Janashakthi Finance PLC, a subsidiary of JXG (Janashakthi Group), delivered a strong performance for the financial year ended 31 March 2026, reflecting disciplined execution, continued business expansion and sustained momentum across its core lending and deposit businesses. The Company’s performance was further supported by improving economic activity, strengthening lending demand and continued focus on operational discipline and prudent portfolio management.

Based on the unaudited interim financial statements, the Company recorded a Profit Before Tax (PBT) of Rs.564 million for the 12 months ended 31 March 2026, marking a robust 62% year-on-year increase with the restated PBT of Rs. 348 million reported recorded in the previous financial year. Net Operating Income grew significantly by 35% to Rs.3.1 billion, underpinned by strong business volumes, improved operational performance and continued expansion across key market segments.

For the year under review, Net Profit After Tax (NPAT) increased by 38% year-on-year to Rs.403 million, reflecting resilient earnings performance amidst evolving market conditions and the Company’s prudent financial management and disciplined growth strategy. The Company’s Q4 performance further reinforced its positive growth trajectory, with quarterly PBT increasing by 17% year-on-year to Rs.175 million, while quarterly NPAT rose by 39% year-on-year to Rs.163 million. Net Operating Income for the quarter recorded a strong 31% year-on-year increase to Rs.883 million compared with the corresponding quarter of the previous year.

Demonstrating strong business expansion and growing market confidence, Janashakthi Finance’s Loans and Receivables Portfolio grew by 48% year-on-year to Rs.32.96 billion as of 31 March 2026. The growth was supported by expansion across the Company’s core lending segments, continued portfolio diversification and a disciplined approach to credit growth. Deposits increased by 14% to Rs.18.2 billion, reflecting sustained customer trust and an expanding financial footprint across the country.

The fourth quarter also showed continued sequential improvement over the preceding quarter, with PBT increasing by 18%, NPAT by 66% and Net Operating Income by 12%, highlighting the Company’s accelerating operational momentum and strengthened earnings capacity heading into the new financial year.

Commenting on the performance, Rajendra Theagarajah, Chairman of Janashakthi Finance PLC stated, “This year’s performance reflects the resilience of our business model and the disciplined execution of our long-term strategy. As the economy continues to regain momentum, Janashakthi Finance is well positioned to strengthen its role as a trusted and progressive non-banking financial institution creating sustainable value for all stakeholders.”

Commenting on the Company’s operational performance, Sithambaram Sri Ganendran, Chief Executive Officer of Janashakthi Finance PLC said, “Our strong Q4 performance was driven by healthy portfolio expansion, improved operational momentum and growing customer confidence across our markets. As we move forward, we remain focused on scaling quality growth, strengthening accessibility enhancing operational agility and delivering innovative, customer-centric financial solutions that are relevant to the evolving needs of customers across Sri Lanka.”

Backed by strong quarterly momentum, a rapidly expanding lending portfolio, an expanding deposit base, Janashakthi Finance enters the new financial year with a strengthened foundation for sustainable growth. The Company remains focused on deepening its market presence, improving operational efficiencies and advancing innovative financial solutions that contribute meaningfully to Sri Lanka’s evolving economic landscape while creating long-term value for shareholders and stakeholders alike.

The impact of the war in the Middle East was reflected in the performance of the External Sector in April 2026 as well. The external current account recorded a deficit in April 2026 compared to the surplus recorded during January through March 2026. This was mainly driven by the widened trade deficit, a moderation in the services surplus, and higher primary income account deficit, despite an increase in workers’ remittances compared to a year earlier. Consequently, the external current account recorded a marginal deficit during January to April 2026.

The merchandise trade deficit widened in April 2026, reflecting stronger growth in imports relative to exports. Further, during January–April 2026, the trade deficit widened to US$ 3.7 billion, compared to US$ 2.3 billion in the corresponding period of 2025.

Expenditure on fuel imports increased notably by 149.9% on a year-on-year basis to US$ 886 million in April 2026, driven by the surge in fuel prices in the global markets amid the ongoing conflict in the Middle East and higher import volumes.

Expenditure on motor vehicle imports, including both personal and commercial vehicles, amounted to US$ 208 million in April 2026, bringing total expenditure on motor vehicle imports to US$ 821 million during January-April 2026.

The terms of trade deteriorated on a year-on-year basis in April 2026, as the increase in import prices exceeded the increase in export prices. Meanwhile, the terms of trade also deteriorated during January–April 2026 compared to the corresponding period of the previous year.

The surplus in the services account declined by 37.8%, year-on-year, to US$ 229 million in April 2026, primarily due to the reduction in tourist earnings. The cumulative surplus also contracted by 24.3% during January to April 2026 compared to the corresponding period of 2025.

Tourist arrivals declined for the second consecutive month in April 2026 to 135,643, recording a year-on-year contraction of 22.3%, owing to the impact of Middle East conflict. Tourist earnings were estimated at US$ 157 million in April 2026, reflecting a year-on-year decline of 38.8%, and the cumulative earnings during first four months of 2026 declined by 19.4% amounting to US$ 1,111 million compared to the corresponding period of the previous year.

Workers’ remittances, amounting to US$ 768 million in April 2026, continued to sustain the positive momentum observed in recent months. On a cumulative basis, workers’ remittances during the first four months of the year recorded a year-on-year growth of 24.5% to US$ 3,063 million.

Foreign investments in the government securities market recorded a marginal net inflow of US$ 2 million, while foreign investments in the Colombo Stock Exchange (CSE), including both primary and secondary market transactions, recorded a net outflow of US$ 16 million during the month of April 2026.

Gross official reserves (GOR), including the swap facility with the People’s Bank of China (PBOC), stood around US$ 6.8 billion by end April 2026, amidst sizeable external debt service payments and net foreign exchange sales by the Central Bank.

As of end May 2026, the Sri Lanka rupee had depreciated by 5.4% against the US dollar on a year-to-date basis, reflecting heightened external sector pressures following the effects of the escalation of the Middle East conflict since late February 2026. This depreciation is in line with the currency depreciation trend that was observed in peer economies.

Meanwhile, the International Monetary Fund (IMF) Executive Board completed the combined Fifth and Sixth Reviews of the Extended Fund Facility for Sri Lanka on 27 May 2026, providing Sri Lanka with immediate access to SDR 508 million (about US$ 695 million) to support economic policies and reforms.

(CBSL)

LOLC Finance PLC, the flagship finance company of the LOLC Group and Sri Lanka’s largest non-bank financial institution, delivered a strong financial performance for the year ended 31 March 2026, supported by robust lending growth, stronger recurring income, improved asset quality and a capital position that remained comfortably above regulatory requirements.

The Company reported profit after tax of Rs. 27.4 billion for the year, compared with Rs. 25 billion in the previous year. At headline level, this represents growth of around 9%. However, the headline comparison does not fully capture the improvement in the Company’s underlying performance.

The previous year’s profit included significant non-recurring gains linked to Sri Lanka sovereign bond-related impairment reversals, partially offset by a derecognition loss. On a net basis, these one-off items added approximately Rs. 4 billion to the prior year result. Adjusting for this, the prior year’s underlying profit base was closer to Rs. 21 billion. Against that adjusted base, the current year profit of approximately Rs. 27 billion reflects underlying profitability growth of close to 30%.

This is the more important message behind the numbers. LOLC Finance did not merely preserve profitability in a recovering economic environment; it expanded its recurring earnings base materially, while simultaneously growing its balance sheet and improving key credit quality indicators.

The improvement was driven primarily by core income. Interest income increased to approximately Rs. 79 billion, supported by strong expansion in the lending portfolio. Interest expense rose at a slower pace to approximately Rs. 29 billion, allowing net interest income to grow to approximately Rs. 50 billion. This demonstrates the Company’s ability to expand its loan book while maintaining control over funding costs.

Net fee and commission income also improved, rising to approximately Rs. 3 billion, reflecting higher business volumes and broader customer activity. Total operating income increased to approximately Rs. 56 billion, despite the absence of the large sovereign bond-related gains that benefited the previous year. This shift from one-off gains to recurring operating income is a clear positive from an earnings-quality perspective.

The balance sheet story was equally significant. Total assets grew by approximately Rs. 129 billion during the year, reaching around Rs. 559 billion as at 31 March 2026. The main driver of this expansion was the lending portfolio, with gross loans and advances increasing from approximately Rs. 305 billion to approximately Rs. 423 billion, representing growth of nearly 39%.

This level of loan book expansion is notable not only because of its scale, but also because it was spread across multiple product categories. Growth was recorded across key lending lines including finance leases, gold loans, speed drafts, alternate finance, personal loans and term loans. This points to a broad-based recovery in customer demand rather than growth concentrated in a single product line.