Cargills Bank posts profit after tax Rs.240mn for 1H 2025

Chairman Asoka Pieris	MD/CEO Senarath Bandara

Cargills Bank’s results for the six months ended June 30, 2025 reflected an increase of Rs.104 million in profitability when compared to the corresponding period in 2024, posting a profit after tax of Rs.240 million for 1H 2025.

 

Net interest income of Rs.1,836 million was an increase of Rs.178 million in 1H 2025 compared to 1H 2024. The marginal reduction in NIM was due to the gradual reduction in market interest rates in line with the CBSL policy directions. The bank continued to focus on repricing of deposits and advances to reflect the market conditions and to manage the NIM in an optimal manner.

 

Net fee and commission income of Rs.440 million for the six months ended June 30, 2025 recorded a Rs.55 million growth in comparison with the corresponding period in 2024. Concerted efforts to improve trade volumes, loan-related fee income, card and acquiring related fee income and improved remittance income were among the main contributory factors for this growth of 14 percent recorded.

 

Capital gains realised on derecognition of financial assets boosted other income streams by Rs.83 million in the six-month period under review to reach Rs.361 million. Net gains from financial assets at fair value through profit or loss decreased by Rs.113 million to reach Rs.67 million in 1H 2025. Consequently, total other income for 1H 2025 decreased by Rs.44 million or 8 percent when compared to 2024 to reach Rs.477 million. Total operating expenses increased by 15 percent from Rs.1,592 million in 1H 2024 to Rs.1,883 million in 1H 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 19 percent due to increase in the branch network, marketing and other administrative expenses, including professional charges. The bank’s cost-to-income ratio of 66.59 percent reflected an increase from 58.23 percent in 2024.

 

Subsequent to a careful scrutiny of the status of borrowers and considering the improved macroeconomic environment and results of recovery actions, impairment charges totalling Rs.80 million reflected a decrease of 59 percent, from Rs.440 million in 1H 2024. The bank’s stage three loans (net of stage three impairment) to total loans ratio stood at 7.85 percent whilst stage three provision cover was 45.04 percent as at June 30, 2025. The bank maintains capital adequacy and liquid assets ratios well within the minimum requirements prescribed by the Central Bank. The total capital ratio stood at 18.06 percent while all liquidity-related ratios were well above the regulatory minimum requirements.

 

Total assets of the bank as at June 30, 2025 at Rs.84.5 billion reflected an increase of Rs.4.2 billion or 5 percent during the 1H 2025. The loan book posted a steady growth of Rs.10.3 billion or 22 percent, from Rs.46.1 billion to Rs.56.4 billion, witnessing the commendable performance of our frontline. 

 

Financial assets measured at fair value through other comprehensive income decreased by Rs.4.6 billion or 20 percent to reach Rs.17.8 billion, partly reallocating its proceeds to fund the loan book growth in response to increased credit demand. Fair value through other comprehensive income reserve dropped to Rs.297 million as at June 30, 2025 on realisation of part of gains in profit or loss and unwinding of another portion in approaching maturity. Customer deposits decreased marginally by one percent to Rs.58.9 billion at the reporting date from Rs.59.4 billion at end-2024.