New loans, higher margins boost Amana Bank 2Q
Amana Bank PLC reported some decent performance during the quarter ended in June 30, 2018 (2Q18) as the bank continued to expand its loan book while stretching its margins but the asset quality weakened.
Amana Bank, Sri Lanka’s first noninterest based Islamic bank reported 5 cents or Rs.125.5 million for the April – June quarter (2Q18), up 47 percent from the same period last year.
The bank earned a net interest income of Rs.793.5 million for the period, up 25 percent from a year earlier.
The bank with an asset base of just shy of Rs.70 billion gave new loans worth of Rs.4.2 billion recording a 10 percent growth in the loan book during the six months to June 30.
The bank has a total loan book of Rs. 47.6 billion as of June 30.
However the nonperforming loans rose to 2.49 percent from 1.89 percent last year.
The deposits grew by Rs.4.5 billion or 8.8 percent on year to Rs. 55.4 billion as the bank managed to fund its loans fully through the deposits.
In 2017, Amana Bank issued 1.25 billion new shares at Rs.3.80 to its existing shareholder, Islamic Corporation for The Development of the Private Sector (ICD), fund manager of IB Growth Fund (Labuan) LLP – (IBGF) to raise Rs.4.75 billion.
Currently Jeddah-based Islamic Development Bank group, of which IB Growth Fund (Labuan) LLP part of, has 29.97 percent stake in the bank.
As of June 30, the bank had a tier I capital base of Rs.10.1 billion with a ratio of 18.5 percent and the total capital base of Rs.10.9 billion with a ratio of 19.9 percent.
Meanwhile, for the six months ended in June 30, 2018 (1H18) Amana Bank reported earnings of 12 Cents or Rs.288.3 million, up 90 percent from the same period last year.
The net interest income rose by 32 percent on year to Rs.1.58 billion supported by new loans and the higher margins. The net interest margin rose to 4.4 percent by the end of the 1H18 from 4.2 percent in December 2017. During the period, Amana Bank paid its inaugural dividend of seven cents a share since going public in 2013 December.
Amana Bank share is currently trading at Rs.3.10, below its Initial Offer Price of Rs.7.00 a share.
Commenting on its first half performance, the bank’s Chief Executive Officer Mohamed Azmeer said, “It is encouraging to see the traction the bank has achieved during the last six month, resulting in sustained profitability for the bank.
Having commenced reciprocating our shareholders with the inaugural dividend, we are confident that this performance will lead us to greater success in line with our 5-year strategic plan”.