Bad loan provisions hamper Cargills Bank March profits

The hefty provisions made against possible bad loans eroded an otherwise good performance at Cargills Bank, as the lender increased its top line and expanded its loan book during the first three months of the year.

The interim results published by the licensed lender of the Cargills group reported a net interest income of Rs.461.6 million for the three months ended March 2018, up 41 percent from the same period last year.

The operating profit also rose by a strong 38 percent year-onyear to Rs.538.4 million.

The newest lender in the industry with an asset base of Rs.35.7 billion managed to expand its loans and receivables book by 16 percent during the three month which translates into Rs.3.3 billion in loans for the period.

Further, the bank grew its deposit base by 10 percent or 1.8 billion to Rs. 20.6 billion.

This was mainly from a foreign currency savings account with a value of Rs.2.0 billion.

Due to this deposit or a combination of a few, the bank managed to operate with 34 percent of its deposits in lowcost funds.

Cargills Bank recently came up with some innovative savings and payment options linked to its stateof-the-art digital banking platform.

The bank’s initial strategy to leverage its existing 300 plus Cargills supermarket stores are yet to yield any results, the interim results showed.