Cargills Bank reports modest quarter in 9-mths results
View(s):Cargills Bank has reported a modest post-tax profit of Rs. 71 million for the 9 months ending September 2018, however up sharply by 56 per cent over the corresponding period of last year.
This is after discounting the one- off gain of Rs. 481 million from the disposal of its subsidiary, the bank said in a media release.
Net interest income of Rs. 1,530 million was an improvement of 46 per cent from the previous year, reflecting increased income from a larger loan portfolio, interest rate benefits from currency swaps and the impact of the inflow of Rs. 1 billion from the disposed subsidiary sale.
Impairment charges increased by 223 per cent to Rs. 237 million with due to growth in the loan portfolio, non-performance by some large customers and delayed settlements on other loans.
The Rs. 24.5 billion loan portfolio of the bank at end September 2018 was 18 per cent than earlier. “Credit growth was moderated by a shift in focus to secured lending, an exit from large low yielding facilities and a re- deployment of funds in the SME segment. Growth was slower than expected given the prevailing macroeconomic environment,” the bank said.
The bank’s deposit base, at Rs. 18 billion at end September remained flat compared to the base at end December 2017. Rupee denominated deposits grew by a modest Rs. 2 billion, which was cancelled out by outflows in foreign currency deposits.
The bank said it has invested in a state- of- the- art Card Management System which is now fully operational, with cards now being marketed. Implementation of the Card Management System was delayed by some months and, as such, customer acquisition was significantly lower than expected.
Cargills Cash, the bank’s agency banking arrangement at Cargills Food City, and “Bank in a Box” Kiosk machines, have seen increased usage with the bank expected to focus on this low- cost customer touch point to increase retail banking penetration.
The bank said it continues its preparation for a listing within the time frame stipulated by the Central Bank, and anticipates listing by June 30, 2020.