LB Finance maintains growth momentum with Rs. 7 b pre-tax profit as the financial services provider reported robust earnings for the first quarter of the 2026/27 financial year, supported by strong lending growth, improved asset quality, and continued expansion across its core businesses.
LB Finance maintains growth momentum with Rs. 7 b pre-tax profit in Q1
For the quarter ended 30 June 2026, LB Finance PLC posted a 31% increase in Profit After Tax (PAT) to Rs. 3.54 billion, compared with Rs. 2.70 billion recorded during the same period last year. The results reflect sustained business growth despite a challenging global economic environment marked by geopolitical uncertainty, inflationary pressures, and market volatility.
The company’s total income rose 47% year-on-year to Rs. 18.76 billion, while net interest income increased 31% to Rs. 8.94 billion, driven by continued expansion of its lending portfolio. Earnings per share also improved to Rs. 6.38, up from Rs. 4.88 in the corresponding quarter of the previous financial year.
Reflecting the company’s operational strength, operating profit before tax from financial services climbed 30% to Rs. 7.17 billion, while overall profit before taxation increased by 30% to Rs. 5.70 billion. Return on Equity (ROE) strengthened to 22.96%, compared with 21.01% a year earlier, demonstrating improved profitability and efficient capital utilisation.
The LB Finance maintains growth momentum with Rs. 7 b pre-tax profit performance was underpinned by steady balance sheet expansion. The company’s loan portfolio increased by more than Rs. 29 billion during the quarter to reach Rs. 341.96 billion, while total assets expanded to Rs. 433.95 billion. Customer deposits also grew to Rs. 181.12 billion, highlighting continued customer confidence and the company’s strong position within the Sri Lanka finance sector.
Asset quality remained a notable strength during the quarter. The Gross Non-Performing Loan (NPL) ratio improved to 1.41%, down from 1.91% a year earlier, reflecting disciplined lending practices, effective credit evaluation, and strong recovery mechanisms. Capital adequacy also remained well above regulatory requirements, with the Core Capital Ratio standing at 18.89% and the Total Capital Ratio at 18.59%. Liquidity levels likewise remained comfortably above mandatory thresholds.
Strengthening its funding base, LB Finance PLC secured new financing facilities from two leading international development finance institutions (DFIs)—Norfund, the Norwegian investment fund for developing countries, and Swedfund, Sweden’s state-owned development finance institution. The funding is expected to support the company’s Environmental, Social and Governance (ESG) initiatives while expanding financing opportunities for Sri Lanka’s micro, small and medium-sized enterprises (MSMEs).
The company’s strong financial performance also received independent recognition. LB Finance PLC was ranked the best-performing finance company in Category 1 by K Seeds Investments in its Finance Sector Ranking for the fourth quarter of FY2025/26. The assessment evaluated 29 listed finance companies using ten key financial performance indicators, recognising LB Finance’s profitability, operational efficiency, growth, and asset quality.
At group level, profit after tax increased 41% to Rs. 3.83 billion, while total operating income rose 43% to Rs. 12.09 billion. Group assets expanded by approximately Rs. 37 billion to Rs. 452.98 billion, supported by the diversified operations of Associated Motor Finance Company PLC and LB Microfinance Myanmar Company Ltd.
Meanwhile, the company’s digital finance and lifestyle platform, CIM, continued its rapid growth through increased customer acquisition and the introduction of new services, including the UnionPay Virtual Debit Card, Tap to Pay, Cross-Border Payments, and e-Gifting. Rising transaction volumes and strong engagement from younger customers further strengthened its presence in Sri Lanka’s digital financial services market.
Looking ahead, LB Finance maintains growth momentum with Rs. 7 b pre-tax profit while continuing to focus on prudent risk management, digital innovation, operational excellence, and sustainable growth. As economic conditions continue to evolve, the company says it remains committed to delivering long-term value to customers, shareholders, and the broader Sri Lanka finance sector through sound governance and responsible financial stewardship.