Fitch Ratings – Colombo/Singapore: Fitch Ratings has assigned DFCC Bank PLC’s (A(lka)/Stable) proposed Basel III-compliant subordinated unsecured debentures of up to LKR12.5 billion a final National Long-Term Rating of ‘BBB+(lka)’.

The proposed debentures will mature in five years and will be listed on the Colombo Stock Exchange. The bank plans to use the proceeds to strengthen its Tier 2 capital base and to support balance sheet growth.

The bank expects the proposed debentures to qualify as Basel III-compliant regulatory Tier 2 capital. The debentures include a non-viability clause whereby they will convert to ordinary voting shares upon the occurrence of a trigger event, as determined by the Governing Board of the Central Bank of Sri Lanka.

The final rating is the same as the expected rating assigned on 20 July 2026 and follows the receipt of documents conforming to information already received.

Key Rating Drivers

DFCC’s Sri Lankan rupee-denominated subordinated debt is rated two notches below the bank’s National Long-Term Rating anchor. This reflects our baseline notching for loss severity on this type of debt and expectations of poor recoveries. There is no additional notching for non-performance risk, as the notes do not incorporate going-concern loss-absorption features.

We use DFCC’s National Long-Term Rating as the anchor for this instrument, because it reflects the bank’s standalone financial strength and best indicates the risk of the bank becoming non-viable.

We reviewed DFCC’s ratings with no rating action on 8 September 2025. See our latest rating action commentary, Fitch Upgrades 10 Sri Lankan Banks’ National Ratings and Affirms Five after Scale Recalibration, published on 21 January 2025, for the key rating drivers and sensitivities.

Rating Sensitivities

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
A downgrade of the bank’s National Long-Term Rating will lead to a downgrade of the subordinated debt rating.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
An upgrade of the bank’s National Long-Term Rating will lead to an upgrade of the subordinated debt rating.

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange was trading higher at Friday midday, with the benchmark All Share Price Index moving up 0.20 percent.

The ASPI was up 43.29 points at 21,322.94, while the more liquid S&P SL20 was up 0.31 percent, or 18.37 points, at 6,013.18.

Market turnover stood at 347 million rupees, with Capital Goods leading the turnover generating 93.7 million rupees.

Positive contributors pushing the market up were Nations Trust Bank (up 2.61 percent or 8.00 rupees at 314.00 rupees), Haycarb (up 3.80 percent or 7.25 rupees at 198.00 rupees), Dialog Axiata (up 1.08 percent or 0.50 rupees at 46.90 rupees), and R I L Property (up 0.84 percent or 0.20 rupees at 24.10 rupees).

Hatton National Bank (down 0.46 percent or 1.75 rupees at 380.00 rupees), Melstacorp (down 0.26 percent or 0.50 rupees at 190.00 rupees), and Sampath Bank (down 0.36 percent or 0.50 rupees at 139.50 rupees) were among the notable drag items.

Arcasia Investment & Trading and ATX Partners announced the conversion of their voluntary offer to a mandatory offer for Industrial Asphalts (Ceylon) under the Company Takeovers and Mergers Code.

The offerors received acceptances totaling 1,880,693,010 shares (50.16% shareholding), including 48.03% from Mr. Ramanan Govindasamy and 2.13% from Mr. Srikumar Balasubramaniyam on August 24, 2026.

ECONOMYNEXT – The Sri Lanka–China Business Council (SLCHBC) of The Ceylon Chamber of Commerce recently marked a quarter-century of economic and trade cooperation between Sri Lanka and China.

The event brought together government officials, diplomats, office-bearers of the cuncil, and business leaders from both countries, including Wang Gang, Chairman of the Chinese Chamber of Commerce in Sri Lanka and Managing Director of China Harbour Engineering Company.

“China greatly appreciates the Council’s outstanding contributions to the economic and trade exchanges between the two countries over the past 25 years, and looks forward to it continuing its bridging role and promoting the bilateral free trade agreement, attracting more Chinese investment, and facilitating the export of more high-quality Sri Lankan products to China,” Zhu Yanwei, Deputy Chief of Mission of the Embassy of the People’s Republic of China, said.

China remained Sri Lanka’s largest import partner in 2025, with iron and steel, knitted fabrics and vehicles among the top imports, Minister of Trade Wasantha Samarasinghe said, while Sri Lankan exports to China included apparel, tea, activated carbon, vegetable fibre, coconut husk chips, etc.

He encouraged strengthened partnerships to continue enhancing trade between the two countries.

Council President Haroun Cader outlined future priorities: giving small and medium-sized Sri Lankan businesses better access to Chinese markets and investors, bringing new technology and skills into local partnerships, and remaining a trusted platform for engagement as digital trade, artificial intelligence, renewable energy and advanced manufacturing reshape global commerce. (Colombo/Aug28/2026)

ECONOMYNEXT – Sri Lanka’s rupee was quoted at 328.00/05 to the US dollar in the spot market on Friday, stronger from 328.50/60 Tuesday, while bond yields were steady to lower on select tenors, dealers said.

A bond maturing on 15.12.2029 was quoted at 10.30/40 percent, down from 10.35/45 percent.

A bond maturing on 01.08.2030 was quoted at 10.50/55 percent, down from 10.50/60 percent.

A bond maturing on 15.10.2030 was quoted at 10.55/60 percent, down from 10.55/62 percent.

A bond maturing on 01.02.2031 was quoted at 11.60/65 percent, down from 11.62/65 percent.

A bond maturing on 15.08.2036 was quoted flat at 11.85/90 percent.

The telegraphic transfer rate for the US dollar was 324.0500 buying, 333.05 selling; the euro was 375.0388 buying, 388.8196 selling; and the pound was 439.4259 buying, 453.5343 selling. (Colombo/Aug28/2026)

ECONOMYNEXT – Foreign investors bought a net 8,297 million rupees (US$25.5 million) worth of Sri Lanka rupee bonds in the week ended on August 21, Central Bank data showed, amid a firmer rupee currency.

The latest buying boosted the foreign buying in the government securities to 81.2  billion (US$246.3 million) in the 10 straight weeks since June 19.

The inflows boosted foreign holding to 202.5 billion rupees, the highest figure the Central Bank has published in its Weekly Economic Indicators.

Officials at the Central Bank, however, said it may not be the record high as the figure changes daily with economic volatility during weekdays.

The net inflows came after the rupee started to stabilize, analysts said.

The rupee currency’s selling rate fell to a near three-year low of 354 against the U.S. dollar on May 21 before recovering and gaining to the 333 level.

The rupee had been steady for more than three years before the sharp depreciation in May with the Central Bank citing higher oil and vehicle imports amid a lingering conflict in the Middle East. The rupee has fallen 6.1 percent through August 21 this year.

Globally, investors are cautious about economic growth due to the impact of the latest Middle East escalation.

The island nation enjoyed a total inflow of around 61.2 billion rupees into rupee bonds so far this year, following a net inflow of 71.5 billion rupees last year.

Analysts said Sri Lanka’s deflationary policies in the past helped inflows amid curtailed imports.

However, the island nation has seen an uptick in inflation in the last three months after a nearly 50 percent hike in fuel prices gradually.

The government reduced fuel prices in the last week of June and kept them steady in July as well.

The Central Bank raised its key monetary policy rate by 100 basis points in May to curb inflationary pressure stemming from higher demand.

Before the May rate hike, the Central Bank kept its key policy rates steady since May 2025 after reducing them by 825 basis points over 24 months since June 2023 and foreign investors have been buying rupee bonds despite slight depreciation in the local currency. (Colombo/August 27/2026)

ECONOMYNEXT – New Anthoney’s Farms was named among global sustainability leaders for its use of the Sustainable US Soy and Fed with Sustainable US Soy labels, a distinction that placed a Sri Lankan poultry producer alongside some of the world’s most established agribusiness names at Soy Connext 2026 in Chicago this August.

The summit, organised by the US Soybean Export Council (USSEC), drew a record turnout of more than 800 delegates to the Hyatt Regency Chicago.

In 2023, New Anthoney’s Farms became the first company in South Asia to secure the Sustainable US Soy licence, verified under the US Soy Sustainability Assurance Protocol.

That early adoption has since made the company a reference point for USSEC when discussing what responsible sourcing looks like in practice, and it sits at the foundation of Anthoney’s Feeds, the group’s feed milling operation, which supplies the protein rich, traceable feed behind the company’s antibiotic free standard.

Sri Lanka was 2025’s largest market in the world for containerised US soybean meal, importing roughly 255,000 tonnes last year to feed a domestic animal feed industry producing close to 1.3 million metric tons annually, with poultry as its biggest customer, the company said.

16 Sri Lankan poultry producers and feed millers currently hold the Sustainable US Soy licence.

Over four decades, New Anthoney’s Farms built its identity around a single, then unusual, commitment: raising poultry without antibiotics at any stage of production.

Today, the company describes itself as Sri Lanka’s only fully antibiotic free poultry producer, a claim that has become central to both its consumer proposition and its investment case.

In June, the International Finance Corporation, a member of the World Bank Group, announced it would invest up to USD 10 million in New Anthoney’s Farms Group.

The investment is designed to expand production capacity, strengthen supply chain efficiency and widen access to safe, affordable poultry across the domestic market.

The company expects to export 1,936 metric tons of poultry annually, roughly 10 percent of total output and a 29 percent increase on 2024 levels, generating an estimated USD 4.95 million in additional foreign exchange earnings by 2032.

The IFC investment carries a social dimension that extends beyond the company’s own balance sheet.

Smallholder farmers currently contribute around 40 percent of New Anthoney’s production, and the expansion is expected to create more than 900 new jobs while benefiting at least 200 smallholder farmers through contract farming and outgrower schemes, with roughly 22 percent of participants expected to be women and 80 percent from low income households.

Sri Lanka’s poultry sector remains a critical source of affordable protein and food security, yet smallholder farms, which make up 85 percent of the sector, supply less than 30 percent of total output, often held back by constraints in productivity and market access.

Strengthening that value chain, rather than simply scaling one company’s output, is central to how the investment has been framed.

“Founded in 1986 as a smallholder enterprise, New Anthoney’s Farms Group is proud to enter its next phase of growth through this partnership,” said Neil Suraweera, CEO of New Anthoney’s Farms Group, of the IFC deal.

“This collaboration represents a paradigm shift for us, reinforcing our commitment to world class governance, transparency and operational excellence, while upholding the highest standards of social and environmental sustainability.” (Colombo/Aug26/2026)