Amãna Bank recaps 9 years of success; looks to greater success in the future

CEO Amana Bank Mohamed Azmeer

As Amãna Bank completes 9 years since inception in August 2020, CEO Mohamed Azmeer speaks about the Bank and its way forward.

Q: Tell us about the journey of the Bank.

 When we launched commercial operations in 2011, we had 14 branches with limited products and services. At that time, we did not have many of the services that were common in other banks, which included ATM, debit card and Internet banking, while we did not have non-interest based alternatives for certain financing products available in conventional banks.  Today, I am happy to say that the context is vastly different. While having a physical network of 32 branches and 19 Self-Banking Centres, the Bank’s footprint for deposits expanded to 750+ access points, and with our debit card, customers now have access to 4500+ ATM points for withdrawals.  With the introduction of our Internet and mobile banking platform, we brought convenience to the fingertips of our customers. Similarly, our product suite expanded, with the introduction of many non-interest-based alternatives, and one such product which we are acclaimed for is our Gold Certificate Financing, which was launched as an alternative for conventional pawning. Within this short period, we were also honoured with the recognition as the World’s Up and Coming Islamic Bank by Global Finance Magazine USA.

Q: Tell us about the Bank’s recent performance.

The Bank commenced recording profits 3 years after launch in August 2014, which is a great achievement for a new bank, where in the market there were established banks that took 5 or more years to achieve the same feat. Since then, the Bank has maintained continuous momentum of profitability, and the same was witnessed in 2019 despite the challenges faced.

In 2019, the Bank’s deposits recorded a significant growth of 16% to end at Rs. 71.6 billion from Rs. 61.7 billion during the year, which was double the industry growth of 8%. In Q1 2020, this figure grew by a further 8%, to close the quarter at Rs. 77.0 billion. This growth is a clear indication of the growing customer confidence and demand for the Bank’s people-friendly banking model. Customer Advances too posted a steady growth of 9% in 2019, in the backdrop of industry credit growth being 5%, to close at Rs. 57.7 billion from Rs. 52.9 billion. Due to achieving continuous profitability, we were successful in rewarding our stakeholders with uninterrupted dividends for three consecutive years, starting from 2018, which I believe is a noteworthy achievement for a new bank. 

Further strengthening the Bank’s position as a growing and stable franchise, in June 2020, Fitch Ratings Sri Lanka upwardly revised the Bank’s National Long Term Rating to BB+ (lka) with a Stable Outlook, from BB (lka). 

Q: Recently there were some rumours on social media with reference to Amãna Bank. Is there any truth to them?

These rumours are totally baseless and false, and there is no truth to it at all. Today with social media, such baseless rumours do surface from time to time, which are a waste of time for everyone. Therefore, we strongly advise our customers to be vigilant and not to be misled by such false content, and to always refer to authentic sources to learn about the Bank, its values, and its performance. Such authentic sources would include the Bank’s website (www.amanabank.lk), the Bank’s Official Facebook page, the Bank’s official periodic publications on Colombo Stock Exchange as a listed company, and the Bank’s publications on recognised and reputed media. 

Further, I would like to emphasise that we are a stand-alone entity which does not have any subsidiaries, associates or affiliated institutions, other than the ‘OrphanCare’ Trust.

Q: Could you elaborate on the ownership of the Bank? 

 We are a Public Limited Company listed at the Colombo Stock Exchange. The principal shareholder of the bank is Jeddah-based IsDB Group, with a stake of 29.97%, and Bank Islam Berhad Malaysia, AB Bank Limited Bangladesh, and Akbar Brothers are other prominent strategic shareholders of the Bank along with a public shareholding of 30.34%. Our principal shareholder IsDB Group is a ‘AAA’ rated multilateral development financial institution, working to improve the lives of those we serve by promoting social and economic development, with a membership of 57 countries. We believe the benefits of this strong association with IsDB Group as a multilateral development agency is not limited to Amãna Bank alone, and has the potential to benefit the economic development of Sri Lanka through financial instruments such as Sukuks, for which IsDB has a strong international track record. 

Q: Who are your target customers? Is it only a selected segment?

 As commonly misconceived, the benefits of this people-friendly banking solution is not limited to Muslims and is for all humanity. Our goal is to ensure these benefits are enjoyed by all Sri Lankans, and I am happy to say that we continue to make strong progress in this area. For this purpose, the Bank established a dedicated unit for knowledge marketing. 

Among many other initiatives by knowledge marketing such as public awareness programs, quizzes, competitions etc., a key initiative launched includes a series of informative animated videos on vital topics. Such topics range from how this unique banking model is different to conventional interest-based banking to how each product is structured and the underlying benefits of such people-friendly structures to the customer. They can be accessed via the Bank’s website and the Bank’s YouTube channel. These videos have gained both local and international acceptance, where reputed international banking establishments had requested permission to reproduce them in their language. 

Our efforts in knowledge marketing will continue and will be made available in English, Sinhala, and Tamil, to create awareness among every Sri Lankan about this unique banking model, and our services are open to every citizen of this country. Commercially apart from individuals, the Bank’s prime focus is on the SME segment spread across a diverse range of sectors, which is the backbone of the Sri Lankan economy. The Bank engages with corporates selectively where we can add value in enabling growth.

 

Q: In the backdrop of the COVID-19 calamity, how did the Bank support its customers?

 Firstly I would like to thank the Government of Sri Lanka, Central Bank of Sri Lanka, Health Authorities, Tri-forces and the Sri Lanka Bankers Association along with all other authorities for their guidance and direction during these unprecedented times. 

At the very beginning, as a measure of living up to our people friendly banking approach, we provided a salary advance to our regular salary-crediting customers, completely free of charge, to help them face the challenges during the critical juncture of the lockdown.

Further throughout the lockdown period, we continued to keep our branches open and safe. We also decided to introduce a Bank-on-Wheels operation, which we did not have up to that point, where we  visited neighbourhoods in which the curfew was in place; providing convenient cash withdrawal facilities to both our customers and customers of other banks. 

With many confined to their homes, we saw the rising need for digital banking channels such as Internet banking, mobile banking, online account opening and doorstep banking services. We waived off charges for Internet banking fund transfers done to other banks, and also enabled convenient digital channel onboarding for customers who have not yet registered for such services, through our contact centre and website, while taking all necessary security precautions. We further made convenient the online account opening process for customers to open accounts without requiring to visit a branch. Based on the direction of the Government and the guidelines of the Central Bank of Sri Lanka towards supporting SMEs, other businesses, and individuals, the Bank extended the special relief moratorium as well as a refinancing solution for working capital requirements. The Bank has also provided its Gold Certificate Financing customers a grace period to settle their facilities due for settlement, where such facility settlements have been extended up to 30 September 2020. The Bank actively participated in the Government-driven Saubagya COVID-19 refinancing scheme, through which we provided refinancing for many affected businesses to recommence their activities. 

In the face of this calamity, many of our customers are still facing challenges and need ongoing support. Thus we would like to reassure to all our loyal customers that Amãna Bank will stand by them and do everything possible to ensure their safety and financial wellbeing. 

Q: You earlier mentioned the OrphanCare Trust. Could you tell us more about it?  

 I am pleased and honoured by the launch of the Bank’s flagship CSR venture OrphanCare, which is something very close to all our hearts. This unique project was launched with the aim of addressing a very important yet mostly unattended social need of orphan children, which is to secure the future of orphans who are compelled to leave institutional care once they attain the age of 18. One of the unique features of this project is our pledge that every rupee donated to the OrphanCare Trust will be directly allocated for orphan accounts, as Amãna Bank undertakes to bear all operating and administrative costs of the Trust. The OrphanCare Trust is independently managed by a team of Trustees who have a proven track record of passionate social service. They have instituted a strong governance framework to maintain the highest standards of integrity and to ensure the long-term sustainability of the Trust. With over 14,000 registered orphans reported in Sri Lanka, the Trust has to-date enrolled over 2700 orphans represented by 75 orphanages island-wide, and has continued to make quarterly disbursements to the orphan accounts. 

The enrolment process of orphans is made within the framework set out in Article 2 of the UN Convention on the Rights of the Child. Such enrolled orphans would benefit from the periodic deposits made to their accounts, thereby strengthening their financial standing by the time they leave institutional care. In addition to the financial assistance provided, emphasis is given on providing qualitative support and guidance to these orphans, in collaboration with various institutions and well-wishers.  The Bank has set its sights on reaching out to all orphans in the country in the near future. Recognising this worthy initiative, the Bank was awarded the Social Responsible Bank of the Year at the internationally acclaimed IRB Awards in 2019, held at Muscat Oman.