Amana Bank ends 2024 with Rs.1.8bn PAT

Amana Bank PLC concluded 2024 on a strong note, as the bank recorded a profit after tax (PAT) growth of 28 percent to reach Rs.1.8 billion, from Rs.1.4 billion posted in 2023.

Reflecting a healthy 21 percent growth, profit before tax for the same period grew from Rs.2.3 billion to close at Rs.2.8 billion. 

This strong bottom-line performance was achieved despite the impact of the declining market rates. The bank maintained a healthy financing margin of 4.0 percent, resulting in the bank’s net financing income improving by 6 percent to reach Rs.6.9 billion, from Rs.6.5 billion a year ago. 

Driven by the trade volumes generated from its valued SME and corporate customers as well as increased digital transactions and other value-added services, the bank’s net fee and commission income grew by 16 percent to cross the one billion milestone to close at Rs.1.1 billion. Against the backdrop of excess US dollar liquidity in the market and the resultant drop in premium, the bank reported a trading income of Rs.0.7 billion. 

With improvements in the operating environment and asset quality, supported by timely customer engagements, the bank’s impairment charges reduced by 86 percent or from Rs.2.1 billion to Rs.0.3 billion, resulting in the bank’s net operating income increasing by 18 percent or Rs.1.3 billion to reach Rs.8.4 billion.

Despite the increase in operating expenses, mainly connected with the bank’s drive to expand its reach and related expenses, the bank maintained a cost-to-income ratio of 53 percent, resulting in an 18 percent increase in operating profit before value added tax on financial services and social security levy to Rs.3.8 billion, from Rs.3.2 billion in 2023.  The bank’s aggregate tax contribution of Rs.2.0 billion accounted for a significant 53 percent of the bank’s operating profit before all taxes.

As a result of the growing demand for the bank’s people-friendly banking model, customer advances grew by 24 percent or Rs.21.6 billion, as it crossed the 100 billion mark, ending the year with a portfolio of Rs.111.3 billion, compared to Rs.89.7 billion in 2023. This performance was achieved while continuing to have one of the lowest industry-wide stage three impaired financing ratio of 1.3 percent, owing to the bank’s effective risk management and underwriting framework, driven by its unique people-friendly and development-focused approach.

Crossing the 150 billion milestone, customer deposits recorded a noteworthy growth of 16 percent or Rs.21.5 billion to close the year on Rs.154.4 billion, while maintaining an industry high CASA ratio of 44 percent. The bank’s total assets grew by Rs.22.9 billion or 14 percent year-on-year from Rs.159.5 billion in 2023 to post a solid Rs.182.3 billion as at end-December 2024.

The bank’s return on equity and return on assets improved to 8.0 percent and 1.6 percent, respectively. Further, Amana Bank’s Common Equity Tier 1 ratio stood at 15.0 percent, whilst total capital ratio was at 17.6 percent, well above the regulatory minimum requirement of 7 percent and 12.5 percent, respectively. 

Source: Daily Mirror