Cargills Bank recorded a modest post-tax profit of Rs. 71 million for the 9 months ended September 30, 2018.This reflects a growth of 56% over the corresponding period of last year, after discounting the one-off gain of Rs. 481million from the disposal of its subsidiary.
The net interest income of Rs. 1,530 million improved by 46%, reflecting increased income from a larger loan portfolio, interest rate benefits from currency swaps and the impact of the inflow of Rs. 1billion from the disposal referred to.
Net Fee- based Income of Rs. 115milion for the 9 months reflected an increase of 43%. Most of this was attributable to income from growth in the loan portfolio and to higher guarantee commissions. This income would have been substantially higher if not for the delay in the launch of credit cards.
Other income for the nine months grew 23% when the exceptional gain in 2017 is excluded, an important contributor being increased earnings on foreign exchange.
Impairment charges increased 223% from Rs. 73 million in 2017 to Rs. 237 million in 2018. Growth in the loan portfolio, non-performance by some large customers and delayed settlements on other loans contributed to this. The bank’s NPA ratio increased from 3.55% at 31 December 2017 to 5.78% at 30 Sep 2018. This is receiving close attention; management considers the increase temporary. The bank stringently assesses credit quality and strengthens monitoring and recovery to contain NPAs at an acceptable level.
Operating expenses increased by 27% for the 9 months. Higher depreciation costs and personnel expenses accounted for most of this increase. The employee head count at September 30 2018 was 524 against 418 at September 30, 2017.
The Rs. 24.5 billion loan portfolio of the bank at September 2018 was 18% higher than at December 31, 2017. 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’s deposit base, at Rs. 18 billion at September 30, 2018, remained flat compared to the base at 31 Dec 2017. Rupee denominated deposits grew by a modest Rs. 2 billion which was cancelled out by outflows in foreign currency deposits.It commenced, during the 3rd quarter, a deposit campaign targeting 6 month, 1 year and 5 year deposits.
This promotion has been well received and we are seeing a steady inflow of deposits.The Bank also unveiled its new ‘Podihitiyo’ Children’s Savings Account on World Children’s Day, offering an attractive interest rates for children’s savings accounts to help create a culture of savings in the community. Targeted promotions to attract deposits will continue. The Bank’s CASA ratio stood at 16% at September 30, 2018.
The Capital Adequacy Ratio of Cargills Bank continued to be well above the minimum regulatory requirement during the period. At 30 Sep 2018, the Tier I Capital Ratio was 32.3% and the Total Capital Adequacy Ratio was 32.7%. The Bank remains focused on the need to productively deploy the capital buffer it presently carries.
The net interest income of Rs. 1,530 million improved by 46%, reflecting increased income from a larger loan portfolio, interest rate benefits from currency swaps and the impact of the inflow of Rs. 1billion from the disposal referred to.
Net Fee- based Income of Rs. 115milion for the 9 months reflected an increase of 43%. Most of this was attributable to income from growth in the loan portfolio and to higher guarantee commissions. This income would have been substantially higher if not for the delay in the launch of credit cards.
Other income for the nine months grew 23% when the exceptional gain in 2017 is excluded, an important contributor being increased earnings on foreign exchange.
Impairment charges increased 223% from Rs. 73 million in 2017 to Rs. 237 million in 2018. Growth in the loan portfolio, non-performance by some large customers and delayed settlements on other loans contributed to this. The bank’s NPA ratio increased from 3.55% at 31 December 2017 to 5.78% at 30 Sep 2018. This is receiving close attention; management considers the increase temporary. The bank stringently assesses credit quality and strengthens monitoring and recovery to contain NPAs at an acceptable level.
Operating expenses increased by 27% for the 9 months. Higher depreciation costs and personnel expenses accounted for most of this increase. The employee head count at September 30 2018 was 524 against 418 at September 30, 2017.
The Rs. 24.5 billion loan portfolio of the bank at September 2018 was 18% higher than at December 31, 2017. 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’s deposit base, at Rs. 18 billion at September 30, 2018, remained flat compared to the base at 31 Dec 2017. Rupee denominated deposits grew by a modest Rs. 2 billion which was cancelled out by outflows in foreign currency deposits.It commenced, during the 3rd quarter, a deposit campaign targeting 6 month, 1 year and 5 year deposits.
This promotion has been well received and we are seeing a steady inflow of deposits.The Bank also unveiled its new ‘Podihitiyo’ Children’s Savings Account on World Children’s Day, offering an attractive interest rates for children’s savings accounts to help create a culture of savings in the community. Targeted promotions to attract deposits will continue. The Bank’s CASA ratio stood at 16% at September 30, 2018.
The Capital Adequacy Ratio of Cargills Bank continued to be well above the minimum regulatory requirement during the period. At 30 Sep 2018, the Tier I Capital Ratio was 32.3% and the Total Capital Adequacy Ratio was 32.7%. The Bank remains focused on the need to productively deploy the capital buffer it presently carries.
www.dailynews.lk
No comments:
Post a Comment