Amana Bank demonstrates stability and resilience

• Achieves Rs. 940 m PBT for 9 months continuing growth momentum

Chairman Asgi Akbarally

Managing Director/CEO Mohamed Azmeer

Amana Bank said yesterday it has successfully continued its growth trajectory to record a Profit Before Tax of Rs. 940.0 million for the nine months ending 30 September 2022, showcasing its resilient performance amidst a challenging economic environment. 

The bank’s PBT achievement reflects a 28% YoY growth compared to the 2021 corresponding period PBT of Rs. 736.3 million. Profit After Tax for the same period reflected a 39% YoY growth to reach Rs. 600.5 million from Rs. 433.2 million recorded a year back. Both Profit Before Tax and Profit After Tax in Q3 alone grew by 66% YoY to reach Rs. 383 million and Rs. 238.5 million respectively.

During the nine months period, the bank’s Financing Income grew by 44% to Rs. 8.09 billion. Owing to policy rate changes resulting in higher cost of deposits and lower financing margin, the bank’s Net Financing Income stood at Rs. 3.10 billion. Total Operating Income recorded a 28% growth to reach Rs. 4.25 billion, which was supported by Net Fee and Commission Income of Rs. 516.2 million and Net Trading Income of Rs. 637.1 million, both showcasing significant YoY growth. After prudentially accounting for an increased level of impairment considering current and anticipated market conditions, Net Operating Income grew by 20% to Rs. 3.49 billion.

Despite headline inflation increasing in the recent past, where it increased from 66.7% in August to 73.7% in September, the bank contained the increase in its operating expenses to 14%. As a result the bank recorded a 32% YoY growth in Operating Profit before VAT on Financial Services to reach Rs. 1.32 billion. The bank’s aggregate tax contribution for the nine months ending 30 September stood at Rs. 723.5 million, accounting for 55% of the bank’s Operating Profit before all taxes.  

In the backdrop of tight monetary and market liquidity conditions, the bank continued to support private sector credit growth, with Customer Advances growing by 10% to close at Rs. 83.43 billion while Customer Deposits grew by 14% to close at Rs. 109.72 billion, reflecting increased confidence in the bank’s people friendly banking model. The growth in customer deposits was achieved whilst maintaining a healthy CASA ratio of 43%. Despite challenging market sentiments, the bank’s Impaired Financing and Advances (Stage 3) ratio continued to remain well below the industry average and stood at 2.3% at Q3 end. The bank’s Total Assets during the nine months grew by 17% to close at Rs. 142.86 billion. Continuing to maintain strong capital adequacy positions, the bank’s Total Capital Ratio stood at a healthy 13.9% as at Q3 2022 while its Common Equity Tier 1 Capital Ratio stood at 11.9%, both well above the minimum regulatory requirement of 12.5% and 7.0% respectively.

As a result of the bank’s continuous profitability, it recently announced its fifth successive annual dividend; a Scrip Dividend of 10 cents per share for the Financial Year 2022, totalling to a dividend pay-out of Rs. 269 million.

Chairman Asgi Akbarally said: “The bank has been successful in navigating a turbulent period to reach a healthy financial position as of end Q3 2022. During the last nine months, we have been able to stand by and support our customers to overcome a period of economic adversities. I am thankful to the management and staff for their resilience, commitment and dedication.” Managing Director/CEO Mohamed Azmeer said: “In the backdrop of increasing challenges in the external environment, I am pleased that the bank has been successful in maintaining its resilient performance in the preceding quarter. In line with CBSL directives and guidelines, the bank continued to play a key role in stimulating economic recovery by supporting our customers at all levels. Thanks to our unique model of banking which is development focussed, we stand protected and unexposed to many of the elements which continue to challenge the entire banking industry. 

“With the nation making headway towards economic recovery in the last few months, we remain confident and positive and stand ready to play an impactful role in enabling growth and enriching lives. On behalf of the board and management of the bank, I am grateful to the commitment of our staff members in managing the numerous uncertainties and the continued confidence and trust placed on us by our customers.”