The banking arm of the Cargills group, Cargills Bank Limited (CBL) recorded a net loss of Rs.78.7 million for the quarter ended September 30, 2015, slightly improving from Rs.79.5 million loss recorded in the same quarter last year, the interim results showed.
The performance was a reflection of the bank’s attempt to grow its loan book aggressively yet under lower interest rates as the net interest margin fell to 3.71 percent from 5.01 percent in December 2014.
The bank on a standalone basis grew its gross loans and advances by Rs. 2.9 billion, a growth of 130 percent from December 2014.
Meanwhile the deposit base grew by Rs.1.8 billion to Rs.3.1 billion during the first nine months. He bank’s low cost, Current And Savings Account ratio is just under 16 percent.
The net interest income rose by 20 percent year-on-year (yoy) to Rs.100.1 million during the three months while the net fee and commission income grew by Rs.9.6 million to Rs.12.2 million.
The bank operates with adequate capital and liquidity to grow its loan book. The bank’s Tier I capital adequacy ratio stood at 54.62 percent while the Tier II capital adequacy ratio was at 51.63 percent. This is significantly above the regulatory minimums of 5 percent and 10 percent respectively.
The bank’s statutory liquid asset ratio stood at 55.61 percent, significantly above the mandatory 20 percent.
The bank has an asset base of Rs.8.9 billion, up 31 percent from Rs.6.8 billion.
The bank now operates with 5 branches and 200 employees.
Meanwhile the banking group for the nine months ended September 30, 2015 recorded a net loss of Rs.239 million, up 51 percent from a year ago.
The net interest income grew by Rs.288.5 million, up 12 percent from a year ago. The net fee and commission income rose by Rs.24 million to Rs.27.2 million.
Due to the rapid growth in the bank’s loan book, the bank recorded a gross non-performing loan ratio of 1.15 percent up from zero in December 2014.
The banking group consists of its 74 percent subsidiary, Capital Alliance Finance PLC bought in August 2014.