HNB Finance growth accelerated in 2025/26 as profit reached LKR 1.68 billion, supported by leasing, gold loans and tighter risk controls.
HNB Finance growth accelerated sharply during the 2025/26 financial year as the company balanced stronger profitability with risk management, responsible lending and customer protection.
Sri Lanka’s non-bank financial institution sector continues to navigate policy changes, higher interest rates, evolving consumer needs and rapid digital transformation. Against this difficult backdrop, HNB Finance PLC reported resilient growth while strengthening its commitment to responsible financing and stakeholder trust.
The 2025/26 financial year marked a pivotal and transformative period for the company. HNB Finance recorded a Profit After Tax of LKR 1.68 billion. This represented 120% growth compared with the previous financial year.
Profit Before Tax also rose significantly, increasing from LKR 2.2 billion to LKR 3.9 billion.
Reflecting on the results, HNB Finance Managing Director and Chief Executive Officer Chaminda Prabhath said the performance went beyond the figures reported on paper.
“The 2025/26 financial year has been a highly significant growth year for HNB Finance. This is not just a victory achieved on paper with numbers; I define this achievement as an optimal opportunity that reflects our business strategy, risk management, and our ability to correctly identify and execute market opportunities,” he said.
Prabhath identified leasing, gold loans and fixed deposits as the main operational areas behind the performance.
“Rather than pursuing aggressive, unchecked growth, our philosophy remains anchored in sustainable and socially responsible expansion. Therefore, it is clear that profitability, customer loyalty, and institutional stability are successfully built together within these financial results,” he added.
HNB Finance Growth Driven by Leasing and Gold Loans
During the financial year, total assets increased by 61% to LKR 94.4 billion. Net assets rose by 22% to LKR 9.3 billion.
Meanwhile, the total loan portfolio expanded by 70% to LKR 76.3 billion. The increase reflected stronger market attraction and closer customer relationships.
The leasing portfolio recorded particularly strong growth. It increased by 98% to reach LKR 51 billion.
Prabhath said HNB Finance acted quickly after authorities relaxed vehicle import restrictions.
“Following the relaxation of vehicle import restrictions, our branch network and dedicated sales teams swiftly moved to capture the resulting market demand, which stood as a driving force behind this success,” he said.
The company’s gold loan portfolio also expanded by 80% to LKR 16 billion. Prabhath said the increase showed that HNB Finance had correctly identified changing consumer requirements.
“Today’s consumers expect swift, secure, easy, and practical financial solutions, and HNB Finance has successfully optimized its service delivery models to meet those exact expectations,” he said.
However, the company stressed that the method used to generate profits remained as important as the overall increase.
HNB Finance improved its Return on Assets from 1.37% to 2.2% during 2025/26. Its Return on Equity also climbed from 11.54% to 19.96%.
These indicators show that the company used its assets more efficiently to create value and deliver stronger returns to shareholders.
Prabhath said strict discipline and prudence supported that progress.
“We maintain an uncompromising focus on rigorous credit risk assessments, customer repayment capacities, collateral quality, and proactive liquidity management. Our ultimate objective is to maintain this momentum without ever compromising asset quality or institutional integrity,” he said.
Diversification Strengthens HNB Finance Operations
HNB Finance originally entered the market with a strong foundation in microfinance and the Grameen concept. It has since developed into a comprehensive non-bank financial institution offering a broad range of products.
The company now operates through a network of 76 branches and employs nearly 2,000 professionals.
“While microfinance remains part of our core expertise, we have strategically pivoted toward leasing, gold loans, and specialized savings portfolios,” Prabhath explained.
He described this diversification as one of the company’s greatest core strengths. However, he said current economic conditions required a carefully calculated approach.
HNB Finance must consider geopolitical variables, changes to Central Bank policy rates, high tax pressures and revised loan-to-value ratios for gold loans.
Therefore, the company’s focus remains on sustainable and properly regulated growth.
Policy-rate changes create direct and indirect pressure across the NBFI sector. They increase funding costs and reshape how customers approach borrowing.
Higher monthly instalments in vehicle leasing, personal lending and SME financing can cause customers to postpone borrowing. Others may choose smaller facilities.
“In a high-interest environment, monitoring customer cash flows, income stability, and repayment discipline is vital. I believe this is a period where the NBFI sector must prioritize prudent credit management over aggressive customer acquisition,” Prabhath said.
He added that responsible growth management remained essential. HNB Finance closely examines each customer’s repayment capacity, income streams, asset security and exposure to wider economic pressure.
Customer Trust and Climate Risk Shape Strategy
Prabhath also highlighted customer relationship management as a critical priority during volatile economic periods.
“During uncertain times, customer trust is a defining asset. It is the responsibility of a financial institution to maintain transparent communication regarding interest rate structures and loan terms,” he said.
He added that the strength of the HNB Finance brand did not come from undercutting prices. Instead, it rested on transparency, reliability and service excellence.
Climate risk has also become a direct financial concern rather than only an environmental issue.
Floods, droughts, unpredictable rainfall and extreme weather can affect borrowers’ incomes, business operations and collateral values.
NBFI customers often have close links to the grassroots economy. Therefore, climate disruptions can increase non-performing loans and raise provisioning requirements for expected credit losses.
Prabhath said financial institutions must move beyond traditional credit assessments and introduce climate-sensitive risk models.
A borrower’s geographical location, exposure to natural disasters, asset vulnerability and insurance protection should influence credit approval decisions.
“At HNB Finance, we view this challenge as an opportunity to innovate,” he said.
The company aims to reduce climate-related credit losses through data-driven risk management, digital monitoring, responsible lending and tailored financial solutions.
“Ultimately, the long-term sustainability of the NBFI sector depends entirely on striking the perfect equilibrium between growth, risk management, and consumer protection,” Prabhath said.
Social Media Raises the Stakes for Financial Brands
The speed and influence of social media present another major challenge for modern financial institutions.
A single local incident can spread instantly across social networks. It can quickly influence public opinion and affect a company’s reputation.
Prabhath said institutions must respond with agility, transparency and empathy rather than simply debating the public narrative.
“For a financial services provider like HNB Finance, where trust forms the absolute foundation of operations, this is critical,” he said.
He added that every part of the business contributes to protecting the brand. These areas include service standards, transparent pricing, efficient grievance handling and strong internal corporate governance.
For HNB Finance, maintaining sustainable momentum will therefore require more than expanding its balance sheet. The company must continue balancing profitability with disciplined lending, customer confidence, climate resilience and institutional integrity.
