NBFI assets up 26% to Rs. 2.2 t in Q2 2025, PAT increases 59%

Wednesday, 8 October 2025 00:10 - - {{hitsCtrl.values.hits}}

Non-bank lending institutions’ assets increase on 30% YoY loan book expansion to Rs. 1.75 t in Q2 2025
Deposit base increases 16% YoY to Rs. 1.77 t; borrowings surge 76% to Rs. 472 b
Non-performing loans fall to 8.3% in Q2 2025, down from 13.6% a year ago

Non-Bank Financial Institutions (NBFIs), or popularly known as finance companies, reported a combined Profit After Tax (PAT) of Rs. 18 billion in the second quarter of 2025, up 59.3% from Rs. 11.3 billion a year earlier with net interest incomes rising 28.3% year-on-year from Rs. 44.4 billion to Rs. 57 billion.

This is according to the Central Bank of Sri Lanka (CBSL) Financial Soundness Indicators Report for Q2 2025.

CBSL said that NBFI sector-wise Return on Assets increased to 6.9% in the quarter, compared to 5.1% a year ago, while Return on Equity increased from 10.9% a year ago to 15.2%.

Total assets of the NBFI sector grew 25.8% year-on-year to Rs. 2.28 trillion in the second quarter of 2025, up from Rs. 1.8 trillion a year ago. In comparison, banking sector assets had grown 15% year-on-year to Rs. 23.8 trillion (see https://www.ft.lk/front-page/Banking-sector-assets-up-15-to-Rs-23-8-t-in-Q2-2025-PAT-surges-68/44-782659).

Loans and advances of the NBFI sector grew 30.2% year-on-year to Rs. 1.74 trillion in the quarter, up from Rs. 1.2 trillion a year ago.

CBSL said total liabilities excluding equity increased by 29% year-on-year to Rs. 1.77 trillion, up from Rs. 1.37 trillion a year ago mainly due to increased deposits and borrowings from financial institutions to fund lending.

The deposit base of the NBFI sector had grown 16.3% year-on-year to Rs. 1.16 trillion, up from Rs. 1 trillion a year ago, while borrowings surged 76% from a Rs. 268.4 billion a year ago to Rs. 472 billion in the second quarter of 2025.

Equity funding increased 16% year-on-year to Rs. 510 billion, up from Rs. 440 billion a year ago.

CBSL said that total regulatory capital to risk-weighted assets declined slightly to 22% in the second quarter of 2025 compared to 23.8% a year ago with total borrowings to equity increasing 0.9 times from 0.6 times a year ago.

Gross non-performing loans of the NBFI sector improved considerably to 8.3% as end June 2025, compared to 13.6% a year ago. In absolute terms, gross non-performing loans of the sector rose 18% to Rs. 151.7 billion in the second quarter of 2025, up from Rs. 185 billion a year ago.