Amãna Bank set to increase capital to Rs. 10 b via Rights Issue

• Jeddah-based IDB Group along with IB Growth Fund of ICD to up their stake to 29.99%    

 Amãna Bank has received an in principle approval from the Colombo Stock Exchange (CSE) for the listing of additional shares to be issued through its proposed Rights Issue. 

Upon securing shareholder approval at the forthcoming Extraordinary General Meeting on 4 July 2017, the bank plans to issue 1,250,695,267 new shares at Rs. 3.80 per share at a ratio of one new ordinary share for every one ordinary share held (1:1). 

The bank’s Net Asset Value per share, which stood at Rs. 4.66 as at 31 March 2017, is 22% higher in comparison to the Rights Issue price, indicating a discount of 86 cents.

Upon full subscription, the Rights Issue will raise a sum of Rs. 4.75 billion, thereby taking the bank’s Core Capital beyond the stipulated Rs. 10 billion mark, well in advance of the statutory deadline of January 2018. 

The bank has already received a commitment from the Islamic Corporation for the Development of the Private Sector (ICD) to subscribe to the issue through its IB Growth Fund Labuan LLP (IBGF). 

IBGF in conjunction with its ultimate parent Islamic Development Bank (IDB), which already has a 9.62% shareholding in the bank, has been granted approval from the Central Bank of Sri Lanka to hold up to 29.99% of voting shares of the bank. 

IB Growth Fund (Labuan) LLP has acquired 1,000 shares in Amana Bank this week at Rs. 3.70 each as a precursor to participate in the Rights Issue of the latter.

Having commenced commercial banking operations in August 2011, the bank started recording core banking profits since the fourth quarter of 2014. Commenting on the bank’s progress, Chief Executive Officer Mohamed Azmeer said: “The bank has been consistent in maintaining above-industry-average growth in Total Assets, Customer Advances and Customer Deposits. While recording impressive growth in advances, the bank succeeded in managing its NPA well below the industry average. The growth in deposits was achieved while maintaining a high CASA ratio well above the industry average.”

The bank’s borrowing to asset ratio stood at 1.35% in YE 2016 against the industry average of 18.43%, showcasing the minimal dependency on external borrowings.

Azmeer added: “Along with the participation of ICD and our other strategic foreign and local shareholders, the funds raised through the rights issue will support the bank’s future expansion activities in taking our unique and people friendly banking model across the nation.”

Amãna Bank is the country’s first licensed commercial bank to operate in complete harmony with the globally growing non-interest based banking model. With the mission of enabling growth and enriching lives, the bank reaches out to its customers through a growing network of 28 branches and more than 3,800 ATM access points and has introduced a bouquet of customer conveniences such as internet and mobile banking, debit card with SMS alerts, saturday banking, extended banking hours, 24x7 cash deposit machines and banking units exclusively for ladies.

Fitch Ratings in October 2016 affirmed the bank’s National Long-Term Rating of BB(lka) with a Stable Outlook. The bank was recognised as the Best ‘Up-and-Comer’ Islamic Bank of the World by ‘Global Finance Magazine’ at the 18th Annual World’s Best Banks Award Ceremony held in Washington DC, US.