Amana Bank surges ahead with aggressive outlook for 2024

• Records 91% growth in Q1 PAT to Rs. 422 m; advances up by 8% to Rs. 97 b

Chairman Asgi Akbarally

Managing Director/CEO Mohamed Azmeer

Amana Bank said yesterday it continued a robust performance trend as it completed a successful first quarter.

It recorded a notable 73% YoY increase in Profit Before Tax to reach Rs. 734.5 million compared to Rs. 423.5 million booked a year back while Profit After Tax surged by 91% YoY to post Rs. 422.2 million as against Rs. 220.7 million recorded in Q1 2023.

The bank’s top line witnessed a marginal decline to close at Rs. 4.1 billion, owing to the drop in market rates in line with the Central Bank’s economic revival policies. However by maintaining a healthy Financing Margin of 4.5%, Net Financing Income improved to close at Rs. 1.8 billion.

The bank’s Fee and Commission Income and Trading Income grew YoY by 15% and 11% to close at Rs. 285.9 million and Rs. 275.1 million respectively resulting in the bank’s Total Operating Income reaching Rs. 2.4 billion. After accounting for impairment charges, which showed a reduction compared to Q1 2023, reflecting prudent risk management, customer engagement and resultant revival, the bank’s Net Operating Income closed at Rs. 2.1 billion reflecting a healthy 36% YoY growth.

The bank said it continued to maintain a healthy cost to income ratio of 48%, resulting in a 51% YoY growth in Operating Profit before VAT on Financial Services to post Rs. 993.6 million. The bank’s aggregate tax contribution of Rs. 571.4 million accounted for a significant 58% of the bank’s Operating Profit before all taxes.

Owing to growing acceptance of its development focused banking model, the bank’s Advances grew by a commendable 8% to close at Rs. 97 billion. Local currency deposits grew by over Rs. 1 billion during the quarter but the overall portfolio remained at Rs. 132 billion after considering effects of Rupee appreciation against the US Dollar for foreign currency deposits. The Bank continued to grow its advance base while maintaining an industry low Stage 3 Impaired Financing Ratio of 1.6%. The bank closed the first quarter with Total Assets of Rs. 161.6 billion.

Given the strong financial performance in the quarter, Amana Bank’s ROE and ROA grew to 7.8% and 1.8% respectively compared to 6.2% and 1.2% respectively to the corresponding period of 2023. As at 31 March 2024, Amana Bank’s Common Equity Tier 1 and Total Capital ratios stood at 15.6% and 18.3% respectively, well above the regulatory minimum requirement of 7% and 12.5%.

Chairman Asgi Akbarally said: “Amana Bank has continued to demonstrate its resilience with a strong Q1 performance in the backdrop of a challenging yet progressively improving economic landscape. This promising start serves as a catalyst for continued future growth and prosperity. I am thankful for the management and our staff for their dedication and unwavering commitment, which has been instrumental in ensuring Amana Bank’s continued success.”

Managing Director/CEO Mohamed Azmeer said: “The strong financial performance in the first quarter affirms Amana Bank’s aggressive outlook towards 2024. Our commitment to providing development focussed and people friendly banking solutions which is also in sync with the revival efforts of the Central Bank, coupled with bank’s prudent risk management framework, has driven our advances growth trajectory, which I am confident will continue through the rest of the year. I would like to commend our team for their hard work and dedication in achieving these excellent results as well as for their commitment towards our mission of enabling growth and enriching lives amongst all Sri Lankans through our unique banking model.”

Through a Rights Issue in Q4 2023, the bank successfully raised its capital to cross Rs. 20 billion thereby meeting the enhanced minimum capital requirement in line with regulatory directions as well as fuelling the bank’s ambitious growth and expansion plans.

The bank also recently announced its decision to consolidate the shares of the bank in the proportion of consolidating 10 existing ordinary shares to 1 ordinary share subject to shareholder and regulatory approval. There will be no change in the stated capital of the bank as a result of the consolidation.