Seylan Bank PLC has delivered a resilient financial performance for 2025, surpassing market forecasts and signaling a steady recovery in its underlying credit profile, according to a recent equity research update by First Capital Holdings PLC.

The bank recorded a net profit of LKR 12.2 billion for the full year 2025, marking a significant 20.3% year-on-year increase. Performance in the final quarter was particularly notable, with net profit reaching LKR 3.8 billion, a 9.4% rise compared to the same period in 2024. This result exceeded analysts’ expectations by 5.4%, underscoring the bank’s strengthening fundamentals.

Core banking operations remained a primary driver of growth. Net interest income (NII) expanded by 18.3% year-on-year to LKR 11.3 billion in 4Q2025. This was supported by an 8.3% increase in interest income and a marginal contraction in interest expenses, reflecting highly favorable funding dynamics.

Total operating income surged by 51.1% in the final quarter, a sharp jump largely attributed to the absence of International Sovereign Bond (ISB) restructuring losses that had impacted the previous year’s performance. Fee and commission income also saw robust growth of 21.8%, fueled by increased activity in cards, remittances, and international trade.

A standout highlight for the period was the aggressive expansion of the bank’s loan book, which grew by 29.6% year-on-year to reach LKR 599.8 billion by the end of 2025. The deposit base also grew by 13.3%.

Asset quality showed marked improvement as the bank successfully navigated the tail-end of the economic recovery. The Stage 3 loan ratio, a key indicator of credit risk, fell to 1.03% in 4Q2025, down significantly from 2.10% a year earlier. This was further bolstered by a 95.1% contraction in impairment charges on loans and advances, reflecting a move toward more stable provisioning.

Seylan Bank’s capital and liquidity positions remain a source of strength, staying comfortably above regulatory requirements. The bank’s Total Capital Ratio stood at a healthy 17.89%, while the liquidity coverage ratio remained elevated at nearly 230%, providing ample buffers to support future lending.

Looking ahead, First Capital projects a more moderated pace of growth as the broader economic momentum eases and the monetary easing cycle reaches its trough. Nevertheless, analysts remain optimistic, projecting net profits to rise to LKR 15.9 billion in 2026 and LKR 18.4 billion in 2027.

While the bank’s estimated fair value for 2026 has been revised to LKR 140 per share to reflect market re-rating trends, the stock still offers a compelling total return of approximately 37%. A newly introduced 2027 fair value of LKR 155 implies an even higher potential return of 52%. Citing these strong fundamentals and the significant upside potential, the First Capital report maintains a “Buy” recommendation on Seylan Bank.

By Sanath Nanayakkare

In a significant moment reflecting renewed confidence in Sri Lanka’s economic recovery and forward-looking national strategy, the Bank of Ceylon (BOC) formally presented its 2025 Annual Report to His Excellency President Anura Kumara Dissanayake. The occasion reaffirmed the Bank’s role as the nation’s leading financial institution and a key pillar of economic stability.

The report was officially handed over by Chairman Mr. Kavinda De Zoysa and General Manager/Chief Executive Officer Mr. Y. A. Jayathilaka, who outlined the Bank’s performance, resilience, and strategic direction during a pivotal phase for Sri Lanka’s financial sector.

BOC’s 2025 Annual Report highlights a strong financial performance, with PBT reaching Rs. 120.8 billion, reinforcing its position as one of the most profitable single entities in the country. Beyond profitability, the Bank made a substantial contribution to the national economy, remitting approximately Rs. 77 billion in taxes underscoring its vital role in supporting fiscal stability and national development.

Despite a reshuffle at the helm of energy sector, the government has moved swiftly to reassure markets, investors, and industry stakeholders that policy continuity—not disruption—will define the road ahead.

Newly appointed Power and Energy Minister Anura Karunathilake, assuming duties at a moment of heightened scrutiny, made it clear that the administration’s core commitment remains unchanged: uninterrupted supply of electricity and fuel, regardless of political transitions.

His remarks come at a critical juncture for the country’s energy economy—still recovering from past volatility, navigating global price pressures, and attempting to build investor confidence in long-term infrastructure and generation projects.

Addressing journalists following his appointment, Karunathilake struck a notably measured tone, signaling stability rather than reformist disruption.

“The national energy policy is anchored in long-term objectives. There is no shift in direction,” he said, in what analysts interpret as a deliberate message to both domestic and foreign investors wary of policy reversals.

Energy economists note that Sri Lanka’s power and fuel sectors remain deeply sensitive to political signals. Even minor uncertainty can ripple through procurement cycles, independent power producer (IPP) negotiations, and fuel hedging strategies.

By emphasizing continuity, the government appears intent on avoiding the stop-start policy cycles that have historically plagued the sector.

The transition follows the resignation of former Minister Eng. Kumara Jayakody and Ministry Secretary Prof. Udayanga Hemapala on April 17, a move widely viewed as an attempt to ensure the independence of an ongoing Presidential Commission probing coal procurement processes.

From a governance perspective, the resignations may serve to reinforce institutional credibility—particularly at a time when transparency in energy procurement is under intense public and political scrutiny.

Karunathilake acknowledged opposition criticism regarding transparency but responded with a firm challenge: present concrete evidence to investigative authorities rather than litigating issues through media narratives.

Perhaps the most market-sensitive assurance came in the Minister’s outright rejection of imminent power cuts.

Energy supply stability remains a cornerstone of economic recovery. From export manufacturing to tourism and digital services, uninterrupted electricity is non-negotiable.

Karunathilake indicated that groundwork laid by his predecessors—including generation planning and fuel supply arrangements—has already mitigated immediate risks.

“If those plans are implemented effectively, there will be no need for power cuts,” he said, positioning his role as one of policy support and execution oversight rather than structural overhaul.

Industry observers point out that this continuity is crucial. Any disruption in electricity supply could directly impact industrial output, SME operations, and investor sentiment—particularly as Sri Lanka courts foreign direct investment in energy-intensive sectors.

On the fuel front, the minister acknowledged the reality that global price movements—exacerbated by geopolitical tensions in the Middle East—remain beyond Sri Lanka’s control.

For businesses, especially logistics operators, fisheries, and agriculture, fuel price predictability is as critical as supply continuity. Sudden spikes can erode margins and disrupt planning cycles.

Karunathilake’s assurance that supply will remain uninterrupted, regardless of external shocks, is therefore likely to be welcomed by key economic sectors.

By Ifham Nizam