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Amana Bank continues positive performance trend with double digit PBT growth

Amãna Bank May 12, 2023
Continuing the positive performance trend, Amana Bank PLC achieved a double digit growth in Profit Before Tax for Q1 2023, by leveraging on its stability and resilience in the back drop of a challenging economic environment. During the quarter the Bank went on to record a healthy 10% growth in Profit Before Tax to close at LKR 423.5 million in comparison to LKR 385.8 million posted a year back. Owing to the higher tax regime, which saw tax expenses increase by 50%, the Bank’s Profit After Tax reduced by 12% to LKR 220.7 million against LKR 250.7 million recorded in 2022. The Bank closed Q1 with a Total Comprehensive Income of LKR 215.3 million, up by 21% from LKR 177.8 million posted in the corresponding period of 2022.
Reflecting its growing acceptance for the unique people friendly banking model among all Sri Lankans, the Bank’s top line Financing Income doubled to reach LKR 4.41 billion against LKR 2.21 billion achieved a year back. Supporting the excellent top-line performance along with effective deployment of funds and timely re-pricing of advances and liabilities, the Bank’s financing margin improved to 5.0% from 3.6% in Q1 2022. As a result the Bank’s Net Financing Income grew commendably by 57% to reach LKR 1.77 billion.
The Bank continued to grow its Net Fee and Commission Income, which witnessed a significant growth of 114% to LKR 248.0 million from LKR 115.9 million recorded last year, while Net Trading Income closed at LKR 247.5 million compared to LKR 235.9 million. As a result, the Bank’s Total Operating Income grew by 56% YoY to reach LKR 2.28 billion. Despite accounting for a higher level of impairment in order to mitigate risks of those businesses vulnerable to economic shocks, the Bank’s Net Operating Income grew by 27% to reach LKR 1.55 billion from LKR 1.22 billion posted in Q1 2022.
In the backdrop of Q1 average headline inflation being recorded at above 50%, the Bank was able to limit the increase in its Operating Expenses to 32%. As a result the Bank posted a noteworthy growth of 21% in Operating Profit Before VAT on Financial Services and Social Security Contribution Levy to reach LKR 656.0 million compared to LKR 541.4 million recorded a year back. The Bank’s Q1 aggregate tax contribution of LKR 435.3 million accounted for 66% of the Bank’s Operating Profit before all taxes.
Amidst tight liquidity conditions and stiff competition for funds in the market, the Bank grew its Customer Deposits by 3% to close Q1 2023 with a portfolio of LKR 115.5 billion, maintaining a healthy CASA ratio of 41%, while Customers Advances closed at LKR 80.0 billion.
Owing to timely customer engagement and effective portfolio management, the Bank improved its Stage 3 Impaired financing ratio to 2.0%, well below the market average. The Bank’s Total Assets as at end of 31 March 2023 stood at LKR 143.0 billion while the Bank’s Total Capital Ratio stood at 15.6%, well above the minimum regulatory requirement of 12.5%.
Commenting on the Bank’s Q1 performance Chairman Asgi Akbarally said “The Bank has been successful to withstand many external challenges to once again record a strong quarterly performance, setting a good platform to carry on the growth momentum for the rest of 2023 as well.  I am thankful to the management and staff for enabling such performance through their resilience, commitment and dedication.”
Also sharing his opinion Amana Bank’s Managing Director/CEO Mohamed Azmeer said “Our Q1 performance reflects the Bank’s stability and resilience amidst a challenging but gradually improving economic environment. With the Bank also playing an important role in stimulating economic activity at all levels, anchored on our people friendly banking solutions along with investments in expanding our digital and regional footprint, I remain optimistic on the future outlook and prospects. I am thankful to my fellow Directors, management, staff, shareholders and customers for their continued trust and confidence in Your Bank.”
Amãna 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. Testifying its position as a leading practitioner of the non-interest based banking model, Amãna Banks continued to be recognized amongst the Top 100 Strongest Islamic Bank’s in the World by The Asian Banker. Amãna Bank does not have any subsidiaries, associates, or affiliated institutions apart from its engagement with OrphanCare as its Founding Sponsor.
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