News & market updates

L B Finance (LFIN.N0000) launched ESG Roadmap 2.0 with targets to 2030, earned an AAA ESG Rating and reported 4,018 tonnes of independently verified avoided CO2 from its vehicle and solar financing in 2025/26.

L B Finance PLC's LB CIM launched the LB CIM Virtual Debit Card with UnionPay, offering in-app NFC Tap-to-Pay, global e-commerce and cross-border QR payments. The platform processed Rs. 300 billion across more than 6 million transactions this year and has 800,000+ downloads.

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.

L B Finance PLC reported a 31% rise in PAT to Rs. 3.54 billion for Q1 ended 30 June 2026. Total income rose 47% to Rs. 18.76 billion, loans expanded to Rs. 341.96 billion, NPL ratio improved to 1.41% and capital ratios remained above regulatory minima.

Rs.120 billion Treasury Bill auction scheduled today as secondary bond market activity picked up and yields compressed; money-market rates edged down and USD/LKR closed at 336.30/336.40.

Minority shareholders of Associated Motor Finance (AMF.N0000) say the proposed amalgamation with L B Finance (LFIN.N0000) undervalues AMF and have asked the SEC and CSE to review the Rs.55 per-share cash consideration; CBSL said pricing is outside its remit.

L B Finance PLC (LFIN.N0000) completed a nationwide network infrastructure upgrade with Huawei to strengthen reliability, speed and security, enabling faster, more secure digital services and laying the groundwork for cloud and AI-driven tools.

Colombo Stock Exchange All Share Price Index fell 141.27 points (0.64%) to 21,821 at midday. Nations Trust Bank said its Basel III-compliant Tier-2 debentures will be listed on July 8 with 5-, 7- and 10-year tranches paying 13.75%, 13.85% and 13.95% respectively.

L B Finance PLC (LFIN.N0000) topped K Seeds Investments' Category 1 ranking of finance companies for Q4 FY25/26 (Jan–Mar 2026), scoring highest across ten equally weighted KPIs. The firm achieved this position despite late-quarter oil-driven fuel-price shocks and rising inflation that pressured peers' margins and loan repayment capacity.

Associated Motor Finance (AMF) will amalgamate with parent L B Finance (LFIN) effective 31 July; AMF shares will be suspended after market close on 27 July and AMF minority shareholders will receive Rs.55 per share. LB Finance will absorb AMF's business and cancel the shares it holds.

Associated Motor Finance Company PLC will amalgamate with L B Finance PLC effective July 31, 2026, with AMF shares suspended after trading on July 27. L B Finance made a voluntary offer in Oct 2025 to buy 113,327,268 AMF shares at Rs.50 (100% of issued capital).

L B Finance (LFIN.N0000) secured $35m in long-term funding — $20m from Norfund and $15m from Swedfund — to support MSMEs, climate-smart agriculture, and electric/hybrid vehicle financing.

Colombo Stock Exchange closed down as the ASPI fell 0.19% (43.18 points) to 22,178.73 on turnover of Rs.1.54 billion. Asia Asset Finance announced GM and rights timetable and Associated Motor Finance said its merger with L B Finance will become effective by 31 July 2026.

Colombo Stock Exchange indices rose after a delayed opening auction call, with the ASPI up 0.26% (57.99 pts) to 22,321 and the S&P SL20 up 0.31% to 6,224. The opening delay was blamed on a CSE-side technical issue that accidentally suspended active accounts after a new policy on inactive accounts; the CSE had not yet issued a statement.

Colombo market fell 0.22% as the ASPI closed at 22,208.58 with turnover near Rs.1.2bn and foreign net outflows of Rs.130.6m. Main negative contributors included SAMP, JKH, LOFC, GRAN and RICH, while SPEN, BOGA and HAYC recorded gains.

The ASPI edged up 0.01% to 22,256.49 with turnover above Rs.1.56bn and foreign investors net-selling Rs.225mn. Hemas, NDB and Hayleys Fibre were top turnover contributors (Hemas and Hayleys up, Panasian Power down).

The CSE added ACL Cables, CIC Holdings and the voting shares of Commercial Bank to the S&P SL20 and removed LB Finance, with the changes effective 22 June.

Colombo Stock Exchange closed flat, with the ASPI up 0.01% at 22,256.49 and the S&P SL20 down 0.03% at 6,193.65. Top positives were LB Finance, National Development Bank, Aitken Spence and Nawaloka; declines came from Melstacorp, Central Finance, Sunshine and Windforce; turnover Rs 1.56bn.

Swedfund invests USD 15 million in L B Finance to expand lending to MSMEs across Sri Lanka and finance electric/hybrid vehicles; the funding will target rural and women-led businesses and support LB Finance's environmental and social risk management.

Fitch says Sri Lanka's central bank tighter capital rules for gold-backed loans (10% risk weight for LTV<70% from 1 Sep) will be manageable for banks but hit finance companies harder; Asia Asset Finance, L B Finance, UB Finance, HNB Finance and MBSL face the largest capital impacts.

Fitch says Sri Lanka’s new risk weights for gold loans (10% for <70% LTV; 40% for 70–100% LTV; 100% for >100% LTV) will raise average risk density to ~12% for banks and ~26% for finance firms and could cut finance companies’ Tier‑1 ratios by ~1pp to a little over 5pp, with Asia Asset Finance most affected.

Fitch says the CBCSL directive raising risk weights on gold-backed loans will raise average risk density to ~12% for rated banks and ~26% for finance companies, cutting banks' CET1 by ~2–35bp and finance companies' Tier‑1 by about 1pp–>5pp. Asia Asset Finance, L B Finance, UB Finance, HNB Finance and MBSL are singled out as most affected.

L B Finance PLC reported pre-tax profit of Rs.25.01 billion for the year ended 31 Mar 2026 (up 22%) and remitted Rs.13.72 billion in taxes. Loans expanded 58% to Rs.312.66 billion, group assets rose to Rs.415.57 billion, and the acquisition of AMF added ~Rs.17.2 billion in loans.

L B Finance PLC reported a pre-tax profit of Rs. 25.01 billion for the year ended 31 Mar 2026 (up 22%) and PAT of Rs. 13.67 billion (up 27%). The company expanded loans to Rs. 312.66 billion, fully consolidated Associated Motor Finance (AMF) and is nearing regulatory approval for entry into the Philippines.

LB Finance PLC will merge with its subsidiary Associated Motor Finance Company PLC; AMF shareholders (except LB) will be paid Rs.55 per AMF share in cash. The CBSL has approved the amalgamation, and shareholder approvals at EGMs are required; LB's 73% stake will be cancelled on completion.

Central Bank cut LTV caps on motor financing (to 60% from 70% for >1yr vehicles; to 40% from 60% for newer/unregistered) and on gold loans (to 70% from 80%); Fitch says the tighter caps should strengthen lenders' risk profiles, especially finance companies.

Fitch says Sri Lanka’s central bank cut motor-vehicle LTVs to 60% (from 70%) for vehicles registered over one year and to 40% (from 60%) for newer/unregistered vehicles, and lowered gold-loan LTVs to 70% (from 80%). Fitch expects the caps to strengthen lenders’ risk profiles—especially finance companies with large gold/vehicle exposures—but may curb volumes and earnings for those firms.