Cargills Bank ups 1Q Profit after Tax by Rs. 116 m to Rs. 162 m

• Profit before Income Tax for the quarter – Rs. 320 m, an increase of Rs. 210 m
• Net fee and commission income grow by Rs. 55 m
• Net gains from derecognition of financial assets at fair value through other comprehensive income grow by Rs. 246 m
• Bank remains well capitalised and liquid with Total Capital Ratio (CAR) at 19.49%; Liquidity Coverage Ratio (LCR), Rupee at 321.59% and All Currency at 278.20%
• Net Stable Funding Ratio (NSFR) at 136.93%
• Total Assets grow by Rs. 2 b

Cargills Bank said yesterday its results for the quarter ended 31 March reflected an increase of Rs. 116 million in profitability when compared to the corresponding quarter in 2024 posting a profit after tax of Rs. 162 million for Q1 2025. Net interest income of Rs. 865 million was an increase of Rs. 51 million in Q1 2025 compared with Q1 2024. Market interest rates have witnessed a gradual reduction in line with the CBSL policy directions and the bank’s portfolio was repriced to reflect these changes. Whilst the bank continues to focus on maintaining the NIM, a reduction from 4.86% to 4.31% was witnessed reflecting the market interest environment.

Net fee and commission income of Rs. 254 million for the quarter ended 31 March 2025 recorded Rs. 55 million growth in comparison with the corresponding period in 2024. Concerted efforts to improve trade volumes, loan related fee income, card-related fee income and improved remittance income were among the main contributory factors for this growth of 28% recorded.

Capital gains realised on derecognition of financial assets boosted other income streams by Rs. 246 million in the quarter under review to reach Rs. 338 million. Net gains from financial assets at fair value through profit or loss decreased by Rs. 38 million to reach Rs. 46 million in Q1 2025. Net other operating income grew by 63% to reach Rs. 27 million largely due to improvement in foreign exchange gains recognised during the quarter under review.

Total operating expenses increased by 19% from Rs. 770 million Q1 2024 to Rs. 915 million in Q1 2025. Personnel expenses increased by 16% due to increase in the cadre coupled with revision in salary to reflect market conditions. Other operating expenses grew by 25% due to increase in the branch network, marketing and other administrative expenses and additional one-time expenses incurred on investigations and recommendations subsequent to the Cyber Security Incident. 

The bank’s Cost-to-Income Ratio of 59.72% reflected a marginal increase from 58.23% in 2024. 

Impairment charges totalling Rs. 126 million reflected a decrease of 44% from Rs. 226 million in the Q1 2025 subsequent to a careful scrutiny of the status of borrowers and considering the improved macro-economic environment and results of recovery actions. The bank’s Stage 3 Loans (net of Stage 3 Impairment) to Total Loans Ratio stood at 8.18% while Stage 3 Provision Cover was 46.46% as at 31 March 2025.

The bank maintains Capital Adequacy and Liquid Assets Ratios well within the minimum requirements prescribed by the Central Bank. The Total Capital Ratio was at 19.49% while all liquidity related ratios were well above the regulatory minimum requirements.

Total assets of the bank as at 31 March at Rs. 82.3 billion reflected an increase of 3% or Rs. 2 billion during the quarter. The loan book posted a moderate growth of 6%, from Rs. 46.1 billion to Rs. 48.8 billion, given conditions prevailing. Financial Assets measured at fair value through other comprehensive income decreased by 2% to reach Rs. 21.8 billion. Net loss of Rs. 307 million was reflected in Other Comprehensive Income. Customer Deposits decreased by 5% to Rs. 56.7 billion at the reporting date from Rs. 59.4 billion at the end 2024.