Cargills Bank reports recurring net loss of Rs.16mn for 3Q

Cargills Bank Limited made a recurring net loss of Rs.16 million for the third quarter ended in September 30, 2017 from a profit of Rs.26.4 million during the corresponding quarter last year, as loan loss provisions rose and operating expenditure swelled.

However, the reported profit was Rs. 464.8 million due to the oneoff gain resulted from the sale of its only subsidiary, Colombo Trust Finance PLC in September.

On September 12, Cargills Bank Limited divested its 80.34 percent stake it held in Colombo Trust Finance to Dialog Axiata PLC for Rs.1.072 billion resulting in a capital gain of Rs. 480.7 million.

The agri-centric lender turned consumer and SME bank has given Rs.4.42 billion in new loans during the nine months to September with a growth in the total loan portfolio of 32.5 percent.

But this resulted in a higher provision against possible bad loans during the period as the general provisions rose from Rs.23 million to Rs.33 million for the quarter.

The bank has a total loan book of Rs.18.02 billion and the gross non-performing loan ratio has risen to 2.65 percent from the previous year’s 0.6 percent, its Chairman Louis R. Pages said in an earnings release.

Meanwhile for the nine months ended in September, the bank reported earnings of Rs.526.6 million, including the oneoff gain from a loss of Rs.100 million in the same period last year. The net interest income for the quarter rose by 27 percent year-on-year (YOY) to Rs.364.1 million but Page said the margin was lower than what they have anticipated for the period. “Higher interest rates coupled with growth in loans and advances portfolio enabled the bank to boost interest income for the period under review.