LB Finance continues growth momentum; PAT up 24% to Rs. 8.9 b

LB Finance PLC has reported a strong financial performance for the nine months ended 31 December 2025, recording a 24% year-on-year (YoY) increase in Profit After Tax (PAT) to Rs. 8.93 billion, underpinned by sustained income growth and a sound financial position.

The company’s total assets increased to Rs. 349.4 billion as at 31 December 2025, reflecting steady expansion across its core business lines while maintaining sound asset quality and capital buffers. On a consolidated basis, the Group reported a PAT of Rs. 9.04 billion, with total Group assets crossing Rs. 369 billion, driven by the growing contribution from subsidiaries.

Income for the period rose 23% YoY to Rs. 42.57 billion, while Total Operating Income increased by 24% to Rs. 27.18 billion. This strong top-line performance translated into improved profitability, with Profit Before Tax (PBT) increasing 25% to Rs. 14.39 billion, supported by healthy margins and effective cost management.

LB Finance continued to deliver strong shareholder returns during the period. Earnings per Share (EPS) increased to Rs. 16.12 from Rs. 12.95 in the corresponding period last year, while Net Asset Value (NAV) per share improved to Rs. 104.45. Profitability indicators remained robust, with an annualised Return on Equity (ROE) of 21.82% and a Return on Assets (ROA) of 4.03%, reflecting the company’s ability to scale operations while preserving financial discipline.

Public confidence in LB Finance remained strong during the period, with customer deposits increasing to Rs. 158.33 billion. Loans and receivables expanded to Rs. 282.25 billion, with balance sheet growth outpacing broader industry trends, supported by conducive market conditions and increased demand across key customer segments, while maintaining sound credit standards. 

LB Finance PLC continued to diversify its funding sources by securing foreign funding, supported by improved economic conditions and strengthened investor confidence. 

The company’s capital and liquidity positions remained well above regulatory requirements. The Capital Funds to Total Deposit Liabilities Ratio stood at 36.55%, compared to the statutory minimum of 10%. Available liquid assets amounted to Rs. 31.65 billion, exceeding the regulatory requirement of Rs. 18.4 billion. The Core Capital to Risk-Weighted Assets Ratio was maintained at 19.93%, providing adequate headroom to support future growth.

Asset quality indicators showed further improvement despite portfolio expansion. The Gross Non-Performing Loan (NPL) ratio declined to 1.46%, while the Net NPL ratio stood at -1.29%, reflecting provision coverage of nearly 190% of the NPL portfolio. Continuous cost optimisation initiatives, supported by increased digital adoption, resulted in a Cost-to-Income Ratio of 30%.

During the period, LB Finance acquired a controlling stake in Associated Motor Finance Company PLC (AMF), strengthening its presence in the leasing and vehicle financing segment. 

LB Finance PLC continued to strengthen its digitalisation strategy during the period. The flagship ‘LB CIM’ platform supported higher customer engagement and improved operational efficiency through enhanced digital onboarding, Artificial Intelligence (AI)-driven credit assessments, and biometric authentication, expanding access to financial services for small and medium-sized enterprise (SME) and micro-business segments across the country.

LB Finance Managing Director Niroshan Udage stated: “Our nine-month results reflect the consistency of our strategy, combining disciplined growth, strong risk management, and continued investment in digital capabilities. The integration of AMF and the steady expansion of our core businesses have further strengthened our foundation. With strong capital and asset quality levels, we are well positioned to pursue our regional growth initiatives.”

Looking ahead, LB Finance PLC expects to maintain its growth momentum, supported by the AMF acquisition and its entry into the Philippines market, while continuing to focus on sustainable expansion within a disciplined operating framework.