With over 28 years of existence in the development banking landscape, SDB bank continued to deliver sustainable financial performance during the third quarter of 2025, reflecting the Bankβs sound fundamentals, disciplined balance sheet management, and continued focus on inclusive and purpose-driven banking. Demonstrating resilience amid a dynamic operating environment, the Bank reported a Profit After Tax (PAT) of Rs. 254 million as at the end of Q3 2025, supported by strategic optimization of yields and funding costs.
The quarter was marked by renewed credit growth, as loan disbursements accelerated across key sectors, underscoring confidence in the Bankβs lending strategy and its strong customer relationships. Loans and advances to customers expanded by Rs. 9.7 billion on a year-to-date basis, while the Non-Performing Loan (NPL) balance declined, signaling improvements in asset quality and the effectiveness of the Bankβs risk management framework. Correspondingly, the Stage 3 loan coverage ratio improved to 52.28%, up from 47.78% in 2024, reflecting prudent provisioning and sustained collection efforts.
Net Fee Income increased by 33% year-on-year, driven by the Bankβs continued expansion of fee-based services and customer engagement initiatives. This performance underscores SDB bankβs commitment to diversifying income sources beyond traditional lending and enhancing the value proposition offered to customers.
While overhead expenses increased modestly by 6% year-on-year reflecting targeted investments in human capital and service innovation, impairment charges declined by 11%, further supporting profitability. The Bank maintained a strong Total Capital Ratio of 14.90% and a Liquidity Coverage Ratio (LCR) of 148.65%, comfortably exceeding regulatory requirements, which underscores its robust liquidity position and balance sheet stability.
During the quarter, SDB bank continued to optimise its funding structure, focusing on reducing high-cost borrowings while strengthening its low-cost deposit base. Although overall assets contracted slightly by 1%, primarily due to the repayment of short-term liabilities and the appreciation of the Sri Lankan rupee, the Bank maintained a stable financial position with a healthy liquidity buffer to support continued credit expansion.
Reflecting on the performance, Kapila Ariyaratne, Executive Director and CEO of SDB bank, stated: βOur Q3 results demonstrate the Bankβs continued ability to navigate evolving market conditions with prudence and purpose. The consistent improvement in revenue streams and asset quality validates our long-term strategy of balancing growth with sustainability while remaining committed to our core purpose of empowering communities, supporting MSMEs, and strengthening the cooperative sector. We also continued to invest in human capital and our digital and ESG-led transformation.β
Sri Lankaβs economy maintained its recovery momentum during the quarter, underpinned by fiscal consolidation, structural reforms, and rising investor confidence. In this favorable backdrop, SDB bank continues to reinforce its role as a catalyst for inclusive growth, advancing sustainable finance, expanding digital accessibility, and fostering resilience within communities across the island.
Source : Ada Derana Biz