The Central Bank released its second Monetary Policy Report for 2026 in keeping with the requirements of the Central Bank of Sri Lanka Act, No. 16 of 2023. The biannual Monetary Policy Report provides forward-looking insights about the economy, particularly inflation and economic growth outlook, and risks to projections. Through this Report, the Central Bank strives to improve its transparency and accountability by communicating the rationale behind its recent monetary policy decisions.

This Report is primarily based on the assessment considered by the Monetary Policy Board during the monetary policy review in July 2026.

The Monetary Policy Report, which is an online publication, is available on the official website of the Central Bank at https://www.cbsl.gov.lk/en/publications/economic-and-financial-reports/monetary- policy-reports

First Capital Holdings PLC, a subsidiary of JXG (Janashakthi Group) and a pioneering force in Sri Lanka’s capital markets landscape, navigated a challenging first quarter of financial year 2026/27 amid heightened global economic uncertainty, geopolitical tensions and significant movements in interest rates. While market conditions placed pressure on fixed income trading activities, the Group’s diversified business portfolio continued to deliver positive contributions across its Corporate Finance Advisory, Corporate Dealing Securities, Wealth Management and Stock Brokering businesses.

First Capital Holdings PLC (the Group) recorded a Loss after Tax of Rs. 726Mn for the quarter ended 30 June 2026, compared to a Profit after Tax of Rs. 2.15Bn in the corresponding period of the previous year.

The Group’s Net Trading Loss before Operating Expenses for the first quarter of 2026/27 was Rs. 565Mn, compared to Net Trading Income before Operating Expenses of Rs. 3.43Bn in the corresponding quarter of the previous year.

During the quarter under review, the Group’s financial performance was impacted by heightened global economic uncertainties, primarily driven by geopolitical tensions arising from the conflict in the Middle East. The Central Bank of Sri Lanka increased its policy rate by 100 basis points during the quarter to address rising inflationary pressures. Against this backdrop, trading opportunities were substantially restrained, while adverse mark-to-market movements were experienced across trading portfolios.

The Primary Dealer division reported a Loss after Tax of Rs. 741Mn for the quarter ended 30 June 2026, compared to a Profit after Tax of Rs. 1.55Bn in the first quarter of 2025/26. The results included net interest income of Rs. 351Mn and a trading loss on government securities amounting to Rs. 1.80Bn, compared to net interest income of Rs. 503Mn and trading gains on government securities of Rs. 2.06Bn in the corresponding quarter of the previous year.

The Corporate Finance Advisory and Corporate Dealing Securities divisions reported a Profit after Tax of Rs. 22Mn for the quarter ended 30 June 2026, compared to Rs. 587Mn in the first quarter of 2025/26.

The Wealth Management division reported a Profit after Tax of Rs. 6Mn for the quarter ended 30 June 2026, compared to Rs. 27Mn in the corresponding quarter of the previous year. The division continued to maintain a strong asset base, with Assets Under Management standing at Rs. 93.3Bn as at 30 June 2026, compared to Rs. 96.2Bn as at 31 March 2026.

The Stock Brokering division recorded a Profit after Tax of Rs. 24Mn for the quarter ended 30 June 2026, compared to Rs. 32Mn in the first quarter of 2025/26.

Commenting on the performance, Rajendra Theagarajah, Chairman of First Capital Holdings PLC, said, “First Capital has built a strong foundation across multiple areas of the capital markets, enabling us to navigate different market cycles with discipline and perspective. While the quarter presented a challenging environment for fixed income markets, the continued performance of our advisory, dealing, wealth management and securities businesses reflect the strength of our broader platform. We remain focused on strengthening our market position, deepening our capabilities and creating sustainable value for our clients and stakeholders.”

Commenting on the outlook, Dilshan Wirasekara, Managing Director/CEO of First Capital Holdings PLC, said, “The quarter reinforced the importance of maintaining a balanced and diversified business model in an evolving market environment. While movements in interest rates affected fixed income trading activities, our other core businesses continued to deliver positive contributions. We remain focused on strengthening execution, expanding our capabilities and identifying opportunities across the capital markets as conditions evolve. Our established platforms and client relationships provide a strong foundation as we move forward.”

Ceylinco Life has announced that its total assets have surpassed the landmark Rs. 300 billion threshold, reaching Rs. 302.5 billion as at 30th June 2026, underscoring the company’s sustained growth momentum and financial resilience.

Over the first six months of 2026 alone, Ceylinco Life recorded asset growth of Rs. 15.65 billion, representing an increase of 5.45 per cent at an average monthly growth of Rs. 2.58 billion.

Significantly, the company reported a Risk-Based Capital Adequacy Ratio (CAR) of 406 per cent as at 30th June 2026, substantially exceeding the minimum regulatory requirement of 120 per cent set by the industry regulator. This strong capital position reflects Ceylinco Life’s prudent risk management practices, sound financial governance, and its commitment to safeguarding the interests of policyholders and other stakeholders, while demonstrating a high capacity to withstand macro-economic pressures and volatility.

Commenting on the achievement, Ceylinco Life Chairman R. Renganathan said: “Crossing the Rs. 300 billion assets milestone is a significant affirmation of the strength, stability and disciplined growth of Ceylinco Life. Our exceptionally strong capital adequacy ratio, which is well above regulatory requirements, highlights our prudent approach to risk management and our unwavering commitment to protecting policyholder interests. This solid financial foundation positions us to navigate economic uncertainties with confidence while continuing to deliver long-term value to all stakeholders.”

Ceylinco Life’s asset base is primarily driven by its financial investments, including a growing portfolio of real estate, reinforcing the quality and stability of its balance sheet. The company has continued to invest strategically in acquiring land for its branch network, enabling the development of eco-friendly green buildings while simultaneously enhancing the strength of its asset portfolio. Construction is currently underway on the company’s 36th branch building on land owned by Ceylinco Life.

Ceylinco Life’s continued growth builds on a strong performance trajectory in 2025, when the company recorded its 22nd consecutive year of market leadership in Sri Lanka’s life insurance industry, with gross written premium income of Rs. 44.18 billion. The company also reported total income of Rs. 72.43 billion and increased its total assets by 14.15 per cent to Rs. 287 billion at the end of that year, while its Life Fund crossed Rs. 200 billion.

With its expanding asset base, disciplined investment strategy, and consistently strong capital position, Ceylinco Life continues to reinforce its standing as Sri Lanka’s most financially stable and trusted life insurer.

Voted the ‘Peoples Life Insurance Service Provider of the Year’ for an unprecedented 20th consecutive year at the 2026 SLIM Kantar Peoples Awards, Ceylinco Life has also been recognised as the Best Life Insurer in Sri Lanka by World Finance for 12 consecutive years and been ranked the most valuable insurance brand in Sri Lanka in 2025 and 2026. The company offers innovative insurance solutions that protect and de-risk the ambitions of policyholders.