Amana Bank achieves record growth in Mid-Year 2024 performance

• Records 68% growth in PBT and 82% growth in PAT
• Both Advances and Deposits up by 10%

Chairman Asgi Akbarally

Managing Director/CEO Mohamed Azmeer

Amana Bank has achieved a remarkable mid-year performance in 2024, outpacing its 2023 first half, with significant growth across multiple key metrics including profitability, advances, deposits, and total assets while also maintaining key health ratios such as CASA and Stage 3 Impairment ratios beyond industry averages.

During the first half of 2024 the bank reported a Profit Before Tax (PBT) of Rs. 1.35 billion, reflecting an impressive 68% YoY growth while the bank’s Profit After Tax amounted to Rs. 763.4 million, a 82% increase from the Rs. 419.6 million reported last year. In Q2 alone, PBT and PAT surged by 63% and 72% YoY, amounting to Rs. 616.9 million and Rs. 341.1 million, respectively. 

By maintaining a healthy Financing Margin of 4.3%, Net Financing Income increased by 5% YoY, reaching Rs. 3.6 billion by 30 June 2023, with a notable 9% growth in Q2 alone. During H1 the Bank’s Net Fee and Commission income rose by 9% to Rs. 519.0 million, while Total Operating Income marginally declined by 1% to Rs. 4.4 billion, mainly owing to a reduction in Net Trading Income due to continuous decline in forex premiums. After accounting for reduced impairment charges owing to improved business conditions and better management of non-performing advances, the Bank’s Net Operating Income improved by 34%, to reach Rs. 4.1 billion, up from Rs. 3.0 billion in H1 2023. 

Despite increase in Operating expenses, the Bank continued to maintain a healthy mid-year cost to income ratio of 51%, resulting in a 48% YoY growth in Operating Profit before VAT on Financial Services to post Rs. 1.8 billion. The bank’s aggregate tax contribution of approx. LKR 1.1 billion accounted for a significant 58% of the bank’s Operating Profit before all taxes. The Total Comprehensive Income for the period was Rs. 755.3 million, reflecting a robust YoY growth of 95%.

Despite competition for funding in the market and the consistently declining deposit rates, the bank saw increased acceptance of its people-friendly banking model. This led to a commendable 10% growth in Customer Deposits, closing H1 2024 with a portfolio of Rs. 146.3 billion while maintaining a healthy CASA ratio of 40%. Moreover, driven by the continued success of its development-focused banking approach, the bank’s Customer Advances also grew by 10% to close at Rs. 98.2 billion, while maintaining an industry low Stage 3 Impaired Financing Ratio of 1.7%. The bank closed the first half with Total Assets of Rs. 173.6 billion.

As at 30 June 2024, Amana Bank’s Net Asset Value per share stands at Rs. 4.08. Consequent to the recent 10 to 1 consolidation of shares carried out in July 2024, this effectively translates to over Rs. 40 per share. Given the robust performance during the six months, the bank’s ROE and ROA grew to 7.0%% and 1.6% respectively compared to 5.8% and 1.1% respectively to the corresponding period of 2023. As at 30 June 2024, Amana Bank’s Common Equity Tier 1 and Total Capital ratios stood at 15.4% and 18.1% respectively, well above the regulatory minimum requirement of 7% and 12.5%.

Commenting on the bank’s mid-year performance, Chairman Asgi Akbarally stated: “Amana Bank’s accelerated growth in the first half of 2024 highlights our strong performance despite a challenging environment. As we mark a decade since our listing on the CSE, the recent capital infusion late last year, coupled with this year’s share consolidation, underscores the bank’s strong commitment to delivering value to our shareholders. We extend our gratitude to all our valued stakeholders, whose support has been vital to our journey, and we look forward with great anticipation to further accelerated growth.”

Also sharing his views on the bank’s performance, Managing Director/CEO Mohamed Azmeer said: “We are humbled by our performance in the first half of 2024. The strong financial results reflect the hard work and dedication of our team. We remain committed to our strategic objectives and are confident in our ability to continue delivering accelerated growth and delivering value to our stakeholders. The robust mid-year performance is a testament to the Bank’s stability and resilience. I extend my heartfelt gratitude to our Chairman and the Board, the Management, staff, shareholders, and customers for their relentless support, trust, and confidence in Your Bank. Looking ahead with optimism, we anticipate a promising journey for the rest of the year and beyond, reinforced by strong growth prospects of our development focussed people-friendly banking approach.”