Sri Lanka Banks' Association said the banking sector remains stable and customer deposits are secure despite recent isolated fraud and cyber incidents, with losses absorbed by banks' capital buffers and regulators confirming capital and liquidity ratios above minimum requirements.
Central Bank hiked the OPR by 100bps to 8.75%; T-bill yields rose sharply (91-day 9.36%, 182-day 9.68%, 364-day 9.83%) and the weekly auction was undersubscribed, while the secondary bond market turned bearish; USD/LKR closed around 324.50/326.00.
Colombo market closed down 0.85% at 22,175.14 after the CBSL raised the policy rate by 100bps and amid heightened Middle East tensions. Foreign investors were net sellers of over Rs.3bn, turnover was Rs.4.93bn with AAIC crossings accounting for about Rs.3.1bn.
Interest Rates
Ada Derana·May 27, 2026·Promotional / marketingPositive
Hatton National Bank (HNB.N0000) is the title sponsor of the CCWE Fashion Week & International Summit 2026, following an open call that drew 200+ models and 50+ designers; the event runs 16–19 July 2026 at Cinnamon Life, Colombo.
Colombo Stock Exchange closed higher as the ASPI rose 0.54% to 22,294.71 and the S&P SL20 gained 0.61%. Top contributors included Dialog Axiata, Ceylon Cold Stores, NDB and Bairaha Farms while Hemas, Lion Brewery and Sampath Bank lagged; Jetwing Symphony declared a final dividend of Rs0.50 and closed at Rs14.30 (+2.88%).
People’s Bank posted a standalone profit before tax of LKR 16.6 billion for Q1-2026 and group PBT of LKR 20.0 billion, with bank assets at LKR 3.8 trillion and group assets at LKR 4.2 trillion. The bank raised a LKR 25.0 billion Tier 2 debenture, lifting CAR to 17.9%, improved Stage 3 ratio to 7.2% and Stage 3 coverage to 50.0%.
Colombo Stock Exchange was up midday, ASPI +0.54% to 22,294.71 with turnover Rs.700m and materials leading turnover at Rs.192.7m. Top movers included Hayleys, Sunshine and HNB (positive) while Royal Ceramics, SMB Finance and Aitken Spence fell; Jetwing Symphony declared a final dividend of Rs.0.50 and its shares rose 3.6%.
SLYCAN Trust held a Lighthouse Event on 21 May 2026 in Colombo to discuss strengthening climate and disaster risk finance and financial protection for communities, businesses and public institutions. The forum highlighted roles for commercial banks, insurers and sector-specific needs in tourism, agriculture and apparel.
People's Bank reported standalone Profit Before Tax of Rs. 16.6 billion for Q1 ended 31 Mar 2026 (Group PBT Rs. 20.0 billion), with total operating income up 13.2% and net interest income up 17.5%. The bank raised Rs. 25 billion via a Basel III Tier-2 debenture, lifted CAR to 17.9%, kept Rupee LCR at 260%, and improved Stage-3 ratio to 7.2%.
Commercial Bank of Ceylon PLC is the first bank onboarded to LankaPay's new eMudhra e-Sign Remote Signature with LankaSign, launching Sri Lanka's first remote digital signature facility in the banking sector. The emSigner integration enables secure, legally recognised remote signing to speed onboarding and digital workflows across banking and other sectors.
Sampath Bank PLC launched integrated PayPal account linking and withdrawal via its Sampath Vishwa mobile app, allowing customers to withdraw PayPal funds directly into Sampath accounts in LKR or USD.
IT & DigitalExporters
EconomyNext·May 26, 2026·Regulatory or legalNegative
Sri Lanka's Central Bank raised the Overnight Policy Rate by 100 basis points and said it could use additional instruments to maintain price stability; the rupee had reached a three-year high of LKR 354/USD but has since stabilised.
Sri Lanka's rupee closed at 324.00/325.50 to the US dollar, firming from 325.50/327.00. Local government bond yields rose across maturities, with the 15.09.2027 bond at 9.90/10.40% and the 15.06.2034 bond at 11.50/12.00%.
Treasury bill yields jumped at Tuesday's auction with 95.55 billion rupees sold of 140 billion offered; 3-month 9.36% (+118bp), 6-month 9.68% (+143bp), 12-month 9.83% (+134bp).
Sri Lanka Banks' Association says the banking sector remains stable and customer deposits are secure despite isolated fraud incidents, with losses absorbed by banks' capital buffers. The Central Bank confirms capital and liquidity are above regulatory minima and banks will bolster cybersecurity and review operations.
The Central Bank of Sri Lanka said banks increased their willingness to lend in 1Q 2026, with loan demand rising across retail, corporate, SME and SOE sectors and overall NPLs declining; banks expect lending to rise further in 2Q while warning that geopolitical tensions and supply disruptions pose risks.
Interest RatesFuel & Energy PricesConstruction ActivityGold & Pawning
The Sri Lankan rupee strengthened for a second session, with interbank spot at Rs. 325.50/Rs. 327.00 (from Friday's Rs. 329.00/Rs. 335.00) and TT rates easing to Rs. 326.01/Rs. 336.42. Analysts say external buffers, expected CBSL rate hikes and easing oil prices reduce the risk of a renewed BOP crisis; CBSL issued an advisory against oversimplified narratives on money printing and exchange rates.
Rupee & ForexFuel & Energy PricesInterest RatesExporters
Sri Lanka's central bank hiked rates 100bp to 8.75%; the rupee strengthened to 322.00/323.50 from 325.50/327.00 and bond yields rose, with nearby maturities quoted around 10.10–11.00%.
Central Bank raised the Overnight Policy Rate by 100bps to 8.75%. The board cited supply-driven inflation (5.4% y/y in April) from high global oil prices, stronger credit-driven demand, external pressures including fuel-import driven trade deficits and recent rupee depreciation; reserves stood at USD 6.8bn.
Interest RatesRupee & ForexFuel & Energy PricesTourism
EconomyNext·May 26, 2026·Regulatory or legalNegative
Sri Lanka’s central bank raised the Overnight Policy Rate by 100bps to 8.75% to address rising inflation, credit expansion and external pressures; the statement cited 5.4% y/y inflation in April, high fuel prices, a wider trade deficit and gross official reserves of USD 6.8bn.
Interest RatesRupee & ForexFuel & Energy PricesTourism
Dialog Axiata (DIAL.N0000) became the Colombo Stock Exchange's largest listed company with a market cap of Rs. 367.09 billion after its share price rose 7% to Rs. 39.90 on May 25. John Keells stood at Rs. 359.36bn and Ceylon Tobacco at Rs. 341.91bn; Commercial Bank was the largest bank at Rs. 320.88bn.
Colombo Stock Exchange closed down as the ASPI fell 0.85% to 22,175.14, with market turnover at Rs.4.92bn and insurance stocks leading turnover at Rs.3.18bn. Top gainers included Ceylon Beverage (+5.20%), Lion Brewery (+3.06%) and Ceylon Guardian (+5.43%), while Sampath Bank, Hayleys and HNB were top decliners.
The central bank hiked rates 100bp to 8.75%, and the Colombo Stock Exchange fell with the ASPI down 0.51% to 22,249.88; market turnover was Rs.2.99bn with insurance leading at Rs.2.6bn. Lanka Ashok Leyland proposed a final dividend of Rs30/share and Lighthouse Hotel declared a final dividend of Rs3/share.
Dialog Axiata regained the top spot on the Colombo Stock Exchange with a market cap of Rs. 367.1 billion (4.51% of total market cap), overtaking John Keells Holdings at Rs. 359.4 billion.
Union Bank recognised top performers for 1Q2026 at the UB Heroes Awards; Trincomalee Branch won Best Branch and the KPI Achievement Award for strong performance across seven KPIs.
Ada Derana·May 26, 2026·Promotional / marketing·AAFPositive
Asia Asset Finance PLC is offering free PickMe rides for Fixed Deposit customers from home to the nearest branch and back across Sri Lanka. The initiative, in partnership with app-based PickMe, aims to improve customer convenience amid rising transport and fuel costs.
Fuel & Energy PricesIT & Digital
Ada Derana·May 26, 2026·Promotional / marketing·COMBPositive
Commercial Bank of Ceylon (COMB.N0000) was announced as the first bank onboarded to LankaPay and eMudhra's remote digital signature solution (eMudhra e-Sign with LankaSign) at a launch on 22 May 2026. The service enables secure, legally recognized remote e-signatures to speed onboarding and digital document workflows.