Amana Bank to float IPO on the Colombo Stock Exchange next month - IFN

Amana Bank to float IPO on the Colombo Stock Exchange next month

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SRI LANKA: Amana Bank, the only fully Shariah compliant financial institution in the republic, has revealed plans for an IPO listing on the Colombo Stock Exchange (CSE). Having obtained necessary approvals from the bourse, the IPO is scheduled to open on the 11th December. The bank will issue 214.3 million new ordinary shares at LKR7 (US$0.05) per share with the option of a further 71.5 million new ordinary shares. Should the bid receive full subscriptions, the issue is set to raise LKR1.5 billion (US$11.42 million); while if the option is also exercised and fully subscribed, the total issue would raise LKR2 billion (US$15.23 million). Following a successful IPO, Amana Bank will most likely be listed on the Diri Savi Board, the secondary board of the CSE. Reaffirming his confidence in the bank and the Islamic finance industry, Osman Kassim, the chairman of Amana Bank, said: “The present and future success of the bank is owing to the vision we had for this unique non-interest, asset-based model of banking, which ensures that risks and rewards are shared with the bank and its customers.” Over the past two years, Amana Bank has achieved a 188% growth in customer financing and a 70% growth in customer deposits. It currently has 24 branches located across Sri Lanka. Faizal Salieh, the managing director and CEO of the financial institution, stated that Amana Bank’s present direction and business strategies are aligned to the country’s economic strategy. “We have a clear focus on the consumer and SME sectors which carry the potential for future economic growth. The funds raised from this IPO will be channelled to meet the regulatory minimum capital requirements and to support the bank’s growth and expansion.” Amana Bank has five strategic investors: three of which are international banking institutions (the IDB, Bank Islam Malaysia and AB Bank of Bangladesh). For the first nine months of the year Amana Bank recorded a 57% increase in customer financing of approximately LKR4.1 billion (US$31.21 million) along with a 27% accretion of LKR3.6 billion (US$27.4 million) in its deposit portfolio.