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.

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

First Capital Holdings PLC, a subsidiary of JXG (Janashakthi Group) and a pioneering force in Sri Lanka’s capital markets landscape, delivered a steady performance during FY2025/26, recording a Profit after Tax of Rs. 2.10Bn for the year ended 31 March 2026. While this compares to Rs. 5.02Bn recorded in the previous year, the Group’s performance reflects its ability to navigate a dynamic operating environment while sustaining long-term value creation.

The year was shaped by the impacts of the devastating cyclone ‘Ditwah” as well as heightened geopolitical tensions arising from the Middle East conflict, which negatively influenced broader capital market conditions. Additionally, the settlement of long-standing tax assessments relating to VAT on financial services that impacted reported outcomes during the latter part of the year. Against this backdrop, the Group remained focused on maintaining operational stability, disciplined execution and strategic continuity across its business verticals.

The Primary Dealer and Corporate Debt Securities businesses continued to deliver strong operational performance, contributing to a Net Income before Operating Expenses of Rs. 6.59Bn for FY2025/26. With a disciplined execution focus and a well-structured business model, the Group remains well-positioned to capitalize on improving market conditions and future growth opportunities.

The Group’s Primary Dealer division recorded a Profit after Tax of Rs. 1.60Bn for the year ended 31 March 2026, supported by Rs. 1.75Bn in net interest income and Rs. 1.44Bn in trading gains from government securities, reaffirming its position as a key contributor to the Group’s performance.

The Corporate Finance Advisory and Dealing Securities division delivered a Profit after Tax of Rs. 0.93Bn, supported by Rs. 2.29Bn in equity trading gains, driven by sustained client engagement, strong execution capabilities and continued market activity.

Meanwhile, the Stock Brokering division recorded a Profit after Tax of Rs. 242Mn, compared to Rs. 71Mn in the previous year, supported by improved market participation, higher execution volumes and enhanced operational efficiencies.

The Wealth Management division reported a Profit after Tax of Rs. 84Mn, while Assets Under Management stood at Rs. 96.2Bn as of 31 March 2026, reflecting continued investor confidence, prudent portfolio management and the strength of the Group’s advisory platform.

In January 2026, First Capital was awarded Superbrands status, further reinforcing its position as one of Sri Lanka’s most trusted and recognised financial services brands.

Commenting on the Group’s performance, Rajendra Theagarajah, Chairman of First Capital Holdings PLC, stated that FY2025/26 was characterised by evolving global and domestic market conditions that influenced investor sentiment and capital market activity, particularly during the latter part of the financial year. He said that the Group’s ability to maintain operational strength amidst changing market dynamics reflects the value of its diversified business model, structured governance framework and prudent strategic direction. He further commented that First Capital remains focused on sustaining long-term stakeholder value while continuing to strengthen its position within Sri Lanka’s financial services sector.

Dilshan Wirasekara, Managing Director/CEO of First Capital Holdings PLC, highlighted that the Group’s core operating segments continued to deliver meaningful contributions throughout the year, supported by strong client engagement, execution strategy and the strength of its integrated financial services platform. He noted that the Group continued to invest in strengthening capabilities across advisory, fixed income, stock brokering and wealth management, enabling greater agility and service excellence across its operations. He further added that these strategic investments, combined with a strong market presence and client-centric approach, will continue to support the Group’s long-term growth ambitions and future value creation.

With a strengthened foundation across fixed income, capital markets, advisory, stock brokering and wealth management, First Capital enters the new financial year with confidence and strategic clarity. The Group remains focused on deepening its leadership position, enhancing client value and driving sustainable growth through focused execution and continued innovation.