Financial Highlights
- Profit after Income Tax for the 1st Half – Rs. 137 Mn
- Net gains from financial assets at fair value through profit or loss grow by Rs. 83 Mn
- Net gains from derecognition of financial assets at fair value through other comprehensive income grow by Rs. 249 Mn
- Bank remains well capitalized and liquid;
- Total Capital Ratio (CAR) at 21.71%
- Liquidity Coverage Ratio (LCR), All Currency at 352.94%
- Net Stable Funding Ratio (NSFR) at 125.75%
- Total Assets grow by Rs. 3.1 Bn
Cargills Bank’s results for the six months ended 30 June 2024 reflected a QoQ decline in profitability. Profit after tax at Rs. 137 Mn was lower by Rs. 116 Mn compared to the corresponding period of 2023. Net interest income of Rs. 1.65 Bn was a marginal decrease of Rs. 49 Mn in the six months period compared with the corresponding period of 2023. The marginal reduction in NIM was due to the gradual reduction in the interest rates and market volatility. The Bank continued to focus on repricing of deposits and advances reflecting the market situation and managing the NIM in an optimal manner.
Net fee and commission income of Rs. 384 Mn for the first half of 2024 was lower than the Rs. 408 Mn recorded in the previous year. The decrease of 6% was largely due to downward revision of tariffs in relation to trade operations and reduced net income from card-related services.
Additionally, net gains from financial assets at fair value through profit or loss grew by Rs. 83 Mn to reach Rs. 180 Mn in IH 2024. Capital gains realized on derecognition of financial assets boosted other income streams by Rs. 249 Mn in the period under review to reach Rs. 278 Mn.
Total operating expenses increased by 18% from Rs. 1.35 Bn last year to Rs. 1.59 Bn. Personnel expenses increased by 23% largely due to adjustments to salary and welfare benefits considering increased costs of living and market conditions. Other operating expenses grew by 17% mainly from the increased cost of utilities and the cost of repair and maintenance of IT assets.
Impairment charges totaling Rs. 440 Mn reflected a marginal reduction of 1% from Rs. 446 Mn in the first six months of 2023 evidencing a focused and proactive management of delinquencies. Additional impairment overlays considered necessary have been incorporated after a careful scrutiny of the status of borrowers. The Bank’s Stage 3 Loans (net of Stage 3 Impairment) to Total Loans Ratio stood at 9.92% while Stage 3 Provision Cover was 46.15% as at 30th June 2024.
The Bank maintains Capital Adequacy and Liquid Assets Ratios well within the minimum requirements prescribed by the Central Bank. The total Capital Adequacy Ratio was 21.71% while all liquidity related ratios were well above the regulatory minimum.
Total assets of the Bank as at 30 June stood at Rs. 72.8 Bn, an increase of 4% or Rs. 3.1 Bn in the first six months of the year. The loan book registered a moderate growth, from Rs. 40.6 Bn to Rs. 41.1 Bn, given conditions prevailing. Financial Assets measured at fair value through other comprehensive income grew by 5% to reach Rs. 18.7 Bn. Negative gain of Rs. 14 Mn was reflected in Other Comprehensive Income.
Customer Deposits grew by 3% to Rs. 52.2 Bn at the reporting date from Rs. 50.7 Bn at the end of 2023 amidst continued reductions in market interest rates.
Mr. Richard Ebell who served on the Bank’s Board as Chairman retired on 02 July 2024 in compliance with the Banking Act on Corporate Governance for licensed commercial banks issued by the Monetary Board of the Central Bank. Mr. Ebell completed nine years in the Bank Board having been appointed in 2015. Mr. Asoka Pieris, who served as Deputy Chairman was appointed as the Chairman of the Bank, with effect from July 3, 2024.
About Cargills Bank
With a vision to be Sri Lanka’s most inclusive bank driven by digital enablement, Cargills Bank is rated A(lka) by Fitch Ratings Lanka and is the financial services arm of the Cargills Group, providing a full range of banking and financial services. The Bank has also embraced a vision for a cashless society, driven by island-wide technology-based payment solutions.
In addition to branches, ATMs and digital channels a unique feature of Cargills Bank is that customers can also access their Cargills Bank accounts through Cargills Supermarket checkout counters across 475+ locations Island-wide with no additional fees, courtesy of the Cargills Bank agency banking service. This wide reach and hybrid network model ensure that financial services are conveniently accessible to businesses across Sri Lanka.
Cargills Bank is headquartered in Colpetty in Colombo and maintains branches at Maitland Crescent, Maharagama, Old Moor Street, Wattala, Kandy, Peradeniya, Nuwara Eliya, Chilaw, Fort, Rajagiriya, Ratnapura, Thanamalwila, Matara, Galle, Kurunegala, Kaduruwela, Vavuniya, Chunnakam, Jaffna Nawalapitiya, Negombo, Anuradhapura and Bandarawela. The Bank’s branch network is bolstered by 30 Cargills Bank MINI service points located within selected Cargills Food City outlets that carry out banking functions such as account opening and customer support.
