LB Finance surpasses Rs. 25bn pre-tax profit on exponential loan portfolio growth

LB Finance PLC reported a landmark financial performance for the year ended March 31, 2026, becoming one of the few non-bank financial institutions in Sri Lanka to surpass the Rs. 25 billion pre-tax profit milestone.

The company recorded a historic pre-tax profit of Rs. 25.01 billion, reflecting a 22 percent increase over the previous year, while profit after tax (PAT) rose by 27 percent to Rs. 13.67 billion. This was driven by strong portfolio expansion, diversified revenue streams, improved operational efficiency, and disciplined risk management.

Broad-based growth was delivered across all key business segments during the year. Total income increased by 28 percent to Rs. 60.04 billion, supported by a 24 percent increase in interest income to Rs. 51.81 billion and a remarkable 72 percent growth in fee and commission income to Rs. 7.91 billion. Total operating income grew by 26 percent to Rs. 37.74 billion, reflecting the continued strength of LB Finance’s diversified business model.

The lending portfolio expanded by 58 percent to Rs. 312.66 billion, significantly outperforming industry growth trends. Total assets increased by 64 percent to Rs. 395.33 billion, underscoring the scale of the company’s balance sheet expansion.

Public confidence in LB Finance remained strong throughout the year, with customer deposits increasing by 25 percent to Rs. 173.33 billion. To support rapid asset growth and strengthen liquidity management, LB Finance further diversified its funding base by expanding bank borrowing facilities to Rs. 102.97 billion and securing strategic long-term funding arrangements from Swiss-based social investment funds.

Return on average equity (ROE) improved to 24 percent from 23 percent in the previous year, while shareholders’ funds increased by 20 percent to Rs. 61.38 billion. Net asset value (NAV) per share rose to Rs. 110.79 from Rs. 92.53 a year earlier, while earnings per share (EPS) increased to Rs. 24.68 from Rs. 19.50. Reflecting confidence in its earnings sustainability, the company declared a dividend of Rs. 8.20 per share.

LB Finance contributed approximately Rs. 13.72 billion in direct and indirect taxes during the year, reinforcing its position among the largest taxpayers within Sri Lanka’s non-bank financial institution sector.

Commenting on the performance, Executive Director Ravindra Yatawara stated, “During the year, we accelerated portfolio growth, strengthened our market position through the acquisition of Associated Motor Finance Company PLC, maintained industry-leading asset quality, and enhanced operational efficiency. These results reflect our commitment to creating sustainable value for shareholders, empowering our customers, and contributing meaningfully to Sri Lanka’s economic progress.”

At the group level, loans and receivables increased to Rs. 333 billion, while total assets rose to Rs. 415.57 billion. Total group profit exceeded Rs. 14.04 billion, supported by strong contributions from subsidiaries and expanding operations.

Despite rapid balance sheet growth, LB Finance maintained capital adequacy and liquidity levels comfortably above regulatory requirements. Asset quality indicators improved further during the year, with the gross non-performing accommodation ratio declining to 1.35 percent from 2.25 percent in the previous year. The net NPL ratio remained at -1.24 percent, supported by strong recovery mechanisms and prudent provisioning practices. The company maintained a robust Stage 3 impairment coverage ratio of 72.61 percent, reflecting its disciplined approach to risk management and credit underwriting.