would not have been possible if not for the guidance given by our Board of Directors, the commitment of our passionate employees and the trust and confidence extended by our valued customers, to all of whom I am thankful. As 2021 comes to a close, I am confident that the bank will continue it robust performance while benefitting from a rebounding economy.”

On 1 August, Amãna Bank completed 10 successful years of ‘people friendly banking,’ during a period in which the bank enabled growth and enriched the lives of over 380,000 customers. Testament to the progress it has made in a short period of time, the bank was recognised as the ‘Best Up and Coming Islamic Bank of the World’ by Global Finance Magazine USA and also recognised as the ‘Fastest Growing Retail Bank in Sri Lanka’ by Global Banking and Finance Awards UK. Taking into consideration the bank’s balance sheet strength and asset size, Amana Bank was recently ranked among the ‘Top 100 Islamic Banks in the World’ by The Asian Banker following a comprehensive and rigorous evaluation scorecard. 

Amana Bank PLC is a stand-alone institution licensed by the Central Bank of Sri Lanka and listed on the Colombo Stock Exchange with Jeddah-based IsDB Group being the principal shareholder having a 29.97% shareholding of the bank. The IsDB Group is a ‘AAA’ rated multilateral development financial institution with a membership of 57 countries. Amãna Bank does not have any subsidiaries, associates or affiliated institutions, other than its flagship CSR project the ‘OrphanCare’ Trust.