BOC

BOC Delivers Solid Financial Results with Rs. 59.4 Billion Profit before Tax in 1H 2025, Strengthening Market Leadership 

• Rs. 39.1 billion contributed to the Government as taxes
• Remains the leading financial institution for SME and development banking in the nation.
• Client-centric Business Revival Unit driven by forward-thinking strategies and industry best practices
• Total Assets base of Rs. 5.3 trillion
• Profit after Tax of Rs. 35.9 billion
• Total Deposit base of Rs. 4.4 trillion
• Gross loans and advances of Rs. 2.5 trillion

Bank of Ceylon (BOC), Sri Lanka’s leading financial institution, delivered a strong performance in 1H 2025, reinforcing its position as a key pillar of the national economy. Building on the strong momentum from 2024, the Bank reported a Profit Before Tax (PBT) of Rs. 59.4 billion in 1H 2025, highlighting its robust financial resilience and effective risk management. This sustained performance reflects BOC’s strategic alignment with national economic priorities amid an evolving macroeconomic environment, underscoring its leadership and deep-rooted trust among stakeholders.

Bank of Ceylon Chairman, Mr. Kavinda de Zoysa, stated, “Building on 86 years of trusted service and our strong performance in the first half of 2025, we remain dedicated to reinforcing our leadership in Sri Lanka’s banking sector. Amid an improving and progressively resilient economic environment, our continued focus on operational excellence, customer-centric innovation, and prudent risk management has enabled us to maintain robust profitability and improved capital strength. We are committed to delivering superior customer service, advancing our digital transformation agenda, and launching new digital services and sustainable banking initiatives to meet the evolving needs of our customers. As we look ahead, we remain steadfast in our commitment to sustainable growth, inclusive economic development, and investing in our people to drive long-term success.”

Strong Financial Performance and Operational Efficiency

In 1H 2025, BOC demonstrated robust financial performance and operational efficiency, marked by a Profit Before Tax (PBT) of Rs. 59.4 billion, representing a significant increase of 165% compared to Rs. 22.4 billion reported in 1H 2024. This growth was primarily driven by a 79% rise in net interest income (NII), which reached Rs. 102.7 billion, underscoring the Bank’s consistent focus on profitability, efficient cost management, and effective execution of strategic priorities

Interest income increased by 15% to Rs. 244.8 billion, while interest expenses declined by 9% to        Rs. 142.1 billion, resulting in an improved net interest margin and demonstrating strong financial stewardship in a lower interest rate environment. Additionally, Non-fund-based income also contributed positively to overall profitability. Net fee and commission income increased by 9% to     Rs. 10.9 billion, supported by higher transaction volumes in card services, retail banking, and remittances. Enhanced customer adoption of digital platforms, coupled with the success of BOC cards offering competitive rewards and features, underscores the Bank’s commitment to innovation and customer-centric service delivery.

Operating income surged by 75% to Rs. 120.3 billion, while operating expenses rose modestly by 9% to Rs. 33.6 billion. Despite this, BOC improved its operational efficiency, achieving a cost-to-income ratio of 31.24%.

Operating profit before taxes on financial services surged to Rs. 75.1 billion. After deducting taxes on financial services (Rs. 15.6 billion) and income tax expenses (Rs. 23.5 billion), the Bank reported a Profit After Tax (PAT) of Rs. 35.9 billion. BOC’s strong bottom-line growth and disciplined expense management highlight its resilience and strategic execution. The Bank also contributed Rs. 39.1 billion in direct and indirect taxes, reaffirming its critical role in the national economy as a leading state-owned financial institution.

The Acting General Manager/ Chief Executive Officer, Mr. Y A Jayathilaka commented that, “As Bank of Ceylon marks 86 years of dedicated service to Sri Lanka, we reflect with pride on a legacy built on trust, resilience, and hope. From our beginnings in 1939 to becoming a pillar of strength and progress, we have stood alongside our customers fueling their aspirations, empowering businesses, and nurturing communities across the island. Our strong performance in the 1H 2025 reflects the enduring spirit of our institution and its people. We remain committed to driving innovation, embracing sustainability, and opening new opportunities for all Sri Lankans. Bank of Ceylon continues to be the steadfast ‘Bankers to the Nation’, dedicated to creating lasting value that uplifts every life we touch and every dream we nurture.”

Impairment charge for Loans and Advances and Other Financial Instruments

In 1H 2025, BOC maintained its prudent and proactive approach to credit risk management amidst continued global and domestic economic headwinds. An impairment charge of Rs. 12.0 billion was recognized on loans and advances, continuing the Bank’s prudent approach in recognition of expected credit losses.

The Stage 3 loan ratio stood at 7.13%, awaiting to improve along with the restructuring of some SOE exposures. However, the Stage 3 provision coverage ratio remained strong at 54.39%, reaffirming the Bank’s commitment to conservative provisioning and sound risk practices. Strategic management overlays, combined with rigorous credit evaluation processes and ongoing portfolio monitoring, enabled early identification of emerging risks and effective mitigation measures.

The Bank’s Business Revival Unit played a pivotal role in supporting financially distressed yet operationally viable borrowers through structured engagement and tailored financial solutions. By working closely with customers and implementing strategic credit decisions, the Bank facilitated business continuity, limited credit losses, and reinforced its commitment to safeguarding asset quality. These efforts not only supported long-term recovery for borrowers but also positioned the Bank as a key contributor to the broader national economic resilience and recovery.

Financial Position

As of 30 June 2025, BOC’s total assets stood at Rs. 5.3 trillion, reflecting a solid 6% increase from Rs. 5.0 trillion at the end of 2024. This growth was largely fueled by investments in government securities and securities under resale agreements, highlighting the Bank’s disciplined approach to liquidity management and its ability to leverage favorable market conditions.

Gross loans and advances increased to Rs. 2.5 trillion, signaling muted credit demand during the period. Conversely, the Bank’s deposit base expanded by 5% to Rs. 4.4 trillion, demonstrating strong customer confidence and the success of the Bank’s strategic initiatives in deposit mobilization.

Key Performance Indicators (KPIs)

BOC delivered robust KPIs in 1H 2025, demonstrating sustained profitability and operational efficiency. The Bank’s Return on Assets (ROA) before tax improved marginally to 2.31%, up from 2.28% in 2024, while the Return on Equity (ROE) after tax remained strong at 22.78%, underscoring consistent value creation for shareholders. Net interest margin expanded to 4.00% from 3.57%, reflecting effective management of interest-earning assets and liabilities. BOC maintained a strong capital base, with a Common Equity Tier 1 ratio of 12.27% and a Total Capital Ratio of 17.37%, both well above the Basel III regulatory requirements. Liquidity coverage ratios remained robust at 306.00% for local currency and 273.14% for all currencies, reinforcing the Bank’s strong liquidity position and its capability to meet financial obligations even under stressed conditions. These results affirm BOC’s unwavering commitment to sustainable growth and financial stability.

In 1 H 2025, The Bank successfully raised Rs. 15 billion through Basel III-compliant Tier 2 listed, rated, unsecured, subordinated, redeemable 5-year debentures with non-viability write down features.

Driving Digital Innovation and Sustainable Banking

In 1H 2025, BOC continues to drive its digital transformation agenda with a strong focus on innovation, customer convenience, and sustainability. The introduction of the BOC biodegradable debit card marks a significant step towards environmentally responsible banking. At the same time, the Bank has enhanced digital accessibility through platforms such as BOC Flex and the newly launched BOC Smart Remit mobile app, which streamlines remittances for Sri Lankans living abroad by offering faster, more secure, and user-friendly transactions. These advancements not only improve customer experience but also reinforce BOC’s leadership in the foreign migrant remittance sector, underscoring its role as a reliable financial bridge between overseas Sri Lankans and their families.

Building Bridges to Prosperity by elevating SMEs, Women, and Youth

BOC drives national economic growth by supporting Micro, Small, and Medium Enterprises (MSMEs) through initiatives like the “SME Circle,” offering tailored financial products and digital solutions to boost competitiveness. The “BOC Mithuru” programme empowers women entrepreneurs with micro-financing, promoting gender equality. BOC also advances financial inclusion via the “Aswesuma” social welfare savings scheme and debit cards for underserved populations. Additionally, the Youth Loan Scheme provides accessible financing with flexible terms and competitive rates, along with mentorship and business support, to nurture young entrepreneurs. This initiative stimulates innovation, job creation, and helps youth overcome barriers to starting and growing successful businesses, contributing significantly to Sri Lanka’s sustainable economic development.

Outlook for second half of 2025 and beyond

Looking ahead to the second half of 2025, BOC remains focused on sustaining growth, enhancing digital innovation, and strengthening its financial position. The Bank plans to continue expanding its credit portfolio in response to improving economic conditions while maintaining prudent risk management. Efforts to deepen customer engagement through enhanced digital platforms and innovative products will remain a priority, alongside ongoing sustainability initiatives such as eco-friendly banking solutions. With a strong capital base and robust liquidity, BOC is well-positioned to capitalize on emerging opportunities, drive operational efficiency, and deliver consistent value to shareholders and customers alike.

Recognition

BOC continues to earn distinguished recognition both locally and internationally. In 2025, the Bank was ranked as the top Sri Lankan bank among the Top 1000 World Banksby “The Banker”Magazine (UK) and was previously honored as Banker of the Year in 2021, 2023, and 2024 by the same publication. On the domestic front, BOC was named as the Most Valuable Brand in Sri Lanka by Brand Finance Lanka in 2025, with a brand value of Rs. 57.4 billion. Additionally, the Bank was awarded People’s Banking Services Brand of the Year at the SLIM KANTAR People’s Awards 2024, further reflecting its strong customer trust and market leadership.

BOC maintains a robust domestic presence with a widespread network of over 2,300 direct customer touchpoints including fully-equipped and mobile branches, SME centers, ATMs, CDMs, and CRMs the Bank ensures comprehensive financial accessibility across all provinces of the country, reinforcing its commitment to financial inclusion. Internationally, the Bank extends its presence through branches in India, Maldives, and Seychelles, a limited-services branch in Hulhumale, and a fully-owned subsidiary in London, United Kingdom, further strengthening its global footprint.

Fitch Ratings has upgraded the National Long-Term Rating at ‘AA-(lka)’ and the Long Term Foreign and Local Currency Issuer Default Ratings at ‘CCC+’.