HNB Assurance PLC reported an outstanding financial performance for the year ended 31st December 2025, delivering a 42% year-on-year growth in Life Insurance Gross Written Premium (GWP), this along with the growth rate in Renewals are the highest in the industry.

Life GWP reached Rs. 19.49 Bn compared to Rs. 13.71 Bn in 2024, reflecting strong New Business generation and Renewal Collection. Net Written Premium grew even faster at 43% to Rs. 18.44 Bn, highlighting the quality and sustainability of the Company’s topline expansion.

Commenting on the results, Chairman Stuart Chapman stated, “The year under review was marked by gradual macroeconomic stabilisation, improved investor sentiment and a more predictable policy environment. Although the economy continues to recover from prior volatility, we are beginning to see renewed financial confidence among individuals and businesses. Against this backdrop, HNB Assurance has delivered strong growth in both revenue and profits, while maintaining robust capital adequacy and prudent risk management. Our improvement in top line, profitability and balance sheet strength demonstrates the resilience of our business model and our ability to navigate changing economic conditions which are reflected in an ROE which increased to 18.5% from 16.9% a year earlier.”

Profit Before Tax increased by 28% to Rs. 3.03 Bn from Rs. 2.36 Bn in the previous year, while Profit After Tax (including Life Surplus Transfer) rose by 28% to Rs. 2.12 Bn compared to Rs. 1.66 Bn in 2024. Earnings Per Share improved by 28% to Rs. 14.15 from Rs. 11.04, reinforcing the Company’s ability to consistently translate business growth into enhanced shareholder value. In line with this strong performance, the Board of Directors has proposed a first and final dividend of Rs. 5.00 per share for 2025, representing a 28% increase over the Rs. 3.90 per share declared in the previous year.

Executive Director and Chief Executive Officer Lasitha Wimalaratne highlighted the consistency of the Company’s upward trajectory. “Our 2025 performance reflects a sustained pattern of high growth and disciplined execution over the past four years. During this period, we have consistently strengthened our distribution reach, enhanced advisor productivity, invested in digital enablement and sharpened our customer centric value proposition. Each year we have built on the previous year’s gains, and the 42% growth in Life GWP in 2025 is the strongest affirmation yet of that strategy. Importantly, we have achieved this while maintaining underwriting discipline, expanding our Life Fund and delivering a 28% increase in PAT.”

The strength of the Company’s balance sheet continued to improve during the year. Total Assets grew by 28% to Rs. 68.44 Bn from Rs. 53.40 Bn, while financial investments increased by 29% to Rs. 62.49 Bn from Rs. 48.49 Bn in 2024, reflecting disciplined asset accumulation and prudent investment management. Total Equity rose to Rs. 12.19 Bn from Rs. 10.81 Bn, supported by Retained Earnings which grew by 18% to Rs. 10.23 Bn.

The Life Insurance Fund recorded a significant expansion of 27%, increasing to Rs. 48.87 Bn from Rs. 38.34 Bn in the previous year. During the year, the Company paid Rs. 4.40 Bn in Net Insurance Benefits and Claims, honouring its commitments to policyholders and their families while further strengthening long term reserves. Investment Income remained a key contributor to performance, with interest and dividend income rising by 10% to Rs. 7.49 Bn.

The Market Capitalisation as at the end of the year stood at Rs. 17.21 Bn up 43% from a year ago when it was Rs. 12.02 Bn, while trading for year ended at Rs. 114.75 per share increasing by 43% from Rs. 81.10 a year ago.

In the intricate world of pastry and bakery arts, R.S. Weerakoon has emerged as a visionary creator, known for his extraordinary ability to transform any concept into a stunning cake masterpiece. Currently serving as the Head Chef (Pastry & Bakery) at the Oak Ray Group in Kandy, Weerakoon’s journey is a blend of local talent and international expertise.

An alumnus of Udispattuwa Maha Vidyalaya, Weerakoon holds an NVQ Level 04 qualification from NAITA and is a distinguished member of the Chefs’ Guild of Sri Lanka. With over 14 years of experience in the industry, including valuable tenures in Kuwait and Oman, he has successfully integrated Middle Eastern culinary trends with local flavors.

One of his most significant contributions to the industry is the introduction of 118 unique products to the Oak Ray Group. Remarkably, all these creations are made without the use of any artificial food colorings, prioritizing the health and well-being of consumers.

Speaking about this talented professional, the Chairman of the Oak Ray Group, Mr. Sujeewa Palliyaguruge, stated that his vision is to provide a creative platform for such skilled young individuals.

“Our goal is to allow talented creators like Weerakoon the freedom to innovate and bring their unique visions to life, which ultimately benefits the entire culinary industry in Sri Lanka,” he said.

Weerakoon’s dedication to natural ingredients and his mastery of cake architecture continue to set new benchmarks for the next generation of chefs in the hill capital.

By S.K. Samaranayake

Pix by Razik Jabbar

Group’s total tax contribution amounted to Rs 48.4 Bn in 2025

Group’s Gross Loans and Advances crosses Rs 1.5 Tn in 2025 and deposits crosses Rs 2.0 Tn

Net Fee and Commission Income grew by 28.9% year-on-year

Asset quality strengthened with the Net Stage 3 ratio improving to 1.09% and Stage 3 coverage at 75.97%

Declares a total dividend of Rs 20.00 per share

HNB Group delivered strong performance in 2025, with Group Profit After Tax (PAT) reaching Rs 49.8 Bn, reflecting the continued progress. The Bank’s PAT stood at Rs 45.4 Bn, supported by robust balance sheet expansion and sustained improvements in asset quality.

Commenting on the performance, Nihal Jayawardena, Chairman of HNB PLC, stated,

“The year 2025 marked a decisive shift in Sri Lanka’s economic trajectory, supported by improving macroeconomic fundamentals, renewed private sector confidence, and continued progress in national reform efforts. HNB’s strong balance sheet expansion, disciplined risk management, and sustained investment in digital and operational capabilities position the Bank to play an essential role in supporting the country’s revival”.

“While the year concluded with the severe impact of Cyclone Ditwah, the resilience demonstrated by communities and institutions underscored the importance of a banking sector that remains agile, responsive, and deeply committed to national progress. We will continue to work closely with stakeholders to mobilise capital, rebuild affected livelihoods, and strengthen long-term economic stability.”

Despite strong credit growth, net interest margins remained under pressure amid an accommodative monetary policy stance. Net Interest Income declined marginally by 0.6% year-on-year, reflecting the broad reduction in market interest rates, and the recognition of a portion of overdue interest from the restructuring of Sri Lanka Sovereign Bonds (SLSBs) in December 2024, which temporarily boosted interest income in the previous year. However, the decrease in net interest income was moderated by the increase in interest income from loans and advances, supported by the expansion in the loan book, and the growth in CASA deposits.

Non-fund-based income provided a strong counterbalance, with Net Fee and Commission Income increasing by 28.9% year-on-year on the back of higher card usage and a sharp increase in digital transactions. The significant increase in the demand for trade related services on the back of the reopening of vehicle imports and improving trade activity, saw trade finance emerge as one of the key contributors to non-fund income in the current year. Furthermore, Exchange income rose to Rs 6.3 Bn during the year, reversing the loss of Rs 2.9 Bn recorded in 2024.

Prudent risk management, disciplined underwriting and focused recovery efforts supported a significant improvement in asset quality during the year. The Stage 3 portfolio recorded a net reduction alongside an impairment reversal of Rs 9.2 Bn, following the recognition of Rs 2.2 Bn in post-model adjustments made prudently for loan exposures with potential vulnerability arising from Cyclone Ditwah. Accordingly, the Net Stage 3 ratio improved to 1.09% as at end December 2025, compared to 1.88% a year earlier, while the Stage 3 coverage ratio remained robust at 75.97%.

Damith Pallewatte, Managing Director / Chief Executive Officer of HNB PLC, commented, “HNB’s performance in 2025 reflects the strength of our strategic priorities and the unwavering commitment of our teams to support customers across all segments of the Economy. The year was characterised by deliberate efforts to optimise our balance sheet, deepen digital integration, and enhance operational agility, enabling us to respond effectively to improving market conditions and renewed private sector confidence. We continued to accelerate our digital journey with next-generation capabilities such as TradeX and HNB Accept, while further enhancing accessibility and convenience through the HNB Mobile Banking App, reinforcing our focus on delivering simple, seamless, and inclusive financial solutions.”

“Our commitment to sustainability remained central to our agenda during the year. We advanced key initiatives through the issuance of a Rs 10 Bn Sustainable Bond and our participation in a USD 1 Bn sustainability-linked funding facility to support eligible green and social projects. In the wake of Cyclone Ditwah, we acted swiftly by recognising prudent impairments, contributing to the Rebuild Sri Lanka Fund, and strengthening the integration of climate risk into our credit assessment frameworks. We also deepened our governance agenda through a strategic partnership with Transparency International Sri Lanka, reflecting our continued commitment to integrity and responsible banking.”

“Our subsidiaries contributed meaningfully to the Group’s overall progress, with the full consolidation of HNB Investment Bank further strengthening our integrated franchise across capital markets. I wish to express my sincere appreciation to our employees for their dedication and professionalism, to our customers for their enduring trust, to our shareholders for their continued confidence, and to our regulators and the Board of Directors for their guidance and stewardship throughout the year.”

The Bank’s asset base expanded to Rs 2.39 Tn, reflecting a year-on-year growth of 15.0% driven by the strong expansion in the loan book and disciplined balance sheet optimisation. With a clear focus on enhancing the asset mix, the Bank redeployed funds from government securities into customer loans. Consequently, Total Gross Loans and Advances grew by Rs 354 Bn during the year to exceed Rs 1.5 Tn, marking the most significant annual increase in the Bank’s history. The Bank’s deposit base also recorded healthy growth of Rs 246 Bn, reaching Rs 1.96 Tn as at end-December 2025, supported by focused efforts to strengthen CASA mobilisation, and improve the overall funding mix.

Capital buffers remained strong, with the Bank’s Tier I and Total Capital Adequacy ratios at 16.85% and 19.95%, respectively, well above regulatory minimums, supported by healthy internal capital generation and prudent risk-weighted asset expansion. The Bank also maintained a robust liquidity position, with an all-currency liquidity coverage ratio of 227.75%, comfortably exceeding statutory requirements across all currencies, underscoring the strength of HNB’s balance sheet and risk management frameworks.

HNB’s share delivered strong performance during 2025, with the voting share trading between a high of Rs 433.00 and a low of Rs 267.00, while the non-voting share recorded a trading range between Rs 340.00 and Rs 230.00 during the year. The voting and non-voting shares closed the year at Rs 398.50 and Rs 318.75, respectively, reflecting improved investor sentiment in line with the Bank’s continued financial progress. The Group’s Net Book Value per share increased to Rs 529.5 as at end-December 2025, supported by strong profitability and internal capital generation. In view of the positive performance, the Board of Directors of HNB PLC has proposed a total dividend of Rs 20.00 per share for 2025, subject to shareholder approval.

HNB is rated AA-(lka) by Fitch Ratings Lanka Ltd. and was recognised as Sri Lanka’s Best Corporate Citizen for 2025 by the Ceylon Chamber of Commerce. Reinforcing its reputation for excellence, HNB was honoured with The Bracken Award for the Best Bank in Sri Lanka by the Banker Magazine, UK. The Bank was also recognised by The Asian Banker as ‘Sri Lanka’s Strongest Bank’ and awarded ‘Best Retail Bank in Sri Lanka’ for the 15th time, while receiving the title of ‘Best Bank for Large Corporates’ at the Euromoney Awards for Excellence 2025. HNB is further ranked among the ‘Top 1000 Banks in the World,’ as affirmed by The Banker Magazine, UK.