Amana Bank continues positive performance trend with double digit PBT growth

Chairman Asgi Akbarally

Managing Director and CEO Mohamed Azmeer

Continuing the positive performance trend, Amana Bank PLC has achieved a double digit growth in Profit Before Tax for Q1 2023, by leveraging on its stability and resilience in the backdrop of a challenging economic environment.  

During the quarter the bank went on to record a healthy 10% growth in Profit Before Tax to close at Rs. 423.5 million in comparison to Rs. 385.8 million posted a year back. Owing to the higher tax regime, which saw tax expenses increase by 50%, the bank’s Profit After Tax reduced by 12% to Rs. 220.7 million against Rs. 250.7 million recorded in 2022. The bank closed Q1 with a Total Comprehensive Income of Rs. 215.3 million, up by 21% from Rs. 177.8 million posted in the corresponding period of 2022.

Reflecting its growing acceptance for the unique people friendly banking model among all Sri Lankans, the bank’s top line Financing Income doubled to reach Rs. 4.41 billion against Rs. 2.21 billion achieved a year back. Supporting the excellent top-line performance along with effective deployment of funds and timely re-pricing of advances and liabilities, the bank’s financing margin improved to 5.0% from 3.6% in Q1 2022. As a result the bank’s Net Financing Income grew commendably by 57% to reach Rs. 1.77 billion.

The bank continued to grow its Net Fee and Commission Income, which witnessed a significant growth of 114% to Rs. 248.0 million from Rs. 115.9 million recorded last year, while Net Trading Income closed at Rs. 247.5 million compared to Rs. 235.9 million. As a result, the Bank’s Total Operating Income grew by 56% YoY to reach Rs. 2.28 billion. Despite accounting for a higher level of impairment in order to mitigate risks of those businesses vulnerable to economic shocks, the bank’s Net Operating Income grew by 27% to reach Rs. 1.55 billion from Rs. 1.22 billion posted in Q1 2022. 

In the backdrop of Q1 average headline inflation being recorded at above 50%, the bank was able to limit the increase in its Operating Expenses to 32%. As a result the bank posted a noteworthy growth of 21% in Operating Profit Before VAT on Financial Services and Social Security Contribution Levy to reach Rs. 656.0 million compared to Rs. 541.4 million recorded a year back. The bank’s Q1 aggregate tax contribution of Rs. 435.3 million accounted for 66% of the bank’s Operating Profit before all taxes.

Amidst tight liquidity conditions and stiff competition for funds in the market, the bank grew its Customer Deposits by 3% to close Q1 2023 with a portfolio of Rs. 115.5 billion, maintaining a healthy CASA ratio of 41%, while Customers Advances closed at Rs. 80.0 billion. 

Owing to timely customer engagement and effective portfolio management, the bank improved its Stage 3 Impaired financing ratio to 2.0%, well below the market average. The bank’s Total Assets as at end of 31 March 2023 stood at Rs. 143.0 billion while the bank’s Total Capital Ratio stood at 15.6%, well above the minimum regulatory requirement of 12.5%.

Chairman Asgi Akbarally said: “The bank has been successful to withstand many external challenges to once again record a strong quarterly performance, setting a good platform to carry on the growth momentum for the rest of 2023 as well. I am thankful to the management and staff for enabling such performance through their resilience, commitment and dedication.”

Managing Director/CEO Mohamed Azmeer said: “Our Q1 performance reflects the BANK’S stability and resilience amidst a challenging but gradually improving economic environment. With the bank also playing an important role in stimulating economic activity at all levels, anchored on our people friendly banking solutions along with investments in expanding our digital and regional footprint, I remain optimistic on the future outlook and prospects. I am thankful to my fellow Directors, management, staff, shareholders and customers for their continued trust and confidence in Your Bank.”