Interest income rose 29.4 percent to 3.38 billion rupees and interest expenses rose at a slower 23.8 percent to 1.095 billion rupees allowing the bank to grow net interest income 32 percent to 2.28 billion rupees.

Many other banks have seen steep rises in interest expenses which have squeezed interest margins as interest rates rose sharply over the several few months.

Fee income rose 36 percent to 1.79 billion rupees, with forex income surging 94 percent to 1.25 billion rupees.

Sri Lanka's rupee was depreciated and was volatile in the first and second quarters of 2012 after the island's dollar soft-peg came under pressure from sterilized foreign exchange sales of the central bank.

There was a 25 million rupee net provision reversal with a 66 million rupee specific provision and 101 million rupees of recoveries, against a 62 million provision reversal a year earlier.

Non-performing loans fell to 303 million rupees by end June 2012 from 792 million rupees in December 2011.

Total performing loans rose only 5.9 percent to 46.8 billion rupees in the six months to December while deposits grew 7.6 percent to 66.7 billion rupees.

Net assets grew to 20.3 billion rupees from 18.0 billion rupees and gross assets grew to 95.2 billion rupees from 84.9 billion rupees during the six months to June 2012.