In 2025, HNB Group reported a total tax contribution of Rs 48.4 billion, with notable achievements including gross loans and advances surpassing Rs 1.5 trillion and deposits exceeding Rs 2.0 trillion. The Group’s net fee and commission income saw a year-on-year growth of 28.9%, while asset quality improved significantly, with the net Stage 3 ratio improving to 1.09% and Stage 3 coverage standing at 75.97%. The company declared a total dividend of Rs 20.00 per share.
HNB Group’s strong performance in 2025 was highlighted by a Group Profit After Tax (PAT) of Rs 49.8 billion, demonstrating continued progress. The Bank’s PAT was Rs 45.4 billion, driven by robust balance sheet expansion and ongoing enhancements in asset quality.
Mr. Nihal Jayawardena, Chairman of HNB PLC, commented on the performance, stating, “The year 2025 marked a decisive shift in Sri Lanka’s economic trajectory, supported by improving macroeconomic fundamentals, renewed private sector confidence, and continued progress in national reform efforts. HNB’s strong balance sheet expansion, disciplined risk management, and sustained investment in digital and operational capabilities position the Bank to play an essential role in supporting the country’s revival.”
“Despite the severe impact of Cyclone Ditwah, the resilience demonstrated by communities and institutions underscored the importance of a banking sector that remains agile, responsive, and deeply committed to national progress. We will continue to work closely with stakeholders to mobilize capital, rebuild affected livelihoods, and strengthen long-term economic stability,” he added.
Despite strong credit growth, net interest margins faced pressure due to an accommodative monetary policy stance. Net Interest Income saw a slight decline of 0.6% year-on-year, influenced by a reduction in market interest rates and overdue interest recognition from restructuring Sri Lanka Sovereign Bonds (SLSBs) in December 2024. However, this decline was moderated by increased interest income from loans and advances and growth in CASA deposits.
Non-fund-based income served as a strong counterbalance, with net fee and commission income rising by 28.9% year-on-year due to higher card usage and a significant increase in digital transactions. The demand for trade-related services surged following the reopening of vehicle imports, with trade finance emerging as a key contributor to non-fund income. Additionally, exchange income rose to Rs 6.3 billion, reversing a Rs 2.9 billion loss recorded in 2024.
Prudent risk management, disciplined underwriting, and focused recovery efforts supported a notable improvement in asset quality. The Stage 3 portfolio recorded a net reduction alongside an impairment reversal of Rs 9.2 billion, following the prudent recognition of Rs 2.2 billion in post-model adjustments for loan exposures potentially vulnerable due to Cyclone Ditwah. Consequently, the net Stage 3 ratio improved to 1.09% by the end of December 2025, compared to 1.88% the previous year, while the Stage 3 coverage ratio remained robust at 75.97%.
Mr. Damith Pallewatte, Managing Director/Chief Executive Officer of HNB PLC, remarked, “HNB’s performance in 2025 reflects the strength of our strategic priorities and the unwavering commitment of our teams to support customers across all segments of the economy. The year was characterized by deliberate efforts to optimize our balance sheet, deepen digital integration, and enhance operational agility, enabling us to respond effectively to improving market conditions and renewed private sector confidence. We continued to accelerate our digital journey with next-generation capabilities such as TradeX and HNB Accept, while further enhancing accessibility and convenience through the HNB Mobile Banking App, reinforcing our focus on delivering simple, seamless, and inclusive financial solutions.”
“Our commitment to sustainability remained central to our agenda during the year. We advanced key initiatives through the issuance of a Rs 10 billion Sustainable Bond and our participation in a USD 1 billion sustainability-linked funding facility to support eligible green and social projects. In the wake of Cyclone Ditwah, we acted swiftly by recognizing prudent impairments, contributing to the Rebuild Sri Lanka Fund, and strengthening the integration of climate risk into our credit assessment frameworks. We also deepened our governance agenda through a strategic partnership with Transparency International Sri Lanka, reflecting our continued commitment to integrity and responsible banking,” he continued.
“Our subsidiaries contributed meaningfully to the Group’s overall progress, with the full consolidation of HNB Investment Bank further strengthening our integrated franchise across capital markets. I wish to express my sincere appreciation to our employees for their dedication and professionalism, to our customers for their enduring trust, to our shareholders for their continued confidence, and to our regulators and the Board of Directors for their guidance and stewardship throughout the year,” he concluded.
The Bank’s asset base grew to Rs 2.39 trillion, representing a year-on-year growth of 15.0%, driven by a strong expansion in the loan book and disciplined balance sheet optimization. With a focus on enhancing the asset mix, the Bank redeployed funds from government securities into customer loans. As a result, total gross loans and advances increased by Rs 354 billion during the year, exceeding Rs 1.5 trillion, marking the largest annual increase in the Bank’s history. The Bank’s deposit base also showed substantial growth of Rs 246 billion, reaching Rs 1.96 trillion by end-December 2025, supported by efforts to strengthen CASA mobilization and improve the overall funding mix.
Capital buffers remained robust, with the Bank’s Tier I and Total Capital Adequacy ratios at 16.85% and 19.95%, respectively, well above regulatory minimums, supported by healthy internal capital generation and prudent risk-weighted asset expansion. The Bank also maintained a strong liquidity position, with an all-currency liquidity coverage ratio of 227.75%, comfortably exceeding statutory requirements across all currencies, underscoring the strength of HNB’s balance sheet and risk management frameworks.
HNB’s share performed well during 2025, with the voting share trading between a high of Rs 433.00 and a low of Rs 267.00, while the non-voting share recorded a trading range between Rs 340.00 and Rs 230.00. The voting and non-voting shares closed the year at Rs 398.50 and Rs 318.75, respectively, reflecting improved investor sentiment in line with the Bank’s continued financial progress. The Group’s Net Book Value per share increased to Rs 529.5 by end-December 2025, supported by strong profitability and internal capital generation. In view of the positive performance, the Board of Directors of HNB PLC has proposed a total dividend of Rs 20.00 per share for 2025, subject to shareholder approval.
HNB is rated AA-(lka) by Fitch Ratings Lanka Ltd. and was recognized as Sri Lanka’s Best Corporate Citizen for 2025 by the Ceylon Chamber of Commerce. Reinforcing its reputation for excellence, HNB was honored with The Bracken Award for the Best Bank in Sri Lanka by the Banker Magazine, UK. The Bank was also recognized by The Asian Banker as ‘Sri Lanka’s Strongest Bank’ and awarded ‘Best Retail Bank in Sri Lanka’ for the 15th time, while receiving the title of ‘Best Bank for Large Corporates’ at the Euromoney Awards for Excellence 2025. HNB is further ranked among the ‘Top 1000 Banks in the World,’ as affirmed by The Banker Magazine, UK.
