First Capital Holdings PLC, a major player in Sri Lanka's capital markets, posted a significant loss in the first quarter of financial year 2026/27 as global economic uncertainty and interest rate hikes disrupted fixed income trading activities.

First Capital Holdings PLC, a subsidiary of Janashakthi Group, reported a loss after tax of Rs. 726 million for the quarter ended 30 June 2026, a sharp reversal from a profit of Rs. 2.15 billion in the corresponding period of the previous year. The deterioration in financial performance reflects the challenging operating environment created by geopolitical tensions, global economic uncertainties, and significant monetary policy shifts.

The company's net trading loss before operating expenses stood at Rs. 565 million compared to net trading income of Rs. 3.43 billion in the prior year quarter. The Primary Dealer division was particularly affected, recording a loss after tax of Rs. 741 million, driven by a Rs. 1.80 billion trading loss on government securities. This contrasted sharply with the prior year's gains of Rs. 2.06 billion. The Central Bank of Sri Lanka's 100 basis point policy rate increase during the quarter significantly impacted fixed income markets, while adverse mark-to-market movements were recorded across trading portfolios.

Despite headwinds in fixed income operations, other segments of the business showed greater resilience. The Corporate Finance Advisory and Corporate Dealing Securities divisions generated a combined profit of Rs. 22 million, though down from Rs. 587 million previously. The Stock Brokering division earned Rs. 24 million, while Wealth Management posted Rs. 6 million in profit. Assets under management in the Wealth Management division declined slightly to Rs. 93.3 billion from Rs. 96.2 billion at the end of the previous quarter.

Management acknowledged the difficult quarter while emphasizing the strength of the company's diversified platform. The company also achieved independent verification of its greenhouse gas emissions for 2025/26 under ISO 14064 standards through the Sri Lanka Climate Fund, demonstrating its commitment to environmental sustainability initiatives.