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Friday November 13th, 2026

Fitch upgrades outlook on Sri Lanka’s Sampath Bank A+(lka) rating to ‘stable’

ECONOMYNEXT – Sri Lanka’s Sampath Bank’s credit rating has been affirmed at A+(lka) and outlook revised to ‘stable’ from ‘negative’, Fitch Ratings said.

"The revision in the outlook reflects Fitch’s expectation that the bank would be able to sustain higher capital buffers as it continues to focus on capital management and earnings retention while expanding its market share," Fitch said in a statement Wednesday.

Sampath’s rating reflects its higher risk appetite, growing franchise and satisfactory asset quality, the rating agency said.

The bank slow loan growth to maintain capital buffers in the absence of further capital infusion, Fitch said.

Sampath Bank’s non-performing loans ratio increased to 1.95 percent during the March 2018 quarter, but remains lower compared with those of its peers.

"The bank’s rapid growth and increased exposure to more-vulnerable segments raises the risk of asset-quality deterioration in the event of a significant economic downturn, although this is not our base case," Fitch said, adding that its expects the operating environment will remain challenging.

Sampath Bank gained 1.20 rupees on Wednesday to close at 312.70 rupees.

The statement is reproduced in full below:

Fitch Ratings has affirmed the National Long-Term Rating of Sampath Bank PLC at ‘A+(lka)’ and revised the Outlook to Stable from Negative. Fitch has also affirmed Sampath’s subordinated debentures at ‘A(lka)’.

KEY RATING DRIVERS

The revision in the Outlook reflects Fitch’s expectation that the bank would be able to sustain higher capital buffers as it continues to focus on capital management and earnings retention while expanding its market share. Sampath’s rating also reflects its higher risk appetite, growing franchise and satisfactory asset quality.

Fitch expects the bank to maintain adequate buffers above regulatory requirements even though its Tier 1 ratio could temporarily fall to around 11% by end-2018 due to continued rapid growth. This compares to a minimum required Tier 1 ratio of 10%, which includes an additional end-point 1.5% buffer for domestic systemically important banks (D-SIB) from 1 January 2019.

Sampath is now required to maintain minimum Tier 1 ratio of 8.875%, which includes a 1% D-SIB buffer. Fitch estimates Sampath’s Tier 1 ratio was 12% in April 2018 after it raised LKR12.5 billion in April 2018 and LKR7.6 billion in December 2017 via rights issuances and retained its 2017 profit of LKR12.7 billion through a scrip dividend.

The bank’s total capital ratio improved to 14.3% by end-March 2018 (2016: 12.9%) after issuing LKR13.5 billion of Basel III-compliant subordinated debt over the last 12 months. The bank is required to maintain a minimum total capital ratio of 14% from the start of 2019, compared with the current requirement of 12.875%.

Loan growth is projected to remain strong in 2018 after a 7.5% expansion in 1Q18 since December 2017 that outpaced the sector’s 4.6% growth. Sampath’s high risk appetite is evident in its loan book’s CAGR of 22% over 2016-2017, exceeding the industry’s 16.8% expansion, and the loan book’s concentration in the consumer, retail and SME/mid-sized corporate segments.

We believe management may slow loan growth to maintain capital buffers in the absence of further capital infusion.

In line with rising non-performing loans (NPLs) in Sri Lanka, Sampath’s NPL ratio increased to 1.95% by end-1Q18 from 1.64% at end-2017, but the ratio remains low compared with those of its peers. The bank’s rapid growth and increased exposure to more-vulnerable segments raises the risk of asset-quality deterioration in the event of a significant economic downturn, although this is not our base case. Fitch expects the overall operating environment to remain challenging.

Total allowances rose to 10.5% of pre-provision profit in 2017 from 8.7% in 2016. We believe impairment charges could rise further due to potential asset-quality pressures, as well as the implementation of SLFRS 9. Sampath’s ROAA improved to 1.7% in 2017 from 1.6% in 2016 and 1.4% in 2015, aided by higher business volumes.

SUBORDINATED DEBT

Fitch rates the Tier 2 instrument one notch below the bank’s National Long-Term Rating to reflect the notes’ subordinated status and higher loss-severity risks relative to senior unsecured instruments. The National Long-Term Rating is used as the anchor rating because the rating reflects the bank’s standalone credit profile, which best indicates the risk of becoming non-viable.

RATING SENSITIVITIES

Failure to sustain the planned capital buffers as a result of insufficient capital generation, rapid loan growth or a sharp decline in asset quality could lead to a rating downgrade.

Sampath’s ratings might be upgraded if its capitalisation were to significantly strengthen alongside a moderation in risk appetite, while managing asset-quality pressures.

SUBORDINATED DEBT

The rating of the notes would move in tandem with Sampath’s National Long-Term Rating. (COLOMBO, 13 June 2018)
 

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Sri Lanka stocks close down 0.60-pct, dragged by HNB and LOLC

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed down on Friday, CSE data showed, with the benchmark All Share Price Index moving down 0.60 percent.

The ASPI was down 133.22 points at 22,024.18, while the more liquid S&P SL20 was down 1.06 percent, or 67.55 points, at 6,298.02.

The ASPI ended the week up 784.53 points from last Friday.

Positive contributors to the ASPI were Dialog Axiata (up 0.40 percent at 50.20 rupees), Distilleries Company of Sri Lanka (up 0.52 percent at 58.30 rupees), Aitken Spence (up 3.60 percent at 151.00 rupees), Ceylon Tobacco Company (up 1.05 percent at 1,828.50 rupees), and LOLC Finance (up 1.96 percent at 5.20 rupees).

Hatton National Bank (down 1.88 percent at 403.75 rupees), Richard Pieris and Company (down 6.21 percent at 27.20 rupees), LOLC Holdings (down 2.17 percent at 405.00 rupees), Sampath Bank (down 1.91 percent at 154.00 rupees), and Singer (Sri Lanka) (down 2.40 percent at 77.30 rupees) were top negative contributors.

Market turnover was 3.23 billion rupees. Capital goods led turnover with 869.21 million rupees. (Colombo/Nov13/2026)

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Sri Lanka MP slams budget speech for omitting Tamil national question

ECONOMYNEXT – A Sri Lanka legislator has voiced strong disappointment that the President’s budget speech failed to make a single mention of the Tamil national question.

“It is very unfortunate that in His Excellency the President’s speech, there has not been a single word mentioned about the Tamil national question. Not a single word,” Shanakiyan Rasamanickam said.

“A budget speech generally, is a policy direction of the government for the next year. The budget speech is not only a statement of the country’s fiscal position or the economy’s position. It is the country’s, the government’s, plan, or what the government plans to do the following year. That’s a policy statement.”

Former presidents would at least mention the Tamil question even if it was not resolved, he said.

Former President Ranil Wickremesinghe in his speech, in his policy statement, he would mention: “The Tamil national question must be resolved,” Rasamanickam said.

Former Presidents Maithripala Sirisena and Gotabaya Rajapaksa also mentioned that the national ethnic question must be resolved, he added.

“Every President, every country’s Head of State, in their policy statements, have acknowledged the fact that there is an unresolved national issue, the Tamil national question, that it needs to be resolved. Various governments have proposed various mechanisms; none of them have succeeded, but at least it was mentioned.”

This year’s budget made allocations for the Office of Missing Persons, and the Office of Reparations.

“But the domestic mechanism is a mechanism that the victim community has rejected. So you all are allocating money to a mechanism where the victim community is not going to be part of.”

Last year’s budget 1 billion was allocated to be spent on the Trincomalee and Jaffna airports.

“Where was that 1 billion for the Trincomalee and Jaffna airports spent last year?”

“The trajectory of this government, Honourable Deputy Speaker, is worrying to me. It’s really worrying to me. Because if the objective is to say that there is no Tamil national question, if the objective is to say that you all have resolved any ethnic issue that this country faced, then Honourable Deputy Speaker, then I think the Tamil people will teach this government a very, very, very harsh lesson in the future.” (Colombo/Nov13/2026)

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Sri Lanka sells extra Rs6.5bn Treasury bills after auction

ECONOMYNEXT – Sri Lanka has sold 6,500 million rupees of treasury bills offered on tap at an average rate of 9.95 percent, the public debt management office said, bringing the total of bills sold in the week to 85.562 billion rupees.

The issue offered 90 billion.

Total market subscription was 6.5 billion rupees.

The debt office sold a 12-month bill at 9.95 percent.

On Wednesday (11) the debt office raised 79 billion rupees of 3, 6 and 12 month bills after offering 90 billion.

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Sri Lanka Treasury bill yields hold broadly steady, less bills sold

The settlement date is November 13. (Colombo/Nov13/2026)

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Access Engineering Sept quarter group net profit surges 200-pct to Rs4.75bn

ECONOMYNEXT — Sri Lanka’s Access Engineering PLC recorded a group net profit attributable to equity holders of Rs. 4.75 billion for the quarter ended September 30, surging 200 percent from Rs. 1.58 billion a year earlier, interim accounts showed.

Basic earnings per share rose to Rs. 4.08 for the September quarter, up from Rs. 1.58 previously.

Quarterly group revenue expanded 36 percent to Rs. 20.39 billion from Rs. 14.94 billion, underpinned by condominium property handovers — reflected in inventories dropping Rs. 7.69 billion since March to Rs. 35.71 billion — alongside strong automobile sales and steady civil engineering execution.

Cost of sales rose at a slower 27 percent to Rs. 14.34 billion, lifting gross profit by 64 percent to Rs. 6.05 billion and expanding gross margins to 29.7 percent from 24.7 percent.

Other income jumped 144 percent to Rs. 259.9 million, while administrative expenses rose 75 percent to Rs. 1.14 billion, leaving operating profit up 64 percent at Rs. 5.16 billion.

However, finance costs more than doubled, rising 107 percent to Rs. 1.18 billion on elevated group borrowings of Rs. 43.74 billion, partly offset by finance income climbing 302 percent to Rs. 42.2 million.

Share of results from equity-accounted investees rose 122 percent to Rs. 26.7 million, pushing pre-tax profit up 56 percent to Rs. 4.05 billion.

Income tax swung to a net reversal of Rs. 186.6 million from an expense of Rs. 804.1 million, boosted by deferred tax assets on unrelieved losses from a 100 percent enhanced capital allowance claimed by 60 percent-owned radiopharmaceutical subsidiary Access Medical Tracers (Private) Limited.

Total period profit rose 136 percent to Rs. 4.24 billion, with non-controlling interest declining 24 percent to Rs. 164.9 million following last year’s buyout of minority shareholders in Harbour Village (Private) Limited.

No separate exchange gain or loss was itemized in quarterly earnings, though foreign currency translation via associates recorded a Rs. 17.4 million loss in other comprehensive income, alongside USD 16.6 million in corporate guarantees.

Notes also flagged an expected Rs. 1.45 billion recovery from the terminated South Asia Commercial and Logistics Hub project, a Rs. 225 million post-quarter legal settlement already provided for, and a Supreme Court appeal over a 2011/12 PAYE tax ruling.

Group assets stood at Rs. 132.4 billion as of September 30, with net asset value per share at Rs. 46.70, as the Employees’ Provident Fund raised its stake to 5.69 percent.

Access Engineering shares closed at 80.00 rupees at the end of September and are currently trading around 85.80 rupees. (Colombo/Nov13/2026)

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Sri Lanka private sector says timely implementation of Budget 2027 key

ECONOMYNEXT – Private sector body, The Ceylon Chamber of Commerce, said it was encouraged by the broad direction of Budget 2027, noting that it reinforces Sri Lanka’s commitment to economic transformation while maintaining policy continuity, macroeconomic stability, and fiscal discipline.

“This continuity is particularly important as the country seeks to transition from economic stabilisation to a more durable, investment-led growth trajectory.”

The chamber also noted several areas where the Budget could have placed greater emphasis to strengthen the country’s growth prospects.

“In particular, there is a need for a stronger focus on attracting Foreign Direct Investment (FDI), accelerating factor market reforms, particularly in land and labour, and fast-tracking public procurement reforms to improve the efficiency and speed of project implementation.

“More targeted and actionable proposals could have been introduced to unlock the potential of sectors with significant growth opportunities, including tourism, agriculture, IT/BPO and logistics.”

The chamber said the budget contains positive measures aimed at enhancing competitiveness, and external sector resilience, while presenting opportunities for focus on sectors that can accelerate growth.

“A number of the key structural reforms identified in last year’s Budget have been carried forward and strengthened, providing greater certainty and predictability to businesses and investors.

“These include the continued implementation of the Trade National Single Window (TNSW), the phased removal of para-tariffs, the rollout of the Digital ID framework, efforts to expand market access through new Free Trade Agreements (FTAs), the strengthening of one-stop-shop investment facilitation mechanisms, progress on Customs reforms, the expansion of Bandaranaike International Airport (BIA), enhanced financing support for SMEs, and reforms relating to the management of State-Owned Enterprises.”

The CCC said that more than 20 proposals submitted by it have been reflected in Budget 2027.

These include measures to strengthen investor facilitation through the establishment of a professionally managed investment promotion agency; continued efforts to improve trade facilitation and export competitiveness; the Government’s consideration of a successor programme with the International Monetary Fund (IMF); accelerated progress on key legislative reforms; the expansion of digital government services; and the promotion of cashless payments and broader digital adoption. The Budget has also captured several priorities relating to energy security, including the accelerated deployment of Battery Energy Storage Systems (BESS) and investments in fuel storage infrastructure, initiatives to optimize underutilized agricultural land, measures to support the expansion of the digital economy and the IT/BPO sector, and tax reforms to support exporters, including the acceptance of newly VAT-registered exporters as eligible exporters.

“The inclusion of these priorities reflects the value of sustained public-private dialogue and demonstrates increasing alignment between national policy objectives and the needs of a competitive, export-oriented economy.

“The priority now must be effective and timely implementation to translate policy commitments into investment, competitiveness, exports and sustainable growth.” (Colombo/Nov13/2026)

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Sri Lanka stocks trend lower day after budget reading

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange was trending lower on Friday, CSE data showed, with the benchmark All Share Price Index moving down 0.66 percent.

The ASPI was down 146.78 points at 22,011, while the more liquid S&P SL20 was down 0.94 percent, or 59.99 points, at 6,306.

Positive contributors to the ASPI were Access Engineering (up 1.30 percent at 85.80 rupees), LAUGFS Gas (up 3.31 percent at 49.90 rupees), Ceylon Tobacco Company (up 1.13 percent at 1,830 rupees), Ceylon Cold Stores (up 0.80 percent at 126 rupees), and Namunukula Plantations (up 1.79 percent at 68.10 rupees).

LOLC Holdings (down 1.03 percent at 409.75 rupees), Hatton National Bank (down 0.61 percent at 409 rupees), Sunshine Holdings (down 3.81 percent at 30.30 rupees), and Sampath Bank (down 1.91 percent at 154 rupees) were top negative contributors.

Market turnover was 1.55 billion rupees. Capital goods led turnover with 459.57 million rupees. (Colombo/Nov13/2026)

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