CAF Bank’s operating profit, and thus its donation to its parent, the Charities Aid Foundation, fell by £1.3m last year, as it reveals plans to further diversify its range of services so that it is“less reliant on wholesale interest income” from its deposits.
Last autumn it introduced a lending service for its customers for the first time and interim CEO Barry Meeks told civilsociety.co.uk that “we are looking at a range of other services” including “whether to bring something new in terms of pre-paid cards credit cards”.
Operating profit for the year-end 2013 was £3.2m for 2013, down from £4.6m in 2012. In the financial year up to April 2013 the bank's net interest income on its wholesale assets was £8.9m - down from just over £10m the previous year, mainly as the result of a reduction in market rates. At the same time its administrative expenses increased from £4.6m to £4.8m.
The bank’s annual report puts the increase in administrative expenses down to the launch of the new lending service, and Meeks said he expected this to be a “one-off” expense.
Meeks added that he was “quite pleased” so far with the lending service, although take-up was a “little bit slower” than anticipated. He suggests that this could be because charities are being “very careful about borrowing” in the current economic climate.
