LB Finance tops 4Q ranking of Sri Lanka’s largest listed finance companies

LB Finance PLC has emerged as the top-ranked company among Sri Lanka’s eight largest listed finance companies for the fourth quarter of financial year 2025/26, outperforming the larger rivals on a composite score spanning profitability, efficiency, asset quality and growth, according to a sector ranking report released by K Seeds Investments (Pvt.) Ltd.

Colombo-based boutique investment bank and advisory firm, K Seeds Investments (Pvt.) Ltd, has been issuing its quarterly sector ranking for the licensed finance entities since at least 2019, earning a reputation for its detailed analysis.

The report, titled ‘Ranking of Listed Finance Companies in Sri Lanka’, evaluates 27 listed licensed finance companies for the quarter ended March 31, 2026, segmenting them into four categories based on asset size: those with assets exceeding Rs.100 billion, between Rs.50 billion and Rs.100 billion, between Rs.20 billion and Rs.50 billion and below Rs.20 billion. 

Within each category, companies are ranked on 10 equally-weighted key performance indicators, including cost-to-income ratio, return on equity, return on assets, net profit margin, net interest margin, impairment to loan book, credit to deposits ratio, operating leverage and growth in both net profit and loans.

In Category 1, comprising companies with an asset base exceeding Rs.100 billion, LB Finance posted revenue of Rs.17.47 billion for the quarter, up 43.37 percent year-on-year and profit after tax of Rs.4.74 billion, an increase of 30.55 percent. 

The company recorded the lowest cost-to-income ratio in its category at 30.88 percent, against a category high of 54.98 percent, along with a return on equity of 7.95 percent, the second-highest in the group. 

Its loan book expanded 10.77 percent quarter-on-quarter to Rs.312.66 billion, while its impairment to loan book ratio stood at a contained 0.133 percent. LB Finance’s total assets stood at Rs.395.33 billion as at the end of the quarter, compared with Rs.558.55 billion for LOLC Finance, the largest company in the category by asset base. 

Despite trailing LOLC Finance by more than Rs.160 billion in assets, LB Finance edged ahead of it and the rest of the category on measures of profitability, efficiency and asset quality to secure the top overall rank.

On the market side, LB Finance shares climbed 63.87 percent over the 12 months to March 31, 2026, closing the quarter at Rs.141.75, up from Rs.86.50 a year earlier and lifting its market capitalisation to Rs.78.54 billion.

According to Fitch Ratings, the company’s credit rating stood at A- (lka), with a stable outlook, as at May 2026.

Commercial Credit and Finance PLC was ranked second overall in the category, despite a 31.54 percent year-on-year decline in revenue and a 14.28 percent fall in profit, supported by the highest return on equity (10.39 percent), return on assets (2.80 percent) and net profit margin (47.96 percent) among its peers, the report showed.

Among mid-sized finance companies with assets between Rs.50 billion and Rs.100 billion, Assetline Finance PLC was ranked first overall, recording the category’s highest return on assets at 1.10 percent and lowest cost-to-income ratio at 32.12 percent. It was followed by Asia Asset Finance PLC, which reported profit after tax of Rs.358.06 million for the quarter, a turnaround from a net loss of Rs.72.74 million in the corresponding period last year, with Senkadagala Finance PLC placed third.

In the Rs.20 billion to Rs. 50 billion asset category, Sarvodaya Development Finance PLC and Abans Finance PLC were jointly ranked first. Abans Finance recorded profit growth of 185.58 percent year-on-year to Rs.334.91 million, along with the category’s highest return on equity at 8.19 percent and net profit margin at 24.39 percent, while Sarvodaya Development Finance posted profit growth of 98.45 percent to Rs.266.67 million. Associated Motor Finance Company PLC and CBC Finance PLC were among companies in the category to report net losses for the quarter.

Among the smallest listed finance companies, with assets below Rs.20 billion, AMW Capital Leasing and Finance PLC was ranked first overall, followed by Dialog Finance PLC, which posted profit growth of 943.43 percent year-on-year to Rs.63.24 million and SMB Finance PLC in third place.

Share prices across several listed finance companies rose sharply over the 12 months to March 31, 2026, extending the gains recorded by LB Finance. 

Smaller counters such as Dialog Finance and U B Finance more than tripled in value over the same period, share price data compiled in the report showed, reflecting renewed investor interest in the sector. (NF)