Lanka Rating Maintains


the Entity Rating of

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WealthTrust Securities Limited with "Positive" Outlook

25-Jun-25

01

Applicable Criteria

Methodology | Non-Banking Financial Institution Rating | Jul-24

02

Related Research

Sector Study | Primary Dealer | Feb-25


03

Analyst

Ruwanthi Sylva | ruwanthi@lra.com.lk
+94 114 500099 | www.lra.com.lk

PRESS
RELEASE


DISCLAIMER

This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to LRA

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Rating Type Entity
Current
(25-Jun-25)
Previous
(08-Jul-24)
Action Maintain Initial
Rating A- A-
Outlook Positive Stable
Rating Watch - -


Wealth Trust Securities Limited’s ("WTSL" or "the Company") operates as an authorized standalone Primary Dealer (PD) in Sri Lanka, actively involved in the underwriting and trading of government securities, including treasury bills and bonds in both the primary and secondary markets. Additionally, WTSL functions as a licensed debt stockbroker/dealer under the authorization of the Securities and Exchange Commission of Sri Lanka. The rating reflects the Company's established track record as a PD, strong capitalization and consistent performance. The Company remains exposed to the inherently volatile nature of PD operations, where profitability is highly sensitive to interest rate movements and market dynamics. WTSL currently holds a modest market share among standalone PDs. The Company reduced its portfolio of government securities by ~13.7% to LKR~22.8bn in FY25 from LKR~26.3bn in FY24, while peer Companies expanded their portfolios during the same period. This encapsulates WTSL’s risk averse trading strategy, characterized by holding positions for short durations and frequent portfolio rollovers. WTSL’s profitability normalized in FY25 after posting exceptional results in previous year. The net income fell to LKR~1.2bn in FY25 (FY24: LKR~4.9bn), a contraction of ~75.7%. This was largely driven by lower gains on the sale of investments as the interest rates stabilized and remains in line with broader industry trend. WTSL has strong Capital Adequacy Ratio (CAR) of ~37.9%, well above the regulatory minimum of 10%, reflecting prudent capital management and buffer against potential market shocks. Furthermore, the Company’s credit risk remains minimal, with ~93.9% of its assets invested in government securities, significantly mitigating exposure to default risk.
The "Positive Outlook" reflects the Company's intended performance and initiatives to expand its asset base, while maintaining a prudent risk approach.
The rating is contingent upon the Company's ability to sustain and strengthen its market position as a non-bank PD by maintaining stable performance and a strong capital buffer. It is essential for WTSL to proactively recalibrate its asset portfolio in response to evolving market conditions and to further enhance its governance frameworks. Any material adverse developments, particularly large-scale losses stemming from unexpected interest rate movements or other market shocks, could impair its risk absorption capacity and will negatively impact the rating.
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About the Entity

WealthTrust Securities Limited (“WTSL” or “the Company”) was incorporated on 1st February 2010 as a limited liability company under the Companies Act No. 7 of 2007, commencing operations on 21st September 2011. It is an authorized Primary Dealer appointed by the Central Bank of Sri Lanka (CBSL). The Company's ownership is concentrated among six corporate entities, which collectively hold ~69.2% of the shares. The Board consists of six members, including five Non-Executive Directors (two of whom are independent and three non-independent) and one Executive Director. The Chairman of the Board, Mr. W. S. Weerasooria, holds the position of Non-Independent Non-Executive Director and the Managing Director, Mr. R. R. Gomez, holds the position of Executive Director.

Lanka Rating Agency Limited

No. 145,
Kynsey Road, Colombo 00800, Sri Lanka

Tel: +94 11 450 0099