Fitch affirms Amana Bank’s rating at BB+: Stable

Fitch Ratings Sri Lanka has affirmed Amana Bank PLC’s National Long Term Rating at BB+ with a Stable Outlook, thereby 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, the bank said in a media release.

Fitch Ratings has commented that Amana Bank's National Long-Term Rating, which is driven by its intrinsic financial strength, is highly influenced by the challenging operating environment and its asset quality. The global rating agency communique adds that Amana Bank’s rating also compares its small and developing franchise against peers, and considers its high-risk appetite stemming from its large exposure to retail and SME customers.

Fitch expects Amana 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 doubled or grew by 102 percent 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. 

Commenting on the rating affirmation, Amãna Bank’s Chief Executive Officer, Mohamed Azmeer said, “At a time when the operating environment continues to be challenged 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. The bank also continues to maintain better asset quality through prudent portfolio management and customer engagement thereby lowering its non-performing advances compared to the industry.”