Amãna Bank shows resilience in 2020 despite COVID-19

Deposits grow by 10%; records PBT of Rs. 250 m in 1H

Despite the COVID-19 pandemic, which disrupted economies around the globe, Amãna Bank through its resilient performance continued its profitability trend in 2020. The bank recorded a Profit Before Tax (PBT) of Rs 250.5 million and Profit After Tax (PAT) of Rs. 170.4 million for the first half of the year whilst PBT and PAT for Q2 stood at Rs. 70.3 million and Rs. 40.6 million respectively. 

Supported by the continuous trend in profitability, the bank in July 2020 announced its third consecutive dividend since 2018; a Scrip Dividend of eight cents per share in line with the directions issued by the Central Bank of Sri Lanka to all licensed commercial banks which restricted payment of cash dividends for the rest of the year. 

The Scrip Dividend, which totals over Rs. 200 million from the bank’s retained earnings, is issued in proportion of one share for approximately every 25 shares held in the bank. The XD date for the Scrip Dividends is 18 September 2020 while uploading of the shares to the respective CDS accounts will be completed by 28 September 2020.

The bank maintained a positive momentum in customer deposits throughout the period to close the first half with a deposit portfolio of Rs. 78.9 billion reflecting a six-month growth of 10%. As a result of conscious strengthening of credit risk parameters in the backdrop of challenging market conditions, advances grew by 2% to close at Rs. 58.6 billion.

At the end of the first half, the bank’s Total Assets stood at Rs. 94.2 billion, 9% higher than the 2019 closing figure, resulting in the bank’s Net Asset Value improving to Rs. 4.81 per share. The bank also continued to maintain a healthy asset portfolio with non-performing ratios being well below industry averages, where Net NPA and Gross NPA stood at 2.2% and 4.6% respectively.

Commenting on the bank’s financial performance Chief Executive Officer Mohamed Azmeer said: “In the backdrop of unfavourable business environment, drop in market rates and the moratorium owing to the COVID-19 outbreak, which impacted business profitability, I am happy to note our resilient performance. I believe the economy is in a much better position than where it was a few months ago, and I am confident this positive momentum will continue and reinforce economic development.” During the pandemic, in facilitating CBSL’s stimulus to support the economic turnaround, especially focusing on SMEs, Amana Bank set up a dedicated unit to enable the channeling of relief and Saubhagya Scheme. During this process, the bank accommodated over 5,000 relief requests, impacting a portfolio of over Rs. 28 billion which comprised 47% of the Bank’s total advances. Further, the bank processed 64 Saubhagya applications and disbursed over Rs. 500 million to its SME customers who requested working capital assistance.

Strengthening the bank’s position as a growing and stable franchise, Fitch Ratings Sri Lanka in June 2020 upwardly revised the bank’s National Long Term Rating to BB+(lka) from BB(lka) with a Stable Outlook. Amidst the economic challenges, the bank’s flagship CSR project ‘OrphanCare’ continued to benefit over 2700 orphan children around the country as it paid its fourth disbursement in July 2020, since its launch in March 2019. 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 (S&P, Moody’s & Fitch) multilateral development financial institution with a membership of 57 countries. Amãna Bank does not have any subsidiaries, associates or affiliated institutions, other than the ‘OrphanCare’ Trust.