News & market updates

CBSL's Financial Intelligence Unit imposed Rs.14.6m in AML/CFT penalties on 12 reporting institutions; Citizens Development Business Finance Plc was fined Rs.3m, Cargills Bank Rs.2m, and L B Finance and Janashakthi Finance Rs.1m each for failures in reporting, sanctions screening and customer due diligence.

The ASPI fell 1.07% (233.18 points) to 21,532.38 as investors sold amid renewed Middle East conflict concerns. Market turnover was over Rs 1bn, foreign investors were net sellers of about Rs 56mn, with banks and food & beverage sectors leading activity.

Colombo market extended losses as the ASPI fell 1.03% for the week to 22,178.73 and the S&P SL20 fell 0.85% to 6,194.22. Market turnover topped Rs.1.5bn with foreigners net sellers of Rs.157.9m and notable moves from SAMP, CINS, JKH, RCL (weak) and DIAL, BUKI, CARS, AEL, COMB (positive/active).

Cargills (Ceylon) PLC reported a March-quarter profit of Rs2.63bn, up 31% y/y, and FY profit of Rs10.61bn (from Rs7.22bn); quarterly revenue rose 16.8% to Rs69.52bn. The group reduced net debt to Rs16.1bn, recorded non-recurring losses (Rs858m cyclone damage; Rs328m on disposal of a 6.54% stake in Cargills Bank) and warned of energy and currency pressures that could moderate consumption.

The Colombo market closed lower as the ASPI fell 0.32% (73.23 pts) to 22,566.58, with foreign investors a thin net buyer of Rs. 3.4m. Top negatives included Bukit Darah, Ceylon Beverage, RIL Property and Sampath; turnover was led by food & beverage while Ceylon Cold Stores and Nawaloka gained and Access Engineering and Softlogic Capital fell.

The EPF's listed equity portfolio rose 27% to Rs. 188.85 billion at end-2025. The fund cut holdings from 65 to 59, fully exited six counters (Cargills Bank, Ceylon Hotels, Colombo Dockyard, Jetwing Symphony, LAUGFS Gas, Sierra Cables) and added Hemas (40m shares); gains were led by banks and diversified stocks.

DFCC Bank convened a discussion examining how the Middle East conflict could transmit into Sri Lanka’s economy, highlighting energy price, shipping, FX, tourism and remittance channels. The forum emphasised banks’ role in helping clients manage FX exposure, trade finance and liquidity amid rising uncertainty.

EPF fully exited holdings in six CSE-listed companies in 2025 — Cargills Bank, Ceylon Hotels, Colombo Dockyard, Jetwing Symphony, LAUGFS Gas and Sierra Cables — and made one new investment, buying 40 million shares in Hemas Holdings; its listed equity count fell from 65 to 59.

Colombo Stock Exchange closed down as the All Share Index fell 0.33% to 21,844.54. National Development Bank (+3.41%), Nations Trust Bank (+1.65%) and Janashakthi Insurance (+8.74%) led gains, while Dialog Axiata (-2.47%), John Keells (-1.02%) and Melstacorp (-1.14%) were top decliners; Cargills Bank listed 294,200,000 rights shares raising Rs.2,500,700,000.

Colombo Stock Exchange fell midday with the ASPI down 0.72% to 21,759.64 and market turnover at 773 million rupees. National Development Bank and L B Finance were among top gainers, John Keells and HNB among decliners; Cargills Bank listed 294,200,000 shares after a rights issue raising 2,500,700,000 rupees and Colombo Dockyard appointed Capt Jagmohan chairman.

Cargills Bank launched Sri Lanka’s first Ocean Plastic Debit Card made from recycled ocean-bound plastic sourced from the Indian Ocean and the Dominican Republic. The card was produced with Lake House Printers and Mastercard to promote sustainability while maintaining standard transaction speed and global acceptance.

Colombo Stock Exchange ASPI closed up 0.04% to 21,126.60 as banking stocks faced selling pressure after NDB disclosed an internal fraud loss of 13.4 billion rupees and trading in NDB was halted. DFCC, Cargills Bank and Access Engineering led gains while Commercial Bank, HNB and Melstacorp were laggards; turnover was Rs.3.029bn.

Rights issue · 14:45 at Rs 8.50 · XD Feb 23, 2026

Cargills Bank has launched its 2026 "Avurudu WasiLitha" New Year campaign, offering cardholders discounts up to 50% across more than 100 merchants and promoting its Tapit contactless payment sticker. The promotion covers clothing, jewellery, restaurants, homecare and e-commerce and applies across its card suite.

Rights issue · 14:45 at Rs 8.50 · XD Feb 23, 2026

Colombo market rebounded as the ASPI rose 2.17% (474.38 pts) to 22,378.52 after global oil prices fell below $95/bbl, with gains led by banks and blue-chips including HNB, SAMP, COMB and DIAL and turnover of about Rs.4.48bn.

Cargills Bank PLC's public float rose to 49.84% as at 19 Feb 2026 from 39.14% at 31 Dec 2025 after Cargills (Ceylon) and CT Holdings sold a combined 10.05%. The Central Bank has directed the bank to meet staged capital targets (Rs16bn by 31-Mar-2027 to Rs20bn by 31-Dec-2029) and to cut the two shareholders' combined holding to 45% by Mar-2027, 35% by Mar-2028, 25% by Mar-2029 and 15% by Dec-2029.

Senior bankers at the Association of Professional Bankers convention urged caution, prioritising balance-sheet discipline—liquidity, capital buffers, and managing interest-rate and FX exposure—over rapid expansion. Speakers also highlighted selective growth, risk-adjusted returns, and greater use of digital capability and sustainable debt instruments.

The Central Bank has directed Cargills Bank to meet interim capital targets (Rs.16.0bn by 31-Mar-2027; Rs.17.5bn by 31-Mar-2028; Rs.19.0bn by 31-Mar-2029; Rs.20.0bn by 31-Dec-2029) and to cut combined holdings of Cargills (Ceylon) and CT Holdings from current ~50.66% to 45% by Mar-2027, 35% by Mar-2028, 25% by Mar-2029 and 15% by Dec-2029.

Fitch says the Central Bank of Sri Lanka's reintroduced bank consolidation framework is broadly credit-positive, targeting banks with assets below Rs.400 billion and subjecting banks scoring under 60% in 2026–27 to possible mandatory consolidation. Fitch notes consolidation should strengthen capital and franchises, and identifies HDFC.N0000 as a likely acquisition target.

Banks across Sri Lanka are intensifying AML/CFT controls ahead of the country's third mutual evaluation, warning a negative outcome would damage financial credibility and access to funding. Leading banks such as DFCC and HNB report system upgrades, AI-backed transaction monitoring, stronger KYC/UBO processes and mock evaluations.

Cargills (Ceylon) PLC and C T Holdings PLC sold a combined 10.05% stake in Cargills Bank PLC (6.05% for Rs.509.3m and 4% for Rs.337.5m) with trades between Rs.8.90–9.70. The Central Bank has ordered the Cargills group to cut its voting stake in the bank to 15% by end-2029.