AFC has improved its profitability and asset quality during FY25 while focusing on sustainable financing solutions. AFC's Net Interest Income (NIM) increased to LKR~5.9bn in 9MFY25 compared to LKR~4.0bn in 9MFY24, a growth of ~48.3% y-o-y. Likewise, AFC's net profit stood at LKR~993.5mn in 9MFY25 (9MFY24: LKR~492.6mn). The Gross NPL ratio was ~6.8% during 9MFY25, lower than the industry average of ~11.3%. The Company’s Capital Adequacy Ratio stood at ~14.5% in 9MFY25, above the Central Bank of Sri Lanka's (CBSL) statutory requirement of ~12.5% but remains below the industry average.
The rating depends on AFC's continued ability to achieve its strategic objectives while maintaining strong asset quality, sound financial management, sustainable leveraging and diversified funding base. Meanwhile, from a bondholder's perspective, the prudent management of Social Bond proceeds and the implementation of a comprehensive governance framework are critical.