LOLC Finance to buy back over 3.5bn shares

The board of LOLC Finance PLC will repurchase up to 3.52 billion shares at Rs.6.00 each, aiming to enhance shareholder value while ensuring financial stability.

The proposed buyback represents a portion of the company’s total 33.08 billion issued shares and is scheduled to take place from 30 June to 8 July 2025, the company said in a stock exchange filing this week.

The Central Bank’s Department of Supervision of Non-Bank Financial Institutions granted the company clearance to proceed with the repurchase, subject to compliance with relevant regulatory requirements.

The board’s decision is backed by Article 16 (b) of LOLC Finance’s Articles of Association, which permits the company to purchase its own shares. The move will also be carried out in line with Section 64 of the Companies Act No. 7 of 2007 and the Colombo Stock Exchange’s Listing Rule 7.10.1.

The company’s profit for the year ended 31 March  2025, amounted to Rs. 25 billion, reflecting a 16 percent increase in profitability compared to the previous year. The net lending portfolio recorded significant growth of Rs. 47 billion, rising from Rs. 250 billion to Rs. 297 billion during the financial year. Additionally, the deposit base expanded from Rs. 206 billion to Rs. 226 billion as of March 31, 2025. 

Both interest income and interest expenses declined during the period, primarily due to lower market rates. Effective management of non-performing loans 

(NPLs), along with a net reversal of Rs. 7.3 billion in impairment provisions related to ISB investments—following the debt restructuring—contributed to a substantial reduction in provisions compared to the prior year. 

However, other operating income declined year-over-year, mainly due to lower revaluation gains on investment properties compared to the previous year and a derecognition loss of Rs. 3.7 billion on the restructuring of SLISBs during the current financial year.