LB Finance PLC reported a landmark financial performance for the year ended 31 March 2026, becoming one of the few non-bank financial institutions in Sri Lanka to surpass the Rs. 25 billion pre-tax profit milestone.
The Company recorded a historic pre-tax profit of Rs. 25.01 billion, reflecting a 22% increase over the previous year, while profit after tax (PAT) rose by 27% to Rs. 13.67 billion. The performance was driven by strong portfolio expansion, diversified revenue streams, improved operational efficiency, and disciplined risk management.
LB Finance delivered broad-based growth across all key business segments during the year. Total income increased by 28% to Rs. 60.04 billion, supported by a 24% rise in interest income to Rs. 51.81 billion and a strong 72% growth in fee and commission income to Rs. 7.91 billion. Total operating income grew by 26% to Rs. 37.74 billion, reflecting the continued strength of its diversified business model.
The lending portfolio expanded by 58% to Rs. 312.66 billion, significantly outperforming industry growth trends, while total assets rose by 64% to Rs. 395.33 billion, underscoring the scale of balance sheet expansion.
Public confidence remained strong, with customer deposits increasing by 25% to Rs. 173.33 billion, reinforcing deposits as the Company’s primary funding source. To support rapid asset growth and strengthen liquidity management, LB Finance further diversified its funding base by expanding bank borrowings to Rs. 102.97 billion and securing long-term funding arrangements from Swiss-based Social Investment Funds.
The Company continued to deliver strong shareholder returns. Return on average equity (ROE) improved to 24%, while shareholders’ funds increased by 20% to Rs. 61.38 billion. Net asset value (NAV) per share rose to Rs. 110.79, and earnings per share (EPS) increased to Rs. 24.68. Reflecting confidence in earnings sustainability, a dividend of Rs. 8.20 per share was declared.
LB Finance contributed approximately Rs. 13.72 billion in direct and indirect taxes during the year, according to Executive Director Ravindra Yatawara.
“Surpassing the Rs. 25 billion pre-tax profit milestone is a landmark achievement for LB Finance and a testament to the resilience of our business model, disciplined execution, and customer-centric strategy,” he said.
At group level, the acquisition strengthened exposure to the high-demand motorbike financing market, contributing approximately Rs. 17.2 billion in loans and receivables. Group loans and receivables increased to Rs. 333 billion, while total assets rose to Rs. 415.57 billion. Group profit exceeded Rs. 14.04 billion, supported by strong subsidiary performance and expanding operations.
Despite rapid growth, LB Finance maintained capital adequacy and liquidity levels comfortably above regulatory requirements. Asset quality improved further, with the gross non-performing accommodation ratio declining to 1.35% from 2.25%. The net NPL ratio remained at -1.24%, supported by strong recoveries and prudent provisioning, while Stage 3 impairment coverage stood at 72.61%.
During the year, the Company also launched “Sanmitha” Small Business Loans targeting the MSME sector, building a loan book of Rs. 1.7 billion.
Operational efficiency improved further, with the cost-to-income ratio declining to 30.52%, supported by cost optimisation initiatives and digital integration. The LB CIM platform recorded a transaction volume exceeding Rs. 316 billion across more than 6 million transactions, reflecting strong digital adoption and customer engagement.
Sri Lanka economy shows mixed signals as tourism and remittances rise while stock market weakens
Sri Lanka’s economy recorded mixed developments during the week ending 5 June 2026, with stronger performance in tourism, workers’ remittances, and government finances offset by declines in the stock market and continued currency depreciation, according to the latest economic indicators released by the Central Bank of Sri Lanka.
In the real sector, global crude oil prices rose during the week amid uncertainty surrounding the US–Iran peace process and renewed geopolitical tensions. However, prices later eased following signs of a possible resolution to the conflict. Despite the late decline, Brent and WTI crude oil prices ended the week higher by US$2.60 and US$5.31 per barrel, respectively, compared to the previous week.
In the monetary sector, the Weekly Average Weighted Prime Lending Rate (AWPR) increased by 10 basis points to 10 percent, while the Average Weighted Call Money Rate edged up to 9.16 percent from 9.10 percent a week earlier. Broad money expanded by 11.6 percent year-on-year in April, while credit extended to the private sector rose by Rs. 100.5 billion, recording annual growth of 27 percent. Total market liquidity also improved, with the surplus rising to Rs. 105.04 billion by 5 June, from Rs. 92.15 billion the previous week.
However, the Colombo Stock Exchange experienced a downturn, with the All Share Price Index (ASPI) declining by 2.54 percent to 21,744.13 points and the S&P SL20 Index falling by 2.19 percent to 6,024 points.
Government finances showed notable improvement during the first quarter of 2026. Revenue and grants increased to Rs. 1,499.2 billion during the three months ending March, compared to Rs. 1,067.4 billion in the corresponding period of the previous year. The overall budget recorded a surplus of Rs. 116.4 billion, a marked turnaround from a deficit of Rs. 234.5 billion in the first quarter of 2025. The government also recorded net repayments in both domestic and foreign financing during the period.
Meanwhile, Treasury bill and bond yields increased during the week, while foreign investor holdings of government securities declined by approximately 3.78 percent.
The external sector continued to show resilience. Tourist arrivals reached 145,745 in May, up from 135,643 in April and 132,919 in May 2025. Workers’ remittances rose to US$847 million in May, compared to US$767.9 million in April and US$641.7 million a year earlier.
Gross official reserves were provisionally estimated at US$6.87 billion at the end of May 2026. However, the Sri Lankan rupee recorded a year-to-date depreciation of 7.8 percent against the US dollar as of 5 June.
Overall, the latest indicators suggest that while economic activity continues to strengthen in several sectors, challenges remain in financial markets and currency stability.
LB Finance surpasses Rs. 25 billion pre-tax profit amid strong loan portfolio growth
