Lanka Rating Maintains


Entity Rating of

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WealthTrust Securities PLC

30-Jun-26

01

Applicable Criteria

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

02

Related Research

Sector Study | Primary Dealer | Mar-26


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
(30-Jun-26) 		Previous
(25-Jun-25)
Action Maintain Maintain
Rating A- A-
Outlook Stable Positive
Rating Watch - -


WealthTrust Securities PLC ("WTS" or "the Company") operates as an authorized standalone Primary Dealer (PD) in Sri Lanka. The Company primarily underwrites and trades government securities (treasury bills and bonds) in both the primary and secondary markets. Additionally, WTS functions as a licensed debt stockbroker/dealer under the authorization of the Securities and Exchange Commission of Sri Lanka. As at end-FY26, WTS accounted for ~12.1% of total assets within the standalone primary dealer segment, reflecting a relatively modest position among the 5 licensed standalone PDs. The rating reflects WTS' strong liquidity profile, underpinned by the high share of liquid G-Secs in its asset base, strong capitalization and access to repo-based market borrowings. The rating also incorporates inherent exposure to interest rate fluctuations that impact performance. In January FY26, WTS was listed on the Colombo Stock Exchange, raising fresh equity capital of LKR ~500Mn. This is considered a positive development, as it is expected to strengthen the Company's capital base and further enhance its governance framework over time. During FY26, WTS posted a net profit of LKR ~541Mn, a decline of ~55% YoY (FY25: LKR ~1.2Bn). The contraction was primarily driven by a sharp reduction in mark-to-market (MTM) gains which fell to LKR ~155Mn (FY25: LKR ~1.2Bn) as interest rates normalized during the period. This was partially offset by an increase in Net Interest Income to LKR ~1.4Bn (FY25: LKR ~1.3Bn). Consequently, profitability indicators weakened, with ROE and ROA recorded at ~8.5% and ~1.6%, respectively, for FY26, both remaining below peers. The recent policy rate hike of 1% is expected to exert pressure on profitability in the near term, as the resultant rise in secondary market yields triggers MTM losses. However, secondary market yields have eased following the recent geopolitical developments. This will lessen the impact and support a gradual recovery in profitability for remaining FY27. As at end-FY26, the Company held ~92% (FY25: ~94%) of total assets in the form of G-Secs, providing a substantial buffer of readily marketable instruments. The investment portfolio remained concentrated in medium-duration T-Bonds, which, while supporting yield, heightens the portfolio's sensitivity to movements in interest rates. The Company also undertakes spread transactions, including reverse repos, to supplement its income base. Capitalization remained at comfortable level, with the Capital Adequacy Ratio (CAR) recorded at ~21.9% as at end-FY26 (FY25: ~37.9%), well above the ~10% regulatory minimum. This provides adequate cushion to absorb potential shocks arising from interest rate volatility. However, the CAR contracted materially on a YoY basis despite the share issue, primarily reflecting growth in the market risk-weighted asset base, outpacing the Company's internal capital generation. Funding is primarily sourced through repurchase agreements, which accounted for ~95.0% of total liabilities as at end-FY26 (FY26: LKR ~35.3Bn; FY25: LKR ~15.6Bn). This funding structure is consistent with the primary dealer model. Credit risk is assessed as minimal, given the near-total concentration of assets in sovereign instruments, while residual reverse repo exposure is mitigated by G-Sec collateral held under appropriate haircuts.

The rating remains contingent upon WTS sustaining its capital levels, improving profitability metrics, managing interest rate risk through the cycle, and deploying leverage prudently relative to its duration-extended portfolio. An adverse and sustained movement in interest rates that results in material MTM losses, or a deterioration in the capital adequacy position, would exert downward pressure on the rating. Conversely, consistent earnings supported by disciplined portfolio and duration management, together with the build-up of additional capitalization buffers, would provide positive impetus over the medium term.
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About the Entity

WealthTrust Securities PLC ("WTS" or "the Company") is a Central Bank of Sri Lanka (CBSL)-designated standalone Primary Dealer engaged in government debt instrument trading and portfolio management, additionally licensed as a debt stockbroker and dealer by the Securities and Exchange Commission of Sri Lanka (SEC). Incorporated in 2010, WTS was listed on the Diri Savi Board of the Colombo Stock Exchange (CSE) in January 2026, with Finco Holdings (Pvt) Limited as the single largest shareholder at ~27.2% as at end-FY26.

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