MONETABRIEF – Profits of Sri Lanka's Commercial Bank group fell 0.9 percent to 16.44 billion rupees in the September 2026 quarter, as higher interest expenses and operating costs offset growth in interest income, interim accounts show.

Commercial Bank reported earnings of 9.95 rupees per share for the quarter, down from 10.18 rupees a year earlier. For the nine months, earnings were 31.08 rupees per share on total profits of 51.37 billion rupees, which increased 8.5 percent.

Sri Lanka's economy is recovering from a currency collapse engineered by the central bank using both monetary and exchange rate policy.

The central bank dishonored its inflated note issue (excess liquidity) created by monetizing balance of payments surpluses, departing from previous techniques of debasing the rupee.

Macro-economists also inflated the note issue executing buy-sell swaps with banks, which was a technique developed in a 2018 currency collapse.

The buy sell swaps also allow banks to give loans out of line with current deposit, creating an external imbalance when the new notes are given for credit which generate imports.

The mis-targeted rates were corrected in May but the rupee debasement was not corrected, which leads to loss of disposable income and sharply appreciated, capital costs for people who were planning projects.

Fee and commission income grew 23 percent to 13.45 billion rupees.

Commercial Bank group net interest income grew 19.3 percent to 41.36 billion rupees, with interest income rising 27.3 percent to 95.33 billion rupees and interest expenses rising 34.2 percent to 53.97 billion rupees.

Loan loss provisions were 1.72 billion rupees, down 41.4 percent from 2.93 billion rupees a year earlier.

Gross loans and advances grew 16.8 percent to 2.29 trillion rupees by end September 2026, from 1.96 trillion rupees at end December 2025.

Debt and other financial instruments grew 0.8 percent to 738.52 billion rupees.

Deposits grew 15.5 percent to 3.12 trillion rupees from 2.70 trillion rupees at end December 2025.

Operating expenses rose 22.7 percent to 16.66 billion rupees. Profit before income tax increased marginally by 0.6 percent to 26.68 billion rupees, while income tax expenses rose 2.7 percent to 9.94 billion rupees.

Net assets attributable to equity holders grew 11.9 percent to 371.64 billion rupees.

At bank level, gross impaired loans (Stage 3) to total loans declined to 5.31 percent at end September 2026, from 5.81 percent at end December 2025 and 6.25 percent a year earlier.

Net impaired loans to total loans declined to 1.47 percent from 1.54 percent at end December 2025 and 1.79 percent a year earlier.

Impairment coverage of Stage 3 loans stood at 72.35 percent, compared with 73.50 percent at end December 2025 and 71.43 percent a year earlier.

Gross assets grew 14.7 percent to 3.87 trillion rupees. (Colombo/Nov13/2026)