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Thursday June 20th, 2024

Banking on the Human Spirit: Cargills Bank’s Approach to Inclusive Growth

Senarath Bandara Managing Director and Chief Executive of Cargills Bank

After turning a corner amidst the economic crisis, Cargills Bank is focusing on inclusive banking to foster entrepreneurship and economic growth.

In a time of great uncertainty, Cargills Bank returned to profitability in the past financial year. In this interview, Senarath Bandara, the Managing Director and Chief Executive of Cargills Bank, sheds light on the bank’s culture that enabled resilience in such a challenging environment. He also shares his thoughts on the economic model that can help Sri Lanka progress, the role of authorities in assisting the banking sector in facilitating economic growth, the operating model of Cargills Bank, and the bank’s plans for growth, including its upcoming listing on the Colombo Stock Exchange.

Amidst an economic crisis, Cargills Bank returned to profitability in the past financial year. Tell us about the culture at Cargills Bank that has facilitated resilience in this environment.

The key to our return to profitability in 2022 was our approach to operating amidst external pressure. We focused on maintaining our liquidity position, ensuring portfolio quality and prudently managing operating costs. We prepared from the onset to navigate challenges and set up proactive management and reporting structures to identify and manage risks, steering the bank’s resilience and growth mindset. Being part of the Cargills Group also benefited the Bank to manage operations during this period.

Our use of technology to facilitate customers and connect employees is a strategy that has worked for us during the past few years. We encouraged our customers to use our technology solutions to address the logistical challenges and keep their operations running, while also enhancing technology integration into our processes to improve efficiency while maintaining the required internal controls.

Our resilience is mainly due to our team. The bank practices a management style built around participation and inclusiveness, giving our team members responsibility while being guided by the senior management team. We were also sensitive to their stress levels, operating under challenging conditions, and took multiple initiatives to build a positive work culture and fortify the spirit of the team. Overall, it was a team effort, top to bottom.

In your opinion, what kind of economic model can help the country progress? And how can authorities assist the banking sector to play its part in facilitating economic growth?

The Central Bank has managed the daunting task of stabilizing inflation, the currency and the financial sector exceptionally well under challenging circumstances. Once greater clarity on the domestic debt restructuring is available, we expect confidence in the sector to improve, leading to a further easing of interest rates.

Sri Lanka is blessed with resources, including a skilled, resilient workforce, geographical advantage, natural beauty, a climate favourable for agriculture, ample aquatic resources and access to fast-growing regional economies. There are significant opportunities to tap into the high-skilled service industry, strengthen domestic manufacturing operations, develop value-added industries, support agriculture and dairy farming modernization, build an ecosystem around tourism, and many more.

The banking sector has a crucial role in financing entrepreneurs and SMEs to materialize these opportunities. Clarity on the economic growth strategy and measures to provide an enabling environment to attract FDIs, build global competitiveness, develop risk mitigation mechanisms, and facilitate low-cost financing to local industries will guide the banking sector’s initiatives to support the domestic recovery process.

How do you see the operating model of Cargills Bank contributing to the economic recovery?

Everything we do at Cargills Bank is influenced and encapsulated by our tagline, Banking on the Human Spirit. As a fully-fledged commercial bank that offers a full suite of financial services, we envisioned becoming the most inclusive bank harnessing the spirit of progress in every Sri Lankan since our inception. Our business model stands on the pillars of sustainable development, corporate responsibility and inclusivity, driven by access to the islandwide Cargills ecosystem to provide convenient financial services on a technology platform.

Financial inclusivity is an integral component of our mission. We work closely with the Cargills group to support the agriculture community to invest in modernization initiatives. During the past year, we strengthened this operation by deploying a mobile branch to give access to banking services in underserved areas. With the support of Cargills, we go beyond providing just financing to uplift local entrepreneurs by supporting marketplace facilitation, training, product development and packaging.

We are also particularly mindful of managing operating costs. We operate a hub-and-spoke model of branches connected with service points in Cargills Food City outlets to provide convenience to our customers. We believe this would provide a long-term competitive edge to Cargills Bank as we expand our service network. With our agency banking arrangement with Cargills Food City, customers can deposit and withdraw funds at over 470 Cargills Food City outlets across Sri Lanka. We also use this arrangement to provide our SME and corporate customers with cash management solutions that enable them to focus on business growth and manage costs. These are just a few examples of how we differentiate within the industry.

What are your plans for growth?

The upcoming year will be a milestone for Cargills Bank as we plan our listing on the Colombo Stock Exchange. Having stabilized our profitability position with an asset book of over Rs50 billion, we are now strong and positioned to launch the next growth phase of the bank. We will focus on driving portfolio and business expansion through a lean operating model to optimize value transferred to all stakeholders, including customers, employees and shareholders. Our strategy focuses on supporting the growth of our customers while continuing to invest in technology to improve our service suite and service excellence. The country is now on a recovery path and we look forward with optimism to supporting the economic resurgence of Sri Lanka.