Business

Govt and Central Bank in a mood for fiscal consolidation

Published

5 years ago

2021/05/13

by Sanath Nanayakkare

A recap of remarks at a recent webinar hosted by the Central Bank of Sri Lanka made it evident that both fiscal and monetary authorities are in a mood for increased tax collection and reduced public spending in the medium term in order to reduce the burgeoning budget deficit in 2021.

Responding to a question from the audience whether the policymakers would take a path of revenue based consolidation in this backdrop, Mahinda Siriwardana, Deputy Governor of the Central Bank said,” You can see that as per the medium term policy framework presented by the Central Bank, revenue is expected to increase gradually and at the same time overall expenditure is expected to go down. It will be a kind of combination of revenue enhancing and expenditure reduction measures as has been announced by the government.”

“As a result, the expectation is to have improvements in both the Current Account and the Primary Account going forward. So these could be the main driving forces in the future in order to reduce the budget deficit, So I’d say the mechanism will be a combination of these two metrics.”

“There was an increase in the budget deficit in 2020. It reflected two things. There was a decline in revenue and at the same time there was an unexpected increase in the recurrent expenditure due to the ongoing pandemic. You know that the government introduced significant changes to the country’s tax policy in 2019 – the idea behind that was to encourage the economic activity. By maintaining a low tax regime in the country. However, the expectations were not entirely met given the subsequent developments, particularly due to Covid-19 and related developments. There was a 3.6% contraction in the economy. That had an impact on the expected revenue generation. At the same time there was an overrun in the recurrent expenditure as well. So the response to your question is in the Central Bank’s medium term framework,” the Deputy Governor said.

According to the Annual Report of the Central Bank, due to the economic fallout from the COVID-19 pandemic, the fiscal outcome deviated from expectations as reflected in the decline of the government revenue and a rise in government recurrent expenditure, thereby widening the budget deficit and raising the outstanding central government debt. Heavy reliance on domestic sources in financing the budget deficit in 2020 reflected the impact of extremely challenging global market conditions that limited access to foreign financing, and the expressed preference of the government to reduce the reliance on foreign financing.

Despite the limited fiscal space in 2020, the government, under extremely challenging circumstances, continued to support the businesses and individuals affected by the pandemic. Going forward, near term risks to the fiscal sector could remain elevated due to low revenue mobilisation and the large foreign currency debt service requirements. Persistent deviations of the budget deficit and the elevated level of outstanding central government debt warrant a firm commitment towards fiscal consolidation as envisaged in the National Policy Framework of the government, the CBSL Annual Report states.

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Business

AIA delivers strong first half results in 2026; double-digit growth across key financial metrics

Published

13 hours ago

2026/09/5

Thilina Walpola

The Board of AIA Group Limited (the “Company”) is pleased to announce the Group’s financial results for the six months ended 30 June 2026. Growth rates are shown on a constant exchange rate basis unless otherwise stated:

New business performance and embedded value

Value of new business (VONB) of US$3,212 million, up 10 per cent overall and 14 per cent excluding Thailand(1)

Record high annualised operating ROEV of 18.0 per cent, up from 15.8 per cent in full year 2025

EV Equity of US$83.4 billion, up 6 per cent per share over the first half on an actual exchange rate basis

IFRS earnings

Operating profit after tax (OPAT) of US$4,163 million, up 13 per cent per share

AIA now expects to exceed OPAT per share CAGR target of 9 to 11 per cent from 2023 to 2026(2)

Record high annualised operating ROE of 17.5 per cent, up from 15.5 per cent in full year 2025

Cash generation and capital returns

Underlying free surplus generation (UFSG) of US$3,935 million, increased by 10 per cent per share

Net free surplus generation (net FSG) of US$2,758 million, up 12 per cent per share

US$3.6 billion returned to shareholders in the first half through dividend and share buy-back

Interim dividend increased by 10 per cent to 53.90 Hong Kong cents per share

Lee Yuan Siong, AIA’s Group Chief Executive and President, said:

“AIA has delivered another strong performance in the first half of 2026, with double-digit growth across our key financial metrics, while continuing to return substantial capital to shareholders. VONB reached a record high of US$3.2 billion with growth across all distribution channels, and all reportable segments excluding Thailand. The Group has achieved 17 per cent CAGR since the first half of 2023(3), demonstrating consistently strong demand for AIA’s professional advice and differentiated products.

“At the core of our unrivalled distribution platform is our market-leading Premier Agency. I am delighted that AIA has once again been ranked the number one Million Dollar Round Table (MDRT) multinational company globally. We have held this position for a record 12 consecutive years and we have more than double the number of MDRT members of our nearest competitor. In the first half of 2026, our Premier Agency achieved strong VONB growth of 11 per cent excluding Thailand(1). Our extensive network of strategic distribution partners further expands our market reach and generated an 18 per cent increase in VONB, supported by very strong performance in both the bancassurance and independent financial adviser (IFA) and broker channels.

“Strong new business, together with disciplined management of our in-force portfolio, has supported sustained growth in recurring earnings with OPAT per share up by 13 per cent in the first half. As a result, we expect to exceed our 9 to 11 per cent OPAT per share CAGR target for 2023 to 2026(2). UFSG, the Group’s core measure of operating cash generation, increased by 10 per cent per share. After allowing for new business investment, net FSG increased by 12 per cent per share. In accordance with our prudent, sustainable and progressive dividend policy, the Board has declared a 10 per cent increase in the interim dividend to 53.90 Hong Kong cents per share. These achievements demonstrate that our financial strategy is working as intended.

“Asia remains the most compelling growth opportunity for life and health insurance. Powerful structural tailwinds across the region continue to create substantial demand for our professional advice and differentiated products and underpin the exceptional long-term prospects for AIA’s business. I am confident that AIA’s disciplined execution of our strategic priorities will continue to deliver long-term sustainable value for all our stakeholders.”

Business

British Council Sri Lanka launches soft skills workshops to elevate learning and empower communication

Published

13 hours ago

2026/09/5

Thilina Walpola

The British Council team answering questions on Corporate English Solutions from leading corporates about professional development skills courses

The British Council Sri Lanka has launched Corporate English Solutions (CES), tailored to the Sri Lankan corporate and education ecosystem, aimed at helping organisations strengthen workplace communication and professional development.

The launch event took place recently at the NH Collection, Colombo 3, gathering corporate partners, clients and education stakeholders throughout the country.

CES extends the British Council’s long-standing work in English language education and teacher training into a dedicated offering for the corporate sector. The launch introduced two new components to the British Council’s presence in Sri Lanka such as public workshops and teacher training programmes, open to learners and educators beyond the organisation’s existing corporate and academic partners. Guests at the event were shown a short video introducing Corporate English Solutions before the formal proceedings began.

Talal Meer, British Council Regional Business Development Director, South Asia, welcomed guests and introduced the British Council’s team in Sri Lanka. In his remarks, Meer set out the scope of the CES launch, covering the introduction of public workshops in Sri Lanka, the rollout of teacher training programmes, and an overview of the CES product portfolio. Meer’s role covers educational partnerships in the South Asia region, and his address framed the Sri Lanka launch within the British Council’s broader regional strategy.

Business

Ogilvy Group tops award tally at ‘Dragons of Sri Lanka’ 2026

Published

13 hours ago

2026/09/5

Thilina Walpola

Ogilvy Group Sri Lanka delivered a standout performance at the recently concluded Dragons of Sri Lanka 2026 Awards, securing a total of nine awards comprising two Gold Dragons, one Silver Dragon and six Black Dragons, among the festival’s highest overall award tallies. Gold Dragon wins for Phoenix Ogilvy and Ogilvy Digital, together with the seven additional recognitions across multiple categories, highlighted Ogilvy’s ability to combine creativity, strategic thinking and commercial effectiveness to deliver business results.

Organised by the 4As Sri Lanka, the third edition of Dragons of Sri Lanka shortlisted more than 50 agencies and corporates, making it one of the country’s most competitive marketing communications awards. These local awards, along with the chapters in Malaysia and Pakistan are part of the Dragons of Asia platform, one of the region’s leading programmes for marketing communications effectiveness, with entries being judged on strategy, originality, execution and measurable results.

Ogilvy Digital accounted for eight awards in total, including a Gold Dragon in the Business & Trade Marketing category, and a Silver Dragon in the Innovative Idea or Concept category. The Agency additionally received six Black Dragons across the categories of Innovative Idea or Concept, Business & Trade Marketing, Content Creation, Small Budget, Event or Experiential, and Brand Trial or Sales Generation.

Commenting on the achievement, Sajith Weerasinghe, Chief Operating Officer of Ogilvy Digital, said, “These recognitions reflect the breadth of capabilities we’ve built across strategy, creative, content, experience design, technology and performance marketing. The fact that the work was recognised across so many different disciplines demonstrates our ability to apply creativity to a wide range of business challenges and objectives. We’re proud that this achievement spans multiple clients, categories and types of work, reflecting both the versatility of our people and our commitment to delivering results.”