In FY25, net interest income of the Company rose ~15.9% to LKR 8,118Mn (3MFY26: LKR ~2,308Mn), with core spread improving to ~7.8% from ~6.0% in FY24 on lower interest rates enabling liability repricing. The spread moderated to ~6.4% in 3MFY26 and remains below industry average. The net income grew by ~22.8% to ~LKR 2,629Mn in FY25 (3MFY26: ~LKR 785Mn), with growth underpinned by higher lease income during the year. The revenue profile is predominantly core (~78%), with the ~22% non-core share. The lending portfolio is concentrated in auto drafts, leases, gold loans, and vehicle loans, which collectively represent 94.2% of the total loan book. The loan and lease portfolio expanded from LKR ~92,147Mn in FY25 to LKR ~104,280Mn in 3MFY26. The gearing stands at ~6.0x in FY25 (3MFY26: ~6.9x), indicating relatively high leverage. The Company improved its short-term asset liability gaps narrowed in FY25 and 3MFY26. However, the gap widens in the 1–3 year tenor due to debenture maturities. VFIN has an adequate capital structure with Tier I CAR standing at ~16.54% (3MFY26: ~13.79%)and Total CAR ~21.51% in FY25. The CAR ratio remains above the regulatory requirement but remains below the industry average. However, the planned subordinated term loan under the capital-augmentation program should provide support for the expansion.
VFIN plans to open new branches in underserved markets to broaden access and expand its market share. The growth strategy includes product diversification (margin trading, digital/online services, Islamic banking) and scaling the property loan franchise; management expects gold loans to reach 30% of the loan book by FY26–FY27.
The rating depends on continued growth, robust governance, and steady financial/operational metrics. Adverse trends particularly higher NPLs or reduced capital headroom—would be viewed negatively for the rating.