Amãna Bank total assets cross Rs. 100 b with over Rs. 1 b operating profit in 2020

Amãna Bank Chairman Asgi Akbarally

Amãna Bank CEO Mohamed Azmeer

Amãna Bank crossed the Rs. 100 billion mark in total assets as at YE2020, a milestone bearing evidence to its accelerated growth, which comes in a context where the bank has completed only nine years in banking operations. 

In the face of the COVID-19 pandemic related challenges, the bank has showcased strong resilience especially during the first three quarters of the year and has bounced back strongly in Q4 with a remarkable 51% growth in pre-tax profit recording Rs. 372.1 million in comparison to Rs. 246.2 million in Q4 2019. Post-tax profit for the same period stood at Rs. 213.3 million. 

In comparison to Q3 2020, the bank’s pre-tax and post-tax profits grew significantly by 168% and 167% respectively in Q4 2020. As a result of its resurgent Q4 performance, the bank, for the 12 months of 2020, reported Rs. 761.4 million as profit before tax and Rs. 463.7 million as profit after tax. It is noteworthy that the profit after tax of 2020 is higher than the Rs. 460.9 million reported in 2019.  

Maintaining a healthy financing margin of 3.7%, the bank’s net financing income grew 9% YoY to close at Rs. 3.45 billion, while achieving Rs. 1.13 billion during Q4 alone, demonstrating a growth of 53% against Q4 2019. Despite import control having an adverse impact on trade related fee income, the bank reported a net operating income of Rs. 3.72 billion for 2020.

Having successfully curtailed operating expenses, as a result of the continued focus on cost containment, the bank recorded an operating profit before VAT, NBT and DRL of Rs. 1.15 billion for 2020. The bank’s aggregate tax contribution of Rs. 691 million accounted for 60% of the bank’s operating profit before all taxes. 

Despite the backdrop of challenging market and economic conditions, the bank continued to maintain a strong growth momentum in customer deposits closing the year with a portfolio of Rs. 83.6 billion which reflected a significant YoY growth of 17%. This growth was achieved whilst also improving the bank’s CASA ratio from 39% in 2019 to 45% by end 2020, a testament to the strong emphasis the bank has placed throughout the year to promote its CASA proposition.

Despite subdued demand for credit, the bank recorded an 8% YoY growth in customer advances, surpassing the country’s private sector credit growth in 2020, to close the year at Rs. 62.6 billion. 

Amidst adverse market conditions, the bank’s continued focus on prudent portfolio management and timely customer engagement resulted in containing NPA well below the industry averages with Net NPA and Gross NPA ratios recording 1.4% and 4.0% respectively. Owing to the steady balance sheet growth and effective implementation of the Strategic Plan, the bank’s total assets grew by 16% YoY to close at Rs. 100.2 billion. 

As a result of its healthy financial profile, the bank continued its dividend journey consistently even through 2020, by paying out its third consecutive dividend, showing gratitude for the confidence of the bank’s shareholders. The payout was done in the form of a scrip dividend, in line with the CBSL directive which curtailed cash dividends of all banks. The bank’s total capital ratio stood at a healthy 17.4% as at 31 December 2020, well above the minimum requirements.

Along with the recalibration of Sri Lanka’s national rating scale by Fitch Ratings in June 2020, Amana Bank’s credit rating was revised upward from BB(lka) to BB+(lka) with a Stable Outlook. The rating was further reaffirmed in Fitch’s latest rating review in October 2020.

Commenting on the bank’s performance, Amãna Bank Chairman Asgi Akbarally said: “Despite the turbulent economic environment that we have all come to associate in the year 2020, Amãna Bank was able to record healthy results showcasing strong resilience, thanks to the underlying strengths of our business model, balance sheet and strong capital position. I am thankful to my fellow Board of Directors, recently retired Founder Chairman Osman Kassim and other retired directors, senior management and staff for their commitment and dedication to achieve this commendable performance. 

“I am also thankful to the Central Bank of Sri Lanka for their swift and timely action in various aspects which resulted in timely relief to the public, valued support to revive affected SMEs, action to enhance the liquidity of banks, and many other positives which has guided and enabled us to steer through the challenges of 2020. 

“Despite the pandemic our efforts to the community did not cease. The OrphanCare project continued to make strong progress, as it made four rounds of fund disbursements in 2020, benefiting over 2800 orphans across the country, for which I am thankful to our independent Board of Trustees, donors and partners including our honorary auditors Ernst & Young along with other well-wishers for believing in our cause.”

Also sharing his comments on the bank’s performance Chief Executive Officer Mohamed Azmeer said: “I believe the pandemic presented an opportunity to demonstrate Amana Bank’s true purpose to support customers, businesses, communities and the nation at all times, which was well demonstrated by our engaged and energetic team, to whom I am really grateful. I am thankful to our directors, shareholders, customers, and valued collaborators, who have been a pivotal force in strengthening the foundation of our resilience. Equipped with such resilience, I believe that Amãna Bank is well poised to face the opportunities and challenges that comes with the 

year 2021.”