Amana Bank upgraded to BBB-(lka) Investment Grade; Stable Outlook: Fitch

Chairman Asgi Akbarally	MD/CEO Mohamed Azmeer

In its latest rating review carried out in August 2024, Fitch Ratings Sri Lanka has upgraded Amana Bank’s National Long-Term Rating from BB+(lka) to an Investment-Grade Rating of BBB-(lka), with a Stable Outlook.

According to the communiqué issued by Fitch Ratings, this rating upgrade reflects Amana Bank’s sustained improvements in its financial profile relative to better-rated peers. Fitch further stated that Amana Bank’s operating profit/risk-weighted assets ratio (four-year average of 2 percent, 1H24: 2.9 percent) has been improving despite the operating environment challenges that have prevailed, supported by healthy net financing margins, sizeable trading gains from forex trading (four-year average of around 38 percent of operating profits) and lower credit costs. Fitch expects this improved profitability to be sustained in the medium term on account of the shift expected in the bank’s advance book towards high-yielding SME and retail segments, from low-yielding corporates. 

The bank’s ‘Investor Connect’ video, published on the CSE website recently, highlights the strong growth in its total assets over the past decade. From Rs.23 billion in 2013, the bank’s total assets have surged to Rs.174 billion as of 2Q 2024, reflecting a compound annual growth rate of 22 percent, significantly outpacing the industry average. This growth has translated into the bank’s profit before tax (PBT) rising from a negative Rs.438 million in 2013 to a positive Rs.2.3 billion in 2023. During the first half of 2024 the bank has already reported a PBT of Rs.1.4 billion, reflecting an impressive 68 percent YoY growth. 

Amana Bank Chairman Asgi Akbarally stated “This significant upgrade to an Investment-Grade Rating is a validation of the strong foundation we have built and performance at Amana Bank, which will pave the way for multiple opportunities for growth and expansion, benefiting all stakeholders.” 

Amana Bank Managing Director/CEO Mohamed Azmeer stated, “With a stronger capital base, sustained financial performance and a steadily growing balance sheet, we are well-positioned for accelerated growth and expansion, which we anticipate will positively impact our financial success and future ratings.”