• Average NPL ratio drops to 3% from 5% year-on-year across Commercial Bank, HNB, and Sampath Bank
• Improved risk management, recovery efforts, and economic stabilisation drive asset quality improvements

Sri Lanka’s top three private banks’ non-performing loan (NPL) ratio averaged at 3% at the end of the first quarter (as at 31 March), compared to the average of 5% during the same period of the previous year, financial statements showed.

According to the March quarter financial statements of Commercial Bank, the largest private bank of the country, the NPL ratio of the bank improved to 2.58% from 2.76% at the end of 2024 and 5.59% a year ago.

Total assets of the Commercial Bank group stood at Rs. 2.9 trillion at the end of March and the stage 3 impairment of the bank rose by Rs. 3.8 billion to Rs. 88 billion.

Meanwhile, Hatton National Bank (HNB) said that its net stage 3 ratio improved to 1.82%, from 1.88% in December 2024, as the stage 3 portfolio had a total impairment reversal of Rs. 379.7 million.

“Driven by the bank’s robust risk management framework and intensified recovery efforts, asset quality continued to show notable improvement. Reflecting the success of these initiatives, the bank witnessed a positive movement in its stage 3 impairments,” HNB said in its financial statement.

HNB Group’s total assets stood at Rs. 2.35 trillion at the end of the first quarter.

Moreover, Sampath Bank reported a total impairment reversal of Rs. 81.8 million, taking the NPL ratio to 4.61% from 4.69% at the end of 2024 and 5.53% last March.

“The bank recorded a 102% decline in the impairment charge against loans and advances during the reporting period,” Sampath Bank said primarily due to improved customer credit quality, the bank’s proactive provisioning strategy adopted in previous years, and the stabilisation of key high-risk sectors supported by the broader recovery of the country’s economy.

The Sampath Bank Group total assets stood at Rs. 1.92 trillion as of the end of March.