# AMANA BANK PLC Financial Summary

Canonical URL: https://pal.lk/updates/abl-financial-summary
Symbol: ABL.N0000
Company: AMANA BANK PLC
Sector: Banks
Published: 2026-08-14T17:08:54Z
Last updated: 2026-08-14T17:08:54Z

# Amãna Bank PLC Financial Summary and Investment Analysis

## Executive Overview

Amãna Bank PLC is a licensed commercial bank operating a non-interest-based, development-focused banking model, with particular emphasis on SMEs, retail customers, trade finance and financial inclusion. It has no subsidiaries or associates.

**Periods covered:** Q3 2023 through Q2 2026, including CY2023, CY2024 and the audited CY2025 Annual Report. The latest Q2 2026/H1 2026 statements are unaudited.

The underlying financial trajectory has strengthened materially. CY2025 produced record Profit After Tax (PAT) of **LKR 2.481 Bn**, up 40%, while H1 2026 PAT increased another 25% YoY to **LKR 1.125 Bn**. Advances expanded particularly rapidly during 2025, while asset quality remained strong. The principal counterbalance is declining capital headroom as the balance sheet expands, alongside tightening liquidity/rate conditions and geopolitical uncertainty.

The CY2025 financial statements received an unmodified audit opinion stating that they presented a true and fair view.

## Financial Performance

### Revenue and Profitability Trends

For a bank, conventional revenue, gross profit and gross margin are not meaningful; **Net Financing Income (NFI)** and **Total Operating Income (TOI)** are more appropriate.

**LKR Mn**

| Period  |     NFI | Total Operating Income |   PAT | PAT / TOI |
| ------- | ------: | ---------------------: | ----: | --------: |
| Q3 2023 | 1,486.4 |                2,264.5 | 471.9 |     20.8% |
| Q4 2023 | 1,644.5 |                2,472.6 | 495.3 |     20.0% |
| Q1 2024 | 1,796.0 |                2,359.2 | 422.2 |     17.9% |
| Q2 2024 | 1,743.7 |                2,074.1 | 341.2 |     16.5% |
| Q3 2024 | 1,592.1 |                2,067.7 | 355.9 |     17.2% |
| Q4 2024 | 1,742.6 |                2,188.7 | 655.3 |     29.9% |
| Q1 2025 | 1,946.9 |                2,378.6 | 434.1 |     18.3% |
| Q2 2025 | 1,885.9 |                2,354.7 | 467.2 |     19.8% |
| Q3 2025 | 2,255.4 |                2,764.5 | 705.9 |     25.5% |
| Q4 2025 | 2,231.9 |                2,562.8 | 873.7 |     34.1% |
| Q1 2026 | 2,215.4 |                2,686.4 | 502.0 |     18.7% |
| Q2 2026 | 2,228.5 |                2,842.5 | 622.7 |     21.9% |

Q2 2026 was strong: TOI increased **22% YoY** and approximately 5.8% QoQ, while PAT rose **33% YoY and 24% QoQ**. H1 2026 PBT reached **LKR 1.874 Bn**, +22%, and PAT reached **LKR 1.125 Bn**, +25%.

CY2025 NFI rose 21% to **LKR 8.320 Bn**, fee and commission income rose 27% to **LKR 1.369 Bn**, TOI rose 16% to **LKR 10.061 Bn**, PBT rose 47% to **LKR 4.091 Bn**, and PAT rose 40%.

Part of late-2025 profitability was supported by impairment reversals: Q4 2025 recorded approximately **LKR 527.9 Mn** of impairment reversals. Q2 2026 instead recorded a **LKR 67.5 Mn impairment charge**, making the latest profit growth less dependent on reversals.

From CY2023 to CY2025, PAT CAGR was approximately **33.8%**, versus TOI CAGR of approximately 4.5%, demonstrating substantial improvement in operating and credit-cost efficiency.

## Balance Sheet Analysis

**LKR Bn**

| Period End | Total Assets | Net Advances | Deposits | Equity |
| ---------- | -----------: | -----------: | -------: | -----: |
| 2023-12-31 |       159.45 |        89.66 |   132.94 |  21.70 |
| 2024-12-31 |       182.34 |       111.30 |   154.41 |  22.84 |
| 2025-12-31 |       204.31 |       150.95 |   172.07 |  25.09 |
| 2026-06-30 |       215.23 |       157.01 |   180.39 |  26.07 |

CY2025 was exceptionally expansionary: advances increased **36%**, versus deposits +11% and assets +12%. From 2023-2025, advances grew at approximately **29.8% CAGR**, much faster than deposits at 13.8%.

H1 2026 growth was more balanced: net advances +4%, deposits +5%, assets +5% and equity +4%. Net advances/deposits stood near **87%**.

Traditional current and debt/equity ratios are not appropriate measures for a commercial bank because deposits and financing are core operating items; regulatory capital and liquidity ratios provide the more meaningful solvency assessment.

## Cash Flow Analysis

| LKR Bn                   |  CY2025 | H1 2026 |
| ------------------------ | ------: | ------: |
| Operating cash flow      | (16.45) |    1.15 |
| Investing cash flow      |   15.06 |   11.97 |
| Financing cash flow      |  (0.73) |    0.00 |
| Closing cash equivalents |   14.96 |   28.07 |

CY2025 negative operating cash flow primarily reflected **LKR 39.02 Bn** of financing/advance growth, partly funded by LKR 17.59 Bn of deposit growth; this is different from negative operating cash flow in an industrial company.

H1 2026 operating cash flow recovered to **LKR 1.147 Bn**, versus negative LKR 3.949 Bn in H1 2025.

H1 capital expenditure increased sharply: **LKR 2.994 Bn** for property/plant/equipment and **LKR 246 Mn** for intangible assets, largely associated with the new corporate office. Conventional free cash flow is therefore not particularly useful for evaluating the Bank.

CY2025 dividends paid were **LKR 729.7 Mn** against PAT of LKR 2.481 Bn, consistent with a moderate payout profile.

## Key Financial Ratios and Growth Indicators

| Indicator                   | CY2024 | CY2025 | H1 2026 |
| --------------------------- | -----: | -----: | ------: |
| Financing margin            |   4.0% |   4.3% |    4.3% |
| ROE                         |   8.0% |  10.4% |    8.9% |
| ROA                         |   1.6% |   2.1% |    1.8% |
| Cost-to-income              |   ~53% |  51.8% |   51.2% |
| CET1 ratio                  |  15.0% |  13.0% |   12.4% |
| Total capital ratio         |  17.6% |  14.7% |   13.8% |
| All-currency LCR            | 252.8% | 231.5% |  206.6% |
| NSFR                        | 129.4% | 142.5% |  144.2% |
| Net Stage 3 ratio           |  ~1.3% |   1.2% |    1.1% |
| Stage 3 impairment coverage |  59.6% |  56.1% |   59.1% |

Capital remains compliant but is the main balance-sheet metric to monitor. At Q2 2026, Total Capital was **13.8% versus the 12.5% minimum**, leaving only 1.3 percentage points of regulatory headroom, compared with 5.1 points at end-2024.

Liquidity remains exceptionally above regulatory minima despite LCR declining as funds are deployed into financing.

CY2025 EPS was **LKR 4.50**, NAV/share **LKR 45.52**, dividend **LKR 1.30**, payout ratio **28.9%** and dividend yield 4.3%.

At the 2026-08-14 close of **LKR 26.40**, against Q2 2026 NAV of LKR 47.30, the share traded at approximately **0.56x book value**. Reported Q3 2025-Q2 2026 EPS totals approximately LKR 4.91, implying an indicative trailing P/E around **5.4x**.

## Economic and Market Context

Management described 2025 as increasingly favourable for credit growth due to economic recovery, lower financing rates, improved business confidence, greater exchange-rate stability and the reopening of vehicle imports in 2025-02.

Conditions became less straightforward in early 2026. Cyclone Ditwah, Middle East instability, elevated global energy prices and exchange-rate volatility increased operating pressures. Management also expects strong private-sector credit demand to tighten rupee liquidity and potentially create upward pressure on financing/policy rates.

## Future Potential and Outlook

Key growth avenues identified include:

* Continued emphasis on **SME financing**, value-chain financing and advisory services.
* Vehicle/EV and housing financing following reopening of the vehicle market.
* Export industries, manufacturing, local vehicle production and major developments including Port City.
* Expansion of trade finance and international correspondent relationships.
* Digitalisation through Amãna Bank Connect, WhatsApp banking, RPA and an automated credit-origination system.
* Customer reach expansion: customers increased from **485,654 to 540,543** during 2025, while Self Banking Centres increased from 34 to 41.
* The new LKR 2.7 Bn corporate office and planned disposal of the former property; management expects the disposal to strengthen financials, although no gain has yet been quantified.

## Risks and Challenges

* **Capital compression:** rapid asset growth and the corporate-office acquisition have reduced capital buffers.
* **Credit-cycle risk:** exceptionally fast advances growth could eventually pressure asset quality despite the current low Stage 3 ratio.
* **Off-balance-sheet growth:** commitments and contingencies increased from LKR 44.20 Bn at end-2025 to **LKR 61.57 Bn** at Q2 2026, approximately +39%.
* **Funding/rate risk:** tighter rupee liquidity and rising financing rates may weaken SME borrowing demand and raise stress.
* **Earnings volatility:** trading income and impairment reversals can materially affect quarterly profitability.
* **Cost pressure:** H1 operating expenses rose 19%, similar to the 18% TOI increase.
* **Cybersecurity:** the Bank reported increased global phishing/cyber activity in 2025, although no material impact occurred; ISO 27001 controls and enhanced monitoring are in place.
* **Climate/ESG risk:** physical climate events can transmit into credit and operational risk; climate risk has been integrated into the broader risk framework.

## Shareholder and Corporate Information

At 2026-06-30 there were **551,222,806 shares**. IB Growth Fund (Labuan) LLP held **24.90%**. Senthilverl Holdings-linked accounts through Sampath Bank and Cargills Bank represented **14.48% and 5.27%** respectively. Bank Islam Malaysia and AB Bank each held 3.80%, while Islamic Development Bank held 3.33%.

Public holding was **44.66%**, with 10,269 public shareholders and float-adjusted market capitalisation of **LKR 6.67 Bn**. Managing Director/CEO Mohamed Azmeer held 300,000 shares; other listed directors held nil.

Over the latest 90 trading sessions to 2026-08-14, the share declined **2.58%**, trading within LKR 25.60-29.40. Foreign ownership remained effectively unchanged at approximately 39.4%.

## Investment Decision Indicators

**Strengths**

* Sustained double-digit profit growth and stronger operating efficiency.
* Rapid expansion of the core financing portfolio.
* Low net Stage 3 ratio and improving coverage.
* Strong CASA of approximately 45% and very high regulatory liquidity.
* Increasing fee income and SME/trade-finance penetration.
* Market price materially below reported NAV.

**Weaknesses**

* Capital ratios are declining toward regulatory thresholds.
* H1 2026 expense growth remained high.
* Recent earnings include some volatility from impairment and trading movements.
* Large corporate-office expenditure increased fixed assets and capital consumption.

**Opportunities**

* SME, trade, vehicle, EV, housing and export-sector financing.
* Digital/process automation and broader self-banking distribution.
* Potential value release from disposal of the previous corporate office.

**Threats**

* Rising financing rates, tighter liquidity, energy/FX volatility and geopolitical disruptions.
* Credit deterioration if rapid loan growth outpaces underwriting capacity.
* Growing off-balance-sheet exposures and cyber/climate risks.

### Overall Assessment

The reports show a bank that has transitioned into a substantially stronger profitability phase, with CY2025 and H1 2026 confirming that improvement was not confined to a single quarter. Asset quality, liquidity and funding composition remain major strengths, while the current market valuation is substantially below reported book value.

The principal metric requiring close monitoring is **capital adequacy**: advances and assets have expanded much faster than equity, reducing Total Capital from 17.6% at end-2024 to 13.8% by Q2 2026. Future investment outcomes therefore depend heavily on whether Amãna Bank PLC can continue converting rapid financing growth into sustainable earnings and retained capital without meaningful deterioration in credit quality.