Thursday 24th April 2014

Cargills into banking; CB Chief says in the future context Sri Lanka not overbanked

  Published : 12:46 am  September 8, 2011  |  3,438 views  |  21 comments  |  Print This Post   |  E-mail to friend 

Top blue chip and consumer brand Cargills (Ceylon) Plc is diversifying into banking, a move which the industry feels already crowded but Central Bank justified its provisional approval saying in the futuristic context the country isn’t overbanked.
Cargills yesterday announced that the Central Bank has issued a provisional approval to set up Cargills Agriculture and Commercial Bank (CACB), subject to fulfilling routine terms and conditions. The new venture will be set in partnership with Cargill’s parent CT Holdings pursuant to a joint application made.

Cargills sources declined to comment beyond the brief initial statement issued yesterday. Post announcement, Cargills saw its share price rise to a high of Rs. 239.80 before closing at Rs. 229.90, up by Rs. 9.10. CT Holdings peaked to a high of Rs. 199 before closing at Rs. 196, up by Rs. 11. CT Holdings already has exposure to financial services with a stock broking arm, investment banking and fund management.
Analysts noted that the proposal cum the business model it had proposed to the Central Bank would have factored in the current notion within the industry that Sri Lanka is overbanked hence differentiate itself and serve an unmet larger need.
“To provide provisional approval the Central Bank must have seen a model which is different or not imitative of what is currently prevalent within the industry,” analysts opined.
Sri Lanka at present has a banking network of 31 comprising 22 licensed commercial banks (LCBs) and 9 licensed specialised banks (LSBs). There are nearly 6,000 bank branches and other outlets whilst the banking density (number of bank branches per 10,000 persons) is nearly 10.
Central Bank Governor Nivard Cabraal told the Daily FT yesterday that given the future development and outlook of post-war Sri Lanka, there is larger space for banking. “We give licences for the future. Given the country’s growth projections and doubling of per capita in the future, there is enough space for more banks,” Cabraal said.
He reiterated that over the next five years a doubling of bank lending is envisaged from the current Rs. 2 trillion. “If the existing banks can do it, it is well and good but we have to support new initiatives in the banking sector,” Central Bank Chief emphasised. In response to industry need for greater consolidation, Cabraal said that the Central Bank will encourage banks who want to do it but suggested that there was more space for more banks in the future of Sri Lanka.
Cargills has been styling itself as a trusted brand in Sri Lanka given its extensive reach via the country’s biggest supermarket chain numbering 163, and analysts anticipate it to harness that strength and build a banking or financial services brand that the masses can trust at rural level. At present in select Supermarkets Cargills has accommodated the Commercial Bank to operate banking facilities and going forward this is unlikely to be a permanent feature. The Central Bank recently allowed Laugfs to operate money exchange units in its supermarket outlets.
Analysts said the name chosen to include Agriculture points to Cargills’ emphasis to serve the rural farmer and perhaps likely to assume itself the role of a barefoot banker, a phrase which was attributed to the late veteran banker N.U. Jayawardena.
Cargills’ foray into banking comes hot on the heels of the company investing a record Rs. 2.5 billion in FY2011 in acquiring Kotmale Holdings, McCallum Breweries of Three Coins fame and Dian Biscuits as part of its aggressive push to expand in the food and beverage industry.
Whilst Cargills’ keenness to tap leisure and up-market shopping sector had been on the cards, its entry into banking wasn’t factored; hence the move has stunned banking circles and other corporates.  In its 2010/11 Annual Report Cargills only said “The year ahead would see your company playing an even more significant role in building on its core strength of food and nutrition whilst investing into key growth sectors of our country. Your company believes in a bright and prosperous future for Sri Lanka and is now well positioned as a trusted partner of Sri Lanka to spearhead that journey of success.”
In the financial year ended 31March, 2011, Cargills recorded an excellent performance with profit after tax crossing the Rs. 1 billion milestone, up by 54% from the previous year. The Group consolidated turnover exceeded Rs. 37 billion, reflecting a 20% growth. Profit before tax rose by 41% to Rs. 1.4 billion and after tax profit attributable to shareholders was Rs. 1.1 billion, up by 53% over FY2010.
Established in 1928 to operate in movie production and exhibition, the Ceylon Theatres Group is now operational in the supermarket business, restaurants, food, manufacturing, real estate and stock broking. The group has acquired interests in ceramics, tiles, plantations and packaging and has ventured into financial services.

Comments

21 Responses to “Cargills into banking; CB Chief says in the future context Sri Lanka not overbanked”

  1. NISHTHAR IDROOS on September 8th, 2011 2:12 am

    Cargill’s transformation from a lack lustre company to a major player with a diversified portfolio conjures images of a visible corporate metamorphosis. Strategic acquisitions complimenting its range were well conceived and executed. Following restructuring phenomenal Marketing ensued for the ultimate consolidation. Overhaul it was feasible business model. As opportunities emerge in post war Sri Lanka it’s up to the corporate fraternity to exploit them. Agriculture is sector that was long neglected; successive governments gave mere lip service. A bank devoted to agriculture can most certainly herald a green revolution and hopefully a healthy diet for Sri Lankans

  2. Stratergic on September 9th, 2011 12:02 am

    Cargills can open over 100 branches overnight through the supermarket chain and some day merge with Sampath Bank to be the largest Private Bank in Sri Lanka

  3. Harendra on September 12th, 2011 8:41 pm

    I would like to work with Cargills Team

  4. Dushmantha Wijerathne on May 31st, 2012 9:21 am

    I would like work with Cargills team & also I’m working as Accountant in reputed company now. I expect a oputunity in Cargills bank

  5. N.C.BINDUHEWA on June 1st, 2012 12:29 pm

    I Desire to join with Cargills Bank,I Have Completed a Agricultural Diploma at HARDY Ampara,Presently I’am working at Sampath Leasing & Factoring Ltd as a Marketing Assistant,I Have Pased Experienced with Micro Finace & Recoveries.

  6. Ilango on June 8th, 2012 9:30 pm

    I’m working in the Commercial bank Jaffna branch as school leaver (intern) and i also like to work with Cargills bank. Please consider me also when you call people for examination or selection.

  7. chathurani on June 21st, 2012 1:16 pm

    Nice

  8. Amali Godage on July 4th, 2012 9:56 pm

    I would like work with Cargills Bank.Please Consider me also When you call Pepole for Selection.

  9. saseeka gamage on October 11th, 2012 9:10 am

    Dear sir/ madam, I would like work with Cargills Bank.I passed GCE A/L in science scheme,so I would like to join with team Cargills.Please Consider me also When you call People for Selection. THANK YOU

  10. D.Ranathunge on October 29th, 2012 11:06 am

    Please send me an e-mail address of Cargills Bank.I’d like to send my CV to its vacancies.

  11. MR.K.Diluxion on November 8th, 2012 11:49 am

    I would like work with Cargills Bank.Please Consider me im also send my cv.im presently working hnb bank as banccasurance officer.

  12. Ms F Nuzraat Jamal on November 24th, 2012 5:01 pm

    Dear Sir/Madam,

    Please send me an e-mail address of Cargills Bank.I’d like to send my CV to its vacancies. I have served 15 years experience in banking sector in one of the largest commercial banks in Sri lnka. If there is any vacancies please consider my request.y contact No- 0777-637140

  13. Mukunthan on December 12th, 2012 11:14 am

    good

  14. Dinushani on December 31st, 2012 11:45 am

    I would like to work CACB. I’m also send my cv.i’m following bsc. In business management at NIBM.i have completed cbf and have working experince in banking industry.

  15. thanuja lakmini on February 17th, 2013 1:49 pm

    Dear Sir/Madam,
    Please send me an e-mail address of Cargills Bank.I’d like to send my CV to its vacancies. I have served 1 years experience in banking sector in peoples bank in Sri lanka. If there is any vacancies please consider my request.y contact No- 0713198331

  16. manoja on February 22nd, 2013 7:47 pm

    i would like to work in cagills bank, i sent my CV to email and post, please consider my request.contact no-0771390386/0785128986.

  17. Nilanga on March 18th, 2013 10:07 am

    It is fantastic movement. all the best

  18. thilanka dinudu on April 19th, 2013 2:20 pm

    Please send me an e-mail address of Cargills Bank.I’d like to send my CV to its vacancies and I’d like to work in Cargills Bank.

  19. Achala on June 14th, 2013 10:20 am

    Dear Sir/Madam,
    I have served in a leading private bank for more than 10 years and I would like to join Cargills Bank. Please send me an e-mail address to send my CV. If there is a suitable vacancy, please consider my request. My contact No. 0773790900. Thanks.

  20. VIHANGI on July 29th, 2013 3:43 pm

    I have 2years experience banking & finance filled, I like to join to Cargills Bank. please send me a link how to join it.

  21. Gamini De Alwis on December 23rd, 2013 1:17 pm

    Dear Mr. Ranjith Page,
    Sir, Cargills supermarket chain doing excellent work to the entire nation. Given many job opportunities to the every sector of nation. Given so many opportunities to all village sector school levers to join and training all the areas of work. Also started and maintenance own aggregation farms also provided the job opportunities. Motivated and encourage local farmers produce there demanded aggregating farming production and same time visiting and purchases.
    We have experience how many supermarket chain was open in this country, not successful and close down. (namely Anglo-Asia, Cornela’s, Budget shop, etc)
    With your proactive experience, management skill, you worked hard, and proved to yourself and everyone what you are capable of.

    — So why is delay to Open Cargills Agriculture and Commercial Bank (CACB), it will world record local bank . I have serious concern, may be operational commercial bank ask to not given permission form CBSL because some small bank have serious capital issues and other NPL issues—-

    I am a Banker,I have 16 years experience banks IT Operations and Information systems security administration. I am waiting and waiting open CACB and given my all the experience in voluntarily.

    I hope Year 2014 is CACB year.

    Happy Christmas, and new year 2014,

    God Bless you and your family..

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