Tuesday Aug 26, 2025
Tuesday Aug 26, 2025
Tuesday, 26 August 2025 00:01 - - {{hitsCtrl.values.hits}}
K Seeds Investments has identified Commercial Credit and Finance PLC as the best performing Finance Company under the 1st category among the 28 listed Finance Companies in Sri Lanka through a ranking carried out based on their financial performance for the first quarter of 2025/26.
The report segregates the finance companies based on the size of their asset base and ranks them in their respective categories among their peers based on 10 financial metrics, which are calculated from the quarterly financial statements.
Commercial Credit and Finance PLC topped the overall spectrum by belonging to “Category 1” (asset base > Rs. 100 billion). The categories 2, 3 and 4 represent the companies having an asset base between Rs. 50 to 100 billion, 20 to 50 billion, and less than 20 billion respectively.
During Q1 of FY 2025/26 (April–June 2025), Sri Lanka’s finance companies broadly benefited from a supportive monetary environment, improving macroeconomic conditions, and regulatory relaxations. The easing of policy rates lowered funding costs for non-bank financial institutions (NBFIs), enabling cheaper access to money markets and bank borrowings. This supported net interest income, strengthened profit margins, and encouraged stronger credit demand in areas such as leasing, consumer loans, and microfinance. A key structural shift was the removal of restrictions on vehicle imports, which revived demand for leasing and hire-purchase facilities—a core revenue driver for many NBFIs. Inflation, which edged higher during the quarter but remained moderate, had a mixed impact: it boosted repayment capacity by improving nominal incomes, thereby reducing impairments and enhancing asset quality, while also requiring careful liquidity and risk management to offset potential pressure on costs. Historical evidence shows that lower interest rates and stable economic growth help ease non-performing loans (NPLs), and this trend appeared to reinforce capital adequacy and financial stability in the sector. Overall, finance companies experienced loan portfolio growth, improved profitability, and greater resilience, though challenges tied to regulatory requirements, liquidity buffers, and global economic uncertainty kept the outlook cautiously optimistic.
Supported by all these factors, Commercial Credit and Finance PLC managed to maintain their top rank in the series of ranking reports released by K Seeds Investments on the finance sector of Sri Lanka .The report ranks the finance companies according to their financial results released through interim reports on the Colombo Stock Exchange across ten key performance indicators (KPIs) – cost to Income ratio, net profit margin, impairment to loan book, return on equity , return on assets, net interest margin, credit to deposits, operating leverage, net profit growth and loan growth. These ten KPIs are weighted equally and an overall ranking is arrived at, based on the aggregate score for each category.
