BOC posts Rs. 28.8 b PBT in 1Q

Chairman Kavinda de Zoysa (left) and General Manager/CEO Y.A. Jayathilaka

 Posts PAT of Rs. 18.8 b 

 Total assets reach Rs. 5.5 t 

 Total deposit base amounts to Rs. 4.5 t, gross loans and advances Rs. 2.7 t 

 Contribution to Govt. as taxes Rs. 17.5 b

State banking giant Bank of Ceylon (BOC) commenced 2026 with a solid financial performance, recording a Profit After Tax (PAT) of Rs. 18.8 billion for the three months ended 31 March 2026. 

Operating within a stabilising macroeconomic environment, the bank said it continued to demonstrate resilience, strategic focus, and sustained business momentum through disciplined execution, enhanced operational efficiency, prudent risk management, and strong customer confidence.

The performance reinforces BOC’s position as the nation’s banking leader and reflects its continued commitment to financial stability, sustainable growth, innovation, and meaningful contribution to Sri Lanka’s economic progress.

Chairman Kavinda de Zoysa said: “The 1Q 2026 results reflect the bank’s continued resilience and disciplined execution in a gradually improving economic environment, underpinned by a strong financial performance and a clear strategic focus on sustainability and digital transformation. Building on the strong momentum of 2025, the bank has further strengthened its core fundamentals through operational excellence, prudent risk management, and innovation-led growth initiatives despite global challenges arising from the Middle East war.” 

He added: “Looking ahead, the bank remains firmly committed to further strengthening our balance sheet, capital (CAR), liquidity and controls while accelerating its digital agenda, deepening sustainable finance, and reinforcing governance standards to deliver long-term value creation and sustained, inclusive growth throughout the year.”

In 1Q 2026, Net Interest Income (NII) stood at Rs. 52.9 billion, supported by effective asset-liability management and optimised funding strategies amid a gradually stabilising interest rate environment. Interest income rose moderately by 3% YoY to Rs. 125.2 billion, reflecting the bank’s strategic agility and sound fund management, enabling it to deliver strong performance despite the prevailing low-interest rate regime.

Strengthening the bank’s revenue base further, net fee and commission income grew by an impressive 22% YoY to Rs. 6.3 billion, driven by increased transaction volumes across card services, retail banking, remittances, and growing customer adoption of digital banking platforms. The continued expansion of value-added digital solutions, together with the strong market presence of the bank’s card services through attractive rewards and promotional offerings, contributed positively to business growth and customer engagement.

The bank delivered a solid financial performance, recording total operating income of        Rs. 61.5 billion, 8% YoY increase driven primarily by robust growth in net interest income and net fee and commission income. Operating expenses stood at Rs. 17.2 billion, reflecting 4% increase compared to the corresponding period of the previous year, while the bank continued to enhance operational efficiency, resulting in an improved cost-to-income ratio of 32.1%.

Operating profit before taxes on financial services reached to Rs. 36.3 billion. After accounting for Value Added Tax (VAT) and the Social Security Contribution Levy (SSCL), the Bank reported a Profit Before Tax (PBT) of Rs. 28.8 billion, underscoring its resilience and effective strategic execution in a challenging operating environment. Income tax expenses for the period amounted to Rs. 10 billion, resulting in a Profit After Tax (PAT) of Rs. 18.8 billion. Total tax contributions to the Government stood at Rs. 17.5 billion, highlighting the bank’s significant contribution to national revenue as a state-owned financial institution.

General Manager/CEO Y.A. Jayathilaka said: “Our performance in 1Q 2026 demonstrates steady business progress, anchored in disciplined execution and strong institutional stability, while benefiting from continued customer confidence and focused execution of strategic priorities. During the period, the bank sustained its transformation journey with greater emphasis on digital enablement, operational efficiency, and enhanced customer-centric service delivery, further reinforcing its competitive positioning. At the same time, prudent financial management and robust governance practices continued to safeguard balance sheet strength and support sustainable outcomes.” 

He added, “Looking ahead, the bank will continue to build on this foundation by driving innovation-led growth, expanding digital capabilities, and supporting broader economic development with a clear focus on long-term resilience and value creation.”

BOC continued to maintain a prudent and forward-looking approach to risk management during the 1Q 2026, further strengthening its financial resilience amid evolving market conditions. Reflecting its conservative risk governance framework and commitment to long-term stability, the bank recorded an impairment charge of Rs. 7.9 billion on loans and advances during the period under review, compared to Rs. 2.9 billion in the corresponding period of the previous year.

The increase in impairment provisions was primarily driven by a cautious and forward-looking assessment of credit exposures across diverse lending segments, in line with the Bank’s disciplined risk management approach and focus on portfolio quality enhancement.

Despite the higher impairment charge, asset quality indicators remained stable, supported by strengthened credit evaluation processes, enhanced recovery mechanisms, and close portfolio monitoring. The Stage 3 loan ratio is managed at 5.46%, reflecting the effectiveness of ongoing credit risk management initiatives.

The Stage 3 provision coverage ratio also improved to 59.41%, underscoring the bank’s continued focus on maintaining adequate buffers and safeguarding long-term financial resilience. The bank remains committed to sustaining portfolio quality through prudent lending practices, strong risk governance, and proactive portfolio management aligned with prevailing economic conditions.

As at 31 March 2026, total assets exceeded Rs. 5.5 trillion, reflecting 1% moderate growth compared to the year end 2025 given by cautious expansion strategies designed to mitigate ongoing global market uncertainties. Gross loans and advances increased to Rs. 2.7 trillion, while the deposit base expanded to Rs. 4.5 trillion, demonstrating sustained customer confidence and strong brand value. The bank achieved a Return on Assets (ROA) ratio of 2.10% and reported a Return on Equity (ROE) ratio of 20.07%. Notably, the bank ensured compliance with regulatory capital requirements, maintaining a Tier I Capital Adequacy Ratio of 13.04% and Total Capital Adequacy Ratio of 17.31%. Liquidity coverage ratios for both rupee and all currencies remained comfortably above minimum thresholds, ensuring strong liquidity resilience.

The bank further strengthened its commitment to national development through the launch of the flagship “BOC Agri Banking Unit”, a dedicated platform established to empower Sri Lankan agri entrepreneurs, farmers, and innovators while supporting the growth of the national economy. The initiative is designed to enhance the agriculture and agri-based sectors through specialised financial solutions, advisory services, and innovative banking support, reaffirming the bank’s continued commitment to safeguarding its national mandate and promoting sustainable economic progress.

The bank said it remains committed to strengthening its role as a trusted financial partner to the nation through access and financial inclusion, resilience, innovation, and responsible banking practices. Guided by a strong legacy and a forward-looking vision, BOC continues to drive sustainable growth, expand digital innovation, and create meaningful value for customers, communities, and the wider economy. With a steadfast commitment to financial inclusion, operational excellence, and national development, the bank is well-positioned to support Sri Lanka’s evolving economic aspirations.