Cargills Bank posts Rs. 162mn PAT for 1Q25

Asoka Peiris  - Chairman	Senarath Bandara  – General Manager

Cargills Bank’s results for the quarter ended 31 March 2025 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 1Q 2025.

Net interest income of Rs. 865 million was an increase of Rs. 51 million in 1Q 2025 compared with 1Q 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 percent to 4.31 percent 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 percent 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 1Q 2025. 

Net other operating income grew by 63 percent 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 percent from Rs. 770 million 1Q 2024 to Rs. 915 million in 1Q 2025. Personnel expenses increased by 16 percent due to increase in the cadre coupled with revision in salary to reflect market conditions. 

Other operating expenses grew by 25 percent due to increase in the branch network, marketing and other administrative expenses and additional onetime expenses incurred on investigations and recommendations subsequent to the Cyber Security Incident. The bank’s Cost-to-Income Ratio of 59.72 percent reflected a marginal increase from 58.23 percent in 2024. 

Impairment charges totaling Rs. 126 million reflected a decrease of 44 percent from Rs. 226 million in the 1Q 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 percent while Stage 3 Provision Cover was 46.46 percent 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 percent while all liquidity related ratios were well above the regulatory minimum requirements. Total assets of the bank as at 31 March 2025 at Rs. 82.3 billion reflected an increase of 3 percent or Rs. 2 billion during the quarter. 

The loan book posted a moderate growth of 6 percent, 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 percent to reach Rs. 21.8 billion. Net loss of Rs. 307 million was reflected in Other Comprehensive Income. Customer Deposits decreased by 5 percent to Rs. 56.7 billion at the reporting date from Rs. 59.4 billion at the end 2024.