Amana Bank 2021 PBT up by 42%; crosses Rs. 1 b milestone

• PAT up by 78%

Chairman Asgi Akbarally

CEO Mohamed Azmeer

Amana Bank celebrated a decade of people-friendly banking in 2021 and concluded the landmark year on a high note, crossing the Rs. 1 billion milestone in Profit Before Tax (PBT), becoming one of the fastest banks in Sri Lanka to reach this landmark. 

Despite challenging economic conditions that prevailed throughout 2021, Amana Bank showcased resilient performance through a significant growth of 42% in PBT to reach Rs. 1.08 billion compared to Rs. 761.4 million recorded a year ago. Profit After Tax for the same period reflected an impressive YoY growth of 78% to close at Rs. 824.7 million in comparison to Rs. 463.7 million recorded in 2020. This translates to an Earnings Per Share of 31 cents in comparison to 17 cents in 2020.

Net Financing Income reached Rs. 4.26 billion from Rs. 3.45 billion in 2020, reflecting a YoY growth of 23% which was supported by maintaining a healthy financing margin of 3.8% through low-cost deposits. It is noteworthy that this achievement comes amidst the relief and concessions offered to COVID-19 affected customers and lower financing rates that prevailed during most part of the year. Despite import controls and restrictions in foreign currency, which impacted Fee and Trading Income, the bank achieved a 13% YoY growth in Total Operating Income to reach Rs. 4.80 billion, while Net Operating Income after accounting for adequate impairment, grew by 8% to Rs. 4.01 billion. 

Despite inflationary pressures, the bank maintained Operating Expenses at 2020 levels through active focus on cost containment, resulting in the bank posting a noteworthy growth of 25% in Operating Profit before VAT on Financial Services to reach Rs. 1.44 billion compared to Rs. 1.15 billion achieved a year back. The bank’s aggregate tax contribution of Rs. 620 million accounted for 42% of the bank’s Operating Profit before all taxes. 

The consistent profit momentum over the years paved the way for the bank to reward its valued shareholders for the fourth consecutive year with the issuance of a scrip dividend valued at 10 cents per share, resulting in a total pay-out of Rs. 260.1 million and being 30% higher than the dividends paid in 2020. Dividends were paid in scrip form to ensure compliance with regulatory guidelines. 

In 2021 the bank recorded double digit growth in both deposit and advance portfolios. Outperforming the banking industry in average credit growth, the bank grew its Customer Advances by a noteworthy 21%, to close the year on Rs. 75.82 billion from Rs. 62.57 billion in 2020. Customer Deposits grew by a commendable 15%, despite challenges in market liquidity towards the latter half of 2021, to complete another successful year at LKR 96.16 billion from Rs. 83.55 billion in 2020. The growth in customer deposits was enabled through a stable mix of funds as Current Accounts and Savings Accounts (CASA) continued its upward momentum with the ratio improving to 46%. The bank also placed great emphasis on portfolio management and recoveries through timely customer engagement which resulted in containing non-performing advances (NPA) well below the industry averages with Net NPA and Gross NPA ratios of 0.5% and 3.1% respectively. 

Having already surpassed the Rs. 100 billion mark in Total Assets in 2020, the bank went on to further enhance its Total Assets to close the year at Rs. 121.91 billion, which translates to a notable YoY increase of 22%. The bank’s Total Capital Ratio stood at a healthy 15.7% as at 31 December 2021, well above the minimum regulatory requirement.

As a recognition of the strong and steady progress made over the last decade, Amana Bank went on to be ranked amongst the Top 50 Strongest Islamic Banks in the World by The Asian Banker, cementing the bank’s position as a leading practitioner of the non-interest-based people friendly banking model across the world.

Sharing his views, Chairman Asgi Akbarally said, “As we celebrate a decade of people friendly banking, I am truly humbled and honoured by the bank’s resilient performance in 2021. These achievements echo the bank’s unique business model, which is well aligned to the needs of the economy. I am thankful to my fellow Board of Directors, Board Advisors, CEO-led senior management and staff for their commitment and dedication to achieve this commendable performance during 2021. I am also thankful to the Central Bank of Sri Lanka for their swift and timely action which resulted in timely relief to the public, valued support to revive affected SMEs, proactive action to support the banking industry, and many other positives which has guided and enabled us to steer through the challenges of 2021. 

Despite the challenges, we also ensured the continuity of the OrphanCare initiative, under the stewardship of its independent Board of Trustees, where we completed the ninth round of disbursement, covering 3,000+ orphans representing 85 orphanages across Sri Lanka, for which I would like to thank all the trustees, partners, donors and well-wishers.”

CEO Mohamed Azmeer said: “Reflecting on our humble beginning in 2011, it is truly satisfying to note how the bank has relentlessly progressed over the last 10 years and emerged as one of the fastest growing institutions within the local banking industry, backed by the trust and confidence of our valued customers and shareholders. Having demonstrated its resilience against the COVID-19 impact of 2020, Amana Bank started 2021 from a position of strength. The bank’s clear vision, ethical business model and strong risk fundamentals combined with prudent planning and strong customer engagement allowed us to further enhance our track record, which is reflected on the bank’s recent financial performance. 

“While achieving profitability, the bank also ensured to embrace sustainability in its activities, aligning to selected UNSDGs while also supporting the Sustainable Banking Initiative founded by the Sri Lanka Banks’ Association. I am thankful to our directors, shareholders, customers and valued partners, for their longstanding trust and confidence on Amana Bank, which has been a pivotal force in our resilient performance. I am confident this will continue in to 2022 and in the many years to come, and invite everyone to be part of our accelerated growth journey, as we lay the foundation to optimise on our opportunities outside the shores of Sri Lanka.”

Amana 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 of the bank. The IsDB Group is a ‘AAA’ rated multilateral development financial institution with a membership of 57 countries. In September 2021 Fitch Ratings Sri Lanka affirmed the National Long Term Rating of Amãna Bank to BB+(lka) with a Stable Outlook. Amãna Bank does not have any subsidiaries, associates or affiliated institutions.