News & market updates

Fitch placed Housing Development Finance Corporation Bank's national rating on Rating Watch Positive after the government approved transferring HDFC’s state shares to Bank of Ceylon, saying the acquisition would likely bring strong owner support and could lead to multi‑notch upgrades.

Fitch placed Housing Development Finance Corporation Bank of Sri Lanka (HDFC) on Rating Watch Positive after the government approved transferring state-owned HDFC shares to Bank of Ceylon, reflecting a very high likelihood of owner support. Fitch said it will resolve the RWP on closing and could upgrade the national rating based on the new shareholders' support.

Fitch placed HDFC and SMIB on Rating Watch Positive after the government approved transferring state-owned shares of HDFC to Bank of Ceylon and SMIB to People’s Bank. Fitch said the acquisitions would likely confer very high owner support and could lead to multi-notch upgrades on closing.

People’s Bank has become the first state bank to receive a Corporate Finance Adviser Licence from the Securities and Exchange Commission of Sri Lanka. Its investment banking unit (PBIBU) has managed 32 debenture listings and one equity IPO mobilising over Rs.200 billion and is structuring four new debt issuances for late 2025/early 2026.

APB Sri Lanka held a CPDC program titled 'AI in HR' bringing industry leaders to discuss integrating AI in recruitment, performance management and learning to boost workforce agility across the banking industry.

Colombo market closed lower — ASPI fell 0.84% (198.24 pts) to 23,461.46 and the S&P SL20 dropped 1.52% to 6,458.15. Banking dominated turnover (39%) and major laggards included SAMP, HNB, JKH, NDB and BUKI while foreign investors were net sellers of about Rs. 788.7 million.

Cabinet approved transferring all government shares of HDFC Bank to Bank of Ceylon and of the State Mortgage and Investment Bank to People’s Bank, making both housing finance institutions subsidiaries to strengthen sustainability and protect depositors.

Cabinet approved transfer of all HDFC shares to Bank of Ceylon, making HDFC a BOC subsidiary to strengthen the bank amid limited deposit-raising capacity, poor profitability and capital shortfalls.

Housing Development Finance Corporation Bank of Sri Lanka (HDFC.N0000) appointed Shiroma Nandani as a Non-Executive Independent Director. Nandani is a Grade I Officer of the Sri Lanka Accountancy Service and Chief Accountant at the Ministry of Labour with over 20 years' public-sector finance experience.

HDFC Bank launched a new sustainable shopping debit card that integrates with LankaPay and works at JCB-certified POS terminals for everyday transactions.

Alliance Finance Company PLC (ALLI.N0000) issued and listed Sri Lanka’s first Social Bond on the Colombo Stock Exchange on 28 Aug; proceeds will fund projects delivering measurable social benefits such as finance for marginalised communities, women-led enterprises, job creation and skills development.

ANNOUNCEMENT FITCH RATING - NATIONAL RATING AT “BB+ (lka)” / OUTLOOK REVISION We refer to the above subject. In terms of the disclosure provisions of the Listing Rules No. 08 of the Colombo Stock Exchange, we write to inform you that Fitch Rating has affirmed the National Long-Term Rating of Housing Development Finance Corporation Bank of Sri Lanka (HDFC) at “BB+(lka)” while revising the Bank’s outlook to Negative from Stable effective from 15th August 2025.

Fitch affirmed Housing Development Finance Corporation Bank's national long-term rating at 'BB+(lka)' but revised the outlook to Negative, citing regulatory restrictions, funding curbs and weak asset quality (impaired-loan ratio ~52% at end‑1H25). Fitch said deposit mobilisation limits and EPF-backed housing loan exposure weaken competitiveness.

Hemal Chaminda Lokugeegana has been appointed General Manager/CEO of HDFC Bank of Sri Lanka effective 14 August and has assumed duties at the bank’s Head Office. Deputy GM Kapila Deshapriya had been acting as cover-up GM since end-July, and two new directors were also appointed to the board.

HDFC Bank PLC appointed Hemal Chaminda Lokugeegana as its new General Manager/CEO. He has over 24 years of banking experience and previously held senior roles at SDB Bank PLC, including Head of Business Banking and founding Chief Risk Officer.

DFCC Bank launched Sri Lanka's first 20-year fixed-rate home loan, offering the 20-year fixed product from 13% and home loan rates starting at 9.5%. The product includes up to 30-year terms, personalised repayment plans and full disbursement in as little as ten working days.

Gayani Premathilake has been appointed to the Board of HDFC Bank PLC as a Non-Independent, Non-Executive Director. She is currently Chief Legal Officer at the Public Administration Provincial Councils and Local Government Ministry and has over two decades of public-sector and academic legal experience.

HDFC Bank disclosed that the Central Bank of Sri Lanka has imposed restrictions on its business expansion and discretionary payments; no further details were given.

Prabhath Kaushallya was appointed to the Board of Housing Development Finance Corporation Bank of Sri Lanka (HDFC) as a Non-Executive Independent Director. He has over 30 years' experience in banking, including roles at NDB Bank and advisory positions at Baker Tilly.

IBM will collaborate with Pan Asia Banking Corporation PLC to modernise the bank’s digital infrastructure and deliver faster, more secure banking services across Sri Lanka. IBM also expressed support for Sri Lanka’s 2030 digital strategy and highlighted new hybrid AI technologies to scale enterprise AI.

The Central Bank of Sri Lanka launched the Sustainable Finance Roadmap 2.0 on 05 May 2025, setting prioritized actions for 2025–2029 to strengthen ESG risk management and finance sustainable development across banks, non‑bank financial institutions, capital markets and insurance. The roadmap was developed with IFC and EU support.

The SEC, with ADB technical support, released a regulatory framework enabling issuance and trading of Green, Blue, Social and Sustainability‑Linked (GSS+) bonds on the Colombo Stock Exchange, allowing sovereigns and corporates to raise capital for environmental and social projects.

Bimputh Lanka Investments has appealed to the Supreme Court (case SC/HC/LA 12/2025) against a Commercial High Court order to liquidate it after Housing Development Finance Corporation Bank filed for liquidation. Bimputh reduced nine-month losses to Rs.81.6m but retained a cumulative loss of Rs.2.18bn and ceased lending/deposit-taking after Central Bank orders.