The Shared Infrastructure Program (SIP) is the Annual Mandatory Compliance conducted by SWIFT (Society for Worldwide Interbank Financial Telecommunication) S C Belgium for all the SWIFT Shared Infrastructures (SWIFT Service Bureaux) in the world to make sure that the Global Standards are compliant by all providers in a consistent manner.

Lanka Financial Services Bureau Ltd (LFSBL)has been a SWIFT Certified Shared Infrastructures provider since 2013 and continuously meet the enhanced stringent standards year on year. The continuous certification of the LFSBL exemplifies a significant stride towards strengthening levels of resilience, quality assurance, cybersecurity, reliability, Business Continuity, Services by SWIFT Certified Technical Specialists and On-boarding specialists and Change management towards consolidating the SWIFT payments system to the nation’s financial sector. The compliance program is based on the specified standards in the Provider Security Control Framework (PSCF), which compliments and aligns seamlessly with SWIFT’s Customer Security Control Framework (CSCF). These stringent standards underscore SWIFT’s broader strategy to ensure the safety and integrity of its global financial messaging system, offering both mandatory and advisory security controls that financial services institutions are required to adopt to safeguard their SWIFT-related operations and payment systems at large.

From the perspective of Sri Lankan Banking and financial services providers and their customers, the standards reflect the following key areas:

1. Assurance of Security and Trust

For existing service providers and their clientele, this partnership guarantees a secure, certified, and robust infrastructure. SWIFT’s rigorous standards enhance confidence in the safety of transactions, fostering trust among stakeholders. This assurance is critical in a digital-first global banking ecosystem, where secure messaging systems are foundational to financial stability.

2. Secure and Cost-Effective Connectivity for Financial Institutions

The partnership serves as an invitation for financial institutions, including banks and other service providers, to leverage cost effective, convenient, and secure connectivity to SWIFT’s systems. This reduces the operational complexities associated with international financial communication, encouraging greater participation by Sri Lankan institutions in global markets. Detecting Anomalies It positions Sri Lanka’s banking sector as a competitive and efficient participant in global cross-border financial transactions.

3. Demonstration of Expertise and Compliance

The partnership reflects LFSBL’s in-house proficiency through its Certified Specialists. LFSBL employs two Onboarding Specialists and two Interface Specialists, all of whom are SWIFT-certified. These experts ensure seamless integration and operational support in line with SWIFT’s stringent global technology, security, and administrative standards. This capability signals LFSBL’s readiness to serve as a hub of expertise for other local institutions seeking to comply with SWIFT’s requirements.

The Framework of Security Controls

The PSCF and CSCF together encompass 12 broad categories of security controls, broken down into approximately 60 specific criteria. These include:

• Restricting Internet Access and Protecting Critical Systems
• Reducing Attack Surfaces and Mitigating Vulnerabilities
• Managing Identities and Separate Privileges
• Detecting Anomalous Activities in Systems and Transactions
• Planning Incident Response and Information Sharing

These measures comprehensively address both preventative and responsive security protocols, enabling institutions to mitigate risks effectively.

Stringent Compliance for Global Recognition

LFSBL undergoes an annual global audit to validate its compliance with SWIFT’s stringent controls. This external validation is a prerequisite for achieving and maintaining SWIFT certification, with 100% compliance necessary to secure a listing in SWIFT’s global registry. This certification positions LFSBL as a reliable financial services provider aligned with global standards, thereby elevating the reputation of Sri Lanka’s banking and financial sector. Any significant and critical deviations will result in immediate suspension on new on-boarding activities and if the organization is unable to complete the remedies for deviations, then it will be escalated to the stage of ‘termination’ of the connection.

Resultant Benefits to Sri Lanka

The SWIFT Certification of LFSB Lenhances the resilience and credibility of Sri Lanka’s financial services providers, fostering customer trust and global competitiveness. It attracts international partnerships, encourages innovation, and bolsters the country’s financial sector as a key player in global markets, ensuring long term growth and stability.

LFSBL contributes significantly towards reducing foreign exchange outflows by providing local access to SWIFT connectivity services. The Sri Lankan banking and financial community benefits from secure, reliable, and cost-effective transaction services while maintaining compliance with global standards.

LFSBL remains committed to supporting Sri Lanka’s banking and financial institutions through globally compliant, secure, and reliable SWIFT connectivity services.

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Financial Performance

Sampath Bank reported Total Operating Income of Rs 28.5 Bn for the quarter ended 31st March 2026, supported by steady growth in Net Interest Income (up 5%) and Net Fee and Commission Income (up 28%) year-on-year. Notwithstanding this performance, Profit After Tax (PAT) declined by 26% to Rs 6.2 Bn, due to significantly higher impairment provisions of Rs 4.5 Bn recognised in response to the continued expansion of the loan book and taking into account the evolving geopolitical conditions. Additionally, one-off gains from the disposal of Treasury Bills and Bonds moderated to Rs 0.7 Bn in 2026, a decrease of Rs 2.0 Bn compared to the elevated levels recorded in the previous year.

The Bank’s total asset base crossed the Rs 2 Tn milestone for the first time, representing a significant achievement supported by strong loan growth of Rs 127 Bn in the first quarter of 2026.

The Sampath Group delivered a Profit Before Tax (PBT) of Rs 9.4 Bn and a Profit After Tax of Rs 6.8 Bn for the quarter ended 31st March 2026.

Fund Based Income

The Bank reported total interest income of Rs 46.5 Bn, reflecting year-on-year growth of 6%. This increase was primarily driven by the expansion of the loan portfolio during the reporting period and in the latter part of the previous year, compared to the negative loan growth recorded in the corresponding period of the previous year, as well as an upward movement in the Average Weighted Prime Lending Rate (AWPLR).

Interest expense for the quarter also increased by 6% to Rs 26.4 Bn, reflecting growth in both deposit and borrowing portfolios. As a result, Net Interest Income (NII) stood at Rs 20.1 Bn, an increase of 5% compared to the corresponding quarter of the previous year.

The Net Interest Margin (NIM) contracted marginally by 2 basis points to 4.09%, from 4.11% reported for 2025. This decline was primarily attributable to lower yields across the Bank’s investment portfolio, reflecting reduced rates in the Government Securities portfolio compared to the previous period.

Non-Fund Based Income

During the three month period ended 31st March 2026, the Bank’s total non-fund based income declined marginally by 4% to Rs 8.3 Bn, mainly due to a decrease in capital gains from the sale of Treasury bills and bonds. Capital gains declined from Rs 2.7 Bn in 1Q 2025 to Rs 0.7 Bn in 1Q 2026, representing a year-on-year decline of 75%.

Net fee and commission income, driven by credit expansion, higher trade volumes and increased card usage, recorded a robust growth of 28% across all income channels, reaching Rs 6.1 Bn by the end of the quarter.

The Bank recorded a total exchange gain of Rs 1.5 Bn during the first quarter of 2026, reflecting a year-on-year increase of 24%. This increase was primarily attributable to the depreciation of the Sri Lankan Rupee against the USD by Rs 5.52 during the quarter.

Impairment Charge

In the first quarter of 2026, the Bank reported a total impairment charge of Rs 4.5 Bn, reflecting an increase of Rs 4.6 Bn when compared to the reversal of Rs 0.2 Bn reported in the previous period.

Impairment charge on loans and advances

The Bank recorded an impairment charge of Rs 4.1 Bn on loans and advances, compared to a reversal of Rs 0.1 Bn reported in 1Q 2025, driven by significant (10.4%) expansion of the loan portfolio and the resultant collective impairment requirements. Even though this growth has resulted in higher provisioning requirements, it is expected to generate net positive results during the current financial year.

Furthermore, the Bank continued its policy of conservative provisioning and an additional overlay allowance of Rs 1.5 Bn was recognised as a prudential measure in response to heightened geopolitical uncertainties. This forward-looking approach reflects the Bank’s commitment to prudent credit risk management, ensuring adequate buffers and resilience against potential adverse developments in the operating environment and the broader global landscape.

The Bank also conducted a comprehensive review of its ISL customers, allocating prudent provisions in its Financial Statements based on each customer’s unique credit risk profile. This targeted assessment reinforces the Bank’s disciplined risk management practices and its focus on maintaining financial stability in a challenging global context.

Impairment charge on other financial instruments

An impairment charge of Rs 0.4 Bn was recognised against other financial instruments during 1Q 2026, primarily due to new investments made during the quarter.

Operating Expenses

During the quarter, operating expenses increased by 19% year on year, driven primarily by costs related to the rollout of new strategic initiatives. The increase was mainly attributable to salary enhancements granted in 2025, the expansion of the cadre to undertake new initiatives and support business growth, and higher investments in technology. These strategic long-term investments are expected to deliver enhanced income in the coming years.

As growth in operating expenses outpaced the improvement in operating income, primarily due to the decline in one off disposal gains recorded in 2025, the Bank’s cost to income ratio (CIR) deteriorated by 620 basis points, increasing from 38.8% in 1Q 2025 to 45.0% in 1Q 2026.

Taxation

The total tax expense for the period amounted to Rs 5.0 Bn, representing a year on year decline of 43%, mainly attributable to lower profits and the finalization of prior period tax assessments.

Key Ratios

The Return on Average Shareholders’ Equity (after tax) stood at 14.05% as at 31st March 2026, compared to 17.93% as at 31st December 2025. Similarly, the Return on Average Assets (before tax) declined to 1.68% from 2.60% reported as at 31st December 2025.

Capital and Liquidity

The Bank maintained all capital ratios well above the regulatory minimum requirements. As at 31st March 2026, the CET 1, Tier 1 and Total Capital ratios stood at 13.17%, 13.17% and 15.79%, respectively, compared to 14.75%, 14.75%, and 17.65% as at year end 2025. The decline in capital ratios was primarily due to the increase in risk-weighted assets arising from substantial loan growth during the quarter.

Liquidity levels remained robust, with the All-currency Liquidity Coverage Ratio (LCR) at 187.87% and the Net Stable Funding Ratio (NSFR) at 161.30% as at 31st March 2026, both comfortably above the regulatory minimum requirement of 100%.

The recognition of profit for capital purposes under Basel III following audit certification, together with the proposed Tier II debenture issue, is expected to further strengthen the Bank’s capital position during the remainder of the year.

Assets

During the reporting period total assets grew by 6%, reflecting an annualized growth of 24%, to Rs 2.1 Tn as at 31st March 2026, supported by the expansion of the loan portfolio. Gross loans increased by Rs 127.5 Bn, from Rs 1,223.6 Bn at end 2025 to Rs 1,351.1 Bn. This growth was primarily driven by a Rs 105 Bn increase in LKR denominated loans, while FCY loans recorded a modest increase of Rs 22 Bn during the period.

Liabilities

The Bank’s total liabilities increased by 7% since year end 2025, reflecting an annualized growth rate of 28%, to Rs 1.92 Tn as at 31st March 2026. This growth was primarily driven by the expansion of the deposit portfolio. Deposits increased by Rs 69 Bn from Rs 1.65 Tn at year end 2025 to Rs 1.72 Tn as at 31st March 2026. The increase was mainly driven by LKR denominated deposits, which contributed Rs 49 Bn, while foreign currency deposits increased by Rs 20 Bn.

Dividend

At the Annual General Meeting held on 30th March 2026, the shareholders of Sampath Bank approved a first and final cash dividend of Rs 10.30 per share for the financial year 2025. The Bank consequently recognised a provision of Rs 12.1 Bn in the 1Q 2026 Financial Statements to facilitate the payment of the approved final dividend to shareholders.

Commitment to Stakeholder Well-being

Reinforcing its environmental leadership, Sampath Bank became the first Sri Lankan bank to obtain ISO 14001:2015 certification across its Head Office and branch network. It also deepened its commitment to responsible business by joining the UN Global Compact Sri Lanka as a Patron on Diversity & Inclusion and Water & Ocean Stewardship, while partnering with NCPC Sri Lanka to raise awareness among Corporate and SME clients on low-carbon transition and sustainable business models.

The Bank continues to advance its sustainability agenda through its infrastructure rejuvenation programme, “Wewata Jeewayak”, marked by the completion of its 40th tank restoration, providing significant support for agricultural and community development in Sri Lanka. This initiative, together with the Bank’s ongoing programmes in coral restoration, turtle conservation, reforestation, mangrove restoration and other environmental and community projects, establishes Sampath Bank as a key contributor to environmental and social sustainability in the country.

As part of its ocean plastic reduction efforts, a Material Recovery Facility (MRF) established in Batheegama, Dickwella, in partnership with an organisation with aligned sustainability objectives, was officially handed over to the community.

Sampath Bank advanced its sustainability agenda during the period, strengthening sustainable finance, climate governance and operational performance. The Bank expanded ESG linked credit screening in line with the best global practices and successfully implemented SLFRS S1 and S2 under its Climate First Action Plan, enhancing climate related governance, risk management and reporting.

As part of its contribution to green finance, Sampath Bank launched a Green Fixed Deposit supported by a comprehensive Green Deposit Framework, which obtained independent limited assurance at the pre-issuance stage, thereby enhancing credibility and stakeholder confidence.

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Sampath Bank has successfully led a landmark syndicated loan of Rs. 33.5 billion for the Ceylon Electricity Board (CEB), together with Nations Trust Bank and Pan Asia Bank. This significant funding facility will cushion the debt restructure of CEB and support its ongoing operations, ensuring the continued delivery of reliable power to the nation.

The syndicated loan highlights the collective strength of Sri Lanka’s banking sector in supporting nationally important institutions. By taking the lead role in this initiative, Sampath Bank reaffirms its commitment to promoting sustainable growth and contributing to the country’s long-term economic development.

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Standard Chartered Sri Lanka will host the Chief Executive Officer for India and South Asia, PD Singh, from the 15^th to the 18^th of September, in Colombo along with a delegation. The delegation includes, the Co-Head of Coverage for India and South Asia Sanjay Gurjar and Anil Kejriwal, CFO India and Cluster CFO South Asia.

With the focus of further deepening the Bank’s long-standing strategic partnership with the nation’s public and private sectors, PD is scheduled to hold discussions with key policy makers, government officials and multilateral agencies. During his 4-day visit to the island nation, he will also meet and interact with several top officials of Sri Lanka’s leading corporates and banks as well as attend an event with key clients of the Bank.

PD Singh is the Cluster Chief Executive Officer for India and South Asia Markets (Bangladesh, Nepal & Sri Lanka) of Standard Chartered. PD brings with him a wealth of experience from close to three decades in banking and finance, spanning leadership and coverage roles across European and American banks.

Prior to joining Standard Chartered Bank, PD was the CEO of JP Morgan Chase Bank in India, where he played a pivotal role in shaping the bank’s corporate banking franchise as a founding member and later managing the bank entity in India. Before JP Morgan, he was at HSBC, where he spent a decade covering leadership roles across corporate and commercial banking.

PD is an active proponent of sustainability and making a positive impact in the society through community impact initiatives, playing an active role in various committees and industry bodies. He currently serves as the Co-Chair of the Diversity and Inclusion Council for the Bank’s Corporate and Investment Banking segment. He is also the Co-Chairman of Banking & Finance Committee of the IMC Chambers of Commerce for the past 4 years. He is a member of the CSR committee of The Cricket Club of India, Mumbai (CCI) and a Managing Committee member of the Indian Banks Association (IBA) and Chairman of its Foreign Banks Committee. PD completed his studies from University of Pune. He has an engineering degree, followed by MBAs in finance and marketing respectively.

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