News & market updates

First Capital Holdings PLC reported a Profit after Tax of Rs. 2.10Bn for the year ended 31 March 2026, with Group net income before operating expenses of Rs. 6.59Bn. The Primary Dealer (PAT Rs.1.60Bn) and Corporate Finance (PAT Rs.0.93Bn) divisions were key contributors.

Colombo Stock Exchange closed higher on May 29, 2026, with the ASPI up 111.57 points to 22,310.80 and turnover at Rs.7.37 billion, driven by a ~400m-share block of HNB Finance (Rs.3.52bn) sold by Prime Lands. Commercial Bank, Melstacorp, Access Engineering and Hemas were among the main positive contributors.

Sri Lanka's CCPI rose to 5.5% in May 2026, a 27-month high driven by a c.40% fuel price increase that pushed up both food and non-food items. The central bank this week raised the policy rate by 100 basis points to curb demand-driven inflation.

The Ceylon Chamber of Commerce welcomed IMF approval of Sri Lanka’s 5th and 6th reviews, unlocking about USD 695 million under the EFF, and urged continued engagement and structural reforms to preserve macro stability, support investor confidence and address exchange-rate and energy pressures.

Colombo headline inflation rose to 5.5% year‑on‑year in May 2026 from 5.4% in April, driven by higher non-food prices—notably housing, L.P. gas and petrol—while food inflation eased to 0.9%. Core inflation edged up to 3.9% and inflation is expected to remain above the 5% target near term.

Prime Lands (Pvt) Ltd sold its entire 23.29% stake (400 million shares) in HNB Finance PLC at Rs. 8.80 per share, totaling Rs. 3.52 billion. Prime Lands chairman B. Premalal was also a member of HNB Finance's board.

IMF Mission Chief Evan Papageorgiou said Sri Lanka’s monetary policy remains broadly appropriate despite a 100-basis-point CBSL rate hike and the IMF approving combined Fifth and Sixth EFF reviews that unlock about $700m. He expects inflation to stay near the 5% target and defended a flexible rupee as a shock absorber against external (including oil) shocks.

President Anura Kumara Dissanayake declared 15 categories of public services — including electricity, fuel distribution, healthcare, transport, ports/airports, water, telecoms, banking and insurance — as essential under the Essential Public Services Act to ensure uninterrupted services in post-disaster conditions.

Central Bank cut LTV caps on motor financing (to 60% from 70% for >1yr vehicles; to 40% from 60% for newer/unregistered) and on gold loans (to 70% from 80%); Fitch says the tighter caps should strengthen lenders' risk profiles, especially finance companies.

The Treasury Bond auction was fully subscribed, raising the full Rs.240 billion at the first phase with WAYRs of 11.86% (01.08.30), 12.32% (15.01.33) and 12.93% (15.03.35). Secondary market saw renewed buying; net liquidity surplus was Rs.126.70bn and USD/LKR closed near 328.50/332.

The Unit Trust Association of Sri Lanka reported industry AUM of Rs. 589 billion in April 2026, flat month‑on‑month and down 2.3% year‑on‑year. Equity-related funds recorded strong flows (up 91.7% YoY to Rs. 61 Bn) and investor numbers rose 26.6% YoY to 154,250.

Sri Lanka's ASPI rose 0.50% to 22,309.23 midday Friday, with turnover Rs.240.5m and capital goods leading turnover at Rs.94.3m. Top movers included Access Engineering, Aitken Spence (declared Rs.4 tax-exempt dividend), Hemas and Central Finance while SMB Finance, Watawala, John Keells and Windforce fell.

Colombo Stock Exchange ASPI rose 0.50% to 22,310.80, with diversified financials leading turnover at Rs.3.89bn and total turnover Rs.7.38bn. Aitken Spence reported Q1 profit of Rs.3.81bn and declared a tax-exempt Rs.4.00/share dividend; Aitken Spence Hotel Holdings declared a Rs.0.28/share tax-exempt dividend.

Commercial Bank of Ceylon implemented advanced 3-D Secure (3DS 2.x) authentication for UnionPay cardholders, becoming the first bank in Sri Lanka and the South Asian region to enable UnionPay 3DS e-commerce with risk-based authentication and OTP step-up flows.

JB Financial launched the JB Vantage Credit Opportunity Fund, offering an annualised yield of about 10.26% with daily subscriptions and redemptions and no early-withdrawal penalties. The SEC-approved fund invests in government and corporate debt with a LKR 100,000 minimum.

Seylan Bank PLC has partnered with Hayleys Fentons Limited to offer a dedicated EV leasing facility with competitive interest rates, up to 7-year repayment terms and 24-hour approvals. The program covers EV brands represented by Hayleys Fentons and includes doorstep support and island-wide branch assistance.

Sampath Bank PLC signed an MoU with John Keells CG Auto to offer NEV buyers a 0.5% reduced interest rate on loans, insurance-financing and free credit cards for BYD and DENZA purchases. John Keells CG Auto is a subsidiary of John Keells Holdings PLC with nationwide sales and service coverage.

HNB PLC has signed a strategic partnership with Hayleys Agriculture Holdings Ltd to provide leasing for Kubota and Agrotech agricultural machinery across Sri Lanka. The collaboration aims to improve farmers' access to tractors, combine harvesters and other equipment to boost mechanisation and productivity.

National Savings Bank Group reported a 1Q 2026 operating profit of Rs. 15.5 billion, with total operating income of Rs. 22.5 billion and customer deposits of Rs. 1.6 trillion. Asset quality and capital remained strong (Stage 3 ratio ~2.34%; Total Capital Ratio 24.9%).

PDMO and the ADB jointly hosted the Asian Regional Public Debt Management Forum 2026 in Colombo to address climate resilience and debt sustainability in the Asia-Pacific. Discussions centered on strengthening public debt management, debt sustainability analysis, local-currency markets, green financing and AI/digital tools for debt operations.

Commercial Bank of Ceylon (COMB.N0000) launched PayPal-linked withdrawals via ComBank Digital, letting eligible customers transfer PayPal balances directly into their Commercial Bank accounts. The self-service email-based linkage enables near-instant transfers for freelancers and exporters, supporting regulated foreign currency inflows.

Hatton National Bank (HNB) will serve as title sponsor of the CCWE Fashion Week and International Summit 2026, a four-day event at Cinnamon Life from 16–19 July expected to bring together over 400 women entrepreneurs. The summit, supported by ESCAP-SSWA, will focus on export linkages, training and digital skills for women-led enterprises.

Fitch says Sri Lanka’s central bank cut motor-vehicle LTVs to 60% (from 70%) for vehicles registered over one year and to 40% (from 60%) for newer/unregistered vehicles, and lowered gold-loan LTVs to 70% (from 80%). Fitch expects the caps to strengthen lenders’ risk profiles—especially finance companies with large gold/vehicle exposures—but may curb volumes and earnings for those firms.

Fitch says Sri Lanka's Central Bank cut LTV caps on motor financing (to 60% from 70% for vehicles >1yr and to 40% from 60% for newer/unregistered vehicles) and reduced gold-loan LTVs to 70% from 80%, measures that should strengthen lenders' risk profiles but may weigh on volumes and earnings, especially at finance companies.

Free Lawyers alleged the Central Bank of Sri Lanka expanded M2b by Rs.1,653 billion in 2025 and a further Rs.610.7 billion in Jan–Mar 2026 via dollar purchases, linking this to recent rupee volatility. The CBSL countered that net FX operations injected about Rs.788.9 billion and that liquidity was partly absorbed by government repayments, withdrawals and coupon payments.

Cabinet approved revised regulations allowing foreign money or value transfer service providers to register and be supervised by the Central Bank under the Payment and Settlement Systems Act, strengthening AML/CFT oversight and formalising remittance and digital payments operations.

The rupee weakened versus the US dollar, with indicative TT rates at Rs.320.40/Rs.330.81 and interbank spot closing at Rs.328.50/Rs.332.00. The Central Bank capped trades at Rs.330, used moral suasion to calm markets and said it may force exporters to convert dollar earnings sooner.