The group reported earnings of 3.05 rupees per share for the quarter down 25 percent.
Interest income grew 13.8 percent to 31.97 billion rupees interest in the quarter ended March 2019 from a year earlier, expense grew at a faster 16.07 percent to 19.95 billion rupees and net interest income grew at a slower 10.4 percent to 12.1 billion rupees.
Loans and advances contracted to 861 billion rupees from 867 billion rupees from three months earlier.
Cash balances grew 15.4 percent to 51.8 billion rupees and interbank loans grew 41 percent to 28.1 billion rupees.
Chief executive S Renganathan said the bank followed a "more cautious approach in expanding its advances portfolio" amid "challenging economic conditions."
"Despite the decline in advances, I am happy to say that the Bank has continued to support the SME sector, as reflected in the satisfactory growth of this portfolio during the quarter," he said.
Loan losses grew 68 percent to 1.89 billion rupees in the quarter from 1.126 billion rupees a year earlier.
At bank level the gross non performing loan ratio rose to 4.14 percent from 3.24 percent.
Total capital adequacy fell to 15.1 percent from 15.6 percent, but is higher than the minimum 14 percent.
Sri Lanka has seen monetary instability due to the operation of a soft-pegged exchange regime with real effective exchange rate targeting, which led to a collapse of the currency, killing an economic recovery, which was worsened by a political crisis in the last quarter of 2018.
Fee and commission income grew 2.5 percent 2.93 billion rupees.
Financial sector value added tax, nation building tax and a new debt repayment tax rose 39 percent to 1.78 billion rupees.
The bank grew deposits 3.14 percent during the quarter to 1,025 billion rupees, as credit contracted.
When a country recovers from a balance of payments trouble, deposits at bank grow faster than loans, while during a currency crisis, loans will growth with printed money from term reserve repurchase injections from the central bank or its outright treasury bill purchases.
The when banks or other savers buy Treasury bills previously held by the central bank, the currency strengthens, imports and economic activity falls and a balance of payments surplus is generated.
Total assets grew 1.78 percent to 1,221 billion rupees during the quarter. Net assets grew 0.73 percent to 121.4 billion rupees