People’s Bank recorded a record Rs. 32.6 billion pre-tax profit in the first half of 2026, supported by stronger core banking income, improved margins, loan growth and disciplined financial management.
People’s Bank strengthens earnings, capital and liquidity in first half of 2026
The state-owned bank delivered a strong financial performance for the six months ended June 30, reinforcing its position amid a changing domestic and global economic environment. Standalone profit after tax reached a record Rs. 20.5 billion, while operating income and net interest income both recorded substantial year-on-year growth.
Total operating income increased 17.7% to Rs. 95.2 billion during the first half, compared with Rs. 80.9 billion in the corresponding period of 2025. Net interest income, the bank’s main source of earnings, rose 18.9% to Rs. 82.4 billion from Rs. 69.3 billion.
The improvement in core earnings was accompanied by stronger margins. People’s Bank increased its Net Interest Margin (NIM) to 4.4% from 4.1% a year earlier, indicating improved returns from its interest-earning assets relative to funding costs.
The bank’s balance sheet also continued to expand, with total assets stabilising at Rs. 3.8 trillion. Gross loans and advances crossed the Rs. 2 trillion threshold for the first time, reaching Rs. 2.1 trillion by June 30.
The growth in lending comes alongside a stronger capital position. The Total Capital Adequacy Ratio increased to 18.2% at the end of June, compared with 17.9% at the end of the first quarter and 16.5% at the end of 2025. The Tier I Capital Adequacy Ratio stood at 12.7%.
The improvement provides the bank with a stronger capital buffer to support future business growth while maintaining resilience against potential financial and economic pressures.
Liquidity indicators also remained robust. The All Currency Liquidity Coverage Ratio stood at 212.3%, while the Rupee Liquidity Coverage Ratio reached 255.9%. Both figures point to a substantial liquidity position relative to regulatory requirements and provide additional support for the bank’s financial stability.
At the Group level, the performance was even stronger. Group Profit Before Tax increased 20.6% to Rs. 37.4 billion from Rs. 31.0 billion in the same period last year.
Group total assets stabilised at Rs. 4.1 trillion, while gross loans and advances rose to Rs. 2.4 trillion. Group net interest income increased 22.9% to Rs. 97.0 billion from Rs. 79.0 billion, while the Group Net Interest Margin improved to 4.8% from 4.4%.
The results reflect the contribution of both the bank’s core operations and wider group activities to overall earnings. The stronger net interest income performance also indicates that improved margins and balance-sheet growth continued to support profitability during the period.
People’s Bank Chairman Narada Fernando attributed the performance to the institution’s financial fundamentals, governance practices and risk-management framework. He said the bank had maintained its momentum despite geopolitical developments and continuing economic uncertainty in the global environment.
Fernando also reaffirmed the bank’s role in supporting Sri Lanka’s economic priorities, particularly through facilitating economic activity and strengthening financial inclusion. He said sustainable and inclusive growth remained central to the institution’s purpose and its approach to creating long-term value for stakeholders.
Chief Executive Officer and General Manager Clive Fonseka similarly pointed to the bank’s core income generation, improved margins, asset quality and stable balance sheet as key factors behind the first-half performance.
According to Fonseka, the bank’s strong capital and liquidity position provides a foundation for continued growth while allowing it to respond to changing domestic and international conditions. The emphasis on disciplined financial management is particularly relevant as banks balance credit expansion with asset quality and risk considerations.
Another notable development was the bank’s ISO 22301:2019 certification, which focuses on business continuity management. Fonseka said the certification demonstrates the institution’s commitment to operational resilience, service continuity and customer trust.
For a financial institution of People’s Bank’s scale, business continuity is increasingly important as banks rely heavily on technology, digital infrastructure and interconnected financial systems. The certification strengthens the bank’s framework for maintaining critical services during unforeseen disruptions.
Overall, the first-half results point to a broad-based improvement in the bank’s financial position. Stronger earnings, higher margins, expanding loans, improved capital adequacy and robust liquidity have combined to support People’s Bank as it enters the second half of 2026.
The challenge ahead will be to sustain this growth while preserving asset quality, managing financial risks and continuing to support credit demand across the economy. With a strengthened balance sheet and significant liquidity and capital buffers, the bank enters the remainder of the year from a position of greater financial resilience.