Business

A deep dive into Fitch Lanka report shows ‘Resilience of the Few’

Published

4 weeks ago

2026/02/9

The domestic credit landscape is currently anchored by a handful of high-performing institutions that have displayed significant resilience through the nation’s most turbulent years, a deep dive into the latest monthly report of Fitch Lanka shows.

While the public often equates the often-adulated private sector credit growth with widespread business expansion, the Fitch Lanka data shows a concentration of capital among the country’s elite ‘blue-chip’ firms.

This latest assessment from Fitch Ratings (Lanka) Ltd. is being hailed by experts as a vital assessment for the country’s financial system. While the technical details of credit ratings can seem dense, an independent economic analyst told The Island Financial Review that these reports act as a ‘global report card,’ fundamentally demonstrating how much international trust is placed in Sri Lankan enterprises.

According to the analyst, the ratings issued as of January 31, 2026, serve as more than just corporate scores; they are the primary benchmark used by global investors to determine the safety of bringing capital into the country.

“High ratings are essential for attracting Foreign Direct Investment (FDI), which is the engine for job creation and infrastructure development. These scores are critical for trade finance, allowing local businesses to import essential goods and export products without friction. The ratings provide a real-time snapshot of how Sri Lankan entities are viewed within the highly competitive global capital markets,” he said.

“Banking sector stability is crucial here. Major institutions like Commercial Bank and HNB maintain strong long-term positions. Meanwhile, blue-chip firms including Dialog Axiata PLC and Hemas Plc continue to operate within the elite AAA(lka) to AA(lka) range.The presence of top-tier firms in the ‘AAA’ to ‘AA’ range indicates a robust internal capacity to meet debt obligations, providing a buffer even when the global economy is unpredictable,” the analyst noted.

When asked if the contents of the report may encourage investors to pay close attention to entities appearing in Red font, the analyst said that he views it as a ‘vital signal’ of a dynamic and transparent market rather than a sign of crisis,

“Entities such as JAT Holdings and CIC Holdings PLC have recently undergone rigorous reviews. This scrutiny is largely centred on the manufacturing and agricultural sectors, which are currently adapting to volatile global supply chain trends.

Looking forward, the ability of these ‘Red font’ companies to stabilise their outlooks will serve as the ultimate litmus test for the national economy.If these key players can maintain their scores and stabilise their trajectories through the middle of the year, it will be a definitive indicator that Sri Lanka’s broader economic path is secure,” the analyst said.

When asked if this was the case across the board including SMEs, he replied,” In fact, a deeper dive into the latest assessments by Fitch Ratings Lanka reveals a different reality: the engine of this credit growth is not the average entrepreneur, but a select group of ‘big ticket’ corporate giants.

” A superficial glance at the financial headlines might suggest a private sector in the midst of a borrowing spree. With the Central Bank reporting a notable 25.2% year-on-year growth in private sector credit as of December 2025, the outlook of a broad-based economic awakening is tempting. However, the Fitch Ratings Lanka monthly report reveals a different reality: the engine of this credit growth is not the average entrepreneur, but a select group of ‘big ticket’ corporate giants. In essence, these are the ‘safe harbours; where capital is currently docking.

“The data provided by Fitch Ratings Lanka underscores a critical distinction in the 2026 economy that credit is indeed flowing. And the authorities are rightly encouraged by private sector growth. Yet, this is not a tide lifting all boats; it is a strategic fortification of the nation’s most resilient pillars. As the year unfolds, the strength of these ‘big ticket’ borrowers will determine whether the rest of the private sector can eventually follow their lead into a more prosperous era or not,” he noted in conclusion.

By Sanath Nanayakkare

All News Advertisement

Business

Embedding human rights, equity and integrity into business leadership

Published

23 hours ago

2026/03/5

Sahan Weerasooriya

Rathika de Silva, Executive Director

At its 2026 Social Sustainability Programme Kick-Off, the UN Global Compact Network Sri Lanka convened business leaders to advance the translation of global ambition into practical corporate action on inclusion, integrity and human rights.

On 24 February 2026, the UN Global Compact Network Sri Lanka (Network Sri Lanka) convened business leaders at Barefoot Garden Café for its 2026 Social Sustainability Programme Kick-Off, delivered in collaboration with Good Life X.

The gathering did more than introduce a calendar of events. It positioned Sri Lanka’s corporate community within the broader direction of the UN Global Compact’s 2026–2030 global strategy — a strategy anchored in three imperatives: equipping companies to act, catalyzing collective action, and advancing the business case for responsible leadership.

At its core, the 2026 Social Sustainability agenda is designed to move companies from commitment to capability.

Within the Diversity & Inclusion Working Group, this means building practical pathways toward equal pay for equal work and strengthening male allyship as a governance issue rather than a cultural afterthought. It means examining sexual and reproductive health, disability inclusion, and mental health not as employee benefits, but as structural determinants of productivity and retention. It means sharpening strategic communications so inclusion is embedded in brand integrity. It also means applying science-based behavioural change approaches to shift organizational culture in measurable ways.

Across the Business & Human Rights Working Group, equipping companies takes the form of deepened engagement on decent work and living wage implementation, strengthening human rights due diligence processes, and addressing emerging risk areas such as AI and digital rights. It extends to reinforcing business integrity and anti-corruption frameworks, understanding the social dimensions of a just transition, and recognizing the link between child rights, nutrition, and workforce productivity.

Business

Union Bank to raise LKR 3 Bn via Basel III Compliant Debenture Issue

Published

23 hours ago

2026/03/5

Sahan Weerasooriya

Shanka Abeywardene

Union Bank of Colombo PLC announced its proposed Debenture Issue 2026, a strategic move aimed at raising up to LKR 3 billion. This issue is designed to bolster the Bank’s Tier II capital base and provide a robust financial foundation for its upcoming growth initiatives.

The offering consists of Basel III compliant, listed, rated, unsecured, subordinated, redeemable high-yield debentures with Non-Viability Conversion. The instrument has been assigned a rating of BB (lka) by Fitch Ratings (Lanka) Ltd, reflecting the bank’s creditworthiness and the structured nature of the subordinated debt.

Investors can choose from three distinct interest structures starting from a high-yield 13% fixed rate per annum (Type A). This option is paid annually, while Type B offers a 12.5% fixed rate paid semi-annually (12.89% AER). For those seeking market-linked returns, Type C provides a floating rate of the 182-days Treasury Bill rate plus a 400-basis point margin, also paid semi-annually.

The debentures are priced at LKR 100 per unit with a 5-year tenure (2026–2031). The initial issue size is set at 20,000,000 debentures with an option to raise 10,000,000 at the discretion of the Bank and is scheduled to open on 10 March 2026.

Shanka Abeywardene, Chief Financial Officer of Union Bank stated “This debenture issue marks a significant step in the Bank’s journey towards enhanced financial stability. By strengthening its capital adequacy, Union Bank is well-positioned to navigate evolving market conditions while fuelling its long-term strategic objectives for sustainable growth”

Business

Sanjay Kulatunga appointed to WindForce Board

Published

23 hours ago

2026/03/5

Sahan Weerasooriya

Sanjay Kulatunga

WindForce PLC announced the appointment of Sanjay Kulatunga as an Independent, Non-Executive Director to its Board with effect from 03rd March 2026, following the resignation of Dilshan Hettiaratchi. The appointment further strengthens the Company’s governance framework, strategic oversight, and long-term decision-making capabilities.

Kulatunga brings an established track record as a founder, entrepreneur, and senior executive across financial services and export-oriented industries. He is the Chief Executive Officer and Co-Founder of LYNEAR Wealth Management, a boutique investment firm established in 2013, which has since grown to become one of Sri Lanka’s largest private wealth management institutions, serving high-net-worth individuals as well as local and international institutional clients.

Prior to founding LYNEAR, Kulatunga played a pivotal role in the establishment of Amba Research, an investment research offshoring firm rooted in Sri Lanka and now operating as part of Acuity Analytics.

Over the years, he has contributed extensively to several key national institutions. His previous appointments include serving on the Financial Sector Stability Consultative Committee of the Central Bank of Sri Lanka, as well as the Board of Investment of Sri Lanka and the Securities and Exchange Commission of Sri Lanka.