As an exception to the banking sector single shareholder limit, the Central Bank has allowed one of the shareholders of Sri Lanka’s Amana Bank to own up to 30% of the issued shares of the bank. Currently IDB has 120.4 million shares or 9.62% stake in Amana Bank, Sri Lanka’s first non-interest based Islamic bank. In recent times, the Central Bank had allowed several banks to have their key shareholders own even beyond 70% such as in the case of Union Bank and Cargills Bank. But they must gradually bring those stakes down to the regulatory limits over time. Amana Bank is required to meet its minimum regulatory core capital of Rs.7.5 billion by June 30, 2017. Given the performance of the share price and the non-receipt of dividends, shareholders may not show appetite to contribute for any fresh capital calls by the bank.
The Islamic Development Bank will invest more cash in Sri Lanka's Amana Bank through an investment vehicle. Approval has been recently given for the investment group to go up to 29.9% of the stock by subscribing to a cash call. The investment vehicle IB Growth Fund (Labuan) will buy stock in in an upcoming rights issue. The investment deal was inked on May 18 in Jeddah, Saudi Arabia.
Amana Takaful Life Limited (ATLL) rang the opening bell to commence trading and celebrate the listing of its shares on the Colombo Stock Exchange (CSE). Speaking at the event, ATLL Director Dato' Mohd Fadzli Yusof stated that the listing brings ATLL to the mainstream of the financial landscape in Sri Lanka. Chairman of CSE Vajira Kulatilaka congratulated ATLL for achieving a successful listing. He also added that while listing on the CSE adds immense value and prestige, it also comes with obligations to investors and other stakeholders. Amana Takaful Life Limited and its parent, Amana Takaful PLC are fully fledged Takaful companies, offering life and general insurance solutions. ATLL distributes its products through an island-wide network of 26 branches, covering 22 districts.
The shares of Amana Takaful Life will be listed on the Colombo Stock Exchange on Thursday. The initial public offering of Amana Takaful Life by way of an offer for sale of 75 million rupees was oversubscribed at its opening day on 21st July, 2016. The company offered 50 million ordinary voting shares at 1.50 rupees per share which represents 10% of its total stake.
Sri Lanka could issue Sukuk and take the lead in becoming a regional centre for Islamic financial services. Bar Association President Shibly Aziz said this can open Sri Lanka to a new niche of investors, rather than the conventional ones. Sri Lanka already has more than twenty years experience in Islamic finance with an approved Islamic bank in operations.
Adam Capital Micro Credit Ltd, a Sharia compliant company and wholly owned subsidiary of Adam Capital PLC, entered in to an agreement with Islamic Insurance provider Amana Takaful Life Limited to promote their products, playing a facilitator role on a fee sharing basis. Adam Capital Micro Credit business has grown steadily since commencing operations in July 2015, and expects to generate steady additional fee based income by this arrangement. The plan is to serve the underserved community within a radius of 15km from the office located at Grandpass Road, Colombo 14, assisting them to up lift their living standards.
Amãna Bank, a Sri Lankan bank operating on the non-interest based Islamic banking model, made a net profit of 47.5 million rupees in the June 2015 quarter against a loss of 85.6 million rupees a year ago. Financing income rose 15 percent to 676 million rupees while expenses rose 7.3 percent to 330 million rupees resulting in net financing income rising 24 percent to 346 million rupees during the period. Earnings per share of Amãna Bank were four cents in the quarter. Net fee and commission income rose 16 percent to 38 million rupees. Amãna Bank’s total assets were up 15 percent to 40 billion rupees as at 30 June 2015 from 31 December 2014 while total deposits rose 13 percent to 33 billion rupees.
The Islamic Finance market has an estimated market of around Rs 300 billion and with the operation of currently five commercial licensed banks, three finance companies and other institutions, Sri Lanka’s total deposit base is nearly Rs 35 billion and the total loan base is Rs 24.8 billion. In Sri Lanka the Banking Act No 30 of 1988 was amended in March 2005 to accommodate the concepts of Islamic banking. Major banks such as HSBC, Standard Chartered Bank ABN Amro have dedicated Islamic Banking subsidiaries or Islamic Banking windows. Islamic finance is considered a key opportunity to bring in funds via different agencies, countries and foreign currencies. Introducing new Shariah-compliant instruments and products is important for expanding the Islamic finance industry in the country.
ICMIF member Amana Takaful, Sri Lanka, recently announced a payment of surplus to its general insurance customers. This means Takaful policyholders will receive a proportionate rate from the surplus of the risk fund. Non-claimant Takaful policyholders will receive their share of the surplus amounting to 12.5% of the residual portion of the Risk Fund shortly, according to Fazal Ghaffoor, Chief Executive Officer of Amana Takaful. As opposed to conventional insurance the Takaful concept not only benefits claimants but also takes care of non-claimants. Non-claimants receive a proportionate share of the surplus from the risk fund at the end of a defined period.
National Asset Management Limited (NAMAL) is going to launch a new Sharia-compliant Unit Trust called "NAMAL Sharia Fund". It will offer clients an opportunity to invest in a large diversified portfolio of Sharia-compliant equities listed on the Colombo Stock Exchange. Dar Al Sharia Legal and Financial Consultancy LLC (DAS) will assist the fund with consulting services.
A new milestone was reached by the Islamic finance industry of Sri Lanka. The first Shariahbased income fund for the country was recently launched. It has the structure of a unit trust. It will be followed by another unit trust - Adl Mudarabah Fund - which will be launched under the combined expertise of Adl Capital Limited and Comtrust Asset Management (Pvt.) Limited. The Trustee of the fund will be Deutsche Bank. Its role is to monitor all investments.
According to the CEO of Amana Bank, Faizal Salieh, it is expected for the current $ 250 million of banking assets to rise to $ 1.5 billion in the coming years. About 8% of the country's population of 21.5 million people are Muslims. The strong demand for Islamic financial products comes not only from the Muslim population but from non-Muslims as well. Still at a preliminary stage, the local Islamic finance is nevertheless developing. The expected rapid growth of the local Islamic finance is attributed to the increased awareness of faith based concepts and the internalization of the financial markets.
Amana Takaful showed a significant growth of 32% for the first half of 2012. According to the figures of the period the total Gross Written Premium(GWP) is as high as Rs 770.8 million. Compared to this, the same period last year had a GWP of Rs.584.7 million. The company's development is in accordance with the 11% growth in overall industry.
With the scheduled launch of the company’s Shariah compliant Independent Finance Unit branded “CDB Meezan”, Citizens Development Business Finance PLC (CDB) endeavours an expansion in the domestic market of Islamic Finance. As part of CDB, “CDB Meezan” will act under its supervision and will offer a range of deposit and financing products and services to its entire clientele. “CDB Meezan” was made possible thanks to the expert guidance and supervision of SEC registered Investment Manager, Adl Capital Limited.
Mr. John Robertson Wright was appointed Non-Executive Director of EIIB by the Board of EIIB.
Mr. Wright is a career Banker with important experience in UK and international markets including assignments in India, Sri Lanka, West Africa, Canada, Hong Kong and the United States. Before this appointment he was Chief Executive of Oman International Bank for 7 years, Chief Executive of the Northern and National Irish Banks in Ireland for 5 years, Chief Executive of the Gulf Bank in Kuwait and finally Chief Executive of Clydesdale & Yorkshire Banks prior to retirement.
It appears that Sri Lanka's Amana Takaful wants to raise 16 million rufiyaa in an initial public offer by selling 800,000 shares.
The opening will be on September 20 and the shares are going to be sold at 20 rufiyaa each.
Amãna Bank is Sri Lanka's first licensed commercial bank to operate fully under the principles of Islamic banking. The launch was simple, having Central Bank Governor Ajith Nivard Cabraal as the Chief Guest.
Amãna Bank will be offering a range of financial products and services like: Current Accounts, Savings Accounts, Children’s Savings Account, Term Investment Accounts, Home Financing, SME Banking, Corporate Banking, Trade Services and Treasury Services.
Suresh R I Perera, Principal – Tax and Regulatory, KPMG Ford, Rhodes, Thornton & Co stated that there were many milestones achieved towards Islamic Banking in Sri Lanka. The statement was given at 3rd Sri Lanka Islamic Banking and Finance Conference which was held in Colombo.
Faizel Salieh, Managing Director/CEO , Amana Bank Ltd , added that if they are to build the right attitude of Islamic Banking and Finance (IBF) in Sri Lanka there should be right behaviour in the whole financial market and the quality dimension over the quantity dimension and a high level of conviction is also important.
Amana Takaful will launch Sri Lanka’s first Sharia’h compliant unit linked Insurance Plan. . The product is branded “Amana Takaful Prosper” and is the first of its kind. The customer will be able to obtain a Takaful (insurance) cover as well as enjoy a choice of Sharia’h compliant investment options.
Reyaz Jeffrey, General Manager/ Chief Executive Officer, Amana Takaful Life, stated that this option was right for all Sri Lankans because it's a part of the expansion plans of product offerings in the backdrop of a peaceful environment and apt economic conditions.
Although bigger claims were asked, Amana Takaful lost less money in 2010. On the other hand, the company was hindered to generate more income because of the lack of compliant instruments.
In Sri Lanka the insurance industry in general is making endorsement losses and the bottom line is propped by investment income. Industry analysts gave a warning by saying that lower interest rates will hit the industry and general insurance premium may have rise.