Amãna Bank crossed the LKR 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 9 years in banking operations. In the face of the Covid-19 pandemic related challenges, the Bank has showcased strong resilience specially during the first 3 quarters of the year and has bounced back strongly in Q4 with a remarkable 51% growth in pre-tax profit recording LKR 372.1 million in comparison to LKR 246.2 million in Q4 2019. Post-tax profit for the same period stood at LKR 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 LKR 761.4 million as profit before tax and LKR 463.7 million as profit after tax. It is noteworthy that the profit after tax of 2020 is higher than the LKR 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 LKR 3.45 billion, while achieving LKR 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 LKR 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 LKR 1.15 billion for 2020. The Bank’s aggregate tax contribution of LKR 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 LKR 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 LKR 62.6 billion. Amidst adverse market conditions, the Banks 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 LKR 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 3rd 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 Chairman of Amãna Bank 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 SME’s, 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 seize. The OrphanCare project continued to make strong progress, as it made 4 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.”
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. Amãna Bank does not have any subsidiaries, associates or affiliated institutions, other than its flagship CSR project the ‘OrphanCare’ Trust.