Amãna Bank PBT up by 20% in Q1; records impressive quarter in credit growth

Amãna Bank continued to showcase strong resilience amidst economic challenges in Q1 2021, achieving a 20% year-on-year (YOY) growth in profit-before-tax (PBT).

The 20% growth is achieved in comparison to a robust pre-COVID performance made in Q1 2020. Accordingly, PBT in Q1 2021 reached Rs. 217.1 million compared to the Rs. 180.2 million recorded in the corresponding period. This quarter also saw the bank recording its best-ever quarterly achievement in customer advances, which significantly grew by 10% or Rs. 6.1 billion in value.

Owing to its advance growth well supported by a healthy financing margin of 3.7%, the bank’s Net Financing Income grew by 10% YOY to close the quarter at Rs. 892.0 million. Net Operating Income after accounting for impairment closed at Rs. 934.2 million. As an outcome of the bank’s ongoing effort to contain costs, which resulted in a 7% reduction in Operating Expenses in comparison to Q1 2020, the bank recorded an 18% YOY growth in Operating Profit before VAT on Financial Services to reach Rs. 308.8 million. The bank’s aggregate tax contribution of Rs. 178.1 million for Q1 accounted for 58% of the bank’s Operating Profit before all taxes. Profit-after-tax for the same period closed at Rs. 130.6 million.

The bank’s customer deposits grew by Rs. 4.2 billion or 5% during the quarter to close at Rs. 87.7 billion. The growth in customer deposits was achieved whilst maintaining a healthy CASA ratio of 45.7%. The bank’s customer advances closed the quarter with a value of Rs. 68.7 billion compared to 2020 ending position of Rs. 62.6 billion. Having crossed the Rs. 100 billion milestone in Total Assets last December, the bank went on to further grow its Total Assets by 6% to reach Rs. 106.5 billion as of 31 March 2021.

Despite growing its advance book amidst challenging market conditions, the bank’s continued focus on prudent portfolio management and timely customer engagement, resulted in improving the NPA from the 2020 year end position, where Net NPA reduced from 1.4% to 0.7%, while gross NPA declined from 4.0% to 3.3%.

Commenting on the bank’s first three months performance, Chief Executive Officer Mohamed Azmeer said: “I am happy to note that Amãna Bank was able to record a strong performance in Q1 2021, built upon the resilience showcased in the previous year for which I am thankful to our customers, staff and shareholders. Our remarkable growth in advances during this quarter testifies the growing interest and acceptance to our people friendly financing solutions. 

“I believe the good start we achieved in 2021 will pave the way for us to record stronger numbers during the rest of the year and I am confident we are well poised to embrace the emerging opportunities especially in the SME sector, which is a key strategic focus area of the bank, thereby contributing to the revival and growth of the economy.”

Affirming its resilient performance, Amãna Bank was recently recognised by UK-based Global Banking and Finance Review with three prestigious awards. Amãna Bank has affirmed its place amongst Sri Lanka’s top performing banking institutions as it secured the title of ‘Fastest Growing Retail Bank – Sri Lanka’. Further in recognition of the bank’s efforts towards catering to the financial requirements of Sri Lankans working and living overseas, especially through its Expat Gold customer proposition Amãna Bank won the accolade for ‘Best Expat Banking Services – Sri Lanka’. Recognising the bank’s impactful community outreach program ‘OrphanCare’ and how it has benefitted over 3,000 orphans even amidst the pandemic, Global Banking and Finance Review further went on to adjudicate Amãna Bank as the ‘Best CSR Bank – Sri Lanka’.

Amana Bank 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 October 2020, 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, other than its flagship CSR project the ‘OrphanCare Trust’.