Amana Bank continues robust performance in 2024

• Advances grow by 24% with industry low Stage 3 Impairment
• Deposits up 16% with industry high CASA of 44%
• PBT up 21% to close at Rs. 2.8 b as PAT grows 28% to reach Rs. 1.8 b

Amana Bank PLC continued its robust performance to conclude 2024 on a strong note as the bank recorded a Profit After Tax (PAT) growth of 28% to reach Rs. 1.8 billion from Rs. 1.4 billion posted in 2023. 

Reflecting a healthy 21% growth, Profit Before Tax (PBT) for the same period grew from Rs. 2.3 billion to close at Rs. 2.8 billion. 

This strong bottom-line performance was achieved despite the impact of declining market rates. The bank maintained a healthy financing margin of 4%, resulting in the bank’s Net Financing Income improving by 6% to reach Rs. 6.9 billion from Rs. 6.5 billion a year ago.

Driven by trade volumes generated from its valued SME and corporate customers, as well as increased digital transactions and other value-added services, the bank’s Net Fee and Commission income grew by 16% to cross the Rs. 1 billion milestone to close at Rs. 1.1 billion. In the backdrop of excess USD liquidity in the market and the resultant drop in premium, the bank reported a Trading Income of Rs. 0.7 billion. With improvements in the operating environment and asset quality, supported by timely customer engagements, the bank’s Impairment Charges reduced by 86% or from Rs. 2.1 billion to Rs. 0.3 billion, resulting in the Bank’s Net Operating Income increasing by 18% or Rs. 1.3 billion to reach Rs. 8.4 billion.

Despite an increase in operating expenses mainly connected with the bank’s drive to expand its reach and related expenses, the bank maintained a cost to income ratio of 53%, resulting in an 18% increase in Operating Profit before VAT on Financial Services and Social Security Levy to Rs. 3.8 billion from Rs. 3.2 billion in 2023. The bank’s aggregate tax contribution of Rs. 2 billion accounted for a significant 53% of the bank’s Operating Profit before all taxes.

As a result of the growing demand for the bank’s people-friendly banking model, Customer Advances grew significantly by 24% or Rs. 21.6 billion as it crossed the Rs. 100 billion mark, ending the year with a portfolio of Rs. 111.3 billion compared to Rs. 89.7 billion in 2023. This performance was achieved while continuing to have one of the lowest industry-wide Stage 3 Impaired financing ratios of 1.3%, owing to the bank’s effective risk management and underwriting framework, driven by its unique people-friendly and development focused approach.

Crossing the Rs. 150 billion milestone, Customer Deposits recorded a noteworthy growth of 16% or Rs. 21.5 billion to close the year on Rs. 154.4 billion, while maintaining an industry high CASA ratio of 44%. The bank’s Total Assets grew by Rs. 22.9 billion or 14% year-on-year (YoY) from Rs. 159.5 billion in 2023 to post a solid Rs. 182.3 billion as at end-December 2024.

The bank’s Return on Equity and Return on Assets improved to 8.0% and 1.6%, respectively. Further, Amana Bank’s Common Equity Tier 1 ratio stood at 15.0%, whilst Total Capital ratio was at 17.6%, well above the regulatory minimum requirement of 7% and 12.5%, respectively.

In 2024, a key milestone further validating the bank’s financial strength was Fitch Ratings Sri Lanka upgrading Amana Bank’s National Long-Term Rating from BB+(lka) to an investment-grade rating of BBB-(lka) with a Stable Outlook – unlocking new opportunities for growth and expansion that benefit all stakeholders. Further cementing the bank’s stability and growth potential, the Lanka Rating Agency, in their initial assessment, assigned Amana Bank a national long-term rating of BBB+ with a stable outlook. 

Demonstrating its strength and industry leadership, Amana Bank was ranked among the World’s Top 25 Strongest Islamic Banks by The Asian Banker, rising to 24th place from 37th in 2023.

Towards creating value to its shareholders, Amana Bank declared its seventh consecutive dividend in 2024, being the highest-ever dividend payout so far, totalling Rs. 661 million, which marks a doubling of the dividend paid in 2023.

Chairman Asgi Akbarally said: “Against the backdrop of an improving operating environment and economic conditions, Amana Bank has once again delivered a strong performance, demonstrating the resilience of our unique banking model. Our continued growth, solid financial position, and recognition by credit rating agencies underscore the trust and confidence placed in us by our customers and stakeholders. I extend my sincere appreciation to my fellow directors, our management, and staff for their dedication and commitment, as well as to our customers and shareholders for their unwavering trust and support. As we move forward, we remain committed to driving sustainable growth while delivering value to all those we serve.”

Managing Director/CEO Mohamed Azmeer said: “With improving economic conditions, Amana Bank has been able to accelerate its growth momentum, surpassing key milestones and strengthening our market position. Our performance reflects the bank’s unwavering focus on customer-centricity, prudent risk management, and operational excellence. I would like to extend my heartfelt gratitude to our Chairman and Board of Directors for their guidance and oversight, our management and staff for their relentless efforts, and our shareholders, customers, and valued partners for their continued trust and confidence. We are excited about the opportunities that lie ahead as we continue to expand our reach and enhance our value proposition, ensuring we remain a trusted financial partner for our customers.”