Fitch Ratings Sri Lanka affirmed Amãna Bank PLC’s national long-term rating at “BB+” with a stable outlook, in its latest rating review carried out in September 2021.
Commenting on the rating affirmation, Amãna Bank Chief Executive Officer (CEO) Mohamed Azmeer said: “At a time when the operating environment continues to be challenging owing to the pandemic, we are humbled to note that Fitch Ratings has affirmed our national long-term rating at BB+ with a stable outlook. This affirmation demonstrates Amãna Bank’s resilience and tenacity where it successfully overcame many challenges during the last two years.”
Fitch Ratings communiqué stated that Amana Bank’s national long-term rating was influenced by the challenging operating environment and its asset quality, while comparing its small and developing franchise against peers, and considering its high-risk appetite stemming from its large exposure to retail and SME customers, thus, maintaining the bank’s rating profile which was upwardly revised in June 2020. This rating is affirmed despite the outlook on Sri Lanka’s operating environment assessment.
Fitch expects Amãna Bank’s financing portfolio, which is driven predominantly by the high yielding SME and retail segments to grow higher than the sector in the medium-term, which will result in boosting the bank’s profitability.
During the first half of 2021, the bank’s profit before tax (PBT) doubled or grew by 102% YoY to reach Rs. 505.7 million from Rs. 250.5 million recorded in H1 of 2020. The bank recently announced its fourth consecutive dividend pay-out in the form of a scrip dividend, totalling over Rs. 260 million and being 30% higher to the dividend paid in 2020.
According to Fitch, a rating upgrade for Amãna Bank can be favourable upon the enhancement of the bank’s franchise together with a sustained improvement in its financial profile leading to an improved intrinsic credit profile relative to the universe of Sri Lankan entities rated on the national rating scale.
Amãna Bank PLC is an institution licensed by the Central Bank of Sri Lanka (CBSL) and listed on the Colombo Stock Exchange (CSE) 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.