Cargills Bank records steady performance in 9M with Rs. 432 Mn PAT
Cargills Bank’s results for the nine months ended September 30, 2023 reflected continuing QoQ improvement in profitability. Profit after tax at Rs. 432 Mn was higher by Rs. 324 Mn than in the corresponding period of 2022.
The Bank has been able to maintain this momentum of profitability growth, and are confident the results of 2023 will reflect the strong commitment of the Bank’s team, successful execution of its strategy, a continued rigorous focus on market trends and its adaptability to a volatile environment.
Net interest income grew 15% or Rs. 353 Mn in the nine months compared with the corresponding period of 2022. The Bank directed its resources towards higher yielding assets, hedging interest rate risk and prudently managing deposits. In addition, close monitoring of the Bank’s lending portfolio and timely solutions offered to financially stressed customers helped maintain a healthy NIM to date.
Net fee and commission income of Rs. 590 Mn for the nine months was lower than the Rs. 641 Mn in the previous year. The decrease of 6% related largely to lower trade volumes and reduced net income from card related services.
Total operating expenses increased 25% from Rs. 1.7 Bn last year to Rs. 2.1 Bn. Personnel expenses increased 15% largely due to adjustments to salary and welfare benefits considering increased costs of living and market conditions. Impairment charges totaling Rs. 607 Mn reflected a reduction of 50% in the first nine months of 2023 evidencing a focused and proactive management of delinquencies and commendable overall team efforts in this direction.
VAT on financial services and income tax expenses increased substantially mainly due to growth in profits and the increased corporate income tax rate effective October 1, 2022. The Bank’s total Capital Adequacy Ratio was 20.43% while the Statutory Liquid Assets Ratio stood at 37.72%. Total assets of the Bank at 30 September stood at Rs. 64.7 Bn, an increase of 20% or Rs. 11 Bnin the first nine months of the year. Financial Assets measured at fair value through other comprehensive income grew by 92% to reach Rs. 19.6 Bn. Positive gains were reflected in Other Comprehensive Income. The loan book registered moderate growth, from Rs. 36 Bn to Rs. 36.8 Bn, given conditions prevailing. Deposits to customers grew 20% from Rs. 37.8 Bn at the end of 2022 to Rs. 44.9 Bn at the reporting date amidst continued reductions in market interest rates.
The Colombo Stock Exchange (CSE) has approved the listing of the Bank’s shares on the CSE. Steps are being taken to duly offer to the public 62.5 Mn shares of the Bank at Rs. 8.oo per share through an Initial Public Offering.
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