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Cargills Bank in ‘steady performance’ over nine months ended September 30, 2023 – PAT Rs. 432 Million

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Chairman of the Board Richard Ebell (L) / Managing DIrector/CEO Senarath Bandara (R)

Economic conditions and challenges prevailing last year have moderated somewhat, given the steadfast approach by policy makers and regulatory authorities towards economic recovery. We appreciate their efforts, and our results bear testimony to the progress made. Nevertheless, the road ahead remains challenging. A meaningful government budget, continued success of the IMF program, general price stability and regained momentum in tourism, remittances and exports will be key in shaping the country’s short- to medium- term economic revival, a Cargills Bank press release said.

The release adds: ‘Cargills Bank’s results for the nine months ended 30 September 2023 reflected continuing QoQ improvement in profitability. Profit after tax at Rs. 432 Mn was higher by Rs. 324 Mn than in the corresponding period of 2022. We are pleased the Bank has been able to maintain this momentum of profitability growth, and are confident the results of 2023 will reflect the strong commitment of the Bank’s team, successful execution of its strategy, a continued rigorous focus on market trends and its adaptability to a volatile environment.

‘Net interest income grew 15% or Rs. 353 Mn in the nine months compared with the corresponding period of 2022. The Bank directed its resources towards higher yielding assets, hedging interest rate risk and prudently managing deposits. In addition, close monitoring of the Bank’s lending portfolio and timely solutions offered to financially stressed customers helped maintain a healthy NIM to date.

‘Net fee and commission income of Rs. 590 Mn for the nine months was lower than the Rs. 641 Mn in the previous year. The decrease of 6% related largely to lower trade volumes and reduced net income from card related services. Additionally, capital gains realized on derecognition of financial assets, and higher foreign exchange income boosted other income streams by Rs. 265 Mn, to Rs. 391 Mn in the nine months.

‘Total operating expenses increased 25% from Rs. 1.7 Bn last year to Rs. 2.1 Bn. Personnel expenses increased 15% largely due to adjustments to salary and welfare benefits considering increased costs of living and market conditions. Other operating expenses grew 44% mainly from the impact of the Social Security Contribution Levy which was effective from October 2022, the increased cost of utilities and the cost of repair and maintenance of IT assets, particularly where denominated in foreign currencies.

‘Impairment charges totaling Rs. 607 Mn reflected a reduction of 50% in the first nine months of 2023 evidencing a focused and proactive management of delinquencies and commendable overall team efforts in this direction. The Bank’s Stage 3 Loans (net of Stage 3 Impairment) to Total Loans Ratio stood at 6.64% while Stage 3 Provision Cover was 52.74% at 30th September 2023. Additional impairment overlays considered necessary have been incorporated after a careful scrutiny of the status of borrowers.

‘VAT on Financial Services and income tax expenses increased substantially mainly due to growth in profits and the increased corporate income tax rate effective 1 October 2022.

‘The Bank maintains Capital Adequacy and Liquid Assets Ratios well above the minimum requirements prescribed by the Central Bank. The total Capital Adequacy Ratio was 20.43% while the Statutory Liquid Assets Ratio stood at 37.72%.

‘Total assets of the Bank at 30 September stood at Rs. 64.7 Bn, an increase of 20% or Rs. 11 Bn in the first nine months of the year. Financial Assets measured at fair value through other comprehensive income grew by 92% to reach Rs. 19.6 Bn. Positive gains were reflected in Other Comprehensive Income. The loan book registered moderate growth, from Rs. 36.0 Bn to Rs. 36.8 Bn, given conditions prevailing. In this regard, the Bank exercised care in maintaining the quality of its lending in a high interest rate environment, where interest payments threatened borrowers’ viability. A shift in strategy commenced in the latter part of the period, to rebuild momentum in lending.

‘Deposits to customers grew 20% from Rs. 37.8 Bn at the end of 2022 to Rs. 44.9 Bn at the reporting date amidst continued reductions in market interest rates. The Bank will judiciously balance interest expenditure and income, as substantial reductions in interest rates and the time lag in repricing loans have a direct impact on NIMs.

‘In October 2023, Fitch Ratings affirmed Cargills Bank’s National Long-Term Rating at ‘A(lka)’; Negative Outlook.

‘Ms Ruvini Fernando, who has served as a Director since 1 August 2018, resigned from the Bank’s Board on 27 October 2023 due to personal circumstances. Mr Arjuna Herath has been appointed to the Bank’s Board effective 1 November 2023.

‘The Colombo Stock Exchange (CSE) has approved the listing of the Bank’s shares on the CSE. Steps are being taken to duly offer to the public 62.5 Mn shares of the Bank at Rs. 8.oo per share through an Initial Public Offering.’



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Pan Asia Bank posts steady performance during FY 2023 –

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Aravinda Perera- Chairman & Naleen Edirisinghe - Director CEO of Pan Asia Bank

Profit before Tax increases by 258% amidst external challenges

Pan Asia Banking Corporation PLC reflected a steady performance amidst multitude of adversities emerging from challenging macro-economic conditions as the Bank reported its financial performance during 2023, which showed judicious portfolio management and prudency exercised in dealing with possible fallout on its asset quality in challenging times.

The Bank reported a Pre-tax Profit of Rs. 2,328 Mn for the year ended 31st December 2023, which is 258% increase compared to corresponding period last year, supported by improved net interest income, increased trading gains from government securities and reduced exchange losses.

The Sri Lankan economy has experienced some positive signs of gradual economic recovery and a measure of stability in macro-economic factors compared to the previous year, with the appreciation of LKR against USD and the IMF bailout followed by the Domestic Debt Optimization (DDO) announcement. The multiple economic scenario models used regarding collective impairment in 2022 were continued in 2023 to ensure that adequate buffers were in place to absorb any potential credit risk that could arise in the future. The allowance for overlays applied in previous year was continued and maintained during 2023 too. Meanwhile, the Bank managed to end the year with healthy credit quality matrices due to improved credit underwriting standards and concerted collection & recovery efforts despite the contraction in the loan book during 2023 which impacted the Bank’s Stage 3 Loan Ratio adversely.

Furthermore, the Bank increased impairment provision buffers held regarding investments in International Sovereign Bonds of Government of Sri Lanka (SLISBs) further during 2023 with the expectation of possible adverse outcomes of the on-going government External Debt Restructuring (EDR) programme. The Bank recognised an impairment charge of nearly Rs. 2 Bn regarding International Sovereign Bonds during 2023.

The interest income for the year 2023 rose by 39% due to the high interest rates that prevailed during the period under review compared to corresponding period of the last year and the re-pricing effect of facilities in response to the market conditions. Further, the growth in interest income was supported by the increased interest income from Rupee denominated securities of the Government of Sri Lanka (T-Bills & Bonds) due to increased investments and high interest rates offered on such new investments compared to the previous year. Consequently, the net interest income increased by 9% in 2023 compared to the last year. (Pan Asia Bank)

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SLT-MOBITEL celebrates the season of love with exciting giveaways

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SLT-MOBITEL, the National ICT Solutions Provider, celebrated Valentine’s Day with a series of heartwarming promotions and networking activities, spreading love and joy for customers across the country.

Connecting hearts from all around the world on social media, SLT-MOBITEL invited participants to share their loving memories for a chance to win movie tickets. Customers were also given the opportunity to dedicate romantic ringing tones to their loved ones by dialling special codes.

As part of the Valentine’s Day celebrations, SLT-MOBITEL also offered a special promotion, providing a special screening for the glamorous movie ‘Sihinayeki Adarey’, powered by SLT-MOBITEL. Furthermore, customers were treated to a surprise bonus of 10GB of free data upon recharging their SLT-MOBITEL mobile numbers with Rs. 500 or more through any banking app.

Taking love to the hill country, in a special engagement event at the Kandy City Centre, fans were able to participate in activities and interact with the ‘Sihinayeki Adarey’ cast including Hemal Ranasinghe, Sheshadri Priyasad, and many others.

Through these exciting promotions, SLT-MOBITEL helped spread love and joy this season while enhancing the customer experience with exclusive activities.

To discover more of SLT-MOBITEL’s Valentine’s Day promotions, visit https://www.facebook.com/SLTMobitel.

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Call for Proposals: Saman Kelegama Memorial Research Grant 2024

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The Institute of Policy Studies of Sri Lanka (IPS) is inviting proposals for the Saman Kelegama Memorial Research Grant 2024. The grant is an annual, merit-based grant awarded to an outstanding undergraduate studying in a Sri Lankan university. It aims to promote policy entrepreneurs among undergraduates by encouraging policy-relevant, rigorous and innovative socio-economic research.

The grant was established in 2018 to honour Dr. Saman Kelegama’s legacy of independent research and public policy engagement in socio-economic development in Sri Lanka and the wider South Asian region. Dr. Kelegama was the Executive Director of the IPS from 1995 to 2017.

Fourth-year undergraduates studying economics or a related subject in a University Grants Commission approved university or higher education institution in Sri Lanka are eligible to apply. Proposals must be written according to the guidelines provided and emailed to tharakam@ips.lk on or before the submission deadline of 30 April 2024.

HOW WILL THE WINNER BE CHOSEN? The quality of the proposals will be judged for its policy relevance, feasibility, originality and creativity. Three finalists will be chosen and invited to present their proposals at the IPS, where the award recipient will be selected.

OUTCOMES OF THE GRANTS – The recipient will be expected to produce a Policy Discussion Brief within six months of receiving the grant. The research report can be written individually or jointly with an IPS senior researcher.

BENEFITS OF THE GRANT – The beneficiary will be awarded a one-time research grant of LKR 200,000 to carry out the proposed research and a three-month internship at the IPS. The recipient will be able to seek guidance from senior researchers and benefit from IPS resources to complete the proposed study during the internship. To enable students from all over Sri Lanka to benefit from this opportunity, the terms of the internship will be flexible. The internship can either be a fully in-house internship at IPS, or it can be an in-house plus online internship. In the case of the second option, the in-house component of the internship should be at least six weeks. To encourage research dissemination, an additional subsidy will be provided for presenting the research findings at local conferences and workshops.

Important Dates

30 April 2024 – Deadline for Submission of Proposals

01 June 2024 – Announcement of Finalists

23 June 2024 – Announcement of the Winner

Further information is available at: https://www.ips.lk/saman-kelegama-memorial-research-grant/

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