Amana Bank announces Rs. 6.7 b Rights Issue to fuel growth

Amana Bank PLC has announced its intention to raise Rs. 6.7 billion in equity capital by way of a Rights Issue, marking a significant milestone in the Bank’s journey towards its next phase of growth. As per the communique sent to the Colombo Stock Exchange (CSE), the Bank will issue 2,902,267,365 ordinary voting shares in the proportion of 1 new share for every 1 share held at a consideration of Rs 2.30 per share. 

The issue is subject to CSE and shareholder approval.

With the forthcoming Rights Issue, the Bank will increase its capital base to over Rs. 20 billion, which would successfully facilitate in meeting the minimum capital requirement for licensed commercial banks well before the regulatory timeline. The proposed capital infusion will also strengthen the Bank’s Capital Adequacy Ratio to facilitate its planned growth and expansion.

Having listed in the CSE in January 2014 after an oversubscribed IPO, Amana Bank has recorded impressive financial performance over the last decade, despite going through periods that were marred by the Covid-19 pandemic and other economic and social challenges. As a result of its resilient performance the Bank has successfully declared 6 consecutive dividends starting from 2018, totalling its dividend pay-outs in excess of  Rs. 1.4 billion. The Bank also successfully carried out a Rights Issue in 2017, which was oversubscribed owing to the confidence expressed by its local and foreign shareholders.

As of 31 March 2023 Amana Bank’s Net Asset Value per share stood at Rs. 5.24, making the Right Issue price of Rs 2.30 per share discounted at 56% an attractive buy.

Amãna Bank’s Chairman Asgi Akbarally said: ““We are pleased to introduce our most recent Rights Issue, which represents a strategic move to advance our bank’s growth trajectory. This undertaking aims to fortify our capital foundation and equip us with the essential resources to capitalize on promising prospects, as we strive to consistently generate exceptional value for our esteemed shareholders.”

Managing Director/CEO Mohamed Azmeer said: “The right issue enables the Bank to capitalise on the growing market potential for its unique and people friendly banking model across the country. The proposed capital infusion would facilitate the next phase of our growth, expanding our core business, which we envision to bring rewards for our shareholders. We are confident that similar to our last rights issue, our shareholders would continue to express their confidence by subscribing to this issue and partaking in our journey of success.”

Amãna Bank PLC is a stand-alone institution licensed by the Central Bank of Sri Lanka and listed on the Colombo Stock Exchange with Jeddah-based IsDB Group being the principal shareholder having a 29.97% shareholding in the Bank. The IsDB Group is a USD ‘AAA’ rated multilateral development financial institution with a membership of 57 countries. Testifying its position as a leading practitioner of the non-interest based banking model, Amãna Banks continued to be recognised amongst the Top 100 Strongest Islamic Bank’s in the World by The Asian Banker.

Amãna Bank does not have any subsidiaries, associates, or affiliated institutions apart from its engagement with OrphanCare as its Founding Sponsor.