Cargills Bank’s results for the year ended 31 December 2024 reflected a YoY increase of 48% in profitability. Profit after tax at Rs. 651 Mn for the year 2024 was higher by Rs. 211 Mn compared to 2023. Net interest income of Rs. 3.589 Bn was a marginal increase of Rs. 208 Mn in the year 2024 compared with 2023. 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. The marginal increase in NIM is attributable to this proactive approach in the decreasing interest rate regime.
Net fee and commission income of Rs. 894 Mn for the year ended 31 December 2024 recorded Rs. 96 Mn growth in comparison with the previous year. Concerted efforts to improve trade volumes, card-related fee income and improved remittance income were among the main contributory factors for this growth of 12% recorded.
Additionally, net gains from financial assets at fair value through profit or loss grew by Rs. 11 Mn to reach Rs. 276 Mn in the year of 2024. Capital gains realized on derecognition of financial assets boosted other income streams by Rs. 493 Mn in the period under review to reach Rs. 670 Mn. Net other operating dropped by 76% to Rs. 61 Mn largely due to reduction in foreign exchange gains recognized during the year under review.
Total operating expenses increased by 11% from Rs. 2.892 Bn last year to Rs. 3.198 Bn. Personnel expenses increased by 24% largely due to adjustments to salary and welfare benefits considering increased costs of living over the last few years and market conditions. Other operating expenses grew by 4% largely due to increased utility-related operating expenses and marketing costs.
Impairment charges totaling Rs. 607 Mn reflected a decrease of 28% from Rs. 849 Mn in the year 2024 partially due to the need for management overlay provisions being lower subsequent to a careful scrutiny of the status of borrowers and considering the improved macro-economic environment. The Bank’s Stage 3 Loans (net of Stage 3 Impairment) to Total Loans Ratio stood at 8.74% while Stage 3 Provision Cover was 46.79% as at 31 December 2024.
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 22.44% while all liquidity related ratios were well above the regulatory minimum.
Total assets of the Bank as at 31 December at Rs. 80.3 Bn, an increase of 15% or Rs. 10.3 Bn during the year. The loan book posted a moderate growth of 14%, from Rs. 40.6 Bn to Rs. 46.1 Bn, given conditions prevailing. Financial Assets measured at fair value through other comprehensive income grew by 26% to reach Rs. 22.4 Bn. Net loss of Rs. 411 Mn was reflected in Other Comprehensive Income. Customer Deposits grew by 17% to Rs. 59.4 Bn at the reporting date from Rs. 50.7 Bn at the end 2023 amidst continued reductions in market interest rates.
Mr. Richard Ebell who served on the Bank’s Board as Chairman retired on 02 July 2024 in compliance with the Banking Act on Corporate Governance for licensed commercial banks issued by the Monetary Board of the Central Bank. Mr. Ebell completed nine years in the Bank Board having been appointed in 2015. Mr. Asoka Pieris, who served as Deputy Chairman was appointed as the Chairman of the Bank, with effect from July 3, 2024.
