Amana Bank 1Q PBT expands 73% YoY to Rs.734mn

Amana Bank saw its profit before tax (PBT) expand 73 percent year-on-year (YoY) to Rs.734.5 million in the first quarter (1Q24), while profit after tax surged by 91 percent YoY to Rs.422.2 million.
The bank’s top line witnessed a marginal decline to close at Rs.4.1 billion, owing to the drop in the market rates, in line with the Central Bank’s economic revival policies. However, by maintaining a financing margin of 4.5 percent, the net financing income improved to close at Rs.1.8 billion.
The bank’s fee and commission income and trading income grew YoY by 15 percent and 11 percent, to close at Rs.285.9 million and Rs.275.1 million, respectively, resulting in the bank’s total operating income reaching Rs.2.4 billion. After accounting for impairment charges, which showed a reduction compared to 1Q 2023, reflecting prudent risk management, customer engagement and resultant revival, the bank’s net operating income closed at Rs.2.1 billion, reflecting a healthy 36 percent YoY growth. 

The bank continued to maintain a cost-to-income ratio of 48 percent, resulting in a 51 percent YoY growth in operating profit before Value Added Tax on financial services, to post Rs.993.6 million. The bank’s aggregate tax contribution of Rs.571.4 million accounted for a significant 58 percent of the bank’s operating profit before all taxes.
Owing to the growing acceptance of its development-focused banking model, the bank’s advances grew by a commendable 8 percent to close at Rs.97 billion. Local currency deposits grew by over Rs.1 billion during the quarter but the overall portfolio remained at Rs.132 billion, after considering the effects of rupee appreciation against the US dollar for foreign currency deposits. The bank continued to grow its advance base while maintaining an industry low Stage 3 impaired financing ratio of 1.6 percent. The bank closed the first quarter with total assets of Rs.161.6 billion.
Amana Bank’s ROE and ROA grew to 7.8 percent and 1.8 percent, respectively, compared to 6.2 percent and 1.2 percent, respectively to the corresponding period of 2023. As at March 31, 2024, Amana Bank’s common equity Tier 1 and total capital ratios stood at 15.6 percent and 18.3 percent, respectively, well above the regulatory minimum requirement of 7 percent and 12.5 percent.