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.

Malaiyaha Tamil workers in Sri Lanka’s private tea estates and smallholdings are facing widespread labour abuses that amount to multiple indicators of forced labour, according to a new report released last week by Amnesty International.

‘The Sri Lankan government is urged to strengthen labour protections, improve enforcement mechanisms and remove barriers that prevent Malaiyaha Tamil workers from accessing their rights under both domestic law and international obligations, a media release on the report explained.

‘Workers are being subjected to intimidation, physical violence, harassment, debt bondage, restrictions on movements, wage withholding and severely poor living and working conditions, the release added.

Some extracts from the release:

‘The research focused on tea estates in Sri Lanka’s Southern Province, particularly in the Galle and Matara Districts. It is based on visits to 45 estates conducted between January 2024 and January 2026, alongside 159 interviews with workers, discussions with Estate Managers and Supervisors, and 15 focus group discussions involving 65 workers. Across all sites, researchers found what they describe as a consistent pattern of exploitation and discrimination affecting Malaiyaha Tamil workers.

‘Workers reported being forced to meet unrealistic daily tea-picking targets, often set at more than 25 kilograms per day. Failure to meet these targets reportedly resulted in wage deductions, delays, or reduced pay, sometimes bringing daily earnings down to as little as LKR 1,000 (around USD 3.10). Workers also described a cycle of wage advances and loans that left them increasingly indebted to estate owners, raising concerns about debt bondage in the plantation sector.

‘Several workers also told researchers they had experienced or witnessed verbal and physical abuse by estate managers, particularly when they were late for work, questioned unpaid wages, or failed to meet production targets. One worker described being beaten with hands, legs, and sticks, and said such violence was still occurring. Others reported that wages were often withheld or manipulated based on arbitrary assessments of productivity.

‘Employers frequently classify them as “casual workers,” which denies them access to maternity benefits, pensions, sickness leave, and other statutory entitlements. The report also notes that trade union representation is largely absent in the Estates surveyed, leaving workers with little collective bargaining power or protection against abuse. According to the report, workers face multiple barriers in accessing justice, including language barriers, discriminatory treatment by officials, lack of documentation, and weak labour inspection mechanisms. These factors, the report says, prevent effective enforcement of labour laws and allow abusive practices to continue largely unchecked.

‘Smriti Singh, Regional Director for South Asia at Amnesty International, said the findings reflect systematic violations of labour laws and a failure of enforcement by the state. She said, private tea estates are operating with little accountability and that the pattern of abuse raises serious concerns about forced labour.’

By Hiran H. Seneviratne

Low investor sentiment persisted in the stock market yesterday due to lingering West Asian uncertainties particularly in relation to Israel and Lebanon.

Both indices moved downwards. The All Share Price Index went down by 48.78 points, while the S and P SL20 declined by 7.46 points. Turnover stood at Rs 1.67 billion with two crossings.

Those crossings were; HNB crossed 185718 shares to the tune of Rs 73.4 million; its shares traded at Rs 395 and Dialog Axiata 1 million shares crossed for Rs 44 million; its shares traded at Rs 44.

In the retail market companies that mainly contributed to the turnover were: RIL Properties Rs 148 million (5.3 million shares traded), Dialog Rs 108 million (2.4 million shares traded), Aitken Spence Rs 74.4 million (542,100 shares traded), LB Finance Rs 72.2 million (7.3 million shares traded), Royal Ceramics Rs 67.2 million (1.4 million shares traded), Renuka Agri Foods Rs 64.8 million (5.2 million shares traded) and JKH Rs 53.7 million (2.7 million shares traded). During the day 71 million shares volumes changed hands in 23582 transactions.

It is said that banking sector counters, especially HNB, performed well while the real estate sector stocks, especially RIL Properties, performed well. An overall mixed performance was noted in most of other sectors, especially finance and agriculture.

Yesterday the rupee was quoted at Rs 330.00/332.00 to the US dollar in the spot market, from 331.00/332.00 Friday, dealers said, while bond yields were flat.

By Hiran H Senewiratne