Business

HNB supports Lanka’s recovery with record advances growth and strengthened balance sheet in 2025

Published

1 week ago

2026/03/1

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.

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Business

Advocata Institute highlights regulatory barrier limiting women’s overtime earnings

Published

14 hours ago

2026/03/10

Sahan Weerasooriya

Advocata Institute says that, a regulatory barrier prevents Sri Lankan women achieving pay parity with their male counterparts despite recent legislative amendments that have opened doors for women to work night shifts.

Despite the 2024 and 2026 liberalizations of the Shop and Office Employees Act (SOEA), which allowed women over 18 to work night shifts in IT, BPO, and hospitality sectors, women remain legally barred from maximizing their income due to rigid overtime restrictions.

Under current regulations, women cannot be employed under the Shop and Office Act for more than nine hours per day, a limit that strictly includes overtime. While Regulation 6 of the Act permits up to twelve hours of overtime per week, this daily “hard cap” creates a practical barrier that prevents women from accessing the full overtime entitlement available to male workers. This creates a regulatory paradox: while the law now permits women to work at night, it simultaneously restricts them from working the hours necessary to take home the same pay as a man performing the same role.

The urgency for reform is underscored by the Sri Lanka Labour Force Survey for the third quarter of 2025, which reveals a significant participation gap. Female labour force participation stands at 33.9 percent, compared to 68.6 percent for men. Closing this gap is a key structural reform priority under Sri Lanka’s International Monetary Fund Extended Fund Facility (EFF) programme, which highlights the importance of modernizing labour laws to expand labour supply and support long-term economic growth.

Debates on reforming these restrictions are often framed around the concern that removing gender-specific protections could expose women to exploitation. However, a woman’s vulnerability in the labour market is shaped less by the absence of gender-specific laws and more by structural challenges such as inadequate public transport, poor workplace infrastructure, weak enforcement of law and order, and limited access to childcare.

Addressing these underlying barriers is critical to ensuring both protection and opportunity. True empowerment requires shifting the focus from paternalistic hour-caps to creating a safe, gender-neutral environment that allows women the agency to maximize their earnings and contribute fully to the national economy.

Business

Drifting lubricant barrels trigger oil spill on southern coast; 99% of clean-up completed

Published

14 hours ago

2026/03/10

Sahan Weerasooriya

Samantha Gunasekara

Authorities have traced the oil contamination reported along sections of the Hikkaduwa and Peraliya coastlines in the Galle District to drifting barrels of industrial lubricant, while rapid response teams have already removed almost all visible oil deposits from the affected beaches.

The Marine Environment Protection Authority (MEPA), together with the Sri Lanka Coast Guard, launched an immediate response after oil patches were detected along about a 20-metre stretch of coastline in the Hikkaduwa and Peraliya areas.

Addressing a media briefing at the Ministry of Environment, MEPA Chairman Samantha Gunasekara said emergency shoreline clean-up operations began on March 7 under the instructions of Environment Minister Dammika Patabendi.

“Nearly 99 percent of the oil patches have already been cleared from the affected coastal stretch,” Gunasekara said, adding that the swift intervention by authorities had prevented the incident from escalating into a wider marine pollution crisis.

Investigations carried out by MEPA have confirmed that the contamination originated from barrels containing Shell Corena S2 P 100 lubricant oil that had apparently been lost at sea and later drifted ashore.

The lubricant manufactured by Shell plc is commonly used to lubricate the internal components of reciprocating piston air compressors. Officials said the substance is not classified as a hazardous or toxic oil, easing initial fears of severe environmental damage.

MEPA General Manager Jagath Gunasekara said monitoring of the coastline was continuing to ensure that no additional oil patches washed ashore.

Meanwhile, the Department of Wildlife Conservation said there had been no confirmed reports of harm to marine animals, including sea turtles and coastal wildlife, following inspections in the affected areas.

Wildlife officials said they were continuing to keep the situation under close observation to ensure that marine fauna along the southern coast remained safe.

Authorities stressed that protecting the ecological integrity of the southern coastal belt—particularly around the Hikkaduwa marine area—remains a priority, while further investigations are under way to determine how the lubricant barrels ended up drifting in Sri Lankan waters.

By Ifham Nizam

Business

Support for psychological well-being: Launch of telemedicine psychology program in response to Ditwa Cyclone

Published

14 hours ago

2026/03/10

Sahan Weerasooriya

The Sri Lanka College of Psychiatrists has launched an innovative telemedicine psychology program designed to provide essential support and mental health care to individuals adversely affected by the Ditwa Cyclone. This initiative is a vital response to the psychological challenges faced by the community in the aftermath of the disaster.

However, the implementation of this program has faced significant obstacles, primarily due to a considerable lack of access to smart devices among the target beneficiaries. Recognizing the urgency of this situation, S-lon Lanka (Pvt) Ltd has made a commendable contribution by donating tablet devices through its corporate social responsibility initiative, the “Suwasahana Charika” Program. This generous donation aims to bridge the technological gap, ensuring that individuals in need can access the psychological services offered by the telemedicine program.

The collaborative efforts were strengthened during a recent event that was attended by key figures, including Mr. S.C. Weerasekara, the Group Director / Chief Operating Officer of The Capital Maharaja Group, and Dr. Dashanthi Akmemana, the Chairman of the Sri Lanka College of Psychiatrists.

The Sri Lanka College of Psychiatrists expressed its gratitude to S-lon Lanka for its support and is committed to addressing the community’s mental health needs during this challenging time.