SDB Bank posts Rs.156mn 1H profit as margins rise

Dinithi Ratnayake - Chairperson, Kapila Ariyaratne - CEO 

• Impairments ease in 2Q

Sanasa Development Bank PLC (SDB Bank) posted a profit after tax of Rs.156 million for the first half of 2025, as improved margins and lower impairments in the second quarter helped offset higher operating costs.

The bank’s net interest margin rose to 5.64 percent in June, supported by proactive yield and funding cost management. Impairment charges fell 18 percent year-on-year in 2Q, aided by stronger collections and remediation efforts, while the Stage 3 impairment coverage ratio improved to 49.84 percent from 47.78 percent at end-2024.

Net fee income climbed 32 percent year-on-year in the first half, highlighting stronger non-interest income streams. Overhead expenses rose 6 percent on account of higher staff costs.

On the balance sheet, loans and advances to customers increased by Rs.3.9 billion since December 2024, though total assets contracted 1 percent during the first half, reflecting repayment of short-term borrowings and the rupee’s appreciation against the U.S. dollar.

The lender maintained strong buffers, with a total capital ratio of 15.26 percent and a liquidity coverage ratio of 281.52 percent at end-June, both well above regulatory thresholds.

SDB Bank CEO Kapila Ariyaratne in a commentary that followed the results said the performance highlights the bank’s fundamentals, noting that targeted growth strategies with prudent risk management had helped maintain stability in a challenging market.