ECONOMYNEXT – Sri Lanka’s Cargills Bank group made a loss of 78 million rupees in the December 2015 quarter against a profit of 44 million rupees a year ago with the bank continuing to expand, adding more branches during the year.
At bank level, net interest income for the December 2015 quarter rose 51 percent to 106 million rupees from a year ago with interest income more than doubling to 184 million rupees and interest expenses shooting up 431 percent to 77 million rupees.
Cargills Bank made a loss of 18 cents per share in the December quarter, interim accounts showed.
For the full year ending 31 December 2015, Cargills Bank group reported a loss per share of 72 cents, up from a loss per share of 26 cents the year before.
The net loss for the year ending 31 December 2015 widened to 316 million rupees, from 113 million rupees the year before.
The accounts showed Cargills Bank had 11 bank branches at year-end, up from three the year before.
Cargills Bank said its main promoters had agreed to further invest in the bank to meet the new minimum capital requirement of 10 billion rupees, with central bank approval pending.
Cargills Bank also said Entrust Securities PLC (ES) with which it has a repurchase agreement had failed to return the securities when the borrowings matured in 2016.
The carrying value of borrowings amounted to 286.92 million rupees at 31 December 2015, and the market value of securities pledged to ES as collateral was 344.54 million rupees.
“ES failed to return the securities when the borrowings matured in 2016,” a note to the accounts said.
“These borrowings have been rolled forward at the request of National Savings Bank who have been appointed by CBSL to manage ES.”
Cargills Bank said it had made no provision in the financial statements in respect of the potential exposure of 57.62 million rupees as at year-end because of “insufficient clarity on the status of ES, specifically on Central bank actions to address issues with ES.”
(COLOMBO, March 14, 2016)