Sri Lanka’s economy continued its recovery during the year under review. Growth strengthened, inflation moderated, and external buffers improved, restoring a measure of stability and confidence across the business environment. While structural reforms remain essential to secure long-term sustainability, the direction of travel has been constructive.

Within this improving yet still evolving landscape, DFCC Bank advanced with conviction.

We delivered a third consecutive year of record financial performance, reflecting consistent execution rather than cyclical advantage. Profit before tax from continuing operations reached LKR 15,582 Mn. Return on equity from continuing operations was 14.5%. Assets expanded by 22%. Capital adequacy remained comfortably above regulatory requirements. Importantly, share price performance reflected renewed investor confidence in the Bank’s strategic trajectory.

These results are not isolated outcomes. They reflect a deliberate transformation – from a development-centric institution with a specialised mandate, to a full-suite commercial bank with deep development roots.

A milestone that reshaped perception

The acquisition of Standard Chartered Bank’s retail banking operations in Sri Lanka stands as a landmark achievement. Its significance extends beyond scale. It signals that DFCC Bank possesses the governance maturity, financial strength and operational competence to execute complex transactions with precision and confidence.

In a competitive process, DFCC Bank was selected not merely for financial capability, but for cultural compatibility, governance integrity and execution credibility. That trust is earned over decades. It cannot be created overnight.

The transaction broadens our retail and wealth management footprint, deepens customer relationships, and accelerates our transition into a stronger mainstream franchise. It also reinforces a core principle: disciplined ambition creates sustainable opportunity.

Discipline anchored in values

As we expanded, we remained equally attentive to the quality of growth.

In managing credit stress over recent years, DFCC Bank has consistently prioritised reconstruction over repossession. Structured repayment plans, moratoriums and targeted concessions were deployed where appropriate to restore borrowers to performance. This approach protects enterprise continuity, preserves employment and ultimately strengthens the banking system itself. It reflects sound commercial judgement aligned with national interest.

The latter part of the year tested both systems and empathy. Cyclone Ditwah caused significant human hardship across several provinces. DFCC Bank responded swiftly with relief measures, including moratoriums, restructuring options and emergency facilities to support rebuilding. While the human toll was profound, economic disruption proved less severe than initially anticipated. Recovery was faster, confidence returned sooner, and portfolio impact remained contained.

The episode underscored the importance of preparedness, responsiveness and prudence — qualities that define a well-governed institution.

Sustainability with substance

DFCC Bank’s development heritage continues to shape its future.

During the year, we issued Sri Lanka’s first Blue Bond, mobilising LKR 3 Bn towards water and ocean-related initiatives. This builds upon our Green Bond issuance of last year and reflects our ongoing leadership in climate-aligned finance.

Sustainability is not treated as an adjunct to strategy. Environmental and social risk considerations are integrated into lending decisions. Governance frameworks have been strengthened in line with evolving ESG and sustainability disclosure standards. Our accreditation by the Green Climate Fund and growing engagement with international development partners reinforce institutional capability in this domain.

Sustainable finance, when executed with rigour, is not a concession. It is competitive advantage.

Culture as competitive strength

Perhaps the most meaningful shift of 2025 has been cultural.

The Bank increasingly operates as a unified institution, rather than as separate verticals. Dialogue has widened. Decision-making has accelerated. Transparency has strengthened. Meritocracy and inclusion remain central to our people philosophy.

The ambition is clear: to build not merely a larger bank, but a better one — defined by clarity of purpose, operational excellence and customer trust.

Positioned for the next decade

Sri Lanka’s path forward will require continued reform, global engagement and disciplined fiscal management. Volatility remains part of the global backdrop. Yet confidence is gradually returning to the country, and DFCC Bank is well positioned within that context.

Our capital planning discipline, guided by ICAAP assessments, provides a clear pathway for sustainable growth over the medium term. Profit accumulation, prudent balance sheet management and improved market standing enhance strategic flexibility.

For seventy years, DFCC Bank has been intertwined with Sri Lanka’s economic progress. We pioneered development finance. We supported enterprise when capital was scarce. We led in renewable energy. Today, we combine that legacy with the governance rigour and commercial responsiveness of a modern universal bank.

We intend to remain profitable because we are purposeful.

We intend to create shareholder value because we create real value for customers, communities and the economy we serve.

Acknowledgement

On behalf of the Board, I extend my sincere appreciation to our employees for their dedication and professionalism throughout the year. I thank our customers for the trust they continue to place in DFCC Bank, and our shareholders for their sustained confidence in our direction.

I also convey our gratitude to the Central Bank of Sri Lanka and other regulators for their oversight and guidance, to our correspondent banks and business partners for their collaboration, and to our depositors, borrowers and communities for their enduring engagement.

The progress of 2025 provides a strong platform for the years ahead. With clarity of strategy and unity of purpose, we look forward to the next phase of our journey with confidence and determination.