SDF has sustained its profitability and asset quality indicators during 6MFY26 while focusing on sustainable financing solutions. SDF's Net Interest Income ("NII") increased to LKR ~1.6Bn in 6MFY26 compared to LKR ~1.3Bn in 6MFY25, a YoY growth of ~30%, as the Company increased its lending portfolio. SDF's net profit improved to LKR ~340Mn in 6MFY26 (6MFY25: LKR ~216Mn) but remain modest when compared to peers. The Gross NPL ratio was ~6.0% during 6MFY26, lower than the industry average of ~6.8% despite exposure to rural and micro-borrower segments. The Company's Capital Adequacy Ratio stood at ~16.5% in 6MFY26, above the CBSL statutory requirement of ~12.5% but remain below the industry average, limiting headroom to absorb significant asset quality deterioration or growth in advances.
The rating depends on SDF's continued ability to achieve its strategic objectives while maintaining strong asset quality, sound financial management and profitability, sustainable leveraging and diversified funding base. Meanwhile, effectively managing Orange Bond proceeds and implementing a strong framework will be critical from bond holder's perspective. Compliance with applicable guidelines and regulatory requirements for Orange Bonds is important.