Home / Financial Services/ Cargills Bank secures multi-notch upgrade from Fitch to A-(lka) with Stable Outlook

Cargills Bank secures multi-notch upgrade from Fitch to A-(lka) with Stable Outlook


Comments / {{hitsCtrl.values.hits}} Views / Monday, 3 June 2019 00:00


An expanding retail footprint and strong backing from its parent company helped Cargills Bank to secure a multiple-notch upgrade to its National Long Term Rating by Fitch Ratings from ‘BB(lka)’ up to ‘A-(lka)’ with a Stable Outlook.  

Cargills Bank MD/CEO Rajendra Theagarajah

Elaborating on its assessment of CBL, Fitch focused operational integration achieved by the Bank through the use of Cargills Food City outlets to expand the bank’s operations, shared brand name and a capital infusion of Rs. 5.8 billion by CT Holdings PLC group in 2016.

“The multiple-notch upgrade of CBL’s rating follows Fitch’s assessment of support from its ultimate parent, CT Holdings PLC (CTH), and our expectation that the bank is likely to receive extraordinary support from its ultimate parent, if needed,” Fitch stated. 

The assessment also noted that support from the parent could be limited by the imposition of restrictions on voting rights of the parent by the regulator.

“For Cargills Bank to have secured an A-(lka) stable rating from Fitch just four years into our journey is, I believe, a testament to the unique value and model that we are bringing to the Sri Lankan banking industry. Backed by the support of our parent, Cargills Bank is working to redefine how Sri Lanka banks. We have achieved immense progress in expanding our ability to serve customers across the country, and while we anticipate a challenging year ahead, we plan to move ahead with consolidation of operations while increasing customer engagement and raising awareness about our unique products and services,” Cargills Bank MD/CEO Rajendra Theagarajah stated. 

Powering into its fourth year of fully-fledged operations, Cargills Bank reported a11% YoY growth in Profit After Tax (PAT) up to Rs. 122.8 million in FY2018, on the back of well-rounded growth across SME and Retail portfolios. 

Supported by an expanding scope of physical, and digital banking operations island-wide, and in synergy with the Cargills Group, the bank was able to generate Rs. 2.03 billion in Net Interest Income and Rs. 158.1 million in Net Fee and Commission Income, reflecting growth rates of 37% YoY and 39% YoY respectively.

Among key challenges the bank faced over the past year was a high NPA ratio, particularly in relation to few large ticket loans, delays in the commencement of credit card and acquisition business, the imposition of a Debt Repayment Levy and more stringent impairment provisioning with the implementation of SLFRS 9, all in the backdrop of tight monetary conditions of subdued economic growth over the last year. 


Share This Article

Facebook Twitter


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

An executive presidency and a technocratic Cabinet accountable to Parliament

Thursday, 21 November 2019

Basil Rajapaksa of the winning party in the 2019 Presidential Election had said that the 19th Amendment (19A) has some good parts and some bad parts. The 19A indeed gives us much despite its flaws. However, the lack of a coherent architecture therein


Sibling wins, patriarch celebrates and minorities stunned

Thursday, 21 November 2019

Is there a more precious gift a family patriarch, who himself a former ruler, could expect to receive on his 74th birthday, than to see his own brother becoming the supreme head of the country he ruled? The victory of Nandasena Gotabaya Rajapaksa (GR


Air India over Colombo

Thursday, 21 November 2019

Amidst the busy politicking in November an unexpected appearance of quite a number of packets of air over the country and in particularly over Colombo caused some distractions and elicited few warnings of a different type. This is about the smog-la


Post-mortem on UNP defeat

Wednesday, 20 November 2019

I believe no post-mortems are necessary on the causes for defeat of the UNP candidate as the reasons were very clear seeing the bickering at the very first post-election meeting of the UNP hierarchy held earlier this week. Although at the election th


Columnists More