Cargills Bank PLC posted a profit-after-tax (PAT) of Rs. 162 million for the first quarter of the year (Q1 2025), reflecting an increase of Rs. 116 million in profitability when compared to the corresponding quarter in 2024, according to a statement released by the bank.
The bank reported its net interest income at Rs. 865 million- an increase of Rs. 51 million in the first quarter, compared with Q1 2024.
Market interest rates have witnessed a gradual reduction in line with the CBSL policy directions and the bank’s portfolio was re-priced to reflect these changes.
While the bank continues to focus on maintaining the net interest margin (NIM), a reduction from 4.86% to 4.31% was witnessed reflecting gradual reduction of market interest rates, in line with the Central Bank’s policy directions.
Moreover, the bank reported a net fee and commission income of Rs. 254 during the first quarter, which has grown by Rs. 55 million compared to the same period of the previous year.
Capital gains from the derecognition of financial assets contributed Rs. 246 million to the total of Rs. 338 million reported for the quarter.
Net gains from financial assets at fair value through profit or loss decreased by Rs. 38 million to Rs. 46 million in the first quarter of 2025. However, net other operating income significantly increased by 63% to Rs. 27 million, mainly due to improved foreign exchange gains during the quarter.
Total operating expenses increased significantly by 19% to Rs. 915 million in the first quarter of this year, up from Rs. 770 million in the first quarter of 2024. This rise was mainly due to a 16% increase in personnel expenses from an expanded workforce and salary adjustments to market conditions.
Other operating expenses also grew by 25%, driven by branch network expansion, higher marketing and administrative costs, and one-time expenses for investigations and recommendations after the Cyber Security Incident.
Consequently, the bank’s cost-to-income ratio slightly increased to 59.72% from 58.23% in 2024.
Impairment charges fell 44% to Rs. 126 million in the first quarter of 2025 (Previous year: Rs. 226 million), following borrower reviews, better economic conditions, and recoveries. The bank’s stage 3 loans (net of impairment) to total loans ratio was 8.18%, and stage 3 provision cover was 46.46% at 31 March.
The bank’s capital adequacy and liquid assets ratios remain above Central Bank minimums. The total capital ratio was 19.49%, and liquidity ratios exceeded regulatory requirements. Total assets reached Rs. 82.3 billion at 31 March, a Rs. 2 billion or 3% increase during the quarter.
The loan book grew 6%, from Rs. 46.1 billion to Rs. 48.8 billion. Financial Assets at fair value through other comprehensive income decreased 2% to Rs. 21.8 billion, and a net loss of Rs. 307 million was in Other Comprehensive Income. Customer deposits decreased 5% to Rs. 56.7 billion at the date, from Rs. 59.4 billion at end 2024.